Question 1

The primary function of collateral is to secure payment of the loan.

Accepted Answer

A) True 
 B)False  True

Question 2

An arrangement in which the owner of real property sells property to a purchaser and extends credit to the purchaser is known as ________.

Accepted Answer

A) a lien release 
B) a credit release 
C) accommodation 
D) land sales contract 
A) a lien release 
B) a credit release 
C) accommodation 
D) land sales contract D

Question 3

The ________ Act of 2003 permits consumers to place fraud alerts in their credit files.

Accepted Answer

A) Fair Debt Collection Practices 
B) Fair Credit Billing 
C) Fair and Accurate Credit Transactions 
D) Fair Credit Reporting 
A) Fair Debt Collection Practices 
B) Fair Credit Billing 
C) Fair and Accurate Credit Transactions 
D) Fair Credit Reporting C

Question 4

When is a creditor a secured creditor?

Accepted Answer

A) the creditor has been guaranteed payment by a trustee 
B) the creditor gives a loan without security 
C) the creditor has been paid back his debt 
D) the creditor has acquired collateral 
A) the creditor has been guaranteed payment by a trustee 
B) the creditor gives a loan without security 
C) the creditor has been paid back his debt 
D) the creditor has acquired collateral

Question 5

A ________ is a contractor's,laborer's,and material person's statutory lien that makes the real property to which services or materials have been provided security for the payment of the services and materials.

Accepted Answer

A) material lien 
B) judgment lien 
C) tax lien 
D) mechanic's lien 
A) material lien 
B) judgment lien 
C) tax lien 
D) mechanic's lien

Question 6

Tara lost a large sum of money to Judy when she invested in what she alleged was a fraudulent investment scheme run by Judy.As a result,Tara sued Judy for fraud.However,as it would take more than a year before the case was heard,Tara was afraid that Judy would transfer any money or property she had to avoid having to pay a judgment if she lost at trial.Which of the following would help Tara stop Judy from doing so?

Accepted Answer

A) writ of attachment 
B) writ of execution 
C) writ of garnishment 
D) writ of exigent 
A) writ of attachment 
B) writ of execution 
C) writ of garnishment 
D) writ of exigent

Question 7

The right of redemption only allows the redemption of a partial interest of the mortgagor.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a prejudgment writ?

Accepted Answer

A) writ of garnishment 
B) writ of execution 
C) writ of attachment 
D) writ of exigent 
A) writ of garnishment 
B) writ of execution 
C) writ of attachment 
D) writ of exigent

Question 9

In a deed of trust,the note is the instrument that evidences the borrower's debt to the lender.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Stanley lost a court case and was ordered to pay $50,000 to Wade.The day after the judgment,Stanley went missing,leaving Wade with no direct contact to recover the money.Wade then obtained a writ ordering the bank with Stanley's savings account to pay Wade.Which of the following writs did Wade use?

Accepted Answer

A) writ of garnishment 
B) writ of attachment 
C) writ of prohibition 
D) writ of exigent 
A) writ of garnishment 
B) writ of attachment 
C) writ of prohibition 
D) writ of exigent

Question 12

Tim has been approached by Kent regarding the payment of Tim's credit card bill.Kent says he is acting on behalf of the bank to get assurance that Tim will pay the bill within a specific period of time.Kent is an outside agent who is not an employee of the bank.Which of the following legislations has the bank violated by contracting Kent to contact Tim?

Accepted Answer

A) Fair Credit Reporting Act 
B) Fair and Accurate Credit Transactions Act 
C) Fair Credit and Charge Card Disclosure Act 
D) Fair Debt Collection Practices Act 
A) Fair Credit Reporting Act 
B) Fair and Accurate Credit Transactions Act 
C) Fair Credit and Charge Card Disclosure Act 
D) Fair Debt Collection Practices Act

Question 13

Which of the following is true of a deed of trust?

Accepted Answer

A) The legal right of the property is with the creditor until payment. 
B) The legal rights to possession of real property lie with a trustee. 
C) The trustor has legal rights to possession of the real property. 
D) The deed of trust is a two-party instrument. 
A) The legal right of the property is with the creditor until payment. 
B) The legal rights to possession of real property lie with a trustee. 
C) The trustor has legal rights to possession of the real property. 
D) The deed of trust is a two-party instrument.

Question 14

Which of the following protects consumers' ability to challenge information contained in a credit file?

Accepted Answer

A) Fair Credit Billing Act 
B) Equal Credit Opportunity Act 
C) Fair Debt Collection Practices Act 
D) Fair Credit Reporting Act 
A) Fair Credit Billing Act 
B) Equal Credit Opportunity Act 
C) Fair Debt Collection Practices Act 
D) Fair Credit Reporting Act

Question 15

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.

Accepted Answer

A) credit report 
B) letter of credit 
C) remittance advice 
D) deed of trust 
A) credit report 
B) letter of credit 
C) remittance advice 
D) deed of trust

Question 16

What are foreclosure sales?

Accepted Answer

A debtor's default may trigger a legal a

Question 17

A lienholder must file a notice of lien with the county recorder's office in the county in which the real property subject to the lien is located.

Accepted Answer

A) True 
 B)False

Question 18

In a mortgage transaction,the creditor is known as the mortgagee.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

What is the statutory period of redemption?

Accepted Answer

A) The time limit that a trustee can claim legal title to the real property. 
B) The time allotted to a mortgagor to pay the full debt on real property even after foreclosure. 
C) The time by which the mortgagor has to pay at least part of his debts. 
D) The time allotted by which a mortgagee must start legal proceedings against a defaulter. 
A) The time limit that a trustee can claim legal title to the real property. 
B) The time allotted to a mortgagor to pay the full debt on real property even after foreclosure. 
C) The time by which the mortgagor has to pay at least part of his debts. 
D) The time allotted by which a mortgagee must start legal proceedings against a defaulter.

Exam 26: Credit, mortgages, and Debtors Rights

The primary function of collateral is to secure payment of the loan.

An arrangement in which the owner of real property sells property to a purchaser and extends credit to the purchaser is known as ________.

The ________ Act of 2003 permits consumers to place fraud alerts in their credit files.

When is a creditor a secured creditor?

A ________ is a contractor's,laborer's,and material person's statutory lien that makes the real property to which services or materials have been provided security for the payment of the services and materials.

The right of redemption only allows the redemption of a partial interest of the mortgagor.

Which of the following is a prejudgment writ?

In a deed of trust,the note is the instrument that evidences the borrower's debt to the lender.

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

Stanley lost a court case and was ordered to pay $50,000 to Wade.The day after the judgment,Stanley went missing,leaving Wade with no direct contact to recover the money.Wade then obtained a writ ordering the bank with Stanley's savings account to pay Wade.Which of the following writs did Wade use?

Which of the following is true of a deed of trust?

Which of the following protects consumers' ability to challenge information contained in a credit file?

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.

What are foreclosure sales?

A lienholder must file a notice of lien with the county recorder's office in the county in which the real property subject to the lien is located.

In a mortgage transaction,the creditor is known as the mortgagee.

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

What is the statutory period of redemption?

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