Principles 8

Question 1

Federal Reserve Bank System

Answer 1

Was created by Congress in 1913 to serve as the central bank of the United States.

Question 2

Federal Deposit Insurance Corporation (FDIC)

Answer 2

Was created by Congress in 1933 to insure individual accounts in participating banks and (as of 1989) savings and loan associations, currently up to $250,000 per depositor, per insured bank, for each ownership category.

Question 3

Home affordable refinance program (HARP)

Answer 3

• introduce March 2009, and later extended through September 30, 2017.
• it’s for borrowers with little or no equity in their home
• Allows a borrower to refinance their mortgage with no new or additional mortgage insurance

Question 4

Promissory note

Answer 4

• Is the borrower’s promise to pay the amount borrowed
• is evidence of the debt
• It establishes the underlying obligation of the loan transaction.

Question 5

Security instrument

Answer 5

Is used to identify the real estate that serves as assurance that the loan will be repaid.

Question 6

Hypothecation

Answer 6

The real property will be forfeited to the holder of the security instrument if the underlying debt is not paid.

Question 7

Usury

Answer 7

Is the charging of an exorbitant amount or rate of interest and is the subject of both state and federal law.

Question 8

Pledge

Answer 8

Possession of the pledges property is turned over to the lender until the debt is paid.

Question 9

Balloon payment

Answer 9

An installment that is at least twice the amount of the smallest installment.

Question 10

Joint and several liability

Answer 10

If one co-signer defaults in payment on the note, the note holder can demand full payment from any other co-signer.

Question 11

Mortgage

Answer 11

• security instrument

- an instrument by which property is hypothecated to secure the payment of a debt or an obligation.

Question 12

Redemption period

Answer 12

A period following the sale during which the judgement debtor or the judgement debtor’s successor in interest can buy back the property.

Question 13

Deed of trust (trust deed)

Answer 13

Is an instrument by which real property is hypothecated to secure payment of a debt or an obligation.

Question 14

Difference between mortgage vs. a trust deed?

Answer 14

There is no right of redemption following a trustee’s sale.

Question 15

Unlawful detainer

Answer 15

Is the legal action which the court orders the sheriff to evict the present occupant.

Question 16

Unruh Civil Rights Act

Answer 16

Covers contracts for goods and services.

Question 17

Construction loan

Answer 17

• Aka interim loan
• made to finance building construction or other improvements to land.
• a short-term temporary loan used until permanent financing is available

Question 18

Uniform residential loan application

Answer 18

Typically is used to qualify a prospective borrower purchasing a single-family residence.

Question 19

Office of thrift supervision (OTS)

Answer 19

Regulates the savings and loan industry.

Question 20

Federal Housing Finance Agency (FHFA)

Answer 20

Oversees the federal Home Loan Banks, which lend funds to member institutions.

Question 21

Judicial foreclosure of a mortgage is?

Answer 21

A longer process than a trustee’s sale, and there is no right of redemption following the trustee’s sale.

Question 22

Institutional lenders

Answer 22

• include thrifts, commercial banks, mutual savings banks, credit unions, and insurance companies.

Question 23

Noninstitutional lenders

Answer 23

• include mortgage companies, and private individuals

Question 24

Money is?

Answer 24

A medium of exchange as well as a measure of value

Question 25

FDIC

Answer 25

Federal agency that insures savings accounts

Question 26

Judicial foreclosure

Answer 26

Proceeding in which a mortgage, a trustee, or another lienholder on property requests a court-supervised sale of the property to cover the unpaid balance of a delinquent debt.