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Question 1 of 10
1. Question
For $375,000, Buyer A buys a home and gets a mortgage loan at an 80% loan-to-value ratio. To secure a lower interest rate, the lender is charged 2 points. How much is the borrower going to have to pay in points?
Correct
1% of the loan amount is a point. $375,000 (Purchase Price) = $300,000,000 = 0.80 (Loan-to-Value Ratio) = (Amount of Mortgage) $300,000 (Amount of Mortgage) = 0.02 (Number of Points) = $6,000 (Amount Paid in Points) Note that you have to convert to decimal to multiply percentages, so 80 percent = 0.80 and 2 percent = 0.02.
Incorrect
1% of the loan amount is a point. $375,000 (Purchase Price) = $300,000,000 = 0.80 (Loan-to-Value Ratio) = (Amount of Mortgage) $300,000 (Amount of Mortgage) = 0.02 (Number of Points) = $6,000 (Amount Paid in Points) Note that you have to convert to decimal to multiply percentages, so 80 percent = 0.80 and 2 percent = 0.02.
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Question 2 of 10
2. Question
Which of the following provides the best definition, in due course, of a holder?
Correct
A holder is someone who takes or acquires an existing note in due course.
Incorrect
A holder is someone who takes or acquires an existing note in due course.
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Question 3 of 10
3. Question
In the case of redemption, the right of redemption exists in which of the following?
Correct
This is a crucial distinction between a mortgage and a deed of trust.
Incorrect
This is a crucial distinction between a mortgage and a deed of trust.
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Question 4 of 10
4. Question
A former owner of a home that was sold by the sale of a trustee was ordered by the court to be evicted. What does the situation imply?
Correct
In some way, all the statements are relevant to the foreclosure of sales of trust deeds, but the correct response is unlawful detainment.
Incorrect
In some way, all the statements are relevant to the foreclosure of sales of trust deeds, but the correct response is unlawful detainment.
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Question 5 of 10
5. Question
Which of the following statements is true?
Correct
The Unruh Act has been created for the protection and security provided to homeowners to prevent losing their homes as a result of the purchase of goods or services by an installment.
Incorrect
The Unruh Act has been created for the protection and security provided to homeowners to prevent losing their homes as a result of the purchase of goods or services by an installment.
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Question 6 of 10
6. Question
Who will claim the property in case of a default of payments on the mortgage loan in a deed of trust situation?
Correct
The lender is the beneficiary, thus he has the claim for the property.
Incorrect
The lender is the beneficiary, thus he has the claim for the property.
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Question 7 of 10
7. Question
Which of the following direct mortgage loans are not made?
Correct
Lending between lenders and borrowers is arranged by mortgage brokers.
Incorrect
Lending between lenders and borrowers is arranged by mortgage brokers.
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Question 8 of 10
8. Question
What is the return on an amortized 30-year loan for $250,000 at 7 percent interest for the first month?
Correct
The 30-year term is devoid of relevance. $250,000 = 0.07 = $17,500 (First Year’s Interest) $17,500 ÷ 12 months = $1,4588 (First Year’s Interest) (rounded)
Incorrect
The 30-year term is devoid of relevance. $250,000 = 0.07 = $17,500 (First Year’s Interest) $17,500 ÷ 12 months = $1,4588 (First Year’s Interest) (rounded)
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Question 9 of 10
9. Question
Which of the following statements about a holographic will is correct?
Correct
For it to be valid, it must be entirely handwritten by the author of the will.
Incorrect
For it to be valid, it must be entirely handwritten by the author of the will.
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Question 10 of 10
10. Question
Which of the following statements is true?
Correct
The soil that is deposited by water’s natural activity is called alluvium or alluvium. The by-products of the natural action of accretion are these alluvial deposits. The destruction of these alluvial deposits is called erosion, or avulsion, in the case of a violent breaking away of the soil. Reliction refers to the steady fall from the normal watermark of the water level. This will result in the uncovering of additional land which is also referred to as alluvium. Accretion is the legal term by which the title is passed from one landowner to another to these alluvial deposits.
Incorrect
The soil that is deposited by water’s natural activity is called alluvium or alluvium. The by-products of the natural action of accretion are these alluvial deposits. The destruction of these alluvial deposits is called erosion, or avulsion, in the case of a violent breaking away of the soil. Reliction refers to the steady fall from the normal watermark of the water level. This will result in the uncovering of additional land which is also referred to as alluvium. Accretion is the legal term by which the title is passed from one landowner to another to these alluvial deposits.