Finance
The term 'underwater mortgage' (or 'negative equity') refers to a situation where:
AA property is in a flood zone
BThe outstanding mortgage balance exceeds the current market value of the property✓ Correct
CThe borrower has fallen behind on mortgage payments
DThe lender cannot locate the original mortgage documents
Explanation
An underwater mortgage (negative equity) occurs when the property's current market value is less than the outstanding loan balance. The owner would need to bring cash to closing to sell the property, or pursue a short sale with lender approval.
Related Tennessee Finance Questions
- In Tennessee, a 'prepayment penalty' in a mortgage is:
- A Tennessee borrower who is refinancing their primary residence has a federally mandated right of rescission period of:
- A real estate investment trust (REIT) allows individuals to:
- A home equity loan differs from a HELOC in that a home equity loan:
- A borrower's loan-to-value (LTV) ratio on a purchase is 95%. This is significant because:
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- A 'points' buy-down in a mortgage means the borrower pays upfront to:
- A Tennessee borrower who wants to lower their mortgage payment without refinancing might consider:
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