Deck 26: Credit,Mortgages,and Debtor's Rights

Question 1

The recording statute gives potential purchasers of real property the ability to determine whether there are any existing liens on the property.

Answer 1

True

Question 2

In a mortgage transaction,the creditor is known as the mortgagee.

Answer 2

True

Question 3

Surplus money obtained from a foreclosure sale must be given to the mortgagor.

Answer 3

True

Question 4

The power of sale foreclosure is implied in mortgages and deeds of trust.

Question 5

In a deed of trust,the creditor is the beneficiary.

Question 6

A written reconveyance transfers the title of a real property from the trustee.

Question 7

The deficiency judgment protects the mortgagor from being recovered further in case there is a foreclosure sale deficiency.

Question 8

In a deed of trust,the trustee has full legal rights to possession of the real property.

Question 9

A deed of trust is a two-party instrument.

Question 10

A court action is necessary for a power of sale foreclosure to be considered valid.

Question 11

Default is a situation where the debtor has not made payment when it is due.

Question 12

The debtor can sue the creditor if the foreclosure sale was less than the value of the property.

Question 13

Unsecured credits require collateral to protect the payment of the debt.

Question 14

The creditor who has to rely on collateral to secure payment is known as an unsecured creditor.

Question 15

An improperly recorded document is effective against subsequent purchasers of the real property.

Question 16

Legal action cannot be bought against a debtor who is judgment proof.

Question 17

The property on which a security interest is taken is called collateral.

Question 18

The right to redemption doctrine only allows redemption of partial interest for the mortgagor.

Question 19

A mortgage is a two-party instrument.

Question 20

The primary function of collateral is to secure payment of the loan.

Question 21

A lien release discharges a material person from a mechanic's lien.

Question 22

The Fair Credit Billing Act requires that creditors promptly acknowledge in writing consumer billing complaints and investigate billing errors.

Question 23

Regulation of mortgage lending comes under the purview of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Question 24

Execution is a postjudgment court order that permits the seizure of the debtor's property that is in the possession of the debtor.

Question 25

The writ of attachment releases a property in the creditor's possession to the debtor.

Question 26

When is credit said to have occurred?

A)when a promissory note for payment is issued
B)when one party sells goods to another party
C)when one party gives a loan to another party
D)when one party pays back money that he owes to another party

Question 27

The garnishor is the party that is in possession of the debtor's property.

Question 28

The surety is primarily liable for paying the principal debtor's debt when it is due in a surety arrangement.

Question 29

Notice of the lien must be given to the owner of the real property for it to be valid.

Question 30

Credit that does not require any collateral to protect the payment of the debt is referred to as ________.

A)unsecured credit
B)secured credit
C)fair credit
D)equal credit

Question 31

The Equal Credit Opportunity Act does not have provisions for consumers to recover damages against the creditor.

Question 32

Garnishment is a court order that permits the seizure of a debtor's property that is in the debtor's possession.

Question 33

In a guaranty agreement,the guarantor is primarily liable on the debt.

Question 34

Payment can be obtained from a guarantor even if the principal debtor has not defaulted.

Question 35

Ashton borrows $25,000 from Amanda.Amanda lends the money to Ashton without taking an interest in collateral for the loan.Amanda is relying on Ashton's credit standing when she makes the loan.What kind of creditor is Amanda?

A)an unsecured creditor
B)a secured creditor
C)an administrative claim creditor
D)a post-petition creditor

Question 36

Casual leases between consumers are subject to the Consumer Leasing Act.

Question 37

The proceeds writ of execution sale is used to pay the creditor the amount of the final judgment.

Question 38

The Fair and Accurate Credit Transactions Act of 2003 permits credit reporting companies to place fraud alerts in their credit files.

Question 39

When is a creditor referred to as a secured creditor?

A)when the creditor has been guaranteed payment by a trustee
B)when the creditor gives a loan without security
C)when the creditor has been paid back his debt
D)when the creditor has acquired collateral

Question 40

Credit that requires collateral that protects payment of the loan is referred to as ________.

A)unsecured credit
B)secured credit
C)equal credit
D)fair credit

Question 41

Which of the following is true of a deed of trust?

A)The legal right of the property is with the creditor until payment.
B)The legal rights to possession of real property lie with a trustee.
C)The trustor has legal rights to possession of the real property.
D)The deed of trust is a two-party instrument.

