Real Estate 101 - Real Estate Principles » Fall 2021 » Chapter 9 Quiz
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Question #1
With what type of clause does the entire balance of the loan become due and payable when an owner is alienating, transferring, or conveying a property?
A.
Transfer clause
B.
None of the answers are correct
C.
Conveyance clause
D.
Alienation clause
Question #2
The practice of purchasing real estate using a small amount of your own money and a large portion of borrowed funds is known as:
A.
alienation.
B.
hypothecation.
C.
amortization.
D.
Ieverage.
Question #3
Moneys collected in advance from borrowers to assure the payment of recurring costs are known as:
A.
impound accounts.
B.
accumulation accounts.
C.
safety accounts.
D.
none of the answers are correct.
Question #4
Which of the following liens are NOT eliminated by a foreclosure sale?
A.
State, county, or city assessments
B.
Federal tax liens
C.
State, county or city taxes
D.
All answers are correct
Question #5
Another term for the trustee is:
A.
escrow company.
B.
borrower.
C.
third party.
D.
lender.
Question #6
A clause in a financial instrument that allows a lender to demand immediate payment of the entire note balance is known as a(n):
A.
acceleration clause.
B.
demand clause.
C.
damage clause.
D.
assumption clause.
Question #7
What document does a trustee record after being notified by the lender of the trustor’s nonpayment?
A.
Notice of Deficiency
B.
Notice of Default
C.
Request for Notice
D.
Notice of Foreclosure
Question #8
What do we call a borrower who secures a loan through a trust deed?
A.
Trustee
B.
Trustor
C.
Holder in due course
D.
Beneficiary
Question #9
What provision in an instrument of finance would permit a change in the priority of liens on a property?
A.
Subordination clause
B.
Alienation clause
C.
Acceleration clause
D.
MPR provision
Question #10
What type of loan allows the interest rate to "fluctuate" depending on money market conditions?
A.
Graduated payment mortgage
B.
Fixed rate mortgage
C.
Adjustable rate mortgage
D.
Reverse annuity mortgage
Question #11
Should the trustor default, the trustee may have to sell the property for the:
A.
trustee.
B.
title insurance company.
C.
beneficiary.
D.
trustor.
Question #12
Which of the following is NOT a party to a trust deed?
A.
Grantor
B.
Trustor
C.
Trustee
D.
Beneficiary
Question #13
The trustor is also known as the:
A.
borrower.
B.
third party.
C.
escrow.
D.
Iender.
Question #14
The trustee issues a "reconveyance deed" when the promissory note is:
A.
in default.
B.
recorded.
C.
expired.
D.
paid in full.
Question #15
A person who takes a negotiable instrument from another with no knowledge of defect is called a(n):
A.
attorney-in-fact.
B.
holder in due course.
C.
assignee.
D.
Iimited note holder.
Question #16
Which of the following is FALSE concerning the Annual Percentage Rate (APR)?
A.
It is expressed as an annual rate.
B.
It is expressed as a percentage rate.
C.
It includes all credit costs.
D.
It is expressed as a weekly rate.
Question #17
The "nominal interest rate" is:
A.
the effective interest rate.
B.
stated in the note.
C.
compounded daily.
D.
the current interest rate.
Question #18
The basic instrument used to evidence an obligation or debt is a:
A.
trust deed.
B.
Iand contract.
C.
promissory note.
D.
mortgage
Question #19
The 1% loan fee on FHA loans is usually paid by the:
A.
buyer.
B.
lender.
C.
broker.
D.
seller.
Question #20
A lender charges an origination fee, which includes points. One “point” is equal to:
A.
10% of the loan amount.
B.
.01% of the loan amount.
C.
1% of the loan amount.
D.
100% of the loan amount.
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