Finance 371 Final Exam Questions & Answers 100% Correct!!
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Finance 371 Fi
Institution
Finance 371 Fi
what is a mortgage - ANSWERA legal document that connects a promissory note with the collateral used to secure the note.
hypothecation - ANSWERLegal principle that allows borrower to use property to secure debt without giving up possession of it.
pledging - ANSWERgives up possession of the co...
Finance 371 Final Exam Questions & Answers 100% Correct!!
what is a mortgage - ANSWERA legal document that connects a promissory note with the collateral
used to secure the note.
hypothecation - ANSWERLegal principle that allows borrower to use property to secure debt without
giving up possession of it.
pledging - ANSWERgives up possession of the collateral to the lender while it
serves as collateral. (e.g., Pawn shop.)
mortgagor - ANSWERThe borrower who pledges real estate as collateral is the mortgagor
mortgagee - ANSWERA lender in a mortgage loan transaction.
promissory note - ANSWERA written promise to pay money owned which
stipulates collateral on which debt is promised.
mortgage instrument - ANSWERA separate agreement from the note that provides collateral to the
lender to back up the promise made in the note by the borrower/mortgagor
provisions of a promissory note - ANSWERPrepayment clause: Does the borrower have right to
prepay the mortgage?
• Acceleration clause: When borrower defaults, principle is "accelerated" and
comes due.
• Due-on-sale clause: When the property is sold, lender can require that
principle is paid off immediately:
• Especially important for joint-ownership.
how do you satisfy a mortgage - ANSWERpay it off completely
foreclosure - ANSWERThe seizure of property from borrowers who are unable to repay their loans
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