Question 1

A foreclosure of a first mortgage will generally terminate a second mortgage lien on the secured property.

Accepted Answer

A) True 
 B)False

Question 2

An oral guaranty is enforceable.

Accepted Answer

A) True 
 B)False

Question 3

A deed in lieu of foreclosure is not a remedy for default stated in the mortgage.

Accepted Answer

A) True 
 B)False

Question 4

Each co-maker of a note is fully responsible for the payment of the note.

Accepted Answer

A) True 
 B)False

Question 5

A debtor always has the right to pay off the debt and redeem the real property from foreclosure prior to the sale.

Accepted Answer

A) True 
 B)False

Question 6

A guaranty of a note must be written.

Accepted Answer

A) True 
 B)False

Question 7

A borrows $50,000 from Bank and pledges real property as security. After the loan, A sells the property to B, who buys subject to the mortgage. B then defaults on the mortgage loan. Under the following example, which of the following statements is/are true?

Accepted Answer

A)   The bank may foreclose on the property.
B)   The bank can sue A to recover debt.
C)   The bank cannot sue B to recover debt.
D)   A cannot sue B for reimbursement if A pays the bank.
E)   All of the above.F)  None of the above.

Question 8

Power of sale foreclosure is generally a judicial foreclosure proceeding.

Accepted Answer

A) True 
 B)False

Question 9

Only a nonnegotiable note can be transferred to a holder in due course.

Accepted Answer

A) True 
 B)False

Question 10

An unqualified endorsement imposes upon the endorser the obligation to pay the note in the event the maker does not.

Accepted Answer

A) True 
 B)False

Question 11

Notes are rarely witnessed and notarized.

Accepted Answer

A) True 
 B)False

Question 12

Power of sale foreclosure is generally a nonjudicial foreclosure proceeding.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a mortgagee's remedy for a debtor's default on a mortgage?

Accepted Answer

A)   Judicial foreclosure
B)   Nonjudicial foreclosure
C)   Appointment of a receiver
D)   Injunction

Question 14

A deed in lieu of foreclosure may cause a merger of estates that terminates the lender's mortgage.

Accepted Answer

A) True 
 B)False

Question 15

Forgery of a maker's signature is a defense to a holder in due course.

Accepted Answer

A) True 
 B)False

Question 16

A debtor's rights in bankruptcy are determined by:

Accepted Answer

A)   the law of the state where the debtor resides.
B)   the law of the state where the creditor resides.
C)   federal law.
D)   the law of the state where the property is located.

Question 17

Most notes are witnessed and notarized.

Accepted Answer

A) True 
 B)False

Question 18

Only a negotiable note can be transferred to a holder in due course.

Accepted Answer

A) True 
 B)False

Question 19

Usury statutes establish a minimum rate of interest that can be charged on the loan.

Accepted Answer

A) True 
 B)False

Question 20

If property is sold subject to a debt, it means that the purchaser does not have personal liability to pay the debt.

Accepted Answer

A) True 
 B)False

Exam 10: Legal Aspects of Real Estate Finance

Each co-maker of a note is fully responsible for the payment of the note.

Correct AnswerverifiedShow Answer

Most notes are witnessed and notarized.

Correct AnswerverifiedShow Answer

Only a nonnegotiable note can be transferred to a holder in due course.

Correct AnswerverifiedShow Answer

Power of sale foreclosure is generally a judicial foreclosure proceeding.

Correct AnswerverifiedShow Answer

An unqualified endorsement imposes upon the endorser the obligation to pay the note in the event the maker does not.

Correct AnswerverifiedShow Answer

A borrows $50,000 from Bank and pledges real property as security. After the loan, A sells the property to B, who buys subject to the mortgage. B then defaults on the mortgage loan. Under the following example, which of the following statements is/are true?

Correct AnswerverifiedShow Answer

A debtor always has the right to pay off the debt and redeem the real property from foreclosure prior to the sale.

Correct AnswerverifiedShow Answer

A deed in lieu of foreclosure is not a remedy for default stated in the mortgage.

Correct AnswerverifiedShow Answer

A guaranty of a note must be written.

Correct AnswerverifiedShow Answer

Usury statutes establish a minimum rate of interest that can be charged on the loan.

Correct AnswerverifiedShow Answer

Which of the following is not a mortgagee's remedy for a debtor's default on a mortgage?

Correct AnswerverifiedShow Answer

A foreclosure of a first mortgage will generally terminate a second mortgage lien on the secured property.

Correct AnswerverifiedShow Answer

Power of sale foreclosure is generally a nonjudicial foreclosure proceeding.

Correct AnswerverifiedShow Answer

Only a negotiable note can be transferred to a holder in due course.

Correct AnswerverifiedShow Answer

A deed in lieu of foreclosure may cause a merger of estates that terminates the lender's mortgage.

Correct AnswerverifiedShow Answer

Forgery of a maker's signature is a defense to a holder in due course.

Correct AnswerverifiedShow Answer

If property is sold subject to a debt, it means that the purchaser does not have personal liability to pay the debt.

Correct AnswerverifiedShow Answer

An oral guaranty is enforceable.

Correct AnswerverifiedShow Answer

Notes are rarely witnessed and notarized.

Correct AnswerverifiedShow Answer

A debtor's rights in bankruptcy are determined by:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified