Chapter 12: Loan Documentation and Closing

Which of the following best describes the process in which all required loan documents are signed and funds are disbursed to the borrower:

• Loan Documentation

• Loan Closing

• Credit Approval

• Loss Payee

Which best describes the process of completing all the papers necessary to secure the lender's interest and to comply with the law.

• Loan Documentation

• Loan Closing

• Credit Approval

• Loss Payee

If a bank fails to properly document and close loans, which of the following risks may occur:

• Exposure to lawsuits

• Loan losses

• Penalties for violating regulations

• All of the above

Which best describes a written document in which one party (the maker) agrees to pay a certain sum of money to another party (the payee) or to his or her order on the demand or at the determinable future date.

• Guarantee Agreement

• Security Agreement

• Promissory Note

• All of the above

Which best describes a legal document, the requirements for which vary by state, in which a borrower gives the lender a lien on property as security for repayment of a loan.

• Deed of Trust

• Mortgage

• Promissory Note

• All of the above

A lien is a legal claim or attachment on public record against property as a security interest for payment of a loan obligation.

• True

• False

Select the applicable loan product(s) which require a loan application.

Select all that apply.

• HELOC

• Purchase money mortgage

• Annual Review

• RLOC

Which best describes a sealed instrument in writing, duly executed and delivered, that transfers property to a trustee. The borrower transfers the property to a trustee for the benefit of the lender, and it is conveyed back to the borrower when the loan is paid back.

• Deed of Trust

• Mortgage

• Promissory Note

• All of the above

Which of these instruments will be used to create a valid lien against pledged marketable securities for a loan request.

• Deed of Trust

• Mortgage

• Security Agreement

• All of the above

I would like to do things like this in the future.

• True

• False