Yha - Unit 05 Quiz (Chapters 15 & 16)

50 Questions | Total Attempts: 8296

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Course Quizzes & Trivia

90-Hour Broker Pre-License Course Quizzes


Questions and Answers
  • 1. 
    Under the lien theory, the equitable title to the property is held by the
    • A. 

      Mortgagee.

    • B. 

      Mortgagor.

    • C. 

      Trustor.

    • D. 

      Trustee.

  • 2. 
    Charging more interest than is legally allowed is called
    • A. 

      Escheat.

    • B. 

      Usury.

    • C. 

      A deficiency.

    • D. 

      An estoppel.

  • 3. 
    A mortgagor is the one who
    • A. 

      Gives the mortgage.

    • B. 

      Holds the mortgage.

    • C. 

      Provides the mortgage funds.

    • D. 

      Forecloses on the mortgage.

  • 4. 
    A promissory note
    • A. 

      May not be executed in connection with a real estate loan.

    • B. 

      Is an agreement to perform or not to perform certain acts.

    • C. 

      Is the primary evidence of a debt.

    • D. 

      Is a guarantee by a government agency.

  • 5. 
    An articles of agreement for deed (land contract) provides for the
    • A. 

      Sale of unimproved land only.

    • B. 

      Sale of real property under an option agreement.

    • C. 

      Conveyance of legal title at a future date.

    • D. 

      Immediate transfer of reversionary rights.

  • 6. 
    The finance fee charged by the lender to make the loan is
    • A. 

      A prepayment penalty.

    • B. 

      An advance interest payment.

    • C. 

      A loan origination fee.

    • D. 

      A prepayment of mortgage insurance.

  • 7. 
    The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the
    • A. 

      Amortization ratio.

    • B. 

      Loan-to-value ratio.

    • C. 

      Debt-to-equity ratio.

    • D. 

      Capital-use ratio.

  • 8. 
    If the amount realized at the sheriff's sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to
    • A. 

      The mortgagor.

    • B. 

      The mortgagee.

    • C. 

      The sheriff's office.

    • D. 

      The county.

  • 9. 
    If a borrower defaults and the court simply awards the lender full legal title, what kind of foreclosure has taken place?
    • A. 

      Judicial

    • B. 

      Nonjudicial

    • C. 

      Simple

    • D. 

      Strict

  • 10. 
    An existing mortgage loan can have its lien priority lowered through the use of a
    • A. 

      Hypothecation agreement.

    • B. 

      Satisfaction of mortgage.

    • C. 

      Subordination agreement.

    • D. 

      Reconveyance of mortgage.

  • 11. 
    If a property sold as a mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for
    • A. 

      A default judgment.

    • B. 

      A deficiency judgment.

    • C. 

      Liquidated damages.

    • D. 

      Punitive damages.

  • 12. 
    The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is what clause?
    • A. 

      Judgment

    • B. 

      Escalator

    • C. 

      Forfeiture

    • D. 

      Acceleration

  • 13. 
    When a mortgage loan has been paid in full, it is important for borrowers to be sure that
    • A. 

      The paid note is placed in a safe deposit box.

    • B. 

      They obtain a deed of partial reconveyance.

    • C. 

      The paid mortgage is returned to the lender.

    • D. 

      A satisfaction of mortgage is recorded.

  • 14. 
    A person who assumes an existing mortgage loan is
    • A. 

      Not personally liable for the repayment of the debt.

    • B. 

      Not in danger of losing the property by default.

    • C. 

      Personally responsible for paying the principal balance.

    • D. 

      Generally released from liability, but not always.

  • 15. 
    The interest in a property held by the owner in excess of any liens against it is called
    • A. 

      Hypothecation.

    • B. 

      Subordination.

    • C. 

      Leverage.

    • D. 

      Equity.

  • 16. 
    The clause in a mortgage instrument that would prevent the assumption of the mortgage by a new purchaser is a
    • A. 

      Due-on-sale clause.

    • B. 

      Power of sale clause.

    • C. 

      Defeasance clause.

    • D. 

      Certificate of sale clause.

  • 17. 
    The seller agrees to sell the house to the buyer for $200,000. The buyer was ubable to qualify for a mortgage loan for this amount so the seller and the buyer enter into a contract for deed. The interest the buyer has in the property under a contract for deed is
    • A. 

      Legal title.

    • B. 

      Equitable title.

    • C. 

      Joint title.

    • D. 

      Mortgagee in possession.

  • 18. 
    A "friendly foreclosure" enables a mortgagor to prevent the mortgagee from taking the propetry by statutory means. This can be accomplished by
    • A. 

      A deed in lieu of foreclosure.

    • B. 

      A reconveyance deed.

    • C. 

      An assumption.

    • D. 

      An escrow deed.

  • 19. 
    Mortgage lenders want assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to
    • A. 

      Obtain title insurance.

    • B. 

      Sign a note.

    • C. 

      Pay into an impound (escrow) account.

    • D. 

      Submit paid tax receipts.

  • 20. 
    When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title
    • A. 

      Is subject to a purchase money mortgage.

    • B. 

      Must be transferred to a land trust.

    • C. 

      Is kept by the seller until the purchase price is paid according to the contract.

    • D. 

      Is transferred to the buyer according to the contract.

  • 21. 
    If a buyer of an $185,000 home obtains a $150,000 mortgage with 4 points, how much will the lender charge for the points at closing?
    • A. 

      $6,000

    • B. 

      $3,400

    • C. 

      $2,000

    • D. 

      $40,000

  • 22. 
    The pledging of property as security for payment of a loan is called
    • A. 

      Disintermediation.

    • B. 

      Equity.

    • C. 

      Hypothecation.

    • D. 

      Subordination.

  • 23. 
    The purpose of a mortgage is to
    • A. 

      Provide security for the loan.

    • B. 

      Convey title of the property to the lender.

    • C. 

      Restrict the borrower's use of the property.

    • D. 

      Give title to a third party.

  • 24. 
    Illinois is most accurately referred to as what type of mortgage theory state?
    • A. 

      Title

    • B. 

      Lien

    • C. 

      Trust

    • D. 

      Intermediate

  • 25. 
    What is the Illinois statutory usury ceiling for real estate financing?
    • A. 

      20 percent

    • B. 

      35 percent

    • C. 

      3 percent over prime

    • D. 

      There is no ceiling

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