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1. If a borrower defaults on a mortgage loan that contains an exculpatory clause and the lender receives less than the amount owed on the mortgage when the property is sold in foreclosure, the lender
a. can take legal action against the borrower in order to recover the difference between the amount received when the house was foreclosed upon and sold and the loan amount.
b. is limited to the amount received when the house was foreclosed upon and sold.
c. can put a lien on the borrower's new house.
d. will have the borrower sent to debtor's prison.
2. In a standard mortgage contract, the principle borrowed is said to be amortized over the term of the loan. In other words, when a borrower makes their scheduled payment the principle balance
a. decreases.
b. remains the same.
c. increases.
d. decreases then, after a while, increases.
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