Question

1) What is a lock-box provision?

a) Trustee or Lender has control over gross revenues of underlying properties

b) Reserve balance is set at a percentage of incoming cashflow

c) Loans absolutely cannot be prepaid prior to Open Period.

d) Bond investors do not receive accrued interest until bond is sold or retired.

2) The best measure of a property’s ability to service its debt is:

a) Cap Rate

b) LTV

c) NOI

d) DSCR

Answer 1

Q-1 :: ANSWER :: (A) Trustee or Lender has control over gross revenues of underlying properties

=> Explanation :;

The Lock Box Provision Is The System That Is Used In The Banking. When bank Have Receive Costumer Payments Then Bank Collect and Process All the Costumer Payment Directly to The Trustee"s Account And Trustee or Lender has control over gross revenues of underlying properties. So All The Underlying Properties Gross Revenue Is Controlled By Lenders Or Trustees

Q-2 :: Answer :: (D) DSCR

=> Explanation ::

DSCR Stand For Debt-Service Coverage Ratio. The best Measure Of A Property's Service its Debt Is Debt Service Coverage Ratio. it reflect the ability to service debt in a particular Income that is given. So In a Particular Income How much Does It have Ability To Service The Debt Is Measure By The Debt Service Coverage Ratio.