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.
None of the answers are correct
B.
Conveyance clause
C.
Transfer 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.
amortization.
B.
hypothecation.
C.
Ieverage.
D.
alienation.
Question #3
Moneys collected in advance from borrowers to assure the payment of recurring costs are known as:
A.
none of the answers are correct.
B.
safety accounts.
C.
accumulation accounts.
D.
impound accounts.
Question #4
Which of the following liens are NOT eliminated by a foreclosure sale?
A.
State, county or city taxes
B.
State, county, or city assessments
C.
All answers are correct
D.
Federal tax liens
Question #5
Another term for the trustee is:
A.
third party.
B.
borrower.
C.
lender.
D.
escrow company.
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.
assumption clause.
C.
damage clause.
D.
demand clause.
Question #7
What document does a trustee record after being notified by the lender of the trustor’s nonpayment?
A.
Notice of Default
B.
Notice of Deficiency
C.
Notice of Foreclosure
D.
Request for Notice
Question #8
What do we call a borrower who secures a loan through a trust deed?
A.
Trustor
B.
Holder in due course
C.
Beneficiary
D.
Trustee
Question #9
What provision in an instrument of finance would permit a change in the priority of liens on a property?
A.
Acceleration clause
B.
Alienation clause
C.
Subordination 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.
Reverse annuity mortgage
C.
Fixed rate mortgage
D.
Adjustable rate mortgage
Question #11
Should the trustor default, the trustee may have to sell the property for the:
A.
trustor.
B.
trustee.
C.
beneficiary.
D.
title insurance company.
Question #12
Which of the following is NOT a party to a trust deed?
A.
Beneficiary
B.
Grantor
C.
Trustee
D.
Trustor
Question #13
The trustor is also known as the:
A.
borrower.
B.
escrow.
C.
third party.
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.
assignee.
B.
holder in due course.
C.
attorney-in-fact.
D.
Iimited note holder.
Question #16
Which of the following is FALSE concerning the Annual Percentage Rate (APR)?
A.
It includes all credit costs.
B.
It is expressed as a weekly rate.
C.
It is expressed as a percentage rate.
D.
It is expressed as an annual rate.
Question #17
The "nominal interest rate" is:
A.
the current interest rate.
B.
the effective interest rate.
C.
compounded daily.
D.
stated in the note.
Question #18
The basic instrument used to evidence an obligation or debt is a:
A.
Iand contract.
B.
trust deed.
C.
mortgage
D.
promissory note.
Question #19
The 1% loan fee on FHA loans is usually paid by the:
A.
broker.
B.
seller.
C.
buyer.
D.
lender.
Question #20
A lender charges an origination fee, which includes points. One “point” is equal to:
A.
10% of the loan amount.
B.
100% of the loan amount.
C.
1% of the loan amount.
D.
.01% of the loan amount.
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