Chapter 14 Mult Choice
If a borrower in a judicial foreclosure abandons the property, the statutory redemption period could be reduced to: A. 30 days B. 60 days C. 90 days D. 6. months
A. 30 days
After a sheriff's sale, a trustor has a statutory right of redemption of: A. 6 months B. 9 months C. 1 year D. 3 years
A. 6 months
After notice of default and trustee's sale has been recorded, how long does the trustor have to reinstate himself in the property? A. 90 days B. 120 days C. 6 months D. 3 years
A. 90 days
The mortgage foreclosure sale did NOT produce enough to satisfy the debt. What could the mortgagee do? A. file for a deficiency judgment agains the borrower B. have the borrower sign a deed of assumption C. have the trustee execute a quit claim deed D. the mortgagee could do nothing
A. file for a deficiency judgment agains the borrower
To pledge real property as collateral is called: A. hypothecate B. devise C. demise D. descent
A. hypothecate
Which of the following persons is NOT a party to a trust agreement? A. mortgagor B. trustor C. trustee D. beneficiary
A. mortgagor
Once a trustee's sale has occurred in the foreclosure of a trust deed, the trustor has: A. no right to redeem B. 30 days to redeem if property is abandoned C. 6 months to redeem D. 90 days to reinstate
A. no right to redeem
The purpose of collateralizing a note with a deed of trust is to: A. protect the lender B. protect the borrower C. protect the trustee D. protect the mortgagee
A. protect the lender
A commercial property is sold at a foreclosure sale for $10,000 less than what is owed. To recover the loss, the lien holder may: A. sue the mortgagor B. not sue the mortgagor C. sue the title insurance company D. sue the mortgagee
A. sue the mortgagor
Regarding a trust deed foreclosure, which of the following is true? A. the debtor receives a notice of sale B. the debtor notifies the trustee of default C. the trustee notifies the beneficiary of default D. the mortgagor notifies the trustee
A. the debtor receives a notice of sale
What is the first step taken after the Notice of Default and Trustee's sale is recorded inn a non-judicial trust deed foreclosure? A. the notice is sent to the debtor B. the debtor has 60 days to redeem C. trustor will file lis pendens D. trustee will order the beneficiary to proceed with the foreclosure
A. the notice is sent to the debtor
Naked legal title best describes the interest of a: A. trustee under a trust deed B. trustee in an agreement for sale C. trustee in a mortgage D. beneficiary to owner
A. trustee under a trust deed
Once a deed of trust is originated, who owns the property? A. trustor B. trustee C. assignee D. beneficiary
A. trustor
Who gives power of sale in a deed of trust A. trustor B. court C. beneficiary D. trustee
A. trustor
What is the main difference between a mortgage and a deed of trust? A. a mortgage is not a legal document, but a deed of trust is B. a deed of trust is a two-party agreement while a mortgage is a three-party agreement C. a mortgage is a two-party agreement, while a deed of trust is a three-party agreement D. mortgages may be foreclosed non-judicially while a deed of trust may only be foreclosed judicially
C. a mortgage is a two-party agreement, while a deed of trust is a three-party agreement
After a deed of trust foreclosure sale, which of the following is true? A. a deed of reconveyance is given to the trustor B. the note is marked paid and returned to the trustor C. a trustee's deed is given to the new owner D. the trust deed is returned to the trustor
C. a trustee's deed is given to the new owner
A property is sold, but the legal title remains in the seller's name. What type of instrument was used to complete the sale? A. mortgage B. deed of trust C. agreement for sale D. option
C. agreement for sale
A deed of trust is paid off to the: A. trustor B. trustee C. beneficiary D. escrow company
C. beneficiary
The funds for a loan secured by a trust deed are supplied by the: A. trustor B. mortgagor C. beneficiary D. trustee
C. beneficiary
A husband and wife purchase a piece of unimproved vacant land with a 60% loan. A year later, they divorce. The husband signs a quit claim deed to the wife, and she records the document. Six months later, the wife is unable to make payments and the lien is foreclosed. The property sells for less than what is owed. Who can the lender go after for the deficiency judgment? A. only the husband B. only the wife C. both the husband and wife D. neither - a deficiency judgment cannot be obtained
C. both the husband and wife
Which of the following may be protected by Arizona anti-deficiency legislation? A. commercial building B. restaurant on 2 1/2 acres C. home on a 9,000 square foot lot D. business brokerage
C. home on a 9,000 square foot lot
Arizona is considered to be a: A. strict foreclosure state B. title theory state C. lien theory state D. controlled interest state
C. lien theory state
In title theory states: A. mortgagors retain legal title B. borrower has no right to title C. mortgagee retains title D. legal title is held by neutral third party
C. mortgagee retains title
If an addition to a property was made more than 10 years ago without building permit: A. the owner is not required to do anything as the statute of limitations for permits has expired B. the property could not be sold without the seller obtaining a permit C. the government could require the owner to obtain a permit retroactively D. the addition would be required to be demolished
C. the government could require the owner to obtain a permit retroactively
A buyer obtains a loan on a parcel of land and secured it by a deed of trust. Later, the buyer moves a mobile home onto the lot and defaults on the deed of trust. Which of the following is true? A. the lender may foreclose on the land and the mobile home B. the lender may not foreclose under the Homestead Act C. the lender may foreclose on the land only D. the lender may foreclose on the mobile home only
C. the lender may foreclose on the land only
In what situation would a short sale be likely? A. the loan balance is less than the property value B. the loan has a non-recourse provision C. the loan balance is greater than the property value D. the total of all liens is less than the property value
C. the loan balance is greater than the property value
When a deed in lieu of foreclosure is given to a lender, which of the following is true? A. redemption rights remain B. subsequent liens are paid off C. time and costs are less D. the borrower would still be liable for the loan in foreclosure
C. time and costs are less
The borrower using a trust deed is called the: A. mortgagor B. beneficiary C. trustor D. trustee
C. trustor
Which party or parties must sign the trust deed? A. trustee B. trustor and beneficiary C. trustor D. trustor and trustee
C. trustor
A contract to sell land or an agreement for sale is also known as a(n): A. warranty of title B. junior mortgage C. vendor's lien D. equity of redemption
C. vendor's lien
All of the following elements are part of the trustee's non-judicial foreclosure process EXCEPT: A. reinstatement B. recorded notice C. public auction D. acceleration
D. acceleration
When a loan is secured by a deed of trust, who holds the deed of trust documents? A. mortgagee B. trustee C. trustor D. beneficiary
D. beneficiary
What does the high bidder receive at a judicial foreclosure sale? A. sheriff's deed B. treasurer's deed C. trustee's deed D. certificate of sale
D. certificate of sale
A trustee under a deed of trust would NOT be involved in which of the following circumstances? A. loan paid in full B. issuance of the deed of reconveyance C. trustor is delinquent D. collection of monthly loan payments
D. collection of monthly loan payments
Which of the following would NOT occur in a forbearance? A. work out B. deferment C. moratorium D. foreclosure
D. foreclosure
A property has a second mortgage and a valid property recorded first mortgage. If the liens are foreclosed, under what circumstance would the second mortgage holder be paid before the first? A. if the second mortgage holder had signed a subordination agreement B. if the first mortgage was an income tax lien C. if the second mortgage was an income tax lien D. if the first mortgage holder had signed a subordination agreement
D. if the first mortgage holder had signed a subordination agreement
A monthly payment is due on January 1 and has not been received by January 7. In order to begin a foreclosure, the beneficiary must: A. wait 30 days B. wait 60 days C. file a notice to foreclose in the newspaper D. instruct the trustee to take action
D. instruct the trustee to take action
If an owner improves a property, a licensed contractor is required to be used in all of these situations EXCEPT if the property: A. will be sold within one year B. will be leased within one year C. is sold within six months D. is owner-occupied for more than one year
D. is owner-occupied for more than one year
Who carries out the foreclosure when a property is secured by a deed of trust? A. mortgagor B. beneficiary C. redemption officer D. neutral third party
D. neutral third party
At a judicial foreclosure sale, the successful bidder gets a deed from: A. the sheriff B. the trustee C. the lender D. no one
D. no one
A deficiency judgment can be obtained against an owner of which of the following properties? A. owner-occupied single-family residence on less than 2 1/2 acres B. owner-occupied duplex on less than 2 1/2 acres C. non-owner-occupied single-family residence D. owner-occupied four-plex
D. owner-occupied four-plex
If a land contract contains an acceleration clause that the seller elects to exercise in event of default, the: A. seller may declare the equity of the buyer forfeited immediately B. seller may pursue the forfeiture procedure as provided by law C. contract is void, as an acceleration is not valid in an agreement for sale D. seller may foreclose as in a mortgage
D. seller may foreclose as in a mortgage
What is the redemption period after a non-judicial foreclosure of trust deed? A. 90 days B. 6 months C. 3 years D. there is no redemption
D. there is no redemption
In an agreement for sale, when does the title convey? A. when the buyer has 50% equaity B. as agreed upon in the contract C. as agreed upon in the note D. upon the last payment
D. upon the last payment
Who has legal title on a land contract? A. vendee B. grantee C. mortgagee D. vendor
D. vendor
In which of the following situations would the lender have completed a foreclosure? A. short sale B. REO transaction C. lender forbearance D. loan modification
B. REO transaction
The lender may consider a mortgage or trust deed to be: A. an estate in land B. a security agreement C. real property D. an encumbrance upon his property
B. a security agreement.
In which of the following situations would a licensed contractor NOT be required to do the work? A. remodeling a recently acquired property to improve it for immediate resale B. adding a storage shed and garage to the contractor's personal residence at a cost of $20,000 C. fixing a property with intent to sell it if the cost of painting it is $800 and the cost of new landscaping is $900 D. building a new home that is sold within 7 months of issuance of a certificate of occupancy
B. adding a storage shed and garage to the contractor's personal residence at a cost of $20,000
In a judicial foreclosure of a voluntary lien, at what point does the property owner lose the ability to sell the property? A. when the sheriff hammers down the sale at the auction B. after the statutory right of redemption expires C. after the equity of redemption expires D. at the time the lis pendens is recorded
B. after the statutory right of redemption expires
A defeasance clause in a deed of trust allows for: A. the trustee to foreclose B. cancellation of the lender's claim upon full note payment C. the lender's protection against forgery D. non-assumability of a loan
B. cancellation of the lender's claim upon full note payment
In a non-judicial foreclosure of a deed of trust, notice is given in which order? A. service of process, then actual, then constructive B. constructive then actual C. actual then constructive D. legal then actual then constructive
B. constructive then actual
After the mortgage and all other debts are paid in a foreclosure sale, any excess funds would go to the: A. lender B. creditor C. buyer at the sale D. foreclosed owner
B. creditor
In relation to a deed in lieu of foreclosure, all of the following are correct EXCEPT: A. it is considered to be voluntary alienation of the property B. it eliminates all lower priority liens against the property C. the lender accepts it to reduce the costs of foreclosure D. the lender is not required to accept it
B. it eliminates all lower priority liens against the property
When a deed in lieu of foreclosure is accepted by the lender, the: A. lien on the property remains in effect B. lien on the property is cancelled C. subordinate liens are eliminated D. property taxes must be brought current
B. lien on the property is cancelled
After a notice of default and trustee's sale has been recorded, the trustor has a certain amount of time during which the loan can be reinstated by paying delinquent payments. The right is known as the right of: A. redemption B. reinstatement C. rescission D. first refusal
B. reinstatement
If a property is encumbered by a first and second trust deed and the borrower defaults on both loans, which of the following statements is CORRECT? A. if the first beneficiary exercises judicial foreclosure, the second lien becomes void B. the second beneficiary should cure the default on the first lien to protect her lien interest C. both beneficiaries must foreclose their liens simultaneously D. a trustee's sale for the second lien will transfer the property to the highest bidder free and clear of the first lien
B. the second beneficiary should cure the default on the first lien to protect her lien interest
