Exam 31: B:mortgages Foreclosures After the Recession

With an adjustable-rate mortgage,the rate of interest paid by the borrower changes periodically.

Main Street Lenders,Inc. ,attempts to coerce Nolan-who specializes in determining the value of real and personal property-into misstating the value of a property on which a loan is to be issued.This is

Kim's home is valued at $250,000.Kim has paid the mortgage-she has 100 percent equity in the property.She wants to start a new business with Lloyd.To obtain funds,Kim refinances the loan through Metro Bank,borrowing $200,000 for fifteen years at an interest rate of 4.85 percent.Before the loan is completed,Metro provides Kim with all of the required disclosures.On the day of the loan,a fifteen-year Treasury bond is yielding 2.85 percent.Kim pays $7,500 in fees to the bank.Less than a month later,she sells her interest in the new business to Lloyd and wants to rescind the loan.Which federal law covers this loan-TILA,HOEPA,HPML,or HAMP? Can Kim rescind the deal? Explain.

Harbor Bay Bank has made mortgage loans to consumers that qualify for the Home Affordable Modification Program (HAMP),which offers incentives to lenders to change the terms of certain loans.The purpose of HAMP is to

Brendan borrows $150,000 from Countywide Credit Union to buy a home.The loan is a fixed-rate mortgage at 5.5 percent with a thirty-year term secured by Brendan's home,which is his principal residence.When Brendan has paid off $10,000 of the mortgage-still owing $140,000-he loses his job and defaults on the loan.The market for homes has declined since Brendan took out the loan,and the value of the home at the time of default is $100,000.Despite the default,Brendan assures Countywide that he has accepted a new position,which will begin in six months.What are Brendan's options to recover the amount still owed on the mortgage? Which option would most benefit these parties? Why?

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.

There are additional disclosure requirements for a higher-priced mortgage loan.

The initial interest rate is the part of a purchase price that is paid up front in cash.

Kenton borrows $150,000 from Liberty Home Finance Corporation to buy a home.Federal law concerns primarily

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

A borrower has a right to rescind a mortgage within three business days.

Due to a lower default rate,lenders charge a lower interest rate for subprime loans.

Home equity is the portion of a home's value that is "paid off."

Consumer Mortgage Loans provides Demi with a mortgage to buy a home.Under the terms,Demi can choose to pay only the interest portion of the monthly payments and forgo paying of the principal for five years.This is

A reverse mortgage starts as a fixed-rate mortgage and then converts into an adjustable-rate mortgage.

Foreclosure is the postponement,for a limited time,of part or all of the payments on a loan in jeopardy of repossession and sale.

Federal law encourages private lenders to modify mortgages so as to lower the monthly payments of borrowers who are in default.

Borrowers are required to recite the terms of their loans in clear,readily understandable language so that lenders can make rational choices.

Great Plains Bank provides a loan to enable Helene to buy real property.This loan is

The loan that a lender provides to enable a borrower to purchase real property is a mortgage.