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20 Real Estate Questions 2
1. The detailed terms and conditions of a borrower’s debt to a lender can be found in a
B. Promissory note
C. Deed of trust
D. First mortgage
2. The obligor in a real estate promissory note and secured by a mortgage is the
3. Normally, which of the instruments associated with a mortgage is recorded in the public records?
a. Promissory Note
c. Purchase contract
d. Bill of sale
4. Under the terms of a mortgage, the mortgagee is the
a. Obligor under the promissory note
d. Maker of the note
5. In states which subscribe to the title theory of mortgages, the
a. Mortgage deeds title of the mortgaged property to the lender
b. Borrower forfeits the rights of possession and use of the property
c. Mortgage is considered a lien on the property
d. Title is transferred to the lender only if the borrower defaults
6. Neil wishes to purchase the Watford’s house for $100,000, giving her a $20,000 cash downpayment and a note and mortgage for the remaining $80,000. Neil can expect to hypothecate which of the following with a mortgage?
a. Lot and house
b. House, but not the lot
c. Lot, but not the house
d. N’s other real estate holdings.
7. Larry hypothecated te title to two equally valued properties as collateral for a $50,000 loan. When he had repaid $25,000 of the principal amount, one of the properties was removed from the mortgage obligation by means of a
a. Mortgage satisfaction
b. Partial release
d. Release of mortgage
8. Regarding mortgage insurance, which of the following statements are true?
a. PMI insures only the top 20 or 25 percent of the loan
b. FHA insures the top 3% of the loan
c. Both PMI and MIP may be paid up front with no further monthly fees
d. PMI requires a one-time payment, while MIP may be paid in several installments
9. The Federal Truth-in-Lending Act requires that, in certain types of loans, all of the following must be disclosed EXCEPT
a. The borrower be told how much it is costing to borrow the money
b. The borrower to be given the right to rescind the transaction within three business days after signing the loan papers
c. The amount financed and finance charges
d. The appraisal fees and closing costs
10. What loan-to-value ratio is considered the safest for a non-insured owner-occupied residential property?
b. 7% to 80%
11. The secondary mortgage market provides
a. A means for investors to acquire real estate loans without origination and servicing facilities
b. A way for a lender to buy real estate loans
c. Direct contact between investors and borrowers
d. Employment opportunities for those who originate and service real estate loan
12. The Federal National Mortgage Association is
a. A publicly owned corporation
b. Managed by the federal government
c. Active in buying FHA and VA mortgage loans
d. Known as Freddie Mac
13. A purchase agreement for a new condominium unit calls for the refrigerator to be financed along with the purchase of the unit. Which of the following statements is NOT true?
a. The refrigerator will be itemized and included in the mortgage
b. The mortgage will be called a package mortgage
c. The buyer may not sell the refrigerator without the lender’s permission
d. The rate of interest on the value of the refrigerator may be higher than that on the real property
14. Which of the following is NOT correct with regard blanket mortgages?
a. More than one property serves as security for a single mortgage
b. Neither property may be sold until the entire debt is repaid
c. The mortgage may contain a partial release clause
d. The sale of either property may invoke a due-on-sale clause
15. Predatory lending is
a. Making loans to minors
b. Making loans in only certain neighborhoods
c. Unscrupulous lending by talking advantage of consumers lack of knowledge
d. Is legal in most states