Barney Fletcher Principles of Real Estate: Section 4
Study Guide – Questions & Fully Solved Answers
Save Groups
Practice questions for this set
Learn 1 /7 Study using Learn
refers to the use of borrowed funds to purchase property
Choose an answer
1 acceleration clause 2 bare legal title
3 leverage 4 subordination clause
Don't know?
Terms in this set (145)
acceleration clause clause that specifies that is the borrower fails to keep
the covenants of the mortgage or trust deed, the
entire loan balance is due and payable upon demand
alienation clause/due-on-sale clause clause that provides that upon alienation of the
property by the mortgagor, the mortgagee may
demand the balance of the debt be paid first
,defeasance clause clause that provides for the "defeat" or cancellation
of the mortgage or trust deed when the borrower
(mortgagor) has repaid the entire debt
prepayment clause clause that may require that the mortgagor pay a
penalty if the loan is paid off prior to the original
maturity date
subordination clause clause that is usually found in a junior clause;
provides that if an existing first mortgage is paid off
or negotiated the junior mortgage will remain
subordinate and will not become a first mortgage
power-of-sale clause clause that gives a trustee in states that use deeds of
trust the right to sell the property in the event of
default
exculpatory clause clause that may be included in a mortgage or deed
of trust, which states that the lender waives his right
to a deficiency judgment
escalator clause clause that provides for loan payments to be
adjusted either up or down
partial release clause clause that is used by developers to provide for the
release of lots as the principal amount of the loan is
paid back
assumption of mortgage When a buyer assumes personal liability for full
repayment of the debt, there is a(n) ______
subject to the mortgage When a buyer purchases a home with an existing
mortgage or deed of trust he may buy the property
______
statutory redemption laws give the foreclosed borrower from one month to one
year or more to pay his judgment in full and redeem
his title
, bare legal title title limited to only those rights that are necessary to
carry out the terms of the trust
deed in lieu of foreclosure When a delinquent borrower voluntarily deeds the
encumbered property to the lender it is known as
______
Releases the borrower from personal By including an exculpatory clause in a mortgage
liability contract, the lender...?
A. Waives her right to escalate the interest rate
B. Releases the borrower from personal liability
C. Agrees to permit an assumption to a qualified
buyer
D. Grants the borrower immunity from foreclosure
The trustee In a home loan using a trust deed, who hold naked
legal title to the property?
subordination clause When a clause is included in a mortgage, requiring it
to assume a lower lien priority position, it is called
a(n) ______ clause
True A borrower has the obligation to keep the
mortgaged property in good repair for the benefit of
the mortgagee. T/F?
trustee Who holds security in a deed of trust?
The lender may be entitled to a If an individual defaults on a $100,000 mortgage and
$5,000 judgment against the original only $95,000 is received by the lender as a result of a
borrower court-ordered sale (foreclosure), which of the
following is true?
A. The lender must file a $5,000 judgment against the
person who purchased the property
B. The lender may be entitled to a $5,000 judgment
against the original borrower
C. The lender cannot recover the $5,000
D. None of the above
Study Guide – Questions & Fully Solved Answers
Save Groups
Practice questions for this set
Learn 1 /7 Study using Learn
refers to the use of borrowed funds to purchase property
Choose an answer
1 acceleration clause 2 bare legal title
3 leverage 4 subordination clause
Don't know?
Terms in this set (145)
acceleration clause clause that specifies that is the borrower fails to keep
the covenants of the mortgage or trust deed, the
entire loan balance is due and payable upon demand
alienation clause/due-on-sale clause clause that provides that upon alienation of the
property by the mortgagor, the mortgagee may
demand the balance of the debt be paid first
,defeasance clause clause that provides for the "defeat" or cancellation
of the mortgage or trust deed when the borrower
(mortgagor) has repaid the entire debt
prepayment clause clause that may require that the mortgagor pay a
penalty if the loan is paid off prior to the original
maturity date
subordination clause clause that is usually found in a junior clause;
provides that if an existing first mortgage is paid off
or negotiated the junior mortgage will remain
subordinate and will not become a first mortgage
power-of-sale clause clause that gives a trustee in states that use deeds of
trust the right to sell the property in the event of
default
exculpatory clause clause that may be included in a mortgage or deed
of trust, which states that the lender waives his right
to a deficiency judgment
escalator clause clause that provides for loan payments to be
adjusted either up or down
partial release clause clause that is used by developers to provide for the
release of lots as the principal amount of the loan is
paid back
assumption of mortgage When a buyer assumes personal liability for full
repayment of the debt, there is a(n) ______
subject to the mortgage When a buyer purchases a home with an existing
mortgage or deed of trust he may buy the property
______
statutory redemption laws give the foreclosed borrower from one month to one
year or more to pay his judgment in full and redeem
his title
, bare legal title title limited to only those rights that are necessary to
carry out the terms of the trust
deed in lieu of foreclosure When a delinquent borrower voluntarily deeds the
encumbered property to the lender it is known as
______
Releases the borrower from personal By including an exculpatory clause in a mortgage
liability contract, the lender...?
A. Waives her right to escalate the interest rate
B. Releases the borrower from personal liability
C. Agrees to permit an assumption to a qualified
buyer
D. Grants the borrower immunity from foreclosure
The trustee In a home loan using a trust deed, who hold naked
legal title to the property?
subordination clause When a clause is included in a mortgage, requiring it
to assume a lower lien priority position, it is called
a(n) ______ clause
True A borrower has the obligation to keep the
mortgaged property in good repair for the benefit of
the mortgagee. T/F?
trustee Who holds security in a deed of trust?
The lender may be entitled to a If an individual defaults on a $100,000 mortgage and
$5,000 judgment against the original only $95,000 is received by the lender as a result of a
borrower court-ordered sale (foreclosure), which of the
following is true?
A. The lender must file a $5,000 judgment against the
person who purchased the property
B. The lender may be entitled to a $5,000 judgment
against the original borrower
C. The lender cannot recover the $5,000
D. None of the above
