Podcast
Questions and Answers
What is the purpose of a subordination clause in a security instrument for land purchase loans?
What is the purpose of a subordination clause in a security instrument for land purchase loans?
- To prevent developers from taking out additional loans for development
- To reduce the interest rates on land purchase loans
- To provide higher lien priority to the security instrument for construction loans (correct)
- To ensure that the developer can sell individual lots unencumbered by the lien
What does a partial release clause allow developers to do in relation to land purchase loans?
What does a partial release clause allow developers to do in relation to land purchase loans?
- Skip making repayments on the principal amount
- Extend the loan term indefinitely
- Increase the interest rates on the land purchase loans
- Release individual lots from the lien once specific amounts of principal have been repaid (correct)
In a deed of trust, what is the role of the trustee?
In a deed of trust, what is the role of the trustee?
- To hold legal title to the property until the loan is fully repaid (correct)
- To assess the creditworthiness of the borrower
- To purchase the property on behalf of the borrower
- To manage and invest the funds received from the lender
Why do lenders generally require construction loans to have a subordination clause?
Why do lenders generally require construction loans to have a subordination clause?
What benefit does a partial release clause provide to developers when selling individual lots?
What benefit does a partial release clause provide to developers when selling individual lots?
What are the payments made up of under a straight note?
What are the payments made up of under a straight note?
Which element is not required in a mortgage?
Which element is not required in a mortgage?
What is a requirement to be a holder in due course of a negotiable instrument?
What is a requirement to be a holder in due course of a negotiable instrument?
Which statement regarding security instruments is not true?
Which statement regarding security instruments is not true?
What role does the trustee play in a deed of trust?
What role does the trustee play in a deed of trust?
Flashcards are hidden until you start studying
