Barney Fletcher Practice Exam 5
Actual Exam Questions & Verified Answers /Latest 2025
1. In which way are a mortgage and a mortgage note similar?
A. both are non-negotiable instruments
B. both are debt reducing instruments
C. both are contracts
D. both promise to pay the debt and are instruments of conveyance:
C. both are contracts
2. All of the following are collateral (security) for the debt except:
A. mortgage
B. note
C. security deed
D. trust deed:
B. note
3. What type of foreclosure does a lien theory state provide unless there is power of sale?
A. mortgage note
B. judicial
C. non judicial
D. deficiency judgement:
B. judicial
4. Which of the following is not true about a deed to secure debt?
A. when the document is delivered and accepted, it passes legal title
B. in order to be recorded, it is witnessed the same way a mortgage is
C. with a security deed, the lender holds equitable title
D. once recorded, the deed to secure debt creates a lien on the property:
C. with a security deed, the lender holds equitable title
5. When necessary, who forecloses in a trust deed state?
A. the beneficiary
B. the lender
C. the trustee
D. the trustor:
C. the trustee
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, 6. Interest that is calculated every month based on the remaining loan balance is best referred
to as:
A. statutory redemption
B. equitable redemption
C. simple interest
D. debt service:
C. simple interest
7. which best describes the difference between a fully amortized loan and a balloon note?
A. a balloon note shows no decrease in the loan balance, whereas a fully amortized loan
shows a decrease as the payments are made
B. a balloon note includes a balloon payment on interest where a fully amor-tized loan
does not
C. a fully amortized loan extinguishes the loan in equal payments, whereas a partially
amortized loan does not
D. a balloon note extinguishes the loan in equal payments, whereas a fully amortized loan
does not:
C. a fully amortized loan extinguishes the loan in equal payments, whereas a partially amortized loan
does not
8. A fixed interest rate loan wherein the monthly payment starts low and then increases is
a/an:
A. accelerated mortgage
B. graduated payment mortgage
C. ARM
D. escalator clause:
B. graduated payment mortgage
9. A mortgage loan on which the interest rate rises and falls with changes in the prevailing
rates or indexes is a/an:
A. defeasance clause
B. graduated payment mortgage
C. ARM
D. FHA 245
C. ARM
10. Which mortgage clause allows a lender to regain their investment if a borrower does not
pay his payment?
A. acceleration clause
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Actual Exam Questions & Verified Answers /Latest 2025
1. In which way are a mortgage and a mortgage note similar?
A. both are non-negotiable instruments
B. both are debt reducing instruments
C. both are contracts
D. both promise to pay the debt and are instruments of conveyance:
C. both are contracts
2. All of the following are collateral (security) for the debt except:
A. mortgage
B. note
C. security deed
D. trust deed:
B. note
3. What type of foreclosure does a lien theory state provide unless there is power of sale?
A. mortgage note
B. judicial
C. non judicial
D. deficiency judgement:
B. judicial
4. Which of the following is not true about a deed to secure debt?
A. when the document is delivered and accepted, it passes legal title
B. in order to be recorded, it is witnessed the same way a mortgage is
C. with a security deed, the lender holds equitable title
D. once recorded, the deed to secure debt creates a lien on the property:
C. with a security deed, the lender holds equitable title
5. When necessary, who forecloses in a trust deed state?
A. the beneficiary
B. the lender
C. the trustee
D. the trustor:
C. the trustee
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, 6. Interest that is calculated every month based on the remaining loan balance is best referred
to as:
A. statutory redemption
B. equitable redemption
C. simple interest
D. debt service:
C. simple interest
7. which best describes the difference between a fully amortized loan and a balloon note?
A. a balloon note shows no decrease in the loan balance, whereas a fully amortized loan
shows a decrease as the payments are made
B. a balloon note includes a balloon payment on interest where a fully amor-tized loan
does not
C. a fully amortized loan extinguishes the loan in equal payments, whereas a partially
amortized loan does not
D. a balloon note extinguishes the loan in equal payments, whereas a fully amortized loan
does not:
C. a fully amortized loan extinguishes the loan in equal payments, whereas a partially amortized loan
does not
8. A fixed interest rate loan wherein the monthly payment starts low and then increases is
a/an:
A. accelerated mortgage
B. graduated payment mortgage
C. ARM
D. escalator clause:
B. graduated payment mortgage
9. A mortgage loan on which the interest rate rises and falls with changes in the prevailing
rates or indexes is a/an:
A. defeasance clause
B. graduated payment mortgage
C. ARM
D. FHA 245
C. ARM
10. Which mortgage clause allows a lender to regain their investment if a borrower does not
pay his payment?
A. acceleration clause
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