Upgrade to remove ads
Only $35.99/year

Finance Cram Exam 1

Terms in this set (30)

D. defeasance.
The clause in a mortgage which cancels the lender's rights and claims against pledged property when the debt is repaid is called:
A. the right to receive payments may be transferred from holder to holder.
Real estate loans are customarily evidenced by two instruments: a promissory note and a security instrument (mortgage, deed of trust, security deed). While the security instruments are not negotiable, the note is, because:
A. John decides to obtain an Owner's Title Insurance Policy.
John is under contract to purchase his new home and he has applied for a 30 year fixed rate conventional loan. Which of the following changes on the Closing Disclosure will NOT trigger a new 3 day waiting period?
C. Truth in Lending Disclosure Statement and Good Faith Estimate.
The loan estimate (LE) replaces which two disclosures?
A. Federal Home Loan Mortgage Corporation.
B. Federal National Mortgage Association.
C. MGIC investment Corporation.
D. All answers are correct.
Which of the following organizations purchases home mortgage loans from originators?
A. Federal Housing Administration.
B. Mortgage Guaranty Insurance Corporation.
C. Both A and B.**
Which of the following organizations functions as a mortgage insurance company?
A. assurance of payment of items which could affect the lender's security.
The principal advantage to the mortgagee of budget mortgages is:
B. The Veteran remains liable for payments unless released by the lender and VA.
A Veteran obtained a VA loan to purchase a home. Subsequently the home was sold via loan assumption to a non-veteran purchaser. Which of the following statements is correct?
C. Maximum loan amount by law.
Which of the following is NOT a characteristic of a VA-backed loan?
A. A plentiful supply results in lower rates.
Which of the following statements expresses the relationship between mortgage money and interest rates?
A. may seek a judgment against the debtor for the difference.
A mortgage loan had an outstanding property sold for $57,000 at public balance of $58,500 at tne tmne of foreclosure. The encumbered auction. The lender:
B. The purchase of an $80,000 home with a new first mortgage loan.
The Federal Truth-in-Lending law applies to which of the following transactions?
C. The relative cost of credit expressed as a percentage of interest.
Which of the following best describes the APR?
B. a straight loan will cost more to repay than an amortized loan,
Given the same term, interest rate and loan amount, then:
D. each payment was of a_ constant amount with decreasing portions applied to interest with each installment.
John borrowed $50,000 to be amortized over thirty years in order to purchase a home. His monthly payments were to be made under a constant mortgage plan. This means:
D. a construction loan.
A loan in which portions of funds are released as improvements are completed is known as:
D. a graduated payment loan. (GPM)
A loan which provides for the borrower to make smaller payments initially and to compensate later by making larger payments is called:
C. a trust deed.
A three-party instrument which transfers title to the third party as security for a debt owed by the first party to the second party is known as:
B. maker or mortgagor.
The person who signs a mortgage note is known as the:
B. an acceleration clause.
The clause in a mortgage which allows the lender to call the outstanding loan amount due and payable should the borrower fail to make payments on time is called:
C. the seller remains legally responsible for repayment of the loan.
When real estate is sold "subiect" to an existing loan, then:
A. equitable right of redemption.
The right to reclaim property between the time of default and foreclosure sale is known as the:
C. either A or B.
A delinquent borrower may attempt to avoid foreclosure by:
A. selling the property prior to foreclosure. B. giving the lender a deed in lieu of foreclosure.
C. either A or B.
D. neither A nor B.
B. protects the lender.
FHA mortgage insurance:
C. an adjustable rate mortgage.
A Joan which uses an index and margin to determine the rate is called:
B. may assume the current loan as an owner occupant if determined to be creditworthy by the Robinson's lender and the sellers are held secondarily liable.
Mary and James Robinson are selling the home tgey purchased 5 years ago with an FHA loan. The bew buyer:
B. $7,500
The total interest charged on a $12,000 straight loan for five years at 12 1/2% interest per annum is:
A. $11
Homer houser borrowed $60000 at 14% annual interest and agreed to make monthly payments of $711 on his 30 year amortized loan. Of his first months payment, how mich was applied to principal?
B. 11%
If an interest payment of $115.50 is made every three months on a $4,200 loan, what is the annual interest rate?
1. 12,000 X 9% = 1080
2. 1080/12= 90
3 3,780/90= 42

D. 42
Tippins borrowed $12,000 on a straight note secured by a mortgage against the home. Tippins made monthly payments of interest computed on a 9 percent annual rate for the full term of the note. The total interest payments were $3,780.00. The term of the note was for how many months?
Other sets by this creator