Exam 20: Mortgages Foreclosures After the Recession

Dahlia borrows $125,000 from Clearview Credit Union to buy a home.The interest rate and other terms that are required to be disclosed under federal law must be

Fact Pattern 20-1 Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes. -Refer to Fact Pattern 20-1.For Mai's loan,Northeast provides all required disclosures.Mai has a right to rescind the mortgage

Ridgeline Bank provides Stanley with a mortgage to buy a home.The rate of interest is fixed for three years and then adjusts annually.This is

A subprime mortgage is a loan made to a borrower who does not qualify for a standard mortgage.

Negative amortization occurs when the monthly payments are insufficient to cover the interest due on a loan.

Violet negotiates with Urban Credit Corporation to obtain a loan for $85,000 to buy a home.During the negotiations,Urban Credit orally misrepresents the terms,but provides the required documents,which accurately state the terms.Violet does not read the documents.The party or parties most likely liable for a violation of the law is

A lender can make a higher-priced mortgage loan based on the value of the consumer's home without verifying the consumer's ability to repay the loan.

In a judicial foreclosure,the lender is allowed to foreclose on and sell the property without judicial supervision.

A lender can make a higher-priced mortgage loan based on the value of the consumer's home without verifying the consumer's other credit obligations.

Loan flipping occurs when a lender convinces a homeowner to refinance soon after obtaining a mortgage.

A deficiency judgment requires a borrower to pay the amount of debt remaining after the collateral is sold.

Hubert borrows $100,000 from Integrity Mortgage Mart to buy a home.Soon after obtaining the mortgage,Integrity convinces Hubert to refinance.This is

Reed borrows $150,000 from Suburban Credit Union to buy a home,which secures the loan.Three years later,Reed stops making payments on the loan.After Suburban Credit repossesses and auctions off the property to Tyler,equity remains.This amount most likely belongs to

Virgil borrows $175,000 from United Finance Bank to buy a home.Federal law regulates primarily

Franz asks Gateway Mortgage Credit for a loan to pay for the purchase of a home.With a poor credit score and a high current debt-to-income ratio,Franz does not qualify for a standard mortgage.Gateway is most likely to provide

If a loan is not paid within a reasonable time after a notice of default,the borrower will receive a notice of sale.

Federal mortgage disclosure requirements apply to the written materials that a lender provides and to any oral representations.

There are additional disclosure requirements for a loan that carries a high rate of interest or entails high fees for the borrower.

Steering and targeting occur when a lender manipulates a borrower into accepting a loan product that benefits the lender but is not the best loan for the borrower.

Duran applies to EZ Credit Mortgage Company for $100,000 to buy a home.EZ Credit steers Duran toward an adjustable-rate mortgage even though he qualifies for a fixed-rate mortgage.This is