Deck 19: Mortgage Foreclosures

Question 1

What is foreclosure, and what are the two basic types of foreclosure?

Answer 1

Foreclosure is the process whereby the real property securing a loan is sold and the proceeds are used to pay the outstanding debt. The two basic types of foreclosure are nonjudicial foreclosure and judicial foreclosure.

Question 2

What information is included in a notice of trustee's sale?

Answer 2

A notice of trustee's sale ordinarily includes the following information:
(1) the name of the trustee;
(2)the name of the trustor;
(3)the name of the beneficiary;
(4)the legal description of the property and the street address;
(5)the date of the sale;
(6)the time of the sale;
(7)the location of the sale;
(8)the recording information pertaining to the deed of trust;
(9)the recording information pertaining to the notice of default;
(10)the party conducting the sale;
(11)the unpaid balance, together with advances, costs, and expenses;
(12)the manner in which payment for the property is to be made; and
(13)a disclaimer regarding warranty of title of the property.

Question 3

In title theory states, deeds of trust are the primary security instruments.

Answer 3

True

Question 4

If there is a risk that the property's value may diminish, or if the property is rental property, a foreclosure complaint should include a request for the appointment of a ___.

Question 5

A reinstatement of loan is particularly applicable if the loan is secured by a standard FNMA/FHLMC mortgage instrument.

Question 6

In a foreclosure action, junior lienholders:

A) receive proceeds before the senior lienholder's debt is paid in full
B) receive proceeds after the senior lienholder's debt is paid in full
C) do not receive proceeds if a senior lienholder brings suit first

Question 7

What information is included in a notice of default?

Question 8

In ___ foreclosure, the lender forecloses by taking possession of the real property and holding possession for a specified time period, after which legal title to the property passes to the lender.

Question 9

A junior lienholder may bring a foreclosure action before action is taken by a senior lienholder.

Question 10

In a judicial foreclosure, the plaintiff should file a:

A) notice of default
B) notice of trustee's sale
C) notice of lis pendens

Question 11

In assisting an attorney with a judicial foreclosure, what documents might a paralegal prepare?

Question 12

In a nonjudicial foreclosure, the purchaser of the property receives a:

A) general warranty deed
B) sheriff's deed
C) trustee's deed

Question 13

A ___ is a statutorily prescribed period of time within which a borrower may prevent foreclosure by paying the amount(s) owed, plus interest and penalties.

Question 14

Service by publication is known as     .

Question 15

The necessary parties to a foreclosure suit are those individuals or entities having an interest in the real property superior to the interest of the lender.

Question 16

A judicial foreclosure generally is a lengthier procedure than a nonjudicial foreclosure.

Question 17

What should a junior lienholder do to protect its interests?

Question 18

In a judicial foreclosure, if the defendant was served by publication, state law may require the appointment of ___.

Question 19

The first step in a nonjudicial foreclosure process is the preparation of a:

A) notice of default
B) deed in lieu of foreclosure
C) notice of trustee's sale

Question 20

In a lien theory state, the appropriate foreclosure method is:

A) nonjudicial foreclosure
B) judicial foreclosure
C) deed in lieu of foreclosure