Deck 8: Mortgage and Note

Question 1

Which is an example of pledged property?

A) Estoppel
B) Covenant
C) Dedication deed
D) Real estate given as security

Answer 1

D
Real estate given as security is an example of pledged property.

Question 2

Of the following parties to a mortgage, whose interest is benefited by an acceleration clause?

A) The mortgagor
B) The mortgagee
C) A future owner
D) The trustee

Answer 2

B
The lender, or mortgagee, benefits from an acceleration clause.

Question 3

When a borrower gets behind on his loan payments, the lender could call for the entire balance due immediately based on the

A) alienation clause.
B) acceleration clause.
C) subordination clause.
D) pre-payment clause.

Answer 3

B
An acceleration clause allows the lender to call the entire balance due immediately.

Question 4

A mortgagee in a lien theory state holds

A) legal title.
B) a note.
C) naked title.
D) naked legal title.

Question 5

Unless there is a specific agreement to the contrary, the mortgage having first priority will be the

A) mortgage first recorded.
B) mortgage for the highest amount.
C) original construction loan.
D) mortgage with the earliest signature date.

Question 6

In some states, a mortgage is considered to be a lien on real property. In other states a mortgage is interpreted as

A) a bona fide purchase.
B) a transfer of title.
C) a sales contract.
D) equitable title.

Question 7

Which lien would have highest priority?

A) Property tax lien
B) Mechanic's lien
C) First mortgage or trust deed
D) The lien which is recorded first

Question 8

The parties to a mortgage are called

A) mortgagor and grantor.
B) mortgagee and beneficiary.
C) beneficiary and trustee.
D) mortgagor and mortgagee.

Question 9

A second mortgage is

A) a seller's lien.
B) a smaller loan.
C) paid off 50/50 with a first mortgage at foreclosure.
D) junior to a superior mortgage lien.

Question 10

The phrase "jointly and severally liable" in a note or bond applies when there are two or more

A) makers.
B) obligees.
C) trustees.
D) holders.

Question 11

A "due on sale" clause

A) may be called a subordination clause.
B) gives the lender the right to call the entire loan balance upon alienation.
C) is the right of a mortgagor to repay a loan.
D) gives the mortgagor the right to sell his property with a loan assumption by the buyer.

Question 12

A property is sold and the buyer promises the seller in writing that he, the buyer, will repay the existing loan. This is called

A) assuming the loan.
B) buying down the loan.
C) loan satisfaction.
D) a partial release.

Question 13

A promissory note

A) describes the property being hypothecated.
B) is the primary evidence of a loan.
C) is an agreement not to do a certain thing.
D) is not negotiable when secured by a mortgage.

Question 14

Barry purchased Bob's home without accepting obligation for the existing loan. Barry is said to be buying the house

A) subject to the loan.
B) with an assumption of the loan.
C) with an assumption by substitution of the loan.
D) by contract for equitable title.

Question 15

A borrower who wanted to make a monthly payment larger than that called for by the note, could do so if the note contains a

A) prepayment privilege.
B) grace period.
C) prepayment penalty.
D) subordination clause.

Question 16

Which of the following claims against a real property interest would be the first to be satisfied?

A) First trust deed
B) Second trust deed
C) Property taxes
D) Newly filed IRS tax lien

Question 17

In the United States, the instrument most commonly used to evidence a debt on real property is

A) a promissory note.
B) a mortgagee's title policy.
C) a bill of sale.
D) an earnest money agreements.

Question 18

An alienation clause in a mortgage loan is to the advantage of the

A) borrower.
B) lender.
C) mortgagor.
D) seller.

Question 19

A mortgage or trust deed is considered to be

A) an estate in land.
B) a promissory note.
C) chattel.
D) debt security.

Question 20

When a loan evidenced by a note is secured by a mortgage, the funds are furnished by the

A) grantor.
B) beneficiary.
C) grantee.
D) lender.

Question 21

In a promissory note, the term "principal" refers to the borrower.

Question 22

The right, which allows the mortgagor to regain his property following a mortgage foreclosure, is known as

A) right of redemption.
B) due on sale.
C) satisfaction of mortgage.
D) defeasance.

Question 23

Provisions for the defeat of a mortgage are found in the defeasance clause.

Question 24

Betty is six months behind on her mortgage payments. Foreclosure by public auction has been ordered. The sale has not been completed. Betty may redeem her property by paying the

A) last six months payments.
B) full amount of the loan balance.
C) loan balance plus accrued interest.
D) loan balance, accrued interest and the accumulated cost of the foreclosure action and sale.

Question 25

Mogan and David buy a furnished house. They assume and agree to the existing mortgage. They will need a note and mortgage.

Question 26

That portion of a mortgage that requires the borrower to preserve and maintain the pledged property is called the covenant of good repair.

Question 27

To use property as security for a debt without giving up possession is called hypothecation.

Question 28

Who benefits the most by the inclusion of a subordination clause in a mortgage?

A) Borrower
B) Lender
C) Selling broker
D) Trustee

Question 29

When a clause in a mortgage allows the lender to proceed against a borrower's other assets if the foreclosure sale does not satisfy the debt, the result is called a

A) statutory redemption.
B) deficiency judgment.
C) equity of redemption.
D) foreclosure redemption.

Question 30

A mortgagor signs a deed conveying title to the mortgagee, leaving the mortgagee without recourse. This is an example of

A) deed of surrender.
B) deed in lieu of foreclosure.
C) satisfaction of mortgage.
D) defeasance.

Question 31

Which of the following requires a public sale?

A) Strict foreclosure
B) Entry and possession
C) Deed in lieu of foreclosure
D) Power of sale

Question 32

An acceleration clause most nearly means to speed up the payments.

