Deck 11: Mortgage Forms and Provisions

Question 1

A construction loan agreement will generally require that the borrower submit proof that all utilities such as water, electricity, and gas are available to the property.

Answer 1

True

Question 2

A legal document that creates a security interest in personal property is known as a financing statement.

Answer 2

False

Question 3

It is unusual for a mortgage to provide that the mortgagee shall have any claim to insurance proceeds payable as a result of a casualty of the secured property.

Answer 3

False

Question 4

A legal document that creates a security interest in personal property is known as a security agreement.

Question 5

If the personal property described in a financing statement includes fixtures, the UCC -1 financing statement must be filed in the county of the debtor's residence.

Question 6

Most mortgages provide that a lender shall have a right to receive insurance and condemnation proceeds in the event of a casualty or taking of the secured property.

Question 7

Mortgages are generally signed by both mortgagor and mortgagee.

Question 8

It is legally permissible for a lender to prohibit the sale of the mortgaged property without the lender's consent.

Question 9

A real estate loan in which the borrower is not personally responsible for the repayment of the loan is an exculpated loan.

Question 10

A construction loan agreement by its terms will make the lender an agent of the borrower and responsible for the construction or the payment of the costs of the construction.

Question 11

Mortgages are generally signed by the mortgagor.

Question 12

The provision in a construction loan agreement that requires that a certain percentage of the loan proceeds be held and not disbursed until completion of construction is known as an escrow provision.

Question 13

Construction loan agreements commonly provide that a lender will have a right to take possession of the real property in the event of default and complete the construction.

Question 14

A provision in a mortgage that requires a borrower to pay to the lender 1/12th of the taxes and 1/12 of the insurance premium with each mortgage payment is known as a habendum provision.

Question 15

Mortgages are generally signed by the mortgagee.

Question 16

A real estate loan in which the borrower is not personally responsible for the repayment of the loan is a construction loan.

Question 17

The provision in a construction loan agreement that requires that a certain percentage of the loan proceeds be held and not disbursed until completion of construction is known as a retainage provision.

Question 18

The "due on sale" provision in a mortgage means that if the mortgage is sold, the debt secured by the mortgage will become due and payable.

Question 19

If personal property consists of fixtures, the UCC financing statement must be filed in the county where the real estate is located on which the fixtures are attached.

Question 20

A provision in a mortgage that requires a borrower to pay to the lender 1/2th of the taxes and 1/12 of the insurance premium with each mortgage payment is known as an escrow provision.

Question 21

The debtor's signature is not required on a UCC -1 financing statement.

Question 22

If borrowers have joint and several liability that means that each borrower is only responsible for his or her pro rata share of the mortgage debt.

Question 23

An exculpated loan is full recourse to the borrower.

Question 24

An assignment of rents and leases is generally signed only by the property owner.

Question 25

When a default under one mortgage loan is a default under another mortgage loan, the loans are cross-defaulted.

Question 26

A cross-default means that a default under one provision of a mortgage will constitute a default under another provision of the mortgage.

Question 27

A valid security agreement must identify the debtor.

Question 28

An assignment of rents and leases must be executed by the property owner and all of the tenants.

Question 29

A cross-default means that a default under one loan document such as a mortgage would constitute a default under another loan document such as an assignment of rents.

Question 30

Many states permit UCC-1 financing statements to be filed electronically.