Deck 29: Mortgages and Nonconsensual Liens

Question 1

A mortgagor's liability can terminate through foreclosure.

Answer 1

True

Question 2

Attachment liens and judgment liens are obtained by the creditor with the debtor's consent.

Answer 2

False

Question 3

A property can be sold without paying off the mortgage if the mortgage is assumed by the new buyer, who agrees to pay the seller's debt.

Answer 3

True

Question 4

After default, the mortgagor has no right to exercise his equity of redemption.

Question 5

"Due on sale" clauses, by which assignment of mortgages is prohibited, are illegal.

Question 6

The deed of trust requires only two parties: the borrower and the lender.

Question 7

To shut off the owner's interest in property and sell it upon default is known as foreclosure.

Question 8

A strict foreclosure gives the creditor a right to seek deficiencies from the debtor.

Question 9

The refusal of lenders to make loans on property in low-income neighborhoods is known as redlining.

Question 10

A mortgagee (e.g., a bank) cannot assign a mortgage unless the mortgagor agrees.

Question 11

A mortgage is a security in which the collateral is a piece of land.

Question 12

Buyer purchases real estate "subject to" the existing mortgage; she will have to pay the mortgage debt if the mortgagor does not.

Question 13

A mortgage is a conditional conveyance of real estate.

Question 14

A deed of trust is a conditional conveyance of real estate to a trustee for the benefit of the creditor.

Question 15

The acceleration clause provides that if a debtor should default on any particular payment, the entire principal, but not the interest, will become due immediately at the lender's option.

Question 16

Recording a lien against real estate does not give the lienor an automatic right to the property if the debt remains unpaid.

Question 17

The official filing of a legal document, a mortgage, or a deed is known as recording.

Question 18

A mortgage between parties is invalid if it is not recorded.

Question 19

The due-on-sale clause prevents assumption of a mortgage.

Question 20

The party who holds a mortgage is known as the mortgagor.

Question 21

If a mortgage is obtained at a high rate and interest rates subsequently decline, a mortgagee would probably allow assignment of the mortgage.

Question 22

Once a mortgage has been foreclosed and sold to a new buyer, the new buyer's title may still be devested if the previous mortgagor timely redeems.

Question 23

An attachment lien prevents a property owner from disposing of property during a lawsuit; it is obtainable without judicial intervention.

Question 24

The benefit to a deed of trust is no judicial assistance is necessary for the creditor to obtain title to the real estate collateral.

Question 25

Which of the following act preempts state laws and upholds the validity of due-on-sale clause?

A) Ashurst-Sumners Act
B) Celler-Kefauver Act
C) Esch-Cummins Act
D) Dingell-Johnson Act
E) Garn-St. Germain Depository Institutions Act

Question 26

A mechanic's lien is given priority from the date when it is recorded.

Question 27

Which of the following is a type of mortgage where title to the property is nominally in a trustee, who sells if the buyer defaults?

A) Deed of subrogation
B) Deed of exoneration
C) Deed of perfection
D) Deed of sale
E) Deed of trust

Question 28

Which of the following acts requires that the appropriate federal financial supervisory agencies encourage regulated financial institutions to meet the credit needs of the local areas in which they are chartered, consistent with safe and sound operation?

A) Home Mortgage Disclosure Act
B) Fair Housing Act
C) Equal Credit Opportunity Act
D) Community Reinvestment Act
E) Financial Institutions Reform, Recovery and Enforcement Act

Question 29

Foreclosure may only be accomplished by judicial decree.

Question 30

To shut off the owner's interest in property and sell it upon default is known as:

A) redlining.
B) recording.
C) attachment.
D) foreclosure.
E) redemption.

Question 31

A _____ is a means of securing a debt with real estate.

A) bequest
B) bailment
C) mortgage
D) buyback
E) pledge

Question 32

Raul took his car to Ace's Garage for repair, but was unable to pay the bill. Ace may obtain a mechanic's lien on Raul's real estate.

Question 33

In a land contract, a court supervises the transfer of title from seller to buyer.

Question 34

The refusal of lenders to make loans on property in low-income neighborhoods or impose stricter mortgage terms when they do make loans there is known as:

A) cream-skimming.
B) redlining.
C) exoneration.
D) blockbusting.
E) subrogation.

Question 35

Under statutes enacted in many states, a mortgagor has one last chance to recover his property, even after foreclosure. This is known as the right of:

A) redemption.
B) subrogation.
C) exoneration.
D) acceleration.
E) redlining.

Question 36

Oliver Owner hires Contractor to remodel his living room; the work involves the services of a Masonry, Inc., a subcontractor. After the work is done Contractor fails-unknown to Owner-to pay Masonry, Inc. In most states Masonry itself cannot put a lien on Owner's property.

Question 37

Judicial sale and power of sale are the two types of sale used in:

A) foreclosure.
B) attachment.
C) perfection.
D) exoneration.
E) subrogation.

Question 38

A mortgage is invalid unless it is recorded.

Question 39

Which of the following refers to a situation in which the creditor takes the collateral, discharges the debtor, and has no right to seek any deficiency?

A) Exoneration
B) Blockbusting
C) Subrogation
D) Judicial sale
E) Strict foreclosure

Question 40

Which of the following clauses permits the mortgagee to sell the mortgaged property at public auction without going to court?

A) Strategic foreclosure
B) Power of attorney
C) Power of sale
D) Strict foreclosure
E) Acceleration

Question 41

With a deed of trust,

A) the trustee's possession is really a legal fiction to allow non-judicial foreclosure.
B) title to real estate is in the trustee's name, but if the buyer defaults title revests in seller.
C) the trustee may "bump" the buyer and take possession herself, after paying the seller-owner.
D) disposition after a foreclosure requires court approval.
E) none of the above

Question 42

A(n) _____ is a judicial lien imposed to preserve property during litigation.

A) tax lien
B) attachment lien
C) judgment lien
D) mechanic's lien
E) possessory lien

Question 43

Buyer purchases Seller's house, assuming the mortgage.

A) Buyer is personally liable to pay the mortgage.
B) Seller is personally liable.
C) Seller is discharged from obligation.
D) The mortgagee must make an "election of remedies" as to whether to pursue Buyer or Seller.
E) two of the above

Question 44

To qualify for a(n) _____, the claimant must file a sworn statement describing the work done, the contract made, or the materials furnished that permanently improved the real estate.

A) attachment lien
B) judgment lien
C) mechanic's lien
D) possessory lien
E) tax lien

Question 45

Once filed, which of the following liens takes priority over all subsequently arising liens?

A) Possessory lien
B) Tax lien
C) Attachment lien
D) Judgment lien
E) Mechanic's lien

Question 46

The right of redemption requires

A) payment of installment in arrears
B) a judicial decree
C) consent of all parties
D) payment of the entire amount owing, plus interest
E) all of the above

Question 47

Under the _____, the purchaser takes possession and agrees to pay the seller over a period of years. Until the final payment, title belongs to the seller.

A) land contract
B) right of redemption
C) subrogation
D) exoneration
E) acceleration clause

Question 48

A(n) _____ gives the right to continue to keep the goods on which work has been performed or for which materials have been supplied until the owner pays for the labor or materials.

A) judgment lien
B) mechanic's lien
C) tax lien
D) possessory lien
E) attachment lien

Question 49

Explain deed of trust and installment contract.

Question 50

What are the major types of nonconsensual liens?