Ch 9 REE 3043 Test Questions and
Answers.
1. The element of an adjustable interest rate that is the "moving part" is the:
A. Teaser Rate
B. Index
C. Margin
Adjustment Period
E. None of these. - Answer Index
2. Which of these aspects of a mortgage loan will be addressed in the note rather than in the
mortgage?
A. Prepayment penalty
B. Escrow requirement
C. Takings
D. Acceleration
E. Maintainance of property - Answer Prepayment penalty
3. A lender may reserve the right to require prepayment of a loan at any time they see fit
through a(n):
A. Taking clause
B. Acceleration Clause
C. Demand Clause
D. Due-On-Sale Clause
E. Escrow clause - Answer Demand clause
4. When a buyer of a property with an existing mortgage loan acquires the property without
signing the note for an existing loan the buyer is acquiring the property:
A. By assumption
B. By contract for deed
C. By deed of trust
D. By default
E. Subject to the mortgage - Answer Subject to the mortgage
5. Which if these points in a mortgage loan would be addressed in the mortgage (possibly in the
note as well)?
, A. Loan Amount
B. Interest Rate
C. Late Fees
D. Escrows
E. Loan Term - Answer Escrows
6. To finance property where either the borrower, the property, or both fail to qualify for the
standard mortgage financing, a common nonmortgage solution is through the:
A. Subprime Loan
B. Deed of trust
C. Unsecured loan
D. Contract for Deed
E. Balloon Loan - Answer Contract for deed.
7. Ways that a lender may respond to a defaulted loan without resorting to foreclosure include
all of the following except
A. Offer credit counseling
B. Allow short sale to a third party
C. Defer or forgive some of the past-due payments
D. Accelerate the debt
E. Accept a deed in lieu of foreclosure - Answer Accelerate the debt
8. If the lender in a standard first mortgage wishes to foreclose cost effectively, it is crucial to
have which clause in the mortgage
A. Acceleration Clause
B. Exculpatory Clause
C. Demand Clause
D. Defeasance Clause
E. Taking Clause - Answer Acceleration clause
9. A common risk that frequently interferes with a lender's efforts to work out a defaulted loan
through either nonforeclosure means or foreclosure is
A. Equity of redemption
B. Statutory right of redemption
C. Exculpatory clauses
D. Bankruptcy
Answers.
1. The element of an adjustable interest rate that is the "moving part" is the:
A. Teaser Rate
B. Index
C. Margin
Adjustment Period
E. None of these. - Answer Index
2. Which of these aspects of a mortgage loan will be addressed in the note rather than in the
mortgage?
A. Prepayment penalty
B. Escrow requirement
C. Takings
D. Acceleration
E. Maintainance of property - Answer Prepayment penalty
3. A lender may reserve the right to require prepayment of a loan at any time they see fit
through a(n):
A. Taking clause
B. Acceleration Clause
C. Demand Clause
D. Due-On-Sale Clause
E. Escrow clause - Answer Demand clause
4. When a buyer of a property with an existing mortgage loan acquires the property without
signing the note for an existing loan the buyer is acquiring the property:
A. By assumption
B. By contract for deed
C. By deed of trust
D. By default
E. Subject to the mortgage - Answer Subject to the mortgage
5. Which if these points in a mortgage loan would be addressed in the mortgage (possibly in the
note as well)?
, A. Loan Amount
B. Interest Rate
C. Late Fees
D. Escrows
E. Loan Term - Answer Escrows
6. To finance property where either the borrower, the property, or both fail to qualify for the
standard mortgage financing, a common nonmortgage solution is through the:
A. Subprime Loan
B. Deed of trust
C. Unsecured loan
D. Contract for Deed
E. Balloon Loan - Answer Contract for deed.
7. Ways that a lender may respond to a defaulted loan without resorting to foreclosure include
all of the following except
A. Offer credit counseling
B. Allow short sale to a third party
C. Defer or forgive some of the past-due payments
D. Accelerate the debt
E. Accept a deed in lieu of foreclosure - Answer Accelerate the debt
8. If the lender in a standard first mortgage wishes to foreclose cost effectively, it is crucial to
have which clause in the mortgage
A. Acceleration Clause
B. Exculpatory Clause
C. Demand Clause
D. Defeasance Clause
E. Taking Clause - Answer Acceleration clause
9. A common risk that frequently interferes with a lender's efforts to work out a defaulted loan
through either nonforeclosure means or foreclosure is
A. Equity of redemption
B. Statutory right of redemption
C. Exculpatory clauses
D. Bankruptcy
