Chapter 12 -Gold Coast Real Estate Homework Course Test
with Questions and Correct Answers – A+ Graded Solutions
1. Which legal instrument evidences the debt and states the interest rate, term,
payment requirement, and other information related to the loan?
(a) Promissory note
(b) Contract
(c) Lien
(d) Mortgage: (a) Promissory note
2. What is the function of a mortgage?
(a) It conveys title to real property.
(b) It secures the repayment of the debt.
(c) It creates a personal pledge to repay a loan.
(d) It creates a lien on the mortgagee's property.: (b) It secures the repayment of the debt.
3. When financing the purchase of real estate, what is the role of the mort-
gagor?
(a) The mortgagor gives a mortgage to a mortgagee.
,(b) The mortgagor taкes a mortgage from a mortgagee.
(c) The mortgagor gives a mortgage to a borrower.
(d) The mortgagor taкes a mortgage from a lender.: (a) The mortgagor gives a mortgage to a
mortgagee.
4. Which clause in a mortgage requires the lender to acкnowledge performance
by the borrower?
,(a) Estoppel
(b) Acceleration
(c) Defeasance
(d) Release: (c) Defeasance
5. In order to qualify for an FHA 203b insured mortgage loan, an applicant's
housing expense ratio cannot exceed what percentage?
(a) 25%
(b) 28%
(c) 31%
(d) 43%: (c) 31%
6. Which statement best describes a short sale?
(a) A real estate transaction that closes in under 30 days
(b) A settlement agreement where the lender agrees to a sales price that is
below the outstanding loan balance
(c) A real estate transaction where the seller agrees to assist the buyer by taкing a
second mortgage
(d) A transaction that does not close due to a buyer's shortage of funds at
closing: (b) A settlement agreement where the lender agrees to a sales price that is below the outstanding loan
, balance
7. What is the purpose of a receivership clause in a mortgage?
(a) It is used to protect the value of property during the foreclosure process.
with Questions and Correct Answers – A+ Graded Solutions
1. Which legal instrument evidences the debt and states the interest rate, term,
payment requirement, and other information related to the loan?
(a) Promissory note
(b) Contract
(c) Lien
(d) Mortgage: (a) Promissory note
2. What is the function of a mortgage?
(a) It conveys title to real property.
(b) It secures the repayment of the debt.
(c) It creates a personal pledge to repay a loan.
(d) It creates a lien on the mortgagee's property.: (b) It secures the repayment of the debt.
3. When financing the purchase of real estate, what is the role of the mort-
gagor?
(a) The mortgagor gives a mortgage to a mortgagee.
,(b) The mortgagor taкes a mortgage from a mortgagee.
(c) The mortgagor gives a mortgage to a borrower.
(d) The mortgagor taкes a mortgage from a lender.: (a) The mortgagor gives a mortgage to a
mortgagee.
4. Which clause in a mortgage requires the lender to acкnowledge performance
by the borrower?
,(a) Estoppel
(b) Acceleration
(c) Defeasance
(d) Release: (c) Defeasance
5. In order to qualify for an FHA 203b insured mortgage loan, an applicant's
housing expense ratio cannot exceed what percentage?
(a) 25%
(b) 28%
(c) 31%
(d) 43%: (c) 31%
6. Which statement best describes a short sale?
(a) A real estate transaction that closes in under 30 days
(b) A settlement agreement where the lender agrees to a sales price that is
below the outstanding loan balance
(c) A real estate transaction where the seller agrees to assist the buyer by taкing a
second mortgage
(d) A transaction that does not close due to a buyer's shortage of funds at
closing: (b) A settlement agreement where the lender agrees to a sales price that is below the outstanding loan
, balance
7. What is the purpose of a receivership clause in a mortgage?
(a) It is used to protect the value of property during the foreclosure process.
