Chapter 20: Mortgages

Question 1

Which of the following instruments constitutes the mortgagor’s promise to repay the lender?
a. Note
b. Mortgage
c. Purchase money mortgage
d. Second mortgage

Answer 1

a. Note
The mortgage is the instrument that provides security for the note

Question 2

FILL IN THE BLANKS. The mortgagor is the __________ and the mortgagee is the __________.

a. lender, borrower
b. borrower, lender
c. lender, purchaser

Answer 2

b. borrower, lender

Question 3

True or False?
In a “title state,” granting a mortgage interest has no effect on a joint tenancy.

Answer 3

False. In a “title state,” a mortgage does sever a joint tenancy and converts it into a tenancy in common,

Question 4

FILL IN THE BLANKS. A(n) __________ operates like a mortgage, but uses a trustee to hold title for the benefit of the lender.

a. installment land contract
b. deed of trust
c. absolute deed

Answer 4

b. deed of trust

Question 5

A(n) __________ is when the mortgagor transfers the deed to the property instead of conveying a security interest in exchange for the loan.

a. installment land contract
b. deed of trust
c. absolute deed

Answer 5

c. absolute deed

Question 6

True or False?
In the majority of states, the mortgagee is treated as the holder of lien on the real property interest that is security for the debt.

Answer 6

True

Question 7

True or False?
A mortgage is treated as a lien that does not sever a joint tenancy in the majority of states.

Answer 7

True