Loans & Lending Practices Quiz # 1

The transfer of ownership of mortgage from one company or individual to another

The process of researching a property's title

Filing for bankruptcy

A provision in a mortgage home loan that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the loan

The percentage of gross monthly income that goes towards paying housing expenses

A fund that contains assets the use of which is restricted only to the income earned by these assets

The same as an escrow account

The process of applying for a mortgage 

Because there are laws against it

Because there is no increase in the wealth of the person taking a loan

Because people lie on their tax returns and do not include it

Because taxing them is not fair to people 

An automobile loan

A loan where the debtor's credit is the only thing at stake

A loan only for uneducated people

A loan with no collateral; the lender has no assets backing the loan

Because it is revenue only if over $1,000

Because it was earned legally and therefore must be included in revenue

Because the SEC requires it

Because interest is profit generated by providing a loan and is income to the lender

They lie on their credit applications to get better interest rates

People obtain loans with no plan to pay them back

People use loan funds for purposes other than they should

All of the above

A loan on which interest accrues only in the second year

A loan on which the borrower has to pay back only the interest and not the  principal

A loan on which the borrower has to pay only the interest for a specified time period, not reducing the principal at all

A type of mortgage

When the loan to value ratio is greater than 80%

When the buyer makes under $40,000 a year

When the buyer has unfavorable credit

When the buyer is a millionaire 

Servicing

Liability

Financing

Bond payment 

The process of researching loan options

The process of applying for government mortgage funding

An approved temporary suspension of loan payments based on certain events and criteria

Adding interest that has accrued onto the principal balance 

A loan which uses some form of collateral as a guarantee of payment

A loan under $10,000

A loan for people with bad credit

A short term loan for less than a year 

Exactly half is due

Some small portion of the consumer's total balance is due each month

They must be paid in full

Only interest is due each month 

Yes, the tax benefits make any loan amount worth it

Yes, as long as the loan is paid back in the same year

No, unless the loan is for over $100,000

No, the benefit of deduction of loan interest does not offset the cost of the interest

Mortgages aimed at the poor/uneducated people at higher interest rates

Mortgages aimed at the rich and wealthy

Mortgages offered at the fair market rate

Mortgages geared towards people with jobs

Customary costs above and beyond the sale price of a property that must be paid to cover the transfer of ownership at closing

The portion of a borrower's monthly payments held by the lender or service provider to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due

The time frame of a mortgage

The implied interest rate

The lender can not sue the borrower for any amount

The lender can not sue the borrower to repay the amount beyond what is legally allowed

The lender can have the borrower imprisoned for fraud

The lender goes bankrupt

Recession

Default

Extraction

Extortion

A collection of loans held by a borrower

Anything offered or given to fulfill the performance of a contract

The interest payment of a loan

A combination of assets held for its investment benefits including financial and non-financial returns 

As a long term liability

As a short term liability

As revenue

As an expense incurred during the period 

The transfer of the seller's existing mortgage to the buyer

The process of applying for a mortgage

The Legal process by which the lender or the seller forces the sale of a mortgaged property because the borrower has not met the terms of the mortgage.

The process of finding undervalued properties for investment purposes

Down Payment

Senior Debt

Subsequent Debt

Second Round Debt

Credit cards offer more favorable interest rates

Credit cards are usually for higher credit amounts

Credit cards always have a physical card, loans never do

Credit cards have open ended payment schedules 

Revolving debt

Unsecured debt

Secured debt

All of the above 

There will be no impact

The company would be out of compliance with loan covenants

There will be gain on the sale of automobiles, and a reduction in debt

There will be loss on the sale of automobiles, and an increase in debt 

Because there is no reduction in their assets — there is only a change from cash assets to receivables

Because it is considered the income of the borrower

Because it has minimal impact on tax revenue

Because there is no need to include it as long as the loan is paid back within a year 

Dr: Cash, Cr: Interest Payable

Dr: Buildings, Cr: Mortgage Liability

Dr: Interest Payable, Cr: Mortgage Liability

Cr: Cash, Cr: Mortgage Liability

An assessment of a person's credit

The intentional and voluntary giving up of rights or claims

The ability of a lender to provide clients with a better rate

The determination of the exact boundaries and location of a property 

Rights to demand payment from the general assets of the debtor, without seniority in access to any specific assets

The process taken to apply for a mortgage

The payment of escrow to the seller

The closing process

The physical location where all mortgage papers are signed

An organization that gathers, records, updates, and stores the information about  the financial, public and payment records of the individuals who are being considered for credit

A central clearing house for all loan transactions

The loss of money, property, rights, or privileges due to a breach of legal obligation

Because no credit history is required to get a credit card

Because they are inexpensive

Because regular loans are no longer available to everyday consumers

Because they enable a person to make purchases without having any money at the time of the purchases