Financing Progress Exam 3

The most important factor in the qualification of a buyer for a loan is his:

• number of dependents.

• savings account.

• adequacy of income.

• type of job.

Anyone who sells a promissory note for less than its value is:

• leveraging an investment.

• liquidating a piece of real property.

• discounting a note.

• subordinating a debt.

The primary mortgage market is the market in which lenders make mortgage loans directly to:

• veterans.

• mortgage bankers.

• borrowers.

• the secondary market.

The person who loans money secured by a mortgage on a parcel of real property is called a:

• mortgagee.

• trustee.

• mortgagor

• trustor.

Under the provisions of FHA the borrower is required to pay the non-recurring closing costs unless the seller agrees to pay part or all of them. Which of the following are not considered non-recurring closing costs?

• Credit information costs and loan points (fees)

• Structural, pest control fees, and FHA appraisal fees

• Drawing and escrow fees; title search and title insurance

• Currently due property taxes and hazard insurance on property

Lending institutions are limited as to the amount that they can lend, the types of loans, and the length of the loans. Because of certain limitations, some lenders are not interested or are unable to give construction loans, but are willing to issue long term financing after the construction is completed. Long term loans to be issued by one lender upon completion of the interim construction financing by another lender are known as:

• discount loans.

• take out loans.

• redemption loans.

• renewal loans.

Assume you purchased a home on a land contract of sale two years ago. Last year the property was completely demolished by a lightning strike. According to the provisions of the Uniform Vendor and Purchaser Risk Act of 1947, which of the following would best state the position of you and the seller?

• It would be the seller's obligation to restore the improvements of the property

• Earthquakes are not covered by the above mentioned law

• Since you, the buyer, have taken possession, even though you do not have the legal title, are liable and must continue to make payments on the land contract

• Answers (a) and (b) above

Under the Article 7 of the Real Estate Law, any loan other than trust deed taken back by a seller, made by any person and secured directly by a lien on real property comprising an owner-occupied dwelling that provides for installment payments and the term of which is six years or less, shall require substantially equal installment payments over the period of the loan with the final payment not payable until the maturity date thereof. This section of the law:

• applies to all real property loans.

• means you must have monthly payments on the loan.

• does not apply to a 7-year loan.

• requires a mortgage broker license when negotiating such a loan.

A release clause in a mortgage allows:

• the lender's option to extend.

• the release of a guarantor from further liability under specified conditions.

• portions of the security to be released from a mortgage lien when multiple properties are being used to secure the loan.

•  the mortgagor to be released from liability.

The largest loans would most likely be made by a(n):

• mutual savings bank.

• commercial bank

• federal bank.

• insurance company.