Question 33

A legal description of the property typically appears in a promissory note.

Question 34

If a foreclosed property has sold for less than the loan amount, the difference between the indebtedness and the sale price of the real estate at the foreclosure sale is called the

A) net price.
B) deficit.
C) net market value.
D) deficiency.

Question 35

A borrower wants provisions written into his mortgage whereby the lender will remove a portion of the property from the mortgage upon partial repayment of the loan. The borrower would ask for an alienation clause.

Question 36

If an owner of a single-family residence defaults on his mortgage, it can

A) not be foreclosed if an ALTA title insurance policy insured it.
B) be foreclosed on.
C) not be foreclosed on if the mortgage went into effect before 1978.
D) only be foreclosed on if an ALTA title insurance policy insured it.

Question 37

The right of the mortgagor to reclaim his property upon payment in full of the obligation is

A) reconveyance.
B) redemption.
C) recapture.
D) right of deficiency.

Question 38

A mortgagee allows a clause in his contract stating that another lender's interest will be allowed to take precedence over his own. This clause is a subordination clause.

Question 39

A beneficiary allows a clause in his contract stating that another lender's interest will be allowed to take precedence over his at some later date. This clause is known as

A) a subrogation clause.
B) a rogata clause.
C) a subordination clause.
D) hypothecation.

Question 40

The mortgage holding the highest priority would be the one that is recorded first.

Question 41

When a property sells at a foreclosure sale for less than the debt, a(n)______________________________ may allow the lender to proceed against the borrower's other unsecured assets.

Question 42

A clause that allows the lender to demand immediate payment of the entire balance on a note if the borrower misses the obligatory payments is known as a(n)____________________ clause.

Question 43

A power of sale in a mortgage gives the lender the power to take ownership and sell the mortgaged property without taking the issue to court.

Question 44

A(n)____________________ clause allows the lender to call the entire balance due if the borrower sells or conveys the mortgaged property.

Question 45

A nonjudicial foreclosure does not go to court and is not heard by a judge.

Question 46

When a lender voluntarily takes a lower position than he would normally be entitled to the process is known as ____________________.

Question 47

A(n)____________________ foreclosure does not go to court and is not heard by a judge.

Question 48

The covenant of _________________________ requires the borrower to keep the mortgaged property in good condition.

Question 49

In a promissory note the entity to which the debt is owed is known as the ____________________ or ____________________.

Question 50

In the covenant of good repair the borrower promises not to remove or demolish any buildings or improvements.

Question 51

A partial release would allow a developer to release some of the mortgaged property from the mortgage collateral.

Question 52

In a foreclosure, a surplus money action would be filed by the junior mortgage holder.

Question 53

____________________ means the borrower retains the right to possess and use the property while it serves as collateral.

Question 54

Strict foreclosure is a nonjudicial foreclosure without a judicial sale and usually without a statutory redemption period.

Question 55

In ____________________ theory states, the mortgage gives only a lien right to the lender and the borrower retains title.

Question 56

Any mortgage with a lower priority than the first mortgage is known as a ____________________ mortgage.

Question 57

A lawsuit, filed by the lender, requesting that a borrower's interest in his property be cut off is called a defeasance suit.

Question 58

At the same time that a lawsuit is filled with the court, a notice of lis pendens is also filed with the court.

Question 59

A deed in lieu of foreclosure relieves the lender of foreclosing and waiting out any required redemption period.

Question 60

A deed of trust differs from a traditional mortgage in that it is a three-party agreement.

Question 61

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
voluntary acceptance of a lower mortgage priority position than one would otherwise be entitled to

Question 62

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
the usual procedure by which foreclosed properties are sold

Question 63

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a clause in a mortgage that gives the mortgagee the right to conduct a foreclosure sale without first going to court

Question 64

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a judgment against a borrower if the sale of a mortgaged property at foreclosure does not bring enough to pay the balance owing

Question 65

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
the buyer of an already mortgaged property makes the payment but does not take personal responsibility for the loan

Question 66

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
the mortgage loan with highest priority for repayment in the event of foreclosure

Question 67

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a deed given to a trustee as security for a loan

Question 68

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a clause in a mortgage stating that the mortgage is defeated if the borrower repays the accompanying note on time

Question 69

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
one who gives a mortgage;the borrower

Question 70

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a lawsuit filed by a lender that asks a court to set a time limit on how long a borrower has to redeem her property

Question 71

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a document wherein personal property is used as security for a promissory note

Question 72

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
the buyer personally obligates himself to repay an existing mortgage loan as a condition of the sale

Question 73

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
the evidence of debt;contains amount owed, interest rate, repayment schedule, and a promise to pay

Question 74

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
release of a portion of a property from a mortgage

Question 75

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
the right of a borrower, after a foreclosure sale, to reclaim the property by repaying the defaulted loan

Question 76

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
an agreement that is considered to be a mortgage in its intent even though it may not follow the usual mortgage wording

Question 77

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a document by which property secures the repayment of the debt

Question 78

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
any mortgage lower than a first mortgage in priority

Question 79

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
allows the lender to declare the loan due if the borrower defaults

Question 80

Choose the one most appropriate answer for each.
a.acceleration clause
k.foreclosure
b.alienation clause
l.junior mortgage
c.assumption
m.mortgage
d.chattel mortgage
n.mortgagor
e.deed of trust
o.partial release
f.defeasance clause
p.power of sale
g.deficiency judgment
q.promissory note
h.equitable mortgage
r.public auction
i.equity of redemption
s.subject to
j.first mortgage
t.subordination
a clause in a mortgage that allows a lender to call the loan due if the property changes ownership;also known as a due-on-sale clause