1) Which one of these is not a requirement of a promissory note?
a) Contains the borrower's promise to repay
b) Must be signed by the borrower
c) Must be delivered by the lender and signed by the borrower
d) Parties must have contractual capacity
2) Which of these items isn't included in a promissory note?
a) Reference to a mortgage
b) Prepayment clause
c) Due on sale clause
d) Unsecured debt
3) To calculate the mortgage balance, what three things must you have in order to do this?
a) Contract rate
b) Remaining mortgage payments
c) Monthly payment
d) Monthly debt service
True/False
1) A prepayment clause gives the borrower's the right to prepay the entire loan balance without a penalty. T/F
2) Unsecured debt is a personal promise to pay back a loan. T/F
3) Deed of trust is a document transferring legal title to a trustee. T/F
4) Lien theroy is a state's view that a mortgage is simply a lien on real property, with the mortgagor holding legal title to the collateral. T/F
5) Mortgage underwriting is a process of evaluating the risk associated with taking on a mortgage loan. T/F
Answers
1)C
2)D
3)D
1)T
2)T
3)T
4)T
5)T
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