Mississippi Real Estate Broker Exam — All Questions

A borrower sells a home still subject to a mortgage that contains an alienation (due-on-sale) clause. What can the lender do?

• a.Nothing; the loan simply transfers to the buyer
• b.Increase the interest rate but not call the loan
• c.Demand the full remaining balance be paid upon the transfer✓
• d.Force the buyer to assume the loan on the original terms

An alienation clause, also called a due-on-sale clause, lets the lender accelerate the loan and demand the entire remaining balance if the property is transferred without the lender's consent. It prevents a buyer from simply taking over the seller's loan. The lender is not required to allow an assumption or merely raise the rate. Brokers structuring seller carry-backs, wraparounds, or 'subject to' deals must respect the senior lender's due-on-sale rights.

In a deed of trust, what is the role of the trustee?

• a.A neutral third party who holds bare legal title until the debt is repaid✓
• b.The lender who advances the loan funds
• c.The borrower who repays the note
• d.A government official who records the lien

A deed of trust involves three parties: the trustor (borrower), the beneficiary (lender), and the trustee, a neutral third party who holds bare legal title as security. When the loan is paid, the trustee issues a reconveyance releasing the lien; on default, the trustee may conduct a nonjudicial foreclosure where the state allows. This differs from a mortgage, which has only two parties. Knowing the roles helps a broker explain closing documents accurately.

A settlement service provider offers a broker a cash payment for each buyer the broker refers, with no service performed in return. Under RESPA this arrangement is:

• a.Permitted if disclosed in the listing agreement
• b.Permitted because referral fees are always legal
• c.Permitted only for commercial transactions
• d.Prohibited as an illegal kickback for a referral✓

RESPA prohibits kickbacks, fee-splitting, and unearned fees for referrals of settlement services on federally related mortgage loans. Paying or receiving anything of value merely for a referral, with no bona fide service rendered, is an illegal kickback, and mere disclosure does not cure it. A broker must police the office against such arrangements because a RESPA violation can expose the firm to serious penalties, making this a core risk-management duty.

A real estate advertisement states 'Only 5% down!' Under the Truth in Lending Act (Regulation Z), what does using this specific term require?

• a.Nothing further, because down payment terms are exempt
• b.Disclosure of additional credit terms such as APR and repayment terms✓
• c.Approval from the lender before the ad may run
• d.That the property be a primary residence only

Under Regulation Z, certain specific credit figures are 'trigger terms.' Stating a term such as the amount of the down payment, the number of payments, the period of repayment, or the finance charge triggers a duty to disclose additional required terms, including the annual percentage rate (APR). General statements like 'low down payment' do not trigger the rule, but a specific figure like '5% down' does. Brokers must supervise office advertising for TILA compliance.