The Main Difference Between an Open-End and Closed-End Mortgage Trust

question 32

Multiple Choice

The main difference between an open-end and closed-end mortgage trust indenture is:

• A) the mutual fund carries a no load fee.
• B) security can be diminished as an open-end trust indenture allows for unlimited bond issuance.
• C) security can be diminished as a closed-end trust indenture allows for unlimited bond issuance.
• D) the mortgage trust company does not have any security.

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Definitions:

Main Purpose Doctrine

A legal principle that suggests a promise to pay another's debt is not subject to the statute of frauds if the guarantor's main purpose is to serve their own interests.

Suretyship Provision

A clause in a contract that involves a third party (the surety), who agrees to fulfill the obligations of a debtor to a creditor, should the debtor fail to fulfill their contractual obligations.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing to be legally enforceable.

Real Estate

Property consisting of land or buildings, along with the natural resources of the land including uncultivated flora and fauna, water, and minerals.