REE3043 BROXTERMAN EXAM 3 QUESTIONS AND
ANSWERS 2026
9.1 "What two contracts are always involved in a mortgage loan?" - Answers - - "A
borrower always conveys a mortgage and a note to the lender in a mortgage loan"
"9.4 The two most common types of caps in an adjustable rate mortgage are: " -
Answers - - Periodic caps and overall caps
9.5 "What happens to the balance of a loan with negative amortization? - Answers - -
increase because the scheduled payment is insufficient to cover the accumulated
interest.
"9.7 Of these types of loans, which typically have prepayment restrictions or penalties?
a. Standard home loan. b. Large home loan. c. Subprime loan. d. Commercial property
mortgage loan" - Answers - - "Prepayment penalties occur mainly in large home loans,
subprime loans, and commercial mortgage loans"
"9.9 Why does a mortgage lender want to be able to pay the property taxes on behalf of
a mortgage borrower?" - Answers - - "The mortgage lender wants to be able to pay the
property taxes on behalf of the borrower because the property tax lien"
"9.10 What types of standard home loans are assumable?" - Answers - FHA and VA
loans are assumable, subject to the buyer's ability to qualify for the loan"
"9.11In practice, lenders commonly define default as occurring when a loan is days
overdue." - Answers - - "In practice, lenders commonly define default as occurring when
a loan is 90 days overdue."
"9.14Depending on the state, the process of foreclosure sale is either by _____ or
by_____ . The method most favorable to a lender is ________ - Answers - - "Depending
on the state, the process of foreclosure sale is either by judicial foreclosure or by power
of sale. The method most favorable to a lender is power of sale"
"9.18What law prohibits discrimination in lending by race, sex, religion, and national
origin? What types of income discrimination does it prohibit?" - Answers - - "The Equal
Credit Opportunity Act prohibits discrimination in lending by race, sex, religion, and
national origin. It also prohibits discrimination because an applicant receives income
from a public assistance program."
"The element of an adjustable interest rate that is the "moving part" is the" - Answers -
Index
ANSWERS 2026
9.1 "What two contracts are always involved in a mortgage loan?" - Answers - - "A
borrower always conveys a mortgage and a note to the lender in a mortgage loan"
"9.4 The two most common types of caps in an adjustable rate mortgage are: " -
Answers - - Periodic caps and overall caps
9.5 "What happens to the balance of a loan with negative amortization? - Answers - -
increase because the scheduled payment is insufficient to cover the accumulated
interest.
"9.7 Of these types of loans, which typically have prepayment restrictions or penalties?
a. Standard home loan. b. Large home loan. c. Subprime loan. d. Commercial property
mortgage loan" - Answers - - "Prepayment penalties occur mainly in large home loans,
subprime loans, and commercial mortgage loans"
"9.9 Why does a mortgage lender want to be able to pay the property taxes on behalf of
a mortgage borrower?" - Answers - - "The mortgage lender wants to be able to pay the
property taxes on behalf of the borrower because the property tax lien"
"9.10 What types of standard home loans are assumable?" - Answers - FHA and VA
loans are assumable, subject to the buyer's ability to qualify for the loan"
"9.11In practice, lenders commonly define default as occurring when a loan is days
overdue." - Answers - - "In practice, lenders commonly define default as occurring when
a loan is 90 days overdue."
"9.14Depending on the state, the process of foreclosure sale is either by _____ or
by_____ . The method most favorable to a lender is ________ - Answers - - "Depending
on the state, the process of foreclosure sale is either by judicial foreclosure or by power
of sale. The method most favorable to a lender is power of sale"
"9.18What law prohibits discrimination in lending by race, sex, religion, and national
origin? What types of income discrimination does it prohibit?" - Answers - - "The Equal
Credit Opportunity Act prohibits discrimination in lending by race, sex, religion, and
national origin. It also prohibits discrimination because an applicant receives income
from a public assistance program."
"The element of an adjustable interest rate that is the "moving part" is the" - Answers -
Index
