Chapter 10

1) A personal promise to pay back a loan is called an unsecured dept.

True / False

2) A prepayment clause is the lender’s right to ask for the entire loan balance.

True / False

3) A title theory is a state’s view that the mortgagee is the legal owner of the real property for the loan duration.

True / False

4) Debt service is the mortgage payment comprising interest and principal

True / False

5) According to the amortization payments interest payments increase over time.

True / False

6) A mortgage documentation consists of the following two items.

a) Promissory note and mortgage documentation

b) Promissory note and mortgage payment

c) Mortgage documentation and mortgage underwriting

d) Mortgage underwriting and mortgage payment

7) Generally requirements of a promissory note are all except

a) It must be in writing according to the statue of frauds

b) It outlines terms of repayment

c) The note contains the borrower’s promise to pay

d) The note contains a prepayment clause

8) An amortization schedule does not include following payment

a) Debt service

b) Interest

c) Principal

d) None of the above

Answer:

True, False, True, True, False, a), d), d)