Chapter 10. Lending Activity

1. A requirement specifying that if a borrower defaults on one mortgage defaults on one mortgage
    payment the entire loan balance becomes immediately due.
    A. Prepayment clause  B. Acceleration clause  C. Due on sale clause  D. Reference to a mortgage

2. A state's view that the mortgagee is the legal owner of the real property for the loan duration.
    A. Tittle theory  B. Equitable title  C. Deed of trust  D. Amortization

3. A charge of 1% of the mortgage amount that is paid by the mortgagor to the mortgagee at the loan  
    origination.
    A. Point  B. Origination point  C. Discount point  D. Sales point

4. A prepayment penalty raises the lender's effective yield and this change is greater if the mortgagee 
    decides to prepay.
     A. T
     B. F
5. A buyer is the grantor?
     A. T
     B. F
6. The risk that interest rates will change and positively affect the interest rate spread.
     A. T
     B. F
7. Overall cap is a ceiling on the interest rate change over the life of the mortgage.
    A. T
    B. F
8. Mortgage underwriting is that a process of evaluating the risk associated with taking on a mortgage
    loan as an investment.
    A. T
    B. F

Answer B, A, A, F, F, F, T, T.