Exam 28: Introduction to Credit and Secured Transactions

Jose purchases a refrigerator on credit with a one-year guarantee,but it is defective and the dealer refuses to repair it.His fiancé is a surety on his promise to pay.If Jose refuses to make further payments and the dealer tries to collect from Jose's fiancé,what defense can his fiancé use for not paying the creditor?

A mortgage is a security interest in real property.

Jerry wants to purchase a flat.So he borrows $50,000 from XYZ bank.He signs a note for $50,000 and gives the bank a $50,000 mortgage on the flat as security for his repayment of loan.Within a year and a half,Jerry repays the entire loan.After repayment of the loan,which of the following rights does Jerry have against XYZ bank?

Carrie promises to pay her cousin Joe's debt,but only if Joe does not pay.Carrie is a:

Kim goes to Tanya's house to tune her guitar for a reasonable fee.Tanya does not pay.Does Kim have a possessory lien on the guitar?

Courts today view a mortgage as:

Abby borrows money from Cain Bank and Baker cosigns on the loan contract.Abby fails to repay this loan and Cain Bank collects the debt from Baker.Baker is entitled to recover the amount he paid to the bank from Abby.This is known as the:

Marie wants to buy Ted's farm.She agrees to pay Ted a monthly payment towards the farm,to take possession and to insure the property.Ted retains the legal title while Marie is making payments.This arrangement is called a:

Jimmy co-signed for his friend Fred for the purchase of a motorcycle.Fred is refusing to pay for the motorcycle despite not having a valid defense against payment and despite having the money to do so.Jimmy,who has paid nothing towards the motorcycle yet,should exercise the ________ to require Fred to make good on his obligation to pay for the motorcycle.

Mike operates an upholstering business.He goes to Hans' house to reupholster a sofa for Hans.After the work was complete,Hans refused to pay the agreed price.Mike wants to assert a lien against the sofa in order to collect the money due to him.Is Mike entitled to a lien under these circumstances?

When can a lienholder sell goods or claim ownership if he possesses goods because his charges are not paid?

A submaterialman is not entitled to a lien,unless specifically stated by the statute of the state which is applicable to him.

In the case of ________,the right must be expressly conferred on the mortgagee by the terms of the mortgage.

A surety who pays a debtor's debt to the creditor gets all the rights the creditor had against the debtor.This is called surety's right of subrogation.

A surety is not primarily liable for the debtor's obligation and the debtor can demand performance from the surety only if the debtor refuses to pay.

A surety has a right of exoneration.

A clause in a mortgage specifies that "if the mortgaged property is sold,then the remaining balance becomes immediately due and payable." This clause is called:

Bob borrowed $200,000 from ABC Bank to purchase his residential house.A mortgage was used as the financing vehicle.Several years later Bob encountered financial difficulties.He did not pay his mortgage payments for 4 months and the bank foreclosed.At that time,the remaining loan balance was $170,000.Bob had not maintained the property well,and the winning bid at the foreclosure auction sale was only $150,000.Is Bob liable for the $20,000 deficiency that has resulted (using the majority rule)?

In a(n)________ transaction,the borrower keeps the title of his real property with a third party and in the event of default,the third party can sell the property so that the creditor can recover his loan.

Which of the following is an essential element of a lien?