Deck 15: Financing in the Transfer of Real Estate

Question 1

A mortgage need not be in writing to be valid.

Answer 1

False

Question 2

Under the lien theory, the mortgagor has the right to possession of the property until there has been a foreclosure.

Answer 2

True

Question 3

The note or debt instrument should be referenced in the mortgage.

Answer 3

True

Question 4

In a lien state, the mortgagee holds title to the property.

Question 5

Acceleration clauses in the note or mortgage are void.

Question 6

Penalties for late payment of mortgages are valid.

Question 7

A mortgagee who allows late payments loses its right to foreclose.

Question 8

The general priority rule between recorded land interests is first in time, first in right.

Question 9

A PMSI in fixtures recorded before attachment will have priority over a mortgage with an after-acquired property clause.

Question 10

A mortgagee (with a properly recorded mortgage) who is obligated to advance future funds will not have its interest attach until funds are actually given to the mortgagor.

Question 11

"Due-on-sale" clauses are valid in residential mortgage loans.

Question 12

In a subject to transfer, the grantee will be personally liable to the mortgagee.

Question 13

In an assumption, the buyer is personally liable to the mortgagee.

Question 14

In a subject to sale, the mortgagee loses its right to foreclose.

Question 15

When a buyer refinances his/her purchase of property, the seller is still liable to the mortgagee.

Question 16

There are three parties in a deed of trust financing arrangement.

Question 17

In the deed of trust financing arrangement, the land owner is the trustee.

Question 18

In the deed of trust financing arrangement, the lender is the beneficiary.

Question 19

A mortgagee can provide for a power of sale in a mortgage.

Question 20

In a wrap-around, the buyer is personally liable on the existing mortgage.

Question 21

A purchase contract is the same thing as an installment contract.

Question 22

After a power of sale is exercised, there is no right of redemption.

Question 23

A Brundage clause is a due-on-sale clause.

Question 24

Giving the amount of any payment in an ad is an example of a triggering term requiring further disclosure under Regulation Z.

Question 25

Brokers can be classified as lenders for purposes of Regulation Z disclosure requirements.

Question 26

Regulation Z is inapplicable to second mortgages on residential property.

Question 27

Judicial foreclosure does not require notice to the mortgagor.

Question 28

Under an installment contract, the seller retains title until there is payment in full.

Question 29

In a subdivision trust, the buyer is the only beneficiary.

Question 30

Default under a mortgage is generally defined by state statute.

Question 31

Deficiency judgments on residential mortgages are unconstitutional.

Question 32

In a subject to sale, the buyer is not personally liable to the seller's lender.

Question 33

An ARMS index can be established by the lending institution making the ARM loan.

Question 34

In a lien state, mortgage foreclosures can be accomplished without court proceedings.

Question 35

A subdivision trust is a method of financing in which both the buyer and seller are beneficiaries.

Question 36

Loan workouts are the same as deeds in lieu of foreclosure.

Question 37

The Secure and Fair Enforcement of the Mortgage Licensing Act regulates appraisers.

Question 38

Lenders have no liability for canceling a loan commitment.

Question 39

Reverse mortgages allow retired homeowners to use the equity in the home until their home is sold upon the homeowners' death.

Question 40

The sub-prime mortgage market cannot be regulated except by the federal government.

Question 41

Interest-only mortgages are void in many states.

Question 42

Home equity loans have special disclosure provisions under Regulation Z.

Question 43

The Home Mortgage Disclosure Act is the means the federal government uses to monitor approval rates by race.

Question 44

If a lender makes a mistake in the disclosure of the APR on a loan, there is a 30-day right of rescission for the home buyer.

Question 45

"Total move-in costs of $3,500" is an example of triggering language for purposes of credit ad disclosures.

Question 46

The Community Reinvestment Act does not apply to banks, only mortgage lenders.

Question 47

The Community Reinvestment Act contributed to the growth of the subprime lending market.

Question 48

The growth in LMI loans was fueled by Fannie Mae's purchases of such loans.

Question 49

Because government-backed mortgage loan standards were loosened during the growth of the subprime market, conventional lenders adopted the same standards.

Question 50

The American Recovery and Reinvestment Act does not permit government funds to go to private assistance for home buyers having trouble paying their mortgages.

Question 51

There is little difference in the foreclosure rates on LMI mortgage loans vs. conventional mortgage loans.

Question 52

Flippers are also known as speculators.

Question 53

Mortgage brokers' compensation was based on the number of loans as well as the amount of those loans and the interest rate obtained for them.

Question 54

Flipping is another name for the continuing refinancing of a home mortgage to take advantage of declining interest rates.

Question 55

The Secure and Fair Enforcement of the Mortgage Licensing Act of 2008 provides mortgage relief for home buyers who secured their mortgages prior to January 2007.

Question 56

Some state laws now place time limits on when lenders can begin foreclosures on home mortgages.

Question 57

The FHFA was eliminated from the federal government under the Housing Economic Recovery Act.

Question 58

Fannie Mae, prior to the 2008 collapse, permitted borrowers to finance up to 97% of the home purchase price.

Question 59

The Hope for Homeowners Act allows relief for single-family, condo, and townhome mortgagors.

Question 60

The Troubled Asset Relief Program (TARP) does not permit the federal government to purchase mortgages directly.

Question 61

A deed of trust financing arrangement prevents the problems of separated note holders and mortgage holders in foreclosure.

Question 62

MERS cannot hold a valid mortgage for purposes of foreclosure.

Question 63

MERS has the same information that is available in the public recording offices for land records.

Question 64

The Dodd-Frank Act created a new federal agency to handle all consumer debt regulation.

Question 65

The Mortgage Disclosure Improvement Act requires greater disclosure under Regulation Z.

Question 66

Small errors in lending disclosure statements are acceptable and will not result in the loss of mortgage rights.

Question 67

Appraisals now require a physical visit to the property.

Question 68

The new laws on appraisals allow lenders to have a say on the final appraisal figure.

Question 69

Piggyback mortgages have become impossible to create under the new regulatory requirements for closing loans.

Question 70

The Hope for Homeowners Act is available for all homeowners who are under water in their mortgages.

Question 71

Cities are using eminent domain to solve the problems created by foreclosure ghettos.

Question 72

The challenges mortgagors use in foreclosure proceedings are based on the requirement that the party foreclosing actually holds the mortgage note and lien.

Question 73

Mortgage Assistance Relief Programs are not now regulated as a result of new regulations.

Question 74

A mistake on the APR in a disclosure form for a residential loan results in a three-year right of rescission.

Question 75

Foreclosure by any party requires valid proof of an assignment from the original mortgagee.

Question 76

The MDIA eliminated the RESPA requirements.

Question 77

The loan originator changes to Regulation Z prohibits yield spread premium payments to brokers.

Question 78

The TILA and RESPA requirements are now combined under federal law to govern loan disclosures.

Question 79

Some states prohibit the mortgagee from taking possession of the mortgaged property unless and until foreclosure is complete.

Question 80

A shared-appreciation mortgage gives the lender rights in the increased value of the pledged property.