Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

A collection action against a debtor who is judgment proof is not likely to be successful.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 is the recourse available to Home Providence to recover the loan?

Accepted Answer

A)  buy the plant from Roundwell 
B)  return it to Roundwell 
C)  foreclose on it 
D)  hand it over to the government 
A)  buy the plant from Roundwell 
B)  return it to Roundwell 
C)  foreclose on it 
D)  hand it over to the government

Question 9

In a guaranty agreement, the guarantor is primarily liable on the debt.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A ________ requires a mortgage or deed of trust to be recorded in the county recorder's office of the county in which the real property is located.

Accepted Answer

A)  recording statute 
B)  real property statute 
C)  mortgage statute 
D)  compilation statute 
A)  recording statute 
B)  real property statute 
C)  mortgage statute 
D)  compilation statute

Question 12

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 13

In a deed of trust, the creditor is the beneficiary.

Accepted Answer

A) True 
 B)False

Question 14

An arrangement where an owner of real property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan is known as a(n) ________.

Accepted Answer

A)  consignment 
B)  foreclosure 
C)  mortgage 
D)  assignment 
A)  consignment 
B)  foreclosure 
C)  mortgage 
D)  assignment

Question 15

A prejudgment court order that permits the seizure of a debtor's property while a lawsuit is pending is known as a ________.

Accepted Answer

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

If the debtor is judgment proof, the debtor has little or no property and income, thus the creditor may never collect.

Accepted Answer

A) True 
 B)False

Question 19

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 or her 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 or her debts. 
D)  The time allotted by which a mortgagee must start legal proceedings against a defaulter.

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 26: Credit, Mortgages, and Debtors Rights

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

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

A collection action against a debtor who is judgment proof is not likely to be successful.

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

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

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

In a guaranty agreement, the guarantor is primarily liable on the debt.

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

A ________ requires a mortgage or deed of trust to be recorded in the county recorder's office of the county in which the real property is located.

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

In a deed of trust, the creditor is the beneficiary.

An arrangement where an owner of real property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan is known as a(n) ________.

A prejudgment court order that permits the seizure of a debtor's property while a lawsuit is pending is known as a ________.

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

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

If the debtor is judgment proof, the debtor has little or no property and income, thus the creditor may never collect.

What is the statutory period of redemption?

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

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial, Alternative, and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crime

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Genuineness of Assent and Undue Influence

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

Digital Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Banking System and Electronic Financial Transactions

Secured Transactions

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchise and Special Forms of Business

Investor Protection and E-Securities Transactions

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property, Real Property, and Insurance

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants Duties and Liability

Wills, Trusts, and Estates

Family Law

International and World Trade Law

Filters