REE4204 FINAL EXAM QUESTIONS AND REVISED CORRECT ANSWERS | COMPLETE SET

REE4204 FINAL EXAM QUESTIONS AND REVISED CORRECT ANSWERS | COMPLETE SET Default occurs when the borrow fails to: - ANSWER -make payment on time -repay the interest on the loan -repay the principle of the loan The fact that a lender pays special attention to control ratio between the borrower's total housing expense and income is consistent to - ANSWER the ability to pay theory A theory states that no borrower with substantial positive equity in a property would choose to default, even though they may face difficulty to make monthly payments, is known as - ANSWER equity theory The so called Rule of 4C is represented by four words that begin with the letter C. Which of the following is NOT one of the four words? - ANSWER Conditions The primary difference between mortgage and security deed is - ANSWER Security deed can be foreclosed without going to court but mortgage must be foreclosed by the court Which of the following ratios on the borrower is LEAST important in the underwriting process? - ANSWER Current ratio or quick ratio The due-on-sale clause in a promissory note stipulates - ANSWER The entire loan balance must be repaid when the property is sold The residual method pf mortgage underwriting is used by which of the loan programs? - ANSWER VA loans In a lending transaction between the lender and the borrower, which of the following is TRUE? - ANSWER The borrower signs both the promissory note and the mortgage in order to receive money from the lender