Question 1

A mortgage that permits repayment of the debt at any time without notice or penalty is called

Accepted Answer

An open mortgage permits the borrower to make repayments at any time without penalty or notice. This means that if the borrower has extra funds, they can pay off the mortgage faster without incurring any fees. In contrast, a closed mortgage has restrictions on prepayment and may have penalties for early repayment. A conventional mortgage is a standard mortgage without any government backing, while an insured mortgage has government-backed mortgage insurance. A partial mortgage is not a common term in the mortgage industry.

Question 2

A mortgagee is the holder of the and the mortgagor the holder of the _ .

Accepted Answer

The mortgagee is the holder of the legal title to the property until the mortgage is fully paid off, while the mortgagor retains the equitable title as the owner of the property.

Question 3

A borrower who conveys the interest in land as security for a loan is called

Accepted Answer

A borrower who conveys the interest in land as security for a loan is called a mortgagor. A mortgagee is the lender who provides the loan. A pledgor is someone who pledges personal property as security for a loan, and an insured is someone who has purchased an insurance policy.

Question 4

A mortgagee is

Accepted Answer

A mortgagee is a creditor who holds a security interest in real property as collateral for a loan, making them a secured creditor.

Question 5

A lender who accepts an interest in land as security for a loan is called

Accepted Answer

A mortgagee is a lender who accepts an interest in land as security for a loan. The mortgagor is the borrower who pledges the interest in land as collateral for the loan. Choice A) "a insured" is not the correct term for a lender who accepts an interest in land as security for a loan. Choice B) "a lender" is a broad term that applies to anyone who lends money, but it doesn't specifically refer to someone who accepts an interest in land as security. Choice C) "a pledgor" is someone who pledges something as collateral, but it doesn't specifically refer to an interest in land. Choice E) "a mortgagor" is the borrower who pledges the interest in land as collateral, not the lender.

Question 6

Upon a sale of property, the document that sets out the debits and credits that must be adjusted to arrive at the proper amount to be paid on closing is called the

Accepted Answer

The document that sets out the debits and credits that must be adjusted to arrive at the proper amount to be paid on closing is called the statement of adjustments. The other options mentioned are different types of documents related to property transactions such as requisitions, draft deed, charge/mortgage, and charge.

Question 7

A creditor who has no security other than the debtor's promise to pay is

Accepted Answer

A creditor who has no security other than the debtor's promise to pay is called a general creditor. They do not have any specific collateral or security interest in the debtor's assets and must rely solely on the debtor's creditworthiness and ability to repay the debt. Preferred creditors have a higher priority in the event of bankruptcy, secured creditors have collateral to back up the debt, mortgagees have a specific interest in a property, and preferential creditors are those who receive preferential treatment in bankruptcy due to their relationship with the debtor.

Question 8

Under the land titles system, mortgages are referred to as

Accepted Answer

Mortgages under the land titles system are referred to as charges, meaning they are a legal claim or lien against the property for the amount of the loan.

Question 9

An interest in land recognized by the common law is

Accepted Answer

A legal title is an interest in land recognized by common law, as it represents the formal ownership of property.

Question 10

The date for completing the sale of a real estate transaction is known as

Accepted Answer

The closing date is the date when the real estate transaction is completed and ownership is transferred to the buyer. This is the date when all legal and financial obligations are fulfilled and the keys to the property are handed over to the buyer. The other options listed do not accurately describe this specific date.

Question 11

An order by a court that ends the right of the mortgagor to redeem the mortgage within a fixed time is called

Accepted Answer

A foreclosure is a legal process that results in the mortgagor losing the right to redeem the mortgage within a fixed time. It allows the mortgagee, or lender, to take possession or sell the property to recover the outstanding loan amount.

Question 12

A clause that states that in the event of a default, the whole amount of the principal of the mortgage, plus accrued interest immediately falls due is

Accepted Answer

An acceleration clause is a provision in a mortgage or other debt agreement that allows the lender to demand payment of the entire outstanding balance if a certain event occurs, such as a default on the loan. In this case, the clause states that in the event of a default, the entire principal of the mortgage, plus any accrued interest, becomes due immediately. This is also known as a "due-on-sale" clause or a "call" clause.

Question 13

A conveyance of a interest in land as security for a debt, with the condition that if the debt is repaid the conveyance becomes void is called

Accepted Answer

This is the definition of a mortgage. It involves conveying an interest in land as security for a debt, with the condition that if the debt is repaid, the conveyance becomes void. A mortgagee is the lender, while a mortgagor is the borrower. A pledge is a similar concept but typically involves personal property rather than real estate. A security can refer to a variety of financial instruments or investments.

Question 14

Which of the following is not a typical stage in a real estate transaction?

Accepted Answer

Cleaning the premises is not a typical stage in a real estate transaction. The other options (A, B, C, and E) are all common stages in a real estate transaction.

Question 15

Which of the following is not a covenant of the mortgagor?

Accepted Answer

The covenant to execute the necessary discharge of the mortgage upon payment in full is actually a covenant of the mortgagee, not the mortgagor. This means that the mortgagee has an obligation to discharge the mortgage upon full payment by the mortgagor. The other covenants listed - to keep the property insured, to keep it in reasonable repair, to pay taxes, and to pay the debt and interest - are all covenants of the mortgagor.

Question 16

The right of the mortgagee, given by a statute or the terms of the mortgage, to sell the property upon default is called

Accepted Answer

The right of the mortgagee to sell the property upon default is commonly referred to as a power of sale. This is usually granted in the terms of the mortgage contract or by a specific statute. The mortgagee can then sell the property without needing to go through the court system, hence the term "power of sale".

Question 17

Michael misses a mortgage payment and receives a letter from the bank advising him that he owes $155,000 plus interest and costs. The bank has most likely

Accepted Answer

The bank has likely invoked the acceleration clause in the mortgage contract, which allows them to demand the entire outstanding balance of the mortgage be paid due to a missed payment. This is a common provision in mortgage contracts. The other options are less likely.

Question 18

In a foreclosure, even after the final day for redemption, the mortgagee may successfully sue the mortgagor for the debt,

Accepted Answer

The Statute of Limitations sets a specific time period within which legal action can be taken. In cases of foreclosure, the mortgagee can pursue legal action against the mortgagor for the debt until the Statute of Limitations period runs out. This timeframe varies depending on jurisdiction and type of debt, but is typically several years.

Question 19

The right of a mortgagor to redeem the property upon the payment of the debt in full is called

Accepted Answer

The right of a mortgagor to redeem the property upon the payment of the debt in full is called the equity of redemption.

Question 20

When there is a mortgage on land, the is the borrower, and the is the lender.

Accepted Answer

The borrower in a mortgage agreement is called the mortgagor, while the lender is called the mortgagee. Therefore, the correct choice is (C) mortgagor; mortgagee.

Quiz 25: Mortgages of Land and Real Estate Transactions