Exam 23: Credit and Secured Transactions

Generally,if two creditors have perfected security interests in the same collateral,only one of which is a purchase money security interest,which has the superior right (priority),assuming all notice is properly given within the appropriate time periods?

Frank has agreed to be a surety for his daughter's loan.If she defaults,the lender must attempt to collect the debt from the daughter first,and may only sue Frank if the daughter refuses to pay.

Many states have enacted recording statutes that require a mortgage or deed of trust to be recorded in the county recorder's office in the county in which the real property is located.

If the collateral is something other than inventory,a perfected purchase money security interest prevails over a perfected nonpurchase money security interest in after-acquired property if it is perfected when the debtor receives possession of the collateral,or within twenty days after the debtor receives possession of the collateral.

To obtain a writ of attachment,a creditor must follow the procedures of state law,give the debtor notice,and post a bond with the court.

A surety is secondarily liable for paying the principal debtor's debt when it is due.

The purpose of a mechanic's lien is to give the homeowner a way to collect against a person who provides inadequate materials for home building or repair.

A purchase money security interest takes priority over perfected security interests in after-acquired property,even if the perfected interest predates the purchase money security interest.

A mortgagor is obligated to pay the amount of the mortgage according to the terms of the mortgage,even if the document is not recorded.

Secured credit refers to credit where there is a second party to pay the debt in the event that the original debtor does not.

Prima Company goes to Urban Bank and borrows $100,000.In this case,Prima Company is the creditor,and Urban Bank is the debtor.

In a guaranty arrangement,the guarantor is primarily liable on another person's debt.

Which of the following will have the lowest repayment priority?

Which of the following is true about security agreements and financing statements?

________ personal property includes equipment,vehicles,furniture,computers,clothing and jewelry,while ________ personal property includes securities,patents,trademarks and copyrights.

A person who acts as a surety is commonly called an accommodation party or co-signer.

A security agreement may provide that the security interest attaches to property that was not originally in the possession of the debtor when the agreement was executed.This interest is usually referred to as a transparent lien.

Some states permit a mortgagee to bring a separate legal action to recover a deficiency from the mortgagor.If the mortgagee is successful,the court will award an equitable judgment that entitles the mortgagee to recover the amount of the judgment from the mortgagor's other property.

Which of the following is true about both sureties and guarantors?

Generally,if two creditors have perfected security interests in the same collateral,which has the superior right (priority)?