Exam 28: Introduction to Credit and Secured Transactions

Payne borrowed $500 from Long Bank.At the time the loan was made to Payne,Gem orally agreed with Long that Gem would repay the loan if Payne failed to do so.Gem received no personal benefit as a result of the loan to Payne.Which of the following is most likely to be true,under the circumstances?

What is an equity of redemption?

Under the common law,artisans,innkeepers,and common carriers were not entitled to liens.

Explain the difference between an accommodation surety and a compensated surety.

A(n)"_____" is a person who is liable for the payment of another person's debt or for the performance of another person's duty.

Generally,purchases of farm property are financed through real estate mortgage.

Xavier deeds to Peter,a trustee,his property in the form of security for the loan,which is lent by Smith,the beneficiary of the trust.The nature of this transaction renders it as a deed of trust.Under these circumstances,if Xavier defaults to pay the loan,which of the following is the appropriate way in which Smith can recover his loan?

Most state laws say that a valid mechanic's lien has priority over all other liens that attach after the first work is performed or the first materials are furnished.

In order for an artisan's lien to be valid,the lien holder normally must have possession of the debtor's property.

Joe Smith obtains a credit card from First National Bank.The credit card is what type of credit?

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.

Foreclosure is the process by which any rights of the mortgagor or the current property owner are cut off.

Give two reasons why the surety-guarantor distinction is important.

Under which of the following systems of foreclosure does the creditor have no right to recover any deficiency between the value of the property and the amount of the debt?

If a debtor defaults and the debtor's surety satisfies the obligation,the surety acquires the right of:

A party who borrows money to buy a home and signs an agreement giving the bank the right to repossess the home in case of default is called a:

Courts today view a mortgage as:

In a foreclosure by "action and sale," deficiency judgments are generally not permitted if the property sold is the residence of the debtor.

George has signed a promissory note and Huber,Nick and Jeffery are cosureties of their friend George.When George defaults,Jeffery pays the whole obligation.Jeffery is entitled to collect one third from both Nick and Huber.This is known as the:

_____ is the method by which the rights of the property owner are cut off so that the lienholder can realize her security interest.