Finance
In Michigan, a 'mortgage modification' agreement between lender and borrower typically:
ACreates a new mortgage on the same property
BAlters the terms of the existing mortgage (rate, payment, term) without refinancing, often to help a borrower avoid foreclosure✓ Correct
CTransfers the mortgage to a new lender
DAdds additional collateral to secure the mortgage
Explanation
A loan modification changes the terms of an existing Michigan mortgage without creating a new loan—commonly by reducing the interest rate, extending the term, or deferring payments—often as an alternative to foreclosure for distressed borrowers.
People Also Study
Related Michigan Questions
- The annual percentage rate (APR) on a Michigan mortgage loan will typically be higher than the stated interest rate because:Finance
- A Michigan buyer obtains a $180,000 mortgage with a 30-year term and a monthly P&I payment of $1,198. How much total interest will be paid over the life of the loan?Real Estate Math
- In Michigan, a mortgage lender who charges higher interest rates to borrowers in predominantly minority neighborhoods than to equally qualified borrowers in predominantly white neighborhoods is practicing:Fair Housing
- A Michigan lender who makes a residential mortgage loan must provide the borrower with a 'Servicing Disclosure Statement' disclosing:Finance
- Which type of Michigan mortgage loan is most common for borrowers with limited credit history who cannot afford a large down payment?Finance
- In Michigan, a mortgage lender's security interest in real property is created by:Finance
- In Michigan, when a tenant's lease term expires and they remain in possession without a new agreement, they become a:Property Management
- A Michigan 30-year mortgage has monthly payments of $1,450. Total payments over the life of the loan are:Real Estate Math
Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
Study This Topic
Practice More Michigan Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Michigan Quiz →