Real Estate Finance Exam 2024 Questions And Answers 100% Correct!

For all practical purposes, an "Alienation Clause" is basically the same as a: a) Call Clause b) Acceleration Clause c) Due on Sale Clause d) Defeasance Clause - ANSWERSc) Due on Sale Clause When the lender determines the amount of money to loan to a borrower by using a percentage of the property's appraisal or sales price, they are trying to determine the: a) Loan-to-Value Ratio b) Interest rate for the loan c) Origination fees d) Borrower's ability to repay the loan - ANSWERSa) Loan-to-Value Ratio An insurance policy that protects the lender when there is increased risk due to low down payment is known as: a) Junior Mortgage Insurance b) Standard Homeowner's Insurance c) Term Life Insurance for the borrower d) PMI - Private Mortgage Insurance - ANSWERSd) PMI - Private Mortgage Insurance What are the two most common documents used in real estate financing? a) Mortgage and Subordination Agreement b) Promissory Note and either a Mortgage or a Deed of Trust c) Junior Mortgage and a Reduction Certificate d) Deed of Title and Deed of Trust - ANSWERSb) Promissory Note and either a Mortgage or a Deed of Trust In a title theory state, the mortgage or a deed of trust is still considered a: a) more important than in a Lien Theory state b) the Lender's statement of the balance remaining on the loan c) transfer of legal title to the lender d) more valuable than any of Donald Trump's Casino stocks - ANSWERSc) transfer of legal title to the lender Lenders prefer a Deed of Trust over a mortgage because: a) it is easier for the Lender to foreclose if the borrower defaults b) the Deed of Trust contains fewer Latin terms to translate c) a third-party beneficiary has to be present when the buyer signs it d) the Lender can charge a higher rate of interest with a Deed of Trust - ANSWERSa) it is easier for the Lender to foreclose if the borrower defaults A deed of Trust contains a "Trustee", whereas a mortgage does not. What is a Trustee? a) The same person as the Beneficiary b) An independent third-party that represents neither borrower nor lender c) Another term for mortgagee d) Both "a" and "c" - ANSWERSb) An independent third-party that represents neither borrower nor lender When the loan is paid, the Promissory Note is marked "Paid in Full" and returned to the borrower along with: