Exam 26: Credit, Mortgages, and Debtors Rights

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?

An unsecured creditor is a creditor who has to rely on collateral to secure payment.

Surplus money obtained from a foreclosure sale must be given to the mortgagor.

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 can help the bank recover the shortage from Wesley?

Melissa owes her bank money for credit card bills. For the past two weeks, debt collectors have been harassing her for bill payment by coming to her workplace. Her boss tells her to not have such meetings at the workplace, and despite requesting the collection agency not to do so, the collectors continue to visit her at her workplace. Which of the following Acts would protect Melissa from such harassment?

A legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan is known as ________.

In a transaction involving the extension of credit, there are two parties - the creditor and the debtor.

The property on which a security interest is taken is called collateral.

A ________ is a written document signed by a contractor, subcontractor, laborer, or material person, waiving his or her statutory lien against real property.

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

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

Briefly explain the key features of the Consumer Financial Protection Act of 2010.

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?

The power of sale foreclosure is implied in mortgages and deeds of trust.

The garnishor is the party that is in possession of the debtor's property.

Ethan purchases a house for $250,000. He borrows $200,000 from StarCross Bank and gives the bank a mortgage on the house for this amount. StarCross Bank fails to record the mortgage. Ethan then applies to borrow $200,000 from Pentalon Bank. Pentalon Bank reviews the real estate recordings and finds no mortgage recorded against the property, so it lends Ethan $200,000. Pentalon Bank records its mortgage. Later, Ethan defaults on both loans. In this case, which of the following would be true in case of the possible foreclosure on the collateral?

Who is the beneficiary in a deed of trust transaction?

Regulation Z is an administrative agency regulation that sets forth detailed rules for compliance with the ________ Act.

What is an antideficiency statute?

A lien release signed by a supplier prevents the supplier from later pursing a mechanic's lien against real property.