Chapter 6
How many parties are included in a deed of trust...?
3
Andrew obtained a loan from a local bank to purchase a new house. Under the deed of trust system, Andrew's bank is the...?
Beneficiary
This is a legal document by which a borrower pledges certain real property or collateral as guarantee for the repayment of a loan...?
Deed of trust
An acceleration clause granting the lender the right to demand full payment of the mortgage upon a sale of the property is known as a...?
Due on sale clause
An unlawful intrusion onto another's adjacent property by improvements to real property is known as a/an...?
Encroachment
A right or interest in a property that is used by someone other than the owner is known as a/an...?
Encumbrance
Which of the following refers to an absolute ownership of real property...?
Fee Simple Estate
A lien on all the property of a debtor is known as a...?
General lien
Which of the following is a non-freehold estate...?
Leasehold Estate
This is a legal claim against a mortgaged property, which must be paid when the property is sold...?
Mortgage lien
Which of the following liens often takes the highest priority...?
Mortgage lien
The charge payable to a lender by a borrower under the terms of the loan agreement if the borrower pays off the outstanding principal balance of the loan prior to its maturity is known as a...?
Prepayment penalty
Which of the following establishes personal liability for the payment of a debt...?
Promissory note
This refers to a stipulation that upon the payment of a specific sum of money to the holder of a trust deed or mortgage, the lien of the instrument as to a specifically described lot or area shall be removed from the blanket lien on the whole area involved...?
Release clause
Junior financing loans are also referred to as a...?
Second mortgage
A home equity line of credit is typically ..............to a first mortgage?
Subordinate
Which of the following liens takes top priority over other liens...?
Tax lien
If a buyer assumes a seller's existing mortgage, who is responsible for the payments on the mortgage...?
The buyer
A mortgage is a secured note...?
True
Subordinate loans are riskier than first mortgages...?
True
Mark recently obtained a loan from a local bank to purchase a new house. Under the deed of trust system, Mark is the...?
Trustor
Credit card debt is considered...?
Unsecured debt
The buyer is also known as the...?
Vendee
The seller is also known as the...?
Vendor
Any lien placed on property with consent of, or as a result of, the voluntary act of the owner, is known as a/an...?
Voluntary lien
A right, privilege or interest limited to a specific purpose which one party has in the land of another is known as a/an...?
Easement
A promissory note includes which of the following...?
Effective date of contract List of collateral Amount of debt
A contract for deed is also known as a...?
Land contract
According to lien theory, the lender retains equitable rights to the property, while the borrower retains...?
Legal rights
This is a form of encumbrance which usually makes specific property security for the payment of a debt or discharge of an obligation...?
Lien
Which of the following is a freehold estate created for the duration of the life or lives of certain named persons...?
Life Estate
An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation is known as a...?
Mortgage
The standard provisions of a mortgage incudes which of the following...?
Recording information Note of attachment Granting clause