Sec4-P138

A borrower signs a document at closing acknowledging they promise to repay the lender under specific terms, including interest rate, payment due dates, and penalties if payments are missed.

Which document is being described?

A borrower lives in a deed-of-trust state. At closing, a trustee is named and holds legal title until the loan is repaid. If the borrower defaults, foreclosure may occur without court involvement.

What type of foreclosure process is being described?

A home seller wants to transfer their existing mortgage to a buyer rather than paying off the loan at closing. The mortgage contract contains a provision allowing this, subject to lender approval.

What clause allows this transfer?

A buyer agrees to assume the seller’s mortgage. The lender reviews the buyer’s credit, income, and assets before approving the transfer.

Why is this step required?

After establishing an escrow account for a purchase loan, a borrower receives a statement showing estimated taxes, insurance premiums, and other charges expected over the next 12 months.

What statement is being provided?

A borrower applies for a refinance and asks whether they will receive an Escrow Analysis Statement at account setup.

Which response is correct?