Exam 23: Credit and Secured Transactions

What is a mortgage?

Mechanic's liens are exempt from the rules permitting defaulting debtor's the right of redemption.

In a foreclosure sale,any surplus must be paid to the mortgagee.

Generally,if the sale of collateral is insufficient to repay a secured loan plus interest,the creditor may bring a lawsuit against the debtor to recover a ________ judgment for the difference.

A writ of execution is a court order directing the sheriff or other government official to seize the debtor's property in the debtor's possession and authorizing a judicial sale of that property.

Perfection is necessary in order for a creditor to have a valid security interest.

Sometimes,a creditor refuses to extend credit to a debtor unless a third party agrees to become liable on the debt.The third person's credit becomes the security for the credit extended to the debtor.This relationship may be either a surety arrangement or a guaranty arrangement.

Which of the following is true regarding a mechanic's lien?

Which of the following is true about attachment and perfection of security interests?

Some states' laws provide for the use of a deed of trust and note instead of a mortgage.

If two or more secured parties claim an interest in the same collateral,but neither has a perfected claim,the first to attach has priority.

Generally,if two creditors have unperfected security interests in the same collateral,which has the superior right in the collateral?

Josh buys a home and finances it through Smyrna National Bank with a Deed of Trust.Smyrna National Bank has legal title to the home.

Title III of the Consumer Credit Protection Act allows debtors who are subject to a writ of garnishment to retain a total of (1)75 percent of their weekly disposable earnings and (2)an amount equal to thirty hours of work paid at federal minimum wage.

The concept of a deficiency judgment applies to:

In a transaction involving unsecured credit,the lender may sell the collateral pledged by the borrower to satisfy the debt obligation.

A transaction involving a security interest generally must include three parties.

Common garnishees include banks in possession of funds belonging to a debtor.

Which of the following is not one of the general categories of goods subject to a security interest under Article 9 of the UCC?

AutoUniverse,a new car dealer,borrowed $500,000 from a bank and signed a security agreement giving the bank a security interest in "all current inventory,and all inventory acquired in the future." The bank forgot to file a financing statement.One year later,AutoUniverse defaults.At the time of default,AutoUniverse owed $400,000 and had 275 cars in inventory,only 15 of which had been in inventory when the security agreement was signed.No other creditor had a security interest in the cars.What can the bank do with respect to the cars in AutoUniverse's inventory?