PSI Oklahoma Real Estate Practice Test

What was the outcome for a couple who lost their home to foreclosure after becoming unemployed?

1. The property was sold at a loss

2. The home went into a short sale

3. They were not able to keep the payments on their adjustible-rate mortgage

4. They relocated to a different state

The correct answer is: They were not able to keep the payments on their adjustible-rate mortgage

The choice indicating that they were not able to keep the payments on their adjustable-rate mortgage is correct because unemployment often leads to a significant decrease in income, making it challenging for individuals to meet their financial obligations, including mortgage payments. When homeowners experience job loss, they may struggle to keep up with increasing mortgage costs, particularly with an adjustable-rate mortgage, which can result in higher payments over time as interest rates rise. As a result, the couple likely faced difficulty in maintaining their mortgage payments, ultimately leading to foreclosure as a direct consequence. This situation underscores the importance of stable employment and financial planning for homeowners, particularly those with adjustable-rate mortgages that can become more expensive. Other outcomes, such as selling the property at a loss, engaging in a short sale, or relocating, are less directly tied to the immediate financial dynamics of losing a job and failing to make mortgage payments.