Exam 26: Credit,Mortgages,and Debtor's Rights

Roundwell Motors purchases a manufacturing plant for $15 million, pays $5 million in cash as down payment, and borrows the remaining $10 million from Home Providence Bank.To secure the loan, Roundwell gives the plant as collateral to Home Providence Bank. -What kind of collateral arrangement is in place between Roundwell Motors and Home Providence Bank?

Which of the following is true of the right of redemption for mortgages?

Payment can be obtained from a guarantor even if the principal debtor has not defaulted.

A court action is necessary for a power of sale foreclosure to be considered valid.

Default is a situation where the debtor has not made payment when it is due.

Unsecured credits require collateral to protect the payment of the debt.

A ________ is an instrument that gives a creditor a security interest in the debtor's real property that is pledged as collateral for a loan.

Give an account of the Consumer Financial Protection Act of 2010.

A deed of trust is a two-party instrument.

Casual leases between consumers are subject to the Consumer Leasing Act.

The Fair and Accurate Credit Transactions Act of 2003 permits credit reporting companies to place fraud alerts in their credit files.

Garnishment is a court order that permits the seizure of a debtor's property that is in the debtor's possession.

The ________ Act of 2010 is a federal statute that requires increased disclosure of credit information and terms to consumers and regulates consumer credit providers and others.

Ashton borrows $25, 000 from Amanda.Amanda lends the money to Ashton without taking an interest in collateral for the loan.Amanda is relying on Ashton's credit standing when she makes the loan.What kind of creditor is Amanda?

A right that allows the mortgagor to redeem real property after default and before foreclosure is known as ________.

What is the antideficiency statute?

Roundwell Motors purchases a manufacturing plant for $15 million, pays $5 million in cash as down payment, and borrows the remaining $10 million from Home Providence Bank. To secure the loan, Roundwell gives the plant as collateral to Home Providence Bank. -If Roundwell defaults on their payment, what recourse is available to Home Providence with respect to recovery of the loan?

The debtor can sue the creditor if the foreclosure sale was less than the value of the property.

Wesley buys a house for $1, 000, 000.He puts $400, 000 down and borrows $600, 000 from a bank, which takes a mortgage on the property to secure the loan.Wesley defaults, and when the bank forecloses on the property, it is worth only $500, 000.There is a shortage of 100, 000, as the foreclosure sale price was $500, 000.The bank brings a legal action against Wesley.Which of the following court doctrines can help the bank recover the shortage from Wesley?

The writ of attachment releases a property in the creditor's possession to the debtor.