Exam 12: Controlling Default Risk Through Borrower Qualification Loan Underwriting and Contractual Relationships

12-20.A theory that states that no borrower with substantial positive equity would default,even if unable to make the monthly payments,is:

12-35.To promote competition between lenders,state legislation,case law,and the regulations of Federal agencies that insure loans (FHA,VA)have virtually eliminated this feature:

When a loan is originated the lender will make certain that the appraised value of the house is:

12-17.If the value of the property is insufficient to cover the amount of indebtedness in a foreclosure action the lender,in many states,has a right to a:

Default occurs when the borrower fails to:

12-16.A borrower is considered self employed if he or she has ownership in a company greater than:

12-39.If a fire completely destroys a residence,the lender has the right to require that the proceeds from insurance be applied to paying off the note rather than rebuilding the property.The event is termed:

12-22.A kind of judgment that a lender can seek in court after a default which results in a loss is:

12-40.A provision that is typical for large residential real estate developments where land is used as collateral for a development loan is a:

12-41.In which action,should the property be expropriated by a government authority,can the lender claim the proceeds from the action to satisfy the debt?

12-11.According to Jackson and Kaserman:

12-13.The provisions of a deed of trust outline the rights and obligations of the:

12-25.The following are NOT of prime importance to an appraiser of property:

12-36.Which term indicates that in the event of default,the lender can require that the entire amount of the debt become due?

12-29."Significant compensating factors," after dual qualifying ratios have been computed in respect to gross income,include:

12-34.The number of states that require that first mortgages be non-recourse through anti-deficiency judgment legislation are:

12-33.Which type of note limits the lender's remedy to the value of the residence that serves as collateral?

For 95% loan-to-value loans FNMA requires that,as a percent of gross income,the payment not exceed:

12-19.The theories that explain default risk include:

12-31.A Federal agency that requires a 10 percent down payment in order to purchase adjustable rate mortgages (ARMs)with negative amortization is: