Section 7 Unit 1

Voluntary and specific

A mortgage lien is a(n) ______ lien.

Contract for deed

A vendor and vendee are the parties involved when the finance instrument is a ______.

Mortgage

Financing for a real estate transaction can use a note with a ______ or a note with a deed of trust.

Involuntary, general

Max has a dog that bit his neighbor. The neighbor sued Max, which resulted in a judgment against him. Max refused to pay the neighbor according to the judgment. The neighbor placed a lien against Max. How is this lien classified?

Promissory note

The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______.

Contract for deed

The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ______.

Sign the note, mark it "paid in full," and return it to Travis.

Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?

It restricts the owner's use or decreases the value.

What are the effects on a property if it includes an encumbrance?

A defect on a title that can be monetary or physical

What is an encumbrance?

Endorsement of the note

When a promissory note is sold, how is ownership transferred?

A lien on the property due to an unpaid tax bill

Which of the following describes an encumbrance?

Court order by judge

Which of the following entities has the authority to place an equitable lien on a property?

A promissory note is a legal instrument that's similar in nature to a contract.

Which of the following is a true statement about the use of a promissory note?

The promissory note is endorsed to the new owner of the loan.

Which of the following is a true statement about when a promissory note is sold?

The borrower and the lender

Which parties must be identified on the promissory note?

The contract for deed is usually used in a seller-financed transaction.

Which statement correctly describes a contract for deed?