mortgage Paper 8

D.
A mortgage is a security instrument for a real estate loan but does not turn over title.

A.
A deed in lieu of foreclosure transfers the property to the lender voluntarily without a foreclosure process.

B.
The Federal Deposit Insurance Corporation (FDIC) insures deposits. It is not part of the secondary mortgage market.

B.
This is statutory. There is also a documentary stamp tax that is charged to record the note or promise to pay. Remember the mortgage is not the promise to pay but establishes the lien on the property.

A.
Remember: The monthly payment on an amortized loan includes principal and interest. $165,000 (Loan Amount) × 0.065 (Annual Interest Rate) = $10,725 (First Year’s Interest) $10,725 (First Year’s Interest) ÷ 12 months = $893.75 (First Month’s Interest Payoff) $1,044.45 (First Month’s Principal and Interest Payment) – $893.75 (First Month’s Interest Payoff) = $150.70 (Principal Payoff) $165,000 (Loan Amount) – $150.70 (First Month’s Principal Payoff) = $164,849.30 balance

C.
A separate mortgage broker’s license is required to engage in the mortgage business.

A.
The due-on-sale clause requires payment of the mortgage in full at the time of sale. There could be no wraparound mortgage in this case, because the original mortgage would have to be paid off.

B.
”Subject to” does not relieve the seller of liability for the mortgage debt in the event that the buyer defaults.

A.
This is definitional. A package mortgage is used when personal property is included with the real estate and a blanket mortgage covers more than one piece of property.

B.
Discount points are prepaid interest and will result in a lower nominal rate and higher APR.