REE 3043 Exam 3- FSU Woodyard
Questions and Correct Answers 2026
Updated.
Acceleration Clause - Answer a clause which grants the holder of the note the rights to all
remaining payments on the loan should the borrower default
due on sale clause - Answer an acceleration clause that is enforceable upon the sale of the
property
Interest escalation and adjustment clause - Answer a clause that allows lenders to adjust the
interest rate charged with respect to some stated index
prepayment clause - Answer a clause that imposes a penalty (fee) on borrowers for making
early payments of principal on the amount borrowed
insurance clause - Answer a clause that requires borrowers to make payments of their hazard
insurance premium along with their periodic payments of the principal and interest
Technically, a mortgage is best described as: - Answer a contractual pledge for real estate to
serve as collateral for a loan
in the U.S. - Answer -the government encourages the development of mortgage securities
-Wall Street investment banks participate in the commercial mortgage market
-equity financing sources include life insurance companies
The secondary mortgage market serves as: - Answer a source for the sale of mortgages to
investors
Firms which assist pension funds, insurance companies, or other lender's in distributing
mortgage obligations to mortgage investors are known as: - Answer conduits
Mortgage documents containing notes with specific language about the borrower's promise to
repay loans establish what is termed: - Answer recourse financing
The public equity quadrant of real estate markets includes the following major participants: -
Answer equity REITs
, Money that is invested in shares issued and traded in securities markets of pools of mortgage
loans such as mortgage backed securities is termed: - Answer public debut
A loan in which a builder is required to obtain a forward commitment to secure construction
financing is termed: - Answer a covered loan
A clause which requires that all remaining payments are due on the loan be paid in the event of
default is termed - Answer acceleration clause
The right is given to borrowers to make up overdue payments when in default, but prior to a
sale of the property is termed the: - Answer equity right of redemption
In all states, the borrowers' rights in a mortgage contract end with the foreclosure sale. - Answer
false, in many states a statutory right of redemption period exists
In lien-theory states mortgage instruments contain power-of-sale clauses that allow foreclosure
without going to court - Answer false, in ( nonjudicial) title theory states mortgage
instruments may contain power-of-sale clause
Real estate investments in England and Japan occurs without highly competitive private
mortgage markets - Answer true
Money that flows to the lender from two sources enables the lender to participate in the
creation of a mortgage- these sources are deposits and the sale of mortgage to the secondary
mortgage market. - Answer true
in title-theory states, lenders technically receive title to property in mortgage contracts - Answer
true
Money invested directly in properties by those who take ownership and operate the properties
is termed private debt. - Answer false, the answer is private equity
Construction loans generally have higher interest rates than permanent loans, due to their
increase risk characteristics - Answer true
An agreement in which the buyer obtains a first mortgage from the seller, and thus an
institutional lender never becomes a party to the agreement, is termed a purchase money
mortgage. - Answer true
Questions and Correct Answers 2026
Updated.
Acceleration Clause - Answer a clause which grants the holder of the note the rights to all
remaining payments on the loan should the borrower default
due on sale clause - Answer an acceleration clause that is enforceable upon the sale of the
property
Interest escalation and adjustment clause - Answer a clause that allows lenders to adjust the
interest rate charged with respect to some stated index
prepayment clause - Answer a clause that imposes a penalty (fee) on borrowers for making
early payments of principal on the amount borrowed
insurance clause - Answer a clause that requires borrowers to make payments of their hazard
insurance premium along with their periodic payments of the principal and interest
Technically, a mortgage is best described as: - Answer a contractual pledge for real estate to
serve as collateral for a loan
in the U.S. - Answer -the government encourages the development of mortgage securities
-Wall Street investment banks participate in the commercial mortgage market
-equity financing sources include life insurance companies
The secondary mortgage market serves as: - Answer a source for the sale of mortgages to
investors
Firms which assist pension funds, insurance companies, or other lender's in distributing
mortgage obligations to mortgage investors are known as: - Answer conduits
Mortgage documents containing notes with specific language about the borrower's promise to
repay loans establish what is termed: - Answer recourse financing
The public equity quadrant of real estate markets includes the following major participants: -
Answer equity REITs
, Money that is invested in shares issued and traded in securities markets of pools of mortgage
loans such as mortgage backed securities is termed: - Answer public debut
A loan in which a builder is required to obtain a forward commitment to secure construction
financing is termed: - Answer a covered loan
A clause which requires that all remaining payments are due on the loan be paid in the event of
default is termed - Answer acceleration clause
The right is given to borrowers to make up overdue payments when in default, but prior to a
sale of the property is termed the: - Answer equity right of redemption
In all states, the borrowers' rights in a mortgage contract end with the foreclosure sale. - Answer
false, in many states a statutory right of redemption period exists
In lien-theory states mortgage instruments contain power-of-sale clauses that allow foreclosure
without going to court - Answer false, in ( nonjudicial) title theory states mortgage
instruments may contain power-of-sale clause
Real estate investments in England and Japan occurs without highly competitive private
mortgage markets - Answer true
Money that flows to the lender from two sources enables the lender to participate in the
creation of a mortgage- these sources are deposits and the sale of mortgage to the secondary
mortgage market. - Answer true
in title-theory states, lenders technically receive title to property in mortgage contracts - Answer
true
Money invested directly in properties by those who take ownership and operate the properties
is termed private debt. - Answer false, the answer is private equity
Construction loans generally have higher interest rates than permanent loans, due to their
increase risk characteristics - Answer true
An agreement in which the buyer obtains a first mortgage from the seller, and thus an
institutional lender never becomes a party to the agreement, is termed a purchase money
mortgage. - Answer true
