Private Mortgage Insurance

question 111

Multiple Choice

Private mortgage insurance

• A) Cannot be avoided.
• B) Is part of all mortgages.
• C) Is usually required if the down payment is less than 25%.
• D) Must be terminated automatically when the home owner's equity reaches 22% of the property value at the time the loan was initiated.
• E) Protects the buyer from financial loss if the value of the home increases.

---

Definitions:

Resulting Trust

A trust formed by implication of law when property is transferred under circumstances suggesting the transferor does not intend the transferee to have beneficial interest in the property.

Revocable Living Trust

A legal document that allows an individual to control their assets during their lifetime and specify how these assets are distributed upon their death. It can be altered or revoked.

Constructive Trust

An equitable remedy imposed by a court to rectify situations where injustice would otherwise occur due to wrongful possession of property.

Irrevocable Living Trust

A legal arrangement where a grantor places assets into a trust, relinquishing control over them, and the assets are managed by a trustee for the benefit of the trust's beneficiaries. Once established, it cannot be amended or dissolved.