UNIT 7:

BOBRA TAHAN

HOWARD HARRIS

NATIONAL INTERACTIVE STUDY GROUP

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Study Group Information

Please refer to your dashboard for the following:

Link to calendar of discussion topics

Links to discussion questions

Use this button on the Learning Management System tab to access your dashboard:

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Setting up the room3

Setting up the room4

Contact Information

Bobra Tahan and Howard Harris both have access to this account:

nationalleadinstructor@kaplan.com

Please include the STATE where you will be taking your exam anytime you reach out to us so we can

find the best resources for you.

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Unit 7:

TOPICS TO BE DISCUSSED:

Your questions

Mortgage and Deed of Trust terms

Types of loans

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DEED OF TRUST/TRUST DEED7

Trustor Conveys “Bare Legal Title” (Borrower)

Trustee holds Bare Legal Title, with Power of Sale (Third Party)

Beneficiary is the Lender

MORTGAGE8

Mortgagor gives the mortgage in exchange for the loan

Mortgagee receives the mortgage and makes the loan

QUESTION

A deed acts as security for a loan?

True

False

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QUESTION

In a mortgage, the lender is called the:

A. Mortgagor

B. Mortgagee

C. Lendee

D. Obligee

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QUESTION

The borrower discovers that the loan is not assumable. What clause did the borrower find?

A. Due on Sale

B. Acceleration

C. Defeasance

D. Subordination

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QUESTION

Acceleration can be caused by what?

A. Delinquent payments

B. Past due taxes

C. Lapsed property insurance

D. All of the above

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QUESTION

Defeasance is what?

A. A potential buyer’s offer is rejected

B. A foreclosure has begun

C. The loan has been paid off and the collateral needs to be returned

D. The collateral is insufficient to pay off the debt

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QUESTION

Subordination accomplishes what?

A. Allows a first offer to be replaced by a subsequent

offer

B. Replaces a party to a contract with a new party

C. Lowers the value of a property

D Allows a later recorded lien to have prior over an

already existing lien

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QUESTION

The value which is based on the lower of the sales price or appraised value is used in:

A. Loan-to-value

B. Discount point

C. Loan origination

D. Equity

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EQUITY VS DEFICIENCY

VALUE $500,000 $500,000

DEBT $300,000 $650,000

$200,000 $150,000

EQUITY DEFICIENCY

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QUESTION

A borrower defaulted on a loan and the lender foreclosed. The lender obtained the property which sold for less than what the borrower owed. In this case the lender may:

A. Do nothing since the property has gone through foreclosure.

B. File for a default judgment and attach all the borrower’s real and personal property

C. Seek a deficiency judgment which can be used to collect the balance owed.

D. Start a new foreclose suit to collect the balance due from the borrower.

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QUESTION

The market value of the property minus the total debt is the:

A. Assessed value

B. Equity

C. Appraised value

D. Net worth

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DISCOUNT POINT REVIEW

One point = 1% of the loan amount

On a typical 30 year loan one point will impact the nominal interest rate by 1/8% (.00125)

Paid to the lender, which may lower the interest rate on the loan

Lender charges points to increase yield on a loan

Paid by buyer or seller at closing

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QUESTION

A lender charges a buyer 2% of the loan in order to increase the lender’s yield on the loan. This fee is known as the:

A. Loan Origination

B. Discount points

C. Lender Commission

D. APR

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QUESTION

In which type of mortgage would the mortgagor pay no principle on the loan until the end of the term?

A. Straight loan

B. Fully amortized loan

C. Contract for deed

D. Partially amortized loan

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QUESTION

A straight loan is also called a(n):

A. Term loan

B. Fully amortized loan

C. Partially amortized

D. Point to point financing

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QUESTION

Compared to a partially amortized loan, an interest only loan has a lower payment with a higher balloon at the end:

True

False

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QUESTION

The mortgagee makes payments to the mortgagor in a reverse mortgage:

True

False

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QUESTION

A loan that is paid in full at the end of the term with no balloon payment is a:

A. Partially amortized loan

B. Term loan

C. Fully amortized loan

D. Reverse mortgage

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QUESTION

A contract for deed is also known as a land contract:

True

False

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CONTACT INFORMATION27

Any questions I missed or that you still have?

Remember if you think of something after class you can reach both Bobra Tahan and Howard Harris at:

nationalleadinstructor@kaplan.com