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Financing Documents/Foreclosure > Voluntary Liens > Flashcards

Voluntary Liens Flashcards

1
Q

Fill In The Blank

The instrument that creates the personal obligationfor the debt and serves as evidence of debt is the ?

A

Promissory Note

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2
Q

Fill in The Blank

The pattern of payments and interest rate are found in the ?

A

Promissory Note

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3
Q

To pledge real property as collateral is called:
a. hypothecate
b. devise
c. demise
d. descent

A

A.

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4
Q

The purpose of collateralizing a note w/ a deed of trust is to:
a. protect the lender
b. protect the borrower
c. protect the trustee
d. protect the mortgagee

A

A.

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5
Q

Which of the following persons in not a party to a trust agreement?
a. mortgagor
b. trustor
c. trustee
d. beneficiary

A

A.

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6
Q

Which party or parties must sign the deed of trust?
a. trustee
b. trustor and beneficiary
c. trustor
d. trustor and trustee

A

C.

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7
Q

Deed of Trust Notes

Deed of Trust
A) Documents:
1. Promissory Note
2. Deed of Trust

B) Parties:
1. Trustor (Borrower): signs trust deed
2. Beneficiary (lender)
3. Trustee (third party w/naked legal title): has power to sell the property when trustor is in default.

C) Defeasance:
At payoff, a deed of reconveyance document = evidence the release of deed of trust. Must be done within 30 days of payoff

D) Deed of Trust in Default: Lender has 2 options:
1. Exercise trustee’s power of sale (non-judicial foreclosure)
2. Exercise judicial foreclosure, same as mortgage

A
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8
Q

Mortgage Notes

Mortgage
A) Mortgage Documents
1. Promissory Note
2. Mortgage

B) Parties:
1. Mortgagor (Borrower)
2. Mortgagee (Lender)

C) Defeasance:
Lender delivers Satisfaction of Mortgage to borrower within 30 of payoff
D) Default:
One option ONLY-Forced sale through judicial foreclosure action

A
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9
Q

Agreement for Sale Notes

Agreement for Sale (contract and financing instrument all in one)
Agreement for Sale is also called:
Contract for sale of real estate
Land contract
Contract for deed
Vendor’s lien

A) Document:
Only the agreement; no promissory note and used for seller financing only
B) Parties:
1. Vendor (seller)
2. Vendee (buyer)
C) At payoff, seller delivers deed to buyer. Buyer then should record the deed.

D) Default: Seller has 2 options
1. Judicial Foreclosure* if original land contract includes an acceleration clause*
2. Foreiture Action:
a) seller req’d to give buyer grace period (30 days to 9 mos) to reinstate payments
b) after grace period expires, seller can terminate buyer’s interest
c) If buyer refuses to vacate, seller may evict

A
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10
Q

A deed of trust is paid of to the:
a. trustor
b. trustee
c. beneficiary
d. escrow company

A

C.

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11
Q

The borrower using a deed of trust is called the:
a. mortgagor
b. beneficiary
c. trustor
d. trustee

A

C.

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12
Q

To pledge real property as collateral is called
a. hypothecate
b. devise
c. demise
d. descent

A

A.

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13
Q

When a loan is secured by a deed of trust, who hold the deed of trust documents?
a. mortgagee
b. trustee
c. trustor
d. beneficiary

A

D. *think beneficiary (lender)
loan is secured/held by LENDER

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14
Q

A defeasance clause in a deed of trust allows for:
a. the trustee to foreclose
b. cancellation of the lender’s claim upon full note payment
c. lender’s protection against forgery
d. non-assumability of a loan

A

B.

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15
Q

Naked legal title best describes the interest of a:
a. trustee under a deed of trust
b. trustee in an agreement for sale
c. trustee in a mortgage
d. beneficiary to owner

A

A.

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16
Q

Once a deed of trust is originated, who owns the property?
a. trustor
b. trustee
c. assignee
d. beneficiary

A

A.

17
Q

Who gives the power of sale in a deed of trust?
a. trustor
b. court
c. beneficiary
d. trustee

A

A.
*Trustor GIVES Power of Sale and Naked Legal Title (to Trustee-3rd party)

18
Q

The funds for a loan secured by a deed of trust are supplied by the:
a. trustor
b. mortgagor
c. beneficiary
d. trustee

A

C.
*beneficiary=lender

19
Q

The lender may consider a mortgage or deed of trust to be
a. an estate in land
b. a security agreement
c. real property
d. an encumbrance upon his property

A

B.
*mortgage, trust deeds, and agreement of sale are SECURITY INSTRUMENTS

20
Q

A trustee under a deed of trust would not be involved in which of the following circumstances
a. loan paid in full
b. issuance of the deed of reconveyance
c. trustor is delinquent
d. collection of monthly loan payments

A

D.

21
Q

In an agreement for sale, when does the title convey?
a. when the buyer has 50% equity
b. as agreed upon in the contract
c. as agreed upon in the note
d. upon the last payment

A

D.

22
Q

Who has legal title on a land contract?
a. vendee
b. grantee
c. mortgagee
d. vendor

A

D.
Vendor is SELLER
Vendee is BUYER
*Seller hold title until last payment received

23
Q

A property is sol, but the legal title remains in the seller’s name. What type of instrument was used to complete the sale?
a. mortgage
b. deed of trust
c. agreement for sale
d. option

A

C.

24
Q

AZ is considered to be a:
a. strict foreclosure state
b title theory state
c. lien theory state
d. controlled interest state

A

C.

25
Q

In title theory states:
a. mortgagors retains legal title
b. borrower has no right to title
c. mortgagee retains the title
d legal title is held by neutral 3rd party

A

C.

26
Q

A contract to sell land or an agreement for sale is aka:
a. warranty of title
b. jr. mortgage
c. vendor’s lien
d. equity of redemption

A

C.

27
Q

If a land contract contains an acceleration clause that the seller elects to exercise in the event of default, the:
a. seller may declare the equity of the buyer forfeited immediately
b. seller may pursue the forfeiture procedure as provided by law
c. contract is void, as an acceleration clause in no valid in an agreement for sale
d. seller may foreclose as in a mortgage

A

D.

28
Q

What is the main difference between a mortgage and a deed of trust?
a. a mortgage is not a legal document, but a deed of trust is
b. a deed of trust is a 2 party agreement while a mortgage is a 3 party agreement
c. a mortgage is a 2 party agreement while a deed of trust is a 3 party agreement
d. mortgages may be foreclosed non judicially while a trust deed may only be foreclosed judicially

A

C.

Financing Documents/Foreclosure (1 decks)

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