Looking for Quiz 9 :
Real Estate Finance: the Laws and Contracts
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Home mortgage lending is heavily regulated by federal laws. Is this a result of congressional pandering to consumer groups, or are there good reasons why home mortgage lending should be regulated more than, say, automobile financing
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Regulation of home mortgage lending :
The regulation of home mortgage lending has many good reasons for having more regulation than automobile financing. Some include:
• Most homes are financed at a greater amount and are the single largest purchase than any typical borrow will make.
• The time to repay a home loan is generally much longer than for a car loan.
• In the deed of title transfer mortgages must have detailed descriptions, photos, etc. to define the property transferred. In most cases a VIN number, make, model and year is all that is required for automobile title transfer.
• Mortgage loans are more complicated than car loans and expose borrowers to more risk from unscrupulous lenders.
• Mortgage borrowers can enjoy protection from discrimination. The home is fairly stationary whereas the automobile is not.
• Buying a home is more difficult to undo than an automobile purchase.
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The element of an adjustable interest rate that is the " moving part " is the:
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The index rate is a market determined interest rate that is the "moving part" in an adjustable interest rate.
Therefore the answer is b Index
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Residential mortgage terms (mortgage notes) have become increasingly uniform as the mortgage market has become more national and efficient. Is there any downside to this for the homeowner
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The increased uniformity of mortgage terms reduces the opportunity for customization of terms based on a homeowner's unique situation and characteristics. However, the standardization of the mortgage process has allowed the borrower to reap the benefits of reduced costs associated with the lending process as well as reduced delays. Furthermore, the standardization of the mortgage process has been accompanied by the introduction of more laws to protect consumers' rights.
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A common risk that frequently interferes with a lender's efforts to work out a defaulted loan through either nonfore- closure means or foreclosure is:
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To finance property where either the borrower, the property, or both fail to qualify for standard mortgage financing, a common nonmortgage solution is through the:
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Which of these points in a mortgage loan would be addressed in the mortgage (possibly in the note as well)
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If the lender in a standard first mortgage wishes to foreclose cost effectively, it is crucial to have which clause in the mortgage
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The characteristics of a borrower that can be considered by a lender in a mortgage loan application are limited by the:
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When a buyer of a property with an existing mortgage loan acquires the property without signing the note for the existing loan, the buyer is acquiring the property:
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Ways that a lender may respond to a defaulted loan without resorting to foreclosure include all of the following except:
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A lender may reserve the right to require prepayment of a loan at any time they see fit through a(n):
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From a home mortgage lender's perspective, which statement is true about the effect of bankruptcy upon foreclosure
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Which of these aspects of a mortgage loan will be addressed in the note rather than in the mortgage
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For your own state, determine whether:
a. It is ajudicial or nonjudicial foreclosure state.
b. The standard home loan is based on a deed of trust or a mortgage.
c. There is a statutory right of redemption and, if so, how long.
d. Deficiency judgments are allowed against defaulted homeowners.
Based on this information, can you judge whether your state is relatively lender friendly or borrower friendly For this exercise use the websites noted in the text: fore- closureassistance.com and foreclosures.com.
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Most lenders making adjustable rate mortgage (ARM) loans offer a "teaser rate." Is this a good policy or is it misrepresentation
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Mortgage law is as clear, consistent, and enforceable in the United States as in any place in the world, and far more so than in many countries. Why is this a vital element of an efficient real estate finance system
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The Congress has adopted changes in bankruptcy law that make Chapter 7 bankruptcy more difficult for households, requiring greater use of Chapter 13, thus providing greater protection to unsecured credit card companies. As a mortgage lender, do you care about this If so, what would be your position
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Download one mortgage and one deed of trust from the Freddie Mac website (see Explore the Web). Compare them to see what differences you can find in their clauses.
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