Question 1

Which of the following must be recorded in order to be valid between the debtor and creditor?

Accepted Answer

A)  deed of trust 
B)  mortgage 
C)  both a deed of trust and a mortgage 
D)  neither a deed of trust nor a mortgage 
A)  deed of trust 
B)  mortgage 
C)  both a deed of trust and a mortgage 
D)  neither a deed of trust nor a mortgage

Question 2

Which of the following is true about the distinction between secured and unsecured credit?

Accepted Answer

A)  Secured debt is debt that has already been paid,and unsecured has not yet been paid. 
B)  Secured debt is expected to be collected,whereas collection of unsecured debt is doubtful. 
C)  Secured debt will be collected over more than 1 year,whereas unsecured debt is expected to be collected within 1 year. 
D)  Secured debt has collateral associated with it,whereas unsecured debt has no associated collateral. 
E)  Secured debt results from a judgment of the court,whereas unsecured debt results from the agreement of the parties. 
A)  Secured debt is debt that has already been paid,and unsecured has not yet been paid. 
B)  Secured debt is expected to be collected,whereas collection of unsecured debt is doubtful. 
C)  Secured debt will be collected over more than 1 year,whereas unsecured debt is expected to be collected within 1 year. 
D)  Secured debt has collateral associated with it,whereas unsecured debt has no associated collateral. 
E)  Secured debt results from a judgment of the court,whereas unsecured debt results from the agreement of the parties.

Question 3

An improperly recorded mortgage document is effective against a subsequent purchaser.

Accepted Answer

A) True 
 B)False

Question 4

No court action is necessary when a foreclosure is by power of sale.

Accepted Answer

A) True 
 B)False

Question 5

The right to redeem foreclosed property can extend beyond the date of the foreclosure sale.

Accepted Answer

A) True 
 B)False

Question 6

In a mortgage,the owner-debtor is the mortgagor.

Accepted Answer

A) True 
 B)False

Question 7

Unsecured credit requires collateral to protect the payment of the debt.

Accepted Answer

A) True 
 B)False

Question 8

A debtor who is judgment-proof does not have a legal obligation for the payment of debts.

Accepted Answer

A) True 
 B)False

Question 9

If unsecured credit has been extended to a judgment-proof debtor,the creditor is unlikely to collect the debt.

Accepted Answer

A) True 
 B)False

Question 10

A statute that prevents a mortgage holder from seeking recovery directly from the borrower any difference in the amount of debt owed and the amount that the property brings at a foreclosure sale is called a(n):

Accepted Answer

A)  homeowner loss prevention statute 
B)  lender's satisfaction statute 
C)  antideficiency statute 
D)  partial lender recovery statute 
E)  modified debtor obligation statute 
A)  homeowner loss prevention statute 
B)  lender's satisfaction statute 
C)  antideficiency statute 
D)  partial lender recovery statute 
E)  modified debtor obligation statute

Question 11

Nora and Jed borrow $700,000 from Your Bank to purchase a house near the lake and they (Nora and Jed)give a mortgage to Your Bank as collateral in order to secure the loan.Nora and Jed prove to be poor money managers and thereafter default on their loan to Your Bank.Your Bank begins foreclosure proceedings and proceeds to sell the home at a judicial sale.Paul and Penelope fall in love with the house and purchase it for $850,000.What if anything must Your Bank remit to Nora and Jed?

Accepted Answer

Your Bank may keep $700,000 to cover the

Question 12

In order to obtain a mechanic's lien on a piece of property,a notice of lien must be filed in the proper place and notice must be given to the owner of the affected real property.

Accepted Answer

A) True 
 B)False

Question 13

The legal right in the debtor's property granted by the debtor to a creditor is known as:

Accepted Answer

A)  collateral 
B)  a garnishment 
C)  a financing statement 
D)  a security interest 
E)  a right of redemption 
A)  collateral 
B)  a garnishment 
C)  a financing statement 
D)  a security interest 
E)  a right of redemption

Question 14

Unsecured creditors may repossess the debtor's property if the debtor is in default on a loan.

Accepted Answer

A) True 
 B)False

Exam 26: Creditor's and Debtor's Rights

Which of the following must be recorded in order to be valid between the debtor and creditor?

Which of the following is true about the distinction between secured and unsecured credit?

An improperly recorded mortgage document is effective against a subsequent purchaser.

No court action is necessary when a foreclosure is by power of sale.

The right to redeem foreclosed property can extend beyond the date of the foreclosure sale.

In a mortgage,the owner-debtor is the mortgagor.

Unsecured credit requires collateral to protect the payment of the debt.

A debtor who is judgment-proof does not have a legal obligation for the payment of debts.

If unsecured credit has been extended to a judgment-proof debtor,the creditor is unlikely to collect the debt.

A statute that prevents a mortgage holder from seeking recovery directly from the borrower any difference in the amount of debt owed and the amount that the property brings at a foreclosure sale is called a(n):

In order to obtain a mechanic's lien on a piece of property,a notice of lien must be filed in the proper place and notice must be given to the owner of the affected real property.

The legal right in the debtor's property granted by the debtor to a creditor is known as:

Unsecured creditors may repossess the debtor's property if the debtor is in default on a loan.

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