Quiz The lender of mortgage money is known as the: A) trustee. B) mortgagor. C) mortgagee. D) trustor.

Transcription

1 Quiz 7 1. On a debt secured by property, the reduction of debt through regular periodic payments is known as: A) principal. B) amortization. C) reduction loan. D) retirement. 2. The lender of mortgage money is known as the: A) trustee. B) mortgagor. C) mortgagee. D) trustor. 3. The written evidence of the borrower's promise to repay a real property loan is contained in the: A) abstract. B) promissory note. C) recorded deed. D) payment book. 4. What is the name given to the dollar value that would remain if all liens and other valid monetary claims were subtracted from the property's present market value? A) Equity. B) Unearned increment. C) Encumbrance. D) Escrow. 5. The quasi-public agency that is nicknamed "Fanny Mae" is the: A) Federal Housing Administration. B) Farmers Home Administration (FmHA). C) Federal National Mortgage Association. D) Federal Home Loan Mortgage Association. 6. Which of the following clauses prevents a buyer from assuming an existing mortgage? A) Defeasance clause. B) Acceleration clause. C) Alienation clause. D) Amortization clause. c:\lotus\work\wordpro\qexams Chapter 7 Page , Information Professionals, Inc.

2 7. When the mortgagor is in default, which clause empowers the mortgagee to cause the balance of mortgage to be immediately due and payable? A) Acceleration clause. B) Default clause. C) Defeasance clause. D) Alienation clause. 8. When a mortgage loan is liquidated with periodic payments, it is said to be: A) Alienated. B) Defaulted. C) Amortized. D) Ballooned. 9. From the following list, which is NOT a feature of a promissory note? A) Personal liability. B) A pledge of property as security. C) Negotiability. D) Promise to repay. 10. In the event of a foreclosure sale, which of the following is paid first? A) The expenses of the sale. B) Unpaid special assessment liens. C) The interest due on the loan. D) The principal due on the loan. 11. Which of the following secondary mortgage markets is not government owned nor government supervised? A) Fannie Mae. B) Maggie Mae. C) Ginnie Mae. D) Freddie Mac. 12. The major purpose of the secondary mortgage market is to improve: A) the lender's profits. B) effects of disintermediation. C) the lender's liquidity. D) the borrower's interest rate. c:\lotus\work\wordpro\qexams Chapter 7 Page , Information Professionals, Inc.

3 13. A "land contract for deed" financing and sale agreement is signed: A) only by the buyer/borrower. B) only by the lender. C) only by the seller/lender. 14. Which of the following acts would not constitute a borrower's default of the normal terms of a mortgage or deed of trust A) Failure to pay property hazard insurance premiums when due. B) Failure to pay personal liability insurance premiums when due. C) Failure to pay the mortgage payment when due. D) Failure to pay ad valorem taxes when due. 15. Identify which is the incorrect statement in the following list regarding promissory notes and mortgages. A) The promissory note secures the accompanying mortgage. B) The provisions of the promissory note take precedence over the accompanying mortgage. C) Both the promissory note and the mortgage contain an acceleration clause. D) The promissory note is negotiable, whereas the mortgage is not. 16. The major difference between a mortgage instrument and a deed of trust instrument: B) is in the type of real estate pledged as collateral. C) is in who holds title to the encumbered real property. D) is that only the mortgage has an acceleration clause. 17. A parcel of real property is encumbered by a conventional mortgage with a prepayment penalty. Following the satisfaction of the mortgage, the property is sold for cash. Which of the following is correct? A) The prepayment penalty clause does not apply. B) Only a portion of the prepayment penalty needs to be paid. C) The entire penalty must be paid. D) The penalty only applies to loan assumptions and since sale is for cash, the penalty is waived. c:\lotus\work\wordpro\qexams Chapter 7 Page , Information Professionals, Inc.

4 18. What type of clause is inserted if a mortgagee does not want the mortgage to be assumable? A) Defeasance. B) Acceleration. C) Alienation. D) Divesture. 19. These lending institutions have no stockholders, are always state chartered, and favor making long-term loans. They are called: A) commercial banks. B) insurance companies. C) savings & loans. D) credit unions. 20. Regarding mortgage brokers and mortgage bankers, which statement is most correct? A) Mortgage brokers are state chartered whereas mortgage bankers are federally chartered. B) A mortgage banker lends only investors' funds. C) A mortgage broker lends only its own funds. D) Mortgage bankers typically service the loans they make whereas mortgage brokers typically do not. A) the deed is placed in escrow. B) the deed is delivered to the buyer. D) the contract has been signed by all parties. 22. Upon the payment in full of a mortgage, the borrower should receive from the mortgagee: A) a satisfaction of mortgage certificate. B) a marginal release certificate. C) a certificate of reduction. D) an estoppel certificate. 23. The clause in a mortgage instrument that imposes a penalty should the loan be paid off early, is called: A) a due-on-sale clause. B) a prepayment clause. C) an alienation clause. D) an acceleration clause. c:\lotus\work\wordpro\qexams Chapter 7 Page , Information Professionals, Inc.

5 24. What type of foreclosure requires the lender to bring a lawsuit against the mortgagor? A) Statutory. B) Strict. C) Power of sale. D) Judicial. 25. Which one of the following clauses is not found in a mortgage A) Acceleration. B) Reconveyance. C) Defeasance. D) Alienation. 26. Which one of the following clauses is not found in a deed of trust A) Reconveyance. B) Acceleration. C) Defeasance. D) Alienation. 27. Which one of the following clauses is found in the promissory note and in both the deed of trust instrument and the mortgage A) Reconveyance. B) Power of sale. C) Defeasance. D) Acceleration. 28. When the borrower pledges real or personal property as security for a loan without surrendering the pledged property the loan is said to be: A) hypothecated. B) pledged. C) secured. D) collateralized. 29. Which secondary market has the greatest share of the market? A) Fannie Mae. B) Ginnie Mae. C) Freddie Mac. D) Maggie Mae. c:\lotus\work\wordpro\qexams Chapter 7 Page , Information Professionals, Inc.

6 30. Savers' deposits in a federally chartered bank are insured by the: A) Resolution Trust Corporation (RTC). B) Bank Insurance Fund (BIF) administered by Federal Deposit Insurance Corporation (FDIC). C) State Insurance Fund (SIF) in state where bank is located. D) Savings Association Insurance Fund (SAIF). 1. Ans: B 2. Ans: C 3. Ans: B 4. Ans: A 5. Ans: C 6. Ans: C 7. Ans: A 8. Ans: C 9. Ans: B 10. Ans: A 11. Ans: B 12. Ans: C 13. Ans: D 14. Ans: B 15. Ans: A 16. Ans: C 17. Ans: A 18. Ans: C 19. Ans: C 20. Ans: D 21. Ans: B 22. Ans: A 23. Ans: B 24. Ans: D 25. Ans: B 26. Ans: C 27. Ans: D 28. Ans: A 29. Ans: A 30. Ans: B c:\lotus\work\wordpro\qexams Chapter 7 Page , Information Professionals, Inc.