A Mortgage Is The Same Thing As A Note.

Question: T/F: A mortgage is the same thing as a note.
Answer: False.
==================================================
Question: T/F: A non-recourse loan is one in which the borrower is personally liable for payment of all amounts due under the terms of the note.
Answer: False.
==================================================
Question: T/F: Prepayment of a loan without penalty is a right of all borrowers.
Answer: False.
==================================================
Question: T/F: A second mortgage is a junior lien mortgage that is sometimes used to bridge the gap between the price of a property and the sum of the first mortgage and down payment.
Answer: True.
==================================================
Question: T/F: A remainder cannot be mortgaged.
Answer: False.
==================================================
Question: T/F: A fee simple estate is a type of freehold estate.
Answer: True.
==================================================
Question: T/F: A clause which specifies that the mortgagor will pay all property taxes and other charges assessed against the property, even if these charges have priority over the mortgage is typically included in a mortgage.
Answer: True.
==================================================
Question: T/F: A clause which specifies that the mortgagee will obtain and maintain property insurance is typically included in a mortgage.
Answer: False.
==================================================
Question: T/F: Under lien theory, title and the right to possession pass from the mortgagor to the mortgagee when the mortgage is executed.
Answer: False.
==================================================
Question: T/F: A due on sale clause which specifies that the mortgage can accelerate the debt if the property is sold without the mortgagee's permissions is a typical clause in a mortgage document.
Answer: True.
==================================================
Question: T/F: It is a federal law that a mortgage must be recorded to be valid.
Answer: False.
==================================================
Question: T/F: A mortgage default can result form failure to pay property taxes.
Answer: True.
==================================================
Question: T/F: A technical default can result from failure to keep the property in repair.
Answer: True.
==================================================
Question: T/F: When a purchaser takes a property "subject to" an existing mortgage, the purchaser becomes personally liable for repaying the debt.
Answer: False.
==================================================
Question: T/F: When a deed is given in lieu of foreclosure of the mortgage, the mortgagor no longer has an obligation to pay the mortgage note.
Answer: True.
==================================================
Question: T/F: Junior liens are eliminated by a voluntary conveyance of a property to the mortgage.
Answer: False.
==================================================
Question: T/F: If a property encumbered by a mortgage is sold at a foreclosure sale for an amount less than the value of the mortgage, the mortgagor is not obligated to pay the mortgagee the remaining balance.
Answer: False.
==================================================
Question: T/F: A purchaser at a tax sale receives a deed to the property at the time of the sale.
Answer: False.
==================================================

Answer: True.
==================================================
Question: T/F: If a debtor, under Chapter 7 bankruptcy, is not behind on his mortgage payments, he does not have to give up the property.
Answer: True.
==================================================
Question: T/F: Unless stated otherwise, the borrower is personally liable for payment of all amounts due under the terms of the note.
Answer: True.
==================================================
Question: A loan in which the borrower arranges in advance with a total amount that will be advanced in stages, such as a construction loan, is said to have which type of mortgage?
Answer: Open-end.
==================================================
Question: A "short sale" of real estate is:
Answer: A sale in which the proceeds from the sale are less than the balance owed on the loan secured by the property sold.
==================================================
Question: Which of the following situations is NOT a common cause for the use of a purchase-money mortgage?
Answer: The seller desires to artificially raise the price of the property by receiving a higher-than-market interest rate.
==================================================
Question: Which of the following is NOT a minimum mortgage requirement?
Answer: Prepayment clause.
==================================================
Question: A mortgage is BEST defined as a legal document that:
Answer: Names real estate as the security or collateral for the repayment of a loan.
==================================================
Question: Which of the following solutions is LEAST likely to be acceptable to a mortgagee when discussing alternatives to foreclosing a property?
Answer: Permanently reducing the interest rate.
==================================================
Question: Which of the following terms refers to an owner's right to redeem a property after foreclosure?
Answer: Statutory redemption.
==================================================
Question: In jurisdiction where a deed of trust is used to finance real estate, there are three parties to the loan secured by the deed of trust. Which of the following is NOT one of those three parties?
A. Borrower.
B. Trustee.
C. Holder of the note.
D. Grantor.
Answer: D. Grantor.
==================================================
Question: A senior mortgage holder is owed a mortgage balance of $140,000 and brings a foreclosure suit which includes all junior claimants in the suit. If the senior mortgage holder purchases the property for $140,000 at the foreclosure sale, what happens to the claim of the junior claimants?
Answer: The liens of the junior claimants are extinguished, but the debt owed to the junior claimants is unaffected.
==================================================
Question: A property is encumbered as follows:

First Mortgage (A): $250,000
Second Mortgage (B): $40,000
Third Mortgage (C): $10,000

How much can mortgage B pay for the property at a foreclosure sale without having to raise additional funds?
Answer: $290,000
==================================================
Question: Which of the following types of bankruptcy is filed with the end result of liquidating the debtor's assets?
Answer: Chapter 7.
==================================================
Question: Which of the following types of bankruptcy is available to a business to reorganize and rehabilitate the debtor?
Answer: Chapter 11.
==================================================
Question: Which of the following terms refers to the prohibition of the commencement or continuation of collection proceedings during a bankruptcy proceeding?
Answer: Automatic stay.
==================================================
Question: A mortgage agreement provides the lender with _____ interests.
Answer: Secured.
==================================================
Question: What is usually executed at the same time as a mortgage and creates the obligation to repay the loan in accordance with its terms?
Answer: Promissory note.
==================================================
Question: The Acceleration Clause says notice of all, but which of the following must be given to the mortgager?
Answer: Acceleration of debt secured by the mortgage has taken place because of default.
==================================================
Question: Which of the following is NOT an alternative to foreclosure?
Answer: Redemption.
==================================================
Question: Which of the following defaults is LEAST often used for foreclosure?
Answer: Failure to keep the security repair.
==================================================
Question: Which of the following statements is FALSE regarding foreclosure?
Answer: If the sale of the mortgaged property realizes a price above the claims of the mortgage and expense of the sale, the balance goes to the mortgagor.
==================================================
Question: When is seller financing NOT used?
Answer: Third-party mortgage financing is less expensive or easily available.
==================================================