Real Estate Finance - Chapter Nine; Instruments of Real Estate

Real Estate Finance - Chapter Nine; Instruments of Real Estate Finance Flashcards The inclusion of a Due-On-Sale clause in a loan contracta.) creates an agreement for future advances.b.) requires the lender's permission for its assumption.c.) requires the owners to subordinate to a new loan.d.) is now prohibited by law.b.) (requires the lender's permission for its assumption.) A Covenant of Seisin in a loan documenta.) stipulates that the borrower has the authority to pledge the property as collateral.b.) eliminates the statutory redemption period.c.) accelerates the loan balance in a default.d.) allows the lender to dispossess a delinquent borrower.a.) (stipulates that the borrower has the authority to pledge the property as collateral.) Covenants that "run with the land" mean that theya.) expire automatically when a home is built on the land.b.) endure no matter how many times the property sells.c.) expire when the land is sold.d.) must be renewed each time title changes.b.) (endure no matter how many times the property sells.) The note executed for a loana.) is a fully enforceable promise to pay.b.) requires an accompanying mortgage.c.) is a recordable instrument.d.) is a lien on real property.a.) (is a fully enforceable promise to pay.) A charge against a property wherein the property itself is made security for the performance of a certain act describes a(n)a.) lien.b.) lease.c.) license.d.) easement.a.) (lien.) The power of sale clause in a trust deed in a nonjudicial foreclosure allows the lendera.) immediate title upon the borrower's default.b.) a share in the delinquent borrower's other assets.c.) a lien against the property.d.) a shorter foreclosure period.d.) (a shorter foreclosure period.) A mortgage is a(n)a.) right in a property being held by one party for the benefit of another.b.) promise to pay.c.) lien on the property.d.) right in a property held by one who is not the legal owner of the property.c.) (lien on the property.) When a property is purchased "subject-to" the balance of an existing loan, all of the following statements are true except that thea.) buyer must now make the loan payments.b.) buyer becomes personally liable for the loan.c.) loan terms remain the same.d.) seller remains personally liable for the loan.b.) (buyer becomes personally liable for the loan.) The provisions of a real property sales contracta.) allow the vendor to charge a high rate of interest to offset the risks involved.b.) prohibit the vendee from selling the collateral.c.) pass legal title to the vendee.d.) retain title in

the name of the vendor.d.) (retain title in the name of the vendor.) Where possible, lenders prefer to use the deed of trust as a financing instrument primarily because ita.) allows the loan to be paid off sooner.b.) allows a higher rate of interest to

be charged.c.) avoids the time and costs of a judicial foreclosure.d.) transfers legal ownership to the beneficiary.c.) (avoids the time and costs of a judicial foreclosure.)