Exam 11: Mortgage Forms and Provisions

Mortgages are generally signed by the mortgagor.

The debtor's signature is not required on a UCC -1 financing statement.

The provision in a construction loan agreement that requires that a certain percentage of the loan proceeds be held and not disbursed until completion of construction is known as a retainage provision.

A valid security agreement must identify the debtor.

A provision in a mortgage that requires a borrower to pay to the lender 1/12th of the taxes and 1/12 of the insurance premium with each mortgage payment is known as a habendum provision.

It is unusual for a mortgage to provide that the mortgagee shall have any claim to insurance proceeds payable as a result of a casualty of the secured property.

If borrowers have joint and several liability that means that each borrower is only responsible for his or her pro rata share of the mortgage debt.

A cross-default means that a default under one loan document such as a mortgage would constitute a default under another loan document such as an assignment of rents.

Most mortgages provide that a lender shall have a right to receive insurance and condemnation proceeds in the event of a casualty or taking of the secured property.

If the personal property described in a financing statement includes fixtures, the UCC -1 financing statement must be filed in the county of the debtor's residence.

Mortgages are generally signed by the mortgagee.

A provision in a mortgage that requires a borrower to pay to the lender 1/2th of the taxes and 1/12 of the insurance premium with each mortgage payment is known as an escrow provision.

A real estate loan in which the borrower is not personally responsible for the repayment of the loan is a construction loan.

A real estate loan in which the borrower is not personally responsible for the repayment of the loan is an exculpated loan.

A construction loan agreement by its terms will make the lender an agent of the borrower and responsible for the construction or the payment of the costs of the construction.

A legal document that creates a security interest in personal property is known as a financing statement.

A legal document that creates a security interest in personal property is known as a security agreement.

Many states permit UCC-1 financing statements to be filed electronically.

Mortgages are generally signed by both mortgagor and mortgagee.

An assignment of rents and leases must be executed by the property owner and all of the tenants.