Study Questions:

Chapter 9

1.Mortgage law is as clear, consistent, and enforceable in the United States as in any place in the world, and far more so than in many countries. What benefits does this bring to a prospective buyer

1. Which of these mortgages clauses is most important to a lender: Due-on sale clause? Acceleration clause? Insurance clause? Escrow clause? Hazardous substance clause? Demand clause?
2. For your own state, determine whether:

a. It is a judicial or nonjudicial foreclosure state.

b. The standard home loan is based on a deed of trust or a mortgage.

c. There is a statutory right of redemption and, if so, how long.

d. Deficiency judgments are allowed against defaulted homeowners.

Based on this information, can you judge whether your state is relatively lender friendly or borrower friendly? For this exercise use the websites noted in the text.

Chapter 10

1. Distinguish between conforming and nonconforming residential mortgage loans and explain the importance of the difference
2. Discuss the role and importance of private mortgage insurance in the residential mortgage market.
3. Explain the maturity imbalance problem faced by savings and loan associations that hold fixed-payment home mortgages as assets