Question 1

A clause which specifies that the mortgagor will pay all property taxes and other charges assessed against the property,even if theses charges have priority over the mortgage is typically included in a mortgage

Accepted Answer

A) True 
 B)False

Question 2

What is usually executed at the same time as a mortgage and creates the obligation to repay the loan in accordance with its terms?

Accepted Answer

A)  Recording acts
B)  Ownership interests
C)  Method of payment
D)  Promissory note

Question 3

It is a federal law that a mortgage must be recorded to be valid

Accepted Answer

A) True 
 B)False

Question 4

A property is encumbered as follows: First mortgage,A: $250,000 Second mortgage,B: $40,000
Third mortgage,C: $10,000
How much can mortgagee B pay for the property at a foreclosure sale without having to raise additional funds?

Accepted Answer

A)  $290,000
B)  $40,000
C)  $300,000
D)  $50,000

Question 5

Unless stated otherwise,the borrower is personally liable for payment of all amounts due under the terms of the note

Accepted Answer

A) True 
 B)False

Question 6

Which of the following solutions is LEAST likely to be acceptable to a mortgagee when discussing alternatives to foreclosing a property?

Accepted Answer

A)  Permanently extending the amortization period
B)  Finding someone else to assume the mortgage
C)  Providing a temporary grace period during which principal and interest are not paid
D)  Permanently reducing the interest rate

Question 7

Which of the following statements is FALSE regarding foreclosure?

Accepted Answer

A)  In judicial foreclosure,property subject to attachment and execution is limited to the mortgaged property
B)  If the sale of the mortgaged property realizes a price above the claims of the mortgage and expense of the sale,the balance goes to the mortgagor
C)  Redemption can be accomplished by paying 95% of the debt,interest and costs due to mortgage
D)  All of the above

Question 8

A mortgage agreement provides the lender with ________ interests.

Accepted Answer

A)  Unsecured
B)  Secured
C)  Nonpossesory
D)  Possesory

Question 9

A remainder cannot be mortgaged

Accepted Answer

A) True 
 B)False

Question 10

Which of the following types of bankruptcy is available to a business to reorganize and rehabilitate the debtor?

Accepted Answer

A)  Chapter 7
B)  Chapter 11
C)  Chapter 13
D)  Chapter 17

Question 11

A non-recourse loan is one in which the borrower is personally liable for payment of all amounts due under the terms of the note

Accepted Answer

A) True 
 B)False

Question 12

A fee simple estates is a type of freehold estate

Accepted Answer

A) True 
 B)False

Question 13

The Acceleration Clause says notice of all,but which of the following must be given to the mortgager?

Accepted Answer

A)  Acceleration of debt secured by the mortgage has taken place because of default
B)  Action required to cure default
C)  Time by which default must be cured
D)  Default

Question 14

A mortgage default can result from failure to pay property taxes

Accepted Answer

A) True 
 B)False

Question 15

A due on sale clause which specifies that the mortgage can accelerate the debt if the property is sold without the mortgagee's permissions is a typical clause in a mortgage document

Accepted Answer

A) True 
 B)False

Question 16

A technical default can result from failure to keep the property in repair

Accepted Answer

A) True 
 B)False

Question 17

Which of the following terms refers to an owner's right to redeem a property after foreclosure?

Accepted Answer

A)  Equity of redemption
B)  Statutory redemption
C)  Attachment
D)  Execution

Question 18

When a purchaser takes a property "subject to" an existing mortgage,the purchaser becomes personally liable for repaying the debt

Accepted Answer

A) True 
 B)False

Question 19

When is seller financing NOT used?

Accepted Answer

A)  The seller desires to take advantage of the installment method of reporting the gain from sale
B)  The buyer does not qualify for long term mortgage credit because of low down payment or difficulty meeting monthly payments
C)  Third-party mortgage financing is less expensive or easily available
D)  The seller desires to artificially raise the price of the property by offering a lower-than-market interest rate on the mortgage

Question 20

A senior mortgage holder is owed a mortgage balance of $140,000 and brings a foreclosure suit which includes all junior claimants in the suit.If the senior mortgage holder purchases the property for $140,000 at the foreclosure sale,what happens to the claim of the junior claimants?

Accepted Answer

A)  The liens of the junior claimants are unaffected and the debt is due upon sale
B)  The liens of the junior claimants are extinguished,but the debt owed to the junior claimants is unaffected
C)  The liens of the junior claimants and the debt owed to them are extinguished
D)  The liens of the junior claimants are unaffected,but the debt owed to them is extinguished

Exam 2: Basic Real Estate Financing: Notes and Mortgages

A mortgage agreement provides the lender with ________ interests.

Correct AnswerverifiedShow Answer

It is a federal law that a mortgage must be recorded to be valid

Correct AnswerverifiedShow Answer

A non-recourse loan is one in which the borrower is personally liable for payment of all amounts due under the terms of the note

Correct AnswerverifiedShow Answer

Which of the following terms refers to an owner's right to redeem a property after foreclosure?

Correct AnswerverifiedShow Answer

A technical default can result from failure to keep the property in repair

Correct AnswerverifiedShow Answer

A mortgage default can result from failure to pay property taxes

Correct AnswerverifiedShow Answer

Which of the following types of bankruptcy is available to a business to reorganize and rehabilitate the debtor?

Correct AnswerverifiedShow Answer

When a purchaser takes a property "subject to" an existing mortgage,the purchaser becomes personally liable for repaying the debt

Correct AnswerverifiedShow Answer

A due on sale clause which specifies that the mortgage can accelerate the debt if the property is sold without the mortgagee's permissions is a typical clause in a mortgage document

Correct AnswerverifiedShow Answer

Which of the following solutions is LEAST likely to be acceptable to a mortgagee when discussing alternatives to foreclosing a property?

Correct AnswerverifiedShow Answer

A remainder cannot be mortgaged

Correct AnswerverifiedShow Answer

A clause which specifies that the mortgagor will pay all property taxes and other charges assessed against the property,even if theses charges have priority over the mortgage is typically included in a mortgage

Correct AnswerverifiedShow Answer

The Acceleration Clause says notice of all,but which of the following must be given to the mortgager?

Correct AnswerverifiedShow Answer

Unless stated otherwise,the borrower is personally liable for payment of all amounts due under the terms of the note

Correct AnswerverifiedShow Answer

A fee simple estates is a type of freehold estate

Correct AnswerverifiedShow Answer

When is seller financing NOT used?

Correct AnswerverifiedShow Answer

A senior mortgage holder is owed a mortgage balance of $140,000 and brings a foreclosure suit which includes all junior claimants in the suit.If the senior mortgage holder purchases the property for $140,000 at the foreclosure sale,what happens to the claim of the junior claimants?

Correct AnswerverifiedShow Answer

A property is encumbered as follows: First mortgage,A: $250,000 Second mortgage,B: $40,000 Third mortgage,C: $10,000 How much can mortgagee B pay for the property at a foreclosure sale without having to raise additional funds?

Correct AnswerverifiedShow Answer

What is usually executed at the same time as a mortgage and creates the obligation to repay the loan in accordance with its terms?

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE regarding foreclosure?

Correct AnswerverifiedShow Answer

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