Real Estate Finance – 7th Edition
Chapter 7 Quiz
By Walt Huber, MS and Levin P. Messick, IFAC
© April 2009, Educational Textbook Company
1. In a promissory note, the borrower is called the:
a. lender.
b. maker.
c. benefactor.
d. seller.
2. A declaration of default is prepared by a:
a. tenant.
b. sheriff.
c. borrower.
d. lender.
3. A subordination clause is most often used for:
a. construction loans.
b. refinancing loans.
c. loans for open land.
d. loans for public buildings.
4. Negotiable instruments are promissory notes that are:
a. non-negotiable.
b. freely transferable.
c. easily recordable.
d. difficult to transfer.
5. A clause in a finance instrument that limits a borrower’s right to transfer the property without the lender’s permission is called a(n):
a. acceleration clause.
b. alienation clause.
c. prepayment clause.
d. none of the above.
6. A “due-on-sale” clause in a loan allows:
a. the lender to declare the entire loan balance due immediately.
b. the lender to declare foreclosure on a property.
c. the lender to negotiate new terms on a loan.
d. the lender to declare a trustee’s sale.
7. A creditor is given the right to have the security property sold to satisfy the debt if the debtor fails to pay the debt according to the terms of the agreement. This is done with a:
a. deed of reconveyance.
b. power of sale.
c. security instrument.
d. title of theory.
8. An out-of-court sale or auction initiated at the direction of a beneficiary is called a:
a. notice of sale.
b. trustee’s sale.
c. sheriff’s sale.
d. nonjudicial sale.
9. In a foreclosure, a judge’s order is called an:
a. order of execution.
b. order of disposition.
c. order of redemption.
d. none of the above.
10. In the event of a default, a creditor or seller may declare the entire outstanding balance immediately due and payable with a(n):
a. quiet title.
b. prepayment clause.
c. due-on-sale clause.
d. acceleration clause.
Real Estate Finance – 7th Edition
Chapter 7 Quiz Answers
© April 2009, Educational Textbook Company
1. b (p. 121)
2. d (p. 125)
3. a (p. 134)
4. b (p. 121)
5. b (p. 133)
6. a (p. 133)
7. c (p. 121)
8. b (p. 125)
9. a (p. 128)
10. d (p. 132)
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