Alaska Real Estate Salesperson Exam — All Questions
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In a typical mortgage or deed of trust, which document is the borrower's personal promise to repay the debt?
- a.The deed of trust
- b.The mortgage
- c.The reconveyance
- d.The promissory note✓
The promissory note is the borrower's written promise to repay the loan and is the evidence of the debt itself. The mortgage or deed of trust is the security instrument that pledges the property as collateral; it secures the note but does not create the debt. A reconveyance is issued when the debt is fully paid to release the lien.
A clause in a loan that allows the lender to demand the entire remaining balance be paid immediately if the borrower defaults is called a(n):
- a.Acceleration clause✓
- b.Alienation clause
- c.Subordination clause
- d.Defeasance clause
An acceleration clause lets the lender declare the whole unpaid balance due at once upon default, which is a necessary step before foreclosure. An alienation (due-on-sale) clause lets the lender call the loan due if the property is sold or transferred. A subordination clause changes lien priority. A defeasance clause requires the lender to release the lien once the debt is paid.
Which federal law requires lenders to disclose the true cost of credit, including the annual percentage rate (APR) and finance charges, to consumer borrowers?
- a.RESPA
- b.The Fair Housing Act
- c.The Truth in Lending Act (Regulation Z)✓
- d.The Equal Credit Opportunity Act
The Truth in Lending Act, implemented by Regulation Z, requires lenders to disclose credit terms such as the APR and total finance charges so borrowers can compare loans. RESPA governs settlement-cost disclosures and prohibits kickbacks. The Fair Housing Act bars discrimination in housing. The Equal Credit Opportunity Act prohibits discrimination in lending but does not set the cost-of-credit disclosure rules.