Real Estate License Financing 4

Question 1

The clause that allows a lender to declare the entire loan balance due upon default is the:

Accepted Answer

Acceleration clause

Answer

An acceleration clause makes the full balance immediately due if the borrower defaults.

Question 2

Usury laws are designed to limit:

Accepted Answer

Maximum interest rates charged

Answer

Usury laws cap the maximum interest rate a lender may legally charge.

Question 3

In a deed of trust, the party who holds title on behalf of the lender is the:

Accepted Answer

Trustee

Answer

The trustee holds bare legal title until the loan is repaid in a deed of trust.

Question 4

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending based on all EXCEPT:

Accepted Answer

Creditworthiness

Answer

ECOA bars discrimination on prohibited bases but lenders may consider actual creditworthiness.

Question 5

A loan that combines an existing mortgage with a new one into a single payment is a:

Accepted Answer

Wraparound mortgage

Answer

A wraparound mortgage wraps the existing loan into a new, larger loan with one payment.

Real Estate License Practice Test