Real Estate Principles Unit 9 multiple choice 2

A promissory note

• Is security for a trust deed

• Is evidence of a debt

• Must be recorded

• Is collateral for the loan

All of the following are negotiable instruments except a(n)

• Personal check

• Promissory note

• Installment note

• Trust deed securing a promissory note

Which of the following statements is correct, regarding effective interest rate, and nominal interest rate?

• The effective interest rate is slightly above the average rate in the marketplace; the nominal interest rate is slightly below

• The interest rate is the rate actually paid by the; the nominal interest rate is the rate named in the note

• The effective interest rate is the rate named in the contract; the nominal interest rate is the average rate in the market place

• None of the above

If the payments on a loan financing, a real estate purchase are insufficient to service the debt, the result will be

• A similar balloon payment

• Negative amortization

• Positive cash flow

• Default on the debt

Which of the following will necessarily involve a balloon payment?

• Fully amortized loan

• Partially amortized loan

• Variable rate loan

• Fixed rate loan

When compared to a 25-year amortized loan a 30-year amortized loan has

• Less interest over the term of the loan

• More principal over the term of the loan

• Higher monthly payments of principle and interest

• Lower monthly payments of principle and interest

Which of the following statements best defines a mortgage loan?

• A loan secured by a mortgage on Real Estate

• Any means of creating a trusteeship

• An unsecured loan, in which the mortgage itself serves as collateral

• None of the above

In a deed of trust, the power of sale in the event of default is given from the

• Beneficiary to the trustee

• Buyer to the seller

• Trustor to the trustee

• Trustee to the beneficiary

A power of sale or trustees sale for closure of a purchase money deed of trust

• Is similar to a court foreclosure

• Prohibits a deficiency judgment

• Allows for no reinstatement period

• Gives the trustor rights of redemption

Mortgages and trust deeds are different in all of the following respects, except

• Parties

• Security

• Statute of limitations

• Title