30-HOUR PA FUNDAMENTALS COURSE EXAM PREP QUESTIONS AND CORRECT DETAILED ANSWERS A+ GRADED
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COLIBRI REAL ESTATE 30 HOUR PA
Institution
COLIBRI REAL ESTATE 30 HOUR PA
What is the loan balance called? - ANS the principal
Charging interest in excess of this rate is called __________ or illegal interest. - ANS usury
What is the total dollar amount of interest and points paid by a borrower at closing. - ANS prepaid interest
What are a one-time fe...
EXAM PREP QUESTIONS AND CORRECT
DETAILED ANSWERS A+ GRADED
,What is the loan balance called? - ANS the principal
Charging interest in excess of this rate is called __________ or illegal interest. - ANS usury
What is the total dollar amount of interest and points paid by a borrower at closing. - ANS
prepaid interest
What are a one-time fee paid at closing to increase the yield to the investor. - ANS points
K
Points give the lender more money up-front so he will be encouraged to make a loan at a
__________ interest rate. - ANS lower
C
The lender is able to make lower interest rate loans, but the buyer must come up with the point
money in ___________ at the time of closing. - ANS cash
LO
What is the principal of using other people's money to make investments? - ANS leverage
The ratio of loan amount compared to the value of the property is called the __________. -
ANS Loan to Value Ratio
YC
The value in a property held by the owner in excess of any liens against it is called __________.
- ANS equity
What is the cost per thousand that is required to create the principal and interest payment
necessary to pay off the loan? - ANS a factor
D
The longer the loan, the lower the __________. - ANS interest rate
What is the order of payment in foreclosure? (4 things) - ANS Cost of Sale - advertising,
U
attorney fees, etc.
Special assessment and general taxes are paid after the costs of the sale.
ST
The first mortgage, which is determined by the order of recording.
Whatever is recorded next
What kind of foreclosure is required to foreclose a Mortgage? - ANS judicial
What kind of foreclosure is required to foreclose on a Deed of Trust? - ANS non-judicial
Who, in a Deed of Trust, holds "Naked Legal Title" (one without possessory rights), and can
claim the property without going through the courts? - ANS the trustee
,What gives the borrower the right to clear up the debt prior to the foreclosure sale? - ANS The
Equitable Right of Redemption
What gives the borrower a certain amount of time after the sale to clear the debt? - ANS The
Statutory Right of Redemption
If the proceeds from the foreclosure sale are not sufficient to cover the debt, the lender can go
to court and seek what 2 things? - ANS Deficiency judgment - a general lien and would apply
to all of the borrower's assets.
K
Deed in lieu of foreclosure - Lender and borrower agree that the lender will become the owner
of the property instead of going through the formal foreclosure process.
C
What is the promise to repay the debt and a negotiable instrument? - ANS a promissory note
(pledge)
LO
What is a long-term note that is not secured by a specific property? - ANS a debenture
The buyer of the property retains the right to use the property exclusively while it is subject to a
__________ or __________. - ANS Mortgage or Deed of Trust
YC
Both create the collateral for a loan by promising the property in case of default by the borrower.
In a mortgage, the borrower is the __________, and the lender is the __________. - ANS
mortgagor
D
mortgagee
In a Deed of Trust, the trustor is the __________. The beneficiary is the __________. And the
U
trustee is __________. - ANS borrower
lender
anyone designated by the lender
ST
Under a Deed of Trust, who holds the promise to repay (Promissory Note) from the borrower? -
ANS the beneficiary (lender)
Who holds the security (Deed of Trust) for the debt. - ANS the trustee
Duties of the borrower in a mortgage or deed of trust: (4 things) - ANS Payment of the debt in
accordance with the terms of the note.
Payment of all real estate taxes on the property given as security.
, Maintenance of adequate insurance and the property in good repair at all times.
Obtain lender authorization prior to making any major alterations to the property.
What clause applies to If a borrower defaults on the loan, the lender can call the entire balance
due and payable immediately. - ANS Acceleration Clause
Allows the interest rate to adjust over the life of the loan. - ANS Escalation Clause
What clause applies to when the beneficiary declares the entire balance of the loan due and
K
payable when the property is transferred? - ANS Alienation Clause
What puts on public record that the loan was paid, and that the lender no longer has a lien on
C
your property? - ANS Satisfaction Piece
What clause allows a lender to charge extra interest if the loan is paid off before the normal
LO
completion date? - ANS Prepayment Penalty Clause
What clause in a Mortgage or Deed of Trust wherein a subsequent mortgage or deed of trust
takes priority? - ANS Subordination Clause
YC
What is the substitution of a third person in place of a creditor to whose rights the third person
succeeds in relation to the debt? - ANS Subrogation
What is it called when the buyer takes over the original payment, the original loan, and the
original interest rate of the seller's existing loan? - ANS an assumption
D
When does a "Budget Mortgage or Deed of Trust" occurs? - ANS as a result of a lender
requiring tax or insurance escrows
U
A monthly loan payment consists of what 4 things? - ANS Principal
Interest
Taxes
ST
Insurance
If recorded, where must a mortgage or deed of trust be recorded? - ANS in the city, county or
municipality where the property is located
What are second mortgages or deeds of trust called? - ANS junior mortgages
The priority of junior liens is determined by what? - ANS the date and time of recording
In an installment land contract, what type of title did the seller retain? - ANS legal
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