Ch 9 Fin 351 Quiz

25 June 2024
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question
The element of an adjustable interest rate that is the "moving part" is the:
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Index
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Which of these aspects of a mortgage loan will be addressed in the note rather than in the mortgage?
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Prepayment Penalty
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A lender may reserve the right to require prepayment of a loan at any time they see fit through a(n):
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Demand Clause
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When a buyer of a property with an existing mortgage loan acquires the property without signing the note for the existing loan, the buyer is acquiring the property:
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Subject to the Mortgage
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Which of these points in a mortgage loan would be addressed in the mortgage (possibly in the note as well)?
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Escrows
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To finance property where either the borrower, the property, or both fail to qualify for standard mortgage financing, a common nonmortgage solution is through the:
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contract deed
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Ways that a lender may respond to a defaulted loan without resorting to foreclosure include all of the following
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-Offer credit counseling -Allow short sale to a third party -Defer or forgive some of the past-due payments -Accept a deed in lieu of foreclosure
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If the lender in a standard first mortgage wishes to foreclosure cost effectively, it is crucial to have which clause in the mortgage?
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Acceleration Clause
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A common risk that frequently interferes with a lender's efforts to work out a defaulted loan through either nonforeclosure means or foreclosure is:
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Bankruptcy
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The characteristics of a borrower that can be considered by a lender in a mortgage loan application are limited by the:
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Equal Credit Opportunity Act
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The Real Estate Settlement Procedures Act does:
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-Requires the use of a standard settlement statement for a mortgage loan closing -Prohibits kickbacks between vendors of closing-related services and lenders -Requires that a borrower receive a good-faith estimate of closing costs shortly after a loan application -Requires that the borrower be able to inspect the closing statement a day before the actual closing
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Foreclosures tends to be quickest in states that:
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Have power of sale
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From a home mortgage lender's perspective, which statement is true about the effect of bankruptcy upon foreclosure?
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Chapter 7 bankruptcy is the most "lender friendly" form
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The most internationally oriented index rate for adjustable rate mortgage is:
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A LIBOR rate
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A type of loan that occurred in recent years, which raised concerns about predatory lending practices, was the:
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Subprime Mortgage
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A partially amortizing loan always will have:
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A Balloon Payment
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What is true about mortgage loans for income producing real estate?
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-They usually are partially amortizing loans -They often have a prepayment penalty -They often are nonrecourse loans -They can be interest only loans
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With what type of loan security arrangement is the deed held by a neutral third party and returned upon payment of the mortgage is full?
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Deed of Trust
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The Truth-in-Lending Act gives some mortgage borrowers how long to rescind a mortgage loan?
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Three Days
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Which statement is correct about the right of prepayment of a home mortgage loan?
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Most home mortgage loans have the right of prepayment without charge, but not all, and the borrower should check the loan carefully