Question 42

What is the statutory period of redemption?

A)The time limit that a trustee can claim legal title to the real property.
B)The time allotted to a mortgagor to keep the property even after foreclosure.
C)The time by which the mortgagor has to pay his debts.
D)The time allotted by which a mortgagee must start legal proceedings against a defaulter.

Question 43

The ________ prohibits deficiency judgments regarding certain types of mortgages,such as those on residential property.

A)foreclosure statute
B)mortgage statute
C)recording statute
D)antideficiency statute

Question 44

A(n)________ is an instrument that evidences a borrower's debt to the lender for a real property.

A)note
B)consignment
C)accommodation
D)deed of trust

Question 45

Who is the beneficiary in a deed of trust transaction?

A)the creditor
B)the debtor
C)the trustee
D)the trustor

Question 46

A right that allows the mortgagor to redeem real property after default and before foreclosure is known as ________.

A)garnishment
B)right of redemption
C)lien release
D)power of sale

Question 47

A ________ is a judgment of a court that permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan.

A)deficiency judgment
B)garnishment
C)lien release
D)foreclosure

Question 48

Which of the following is true of the right of redemption for mortgages?

A)The mortgagor has to pay the full amount of the debt incurred by the mortgagee.
B)The title of possession is passed on to the mortgagee upon completion of redemption.
C)The mortgagee is allowed to pay back partial interest until the statutory period of redemption.
D)The right to redemption is enacted after the foreclosure is complete.

Question 49

A ________ is an instrument that gives a creditor a security interest in the debtor's real property that is pledged as collateral for a loan.

A)credit report
B)letter of credit
C)remittance advice
D)deed of trust

Question 50

To which of the following type of mortgages does the antideficiency statute apply?

A)foreign currency mortgages
B)home improvement mortgages
C)first purchase money mortgages
D)second purchase money mortgages

Question 51

Ethan purchases a house for $250,000.He borrows $200,000 from StarCross Bank and gives the bank a mortgage on the house for this amount.StarCross Bank fails to record the mortgage.Ethan then applies to borrow $200,000 from Pentalon Bank.Pentalon Bank reviews the real estate recordings and finds no mortgage recorded against the property,so it lends Ethan $200,000.Pentalon Bank records its mortgage.Later,Ethan defaults on both loans.In this case,which of the following would be true in case of the foreclosure,if possible,on the collateral?

A)StarCross Bank can foreclose because they made the first loan.
B)Pentalon Bank can foreclose because they made a record of the mortgage.
C)The collateral has to be returned to Ethan since there is a violation of the recording statute.
D)None of the parties involved can claim ownership of the collateral as it passes into the public domain.

Question 52

An arrangement where an owner of real property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan is known as a(n)________.

A)consignment
B)foreclosure
C)mortgage
D)assignment

Question 53

A legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan is known as ________.

A)attachment
B)accountability
C)land sales contract
D)foreclosure sale

Question 54

A power stated in a mortgage or deed that permits foreclosure without court proceedings and sale of the property through an auction is known as ________.

A)reconveyance
B)foreclosure sale
C)power of sale
D)garnishment

Question 55

Roundwell Motors purchases a manufacturing plant for $15 million,pays $5 million in cash as down payment,and borrows the remaining $10 million from Home Providence Bank.To secure the loan,Roundwell gives the plant as collateral to Home Providence Bank.
What kind of collateral arrangement is in place between Roundwell Motors and Home Providence Bank?

A)a mortgage
B)a garnishment
C)a land sales contract
D)an accommodation

Question 56

Which of the following real property transactions involves the use of transfer of legal title in real property to a trustee?

A)land sales contract
B)garnishment
C)deed of trust
D)mortgage

Question 57

Wesley buys a house for $1,000,000.He puts $400,000 down and borrows $600,000 from a bank,which takes a mortgage on the property to secure the loan.Wesley defaults,and when the bank forecloses on the property,it is worth only $500,000.There is a shortage of 100,000,as the foreclosure sale price was $500,000.The bank brings a legal action against Wesley.Which of the following court doctrines can help the bank recover the shortage from Wesley?

A)right of redemption
B)lien release
C)deficiency judgment
D)garnishment

Question 58

An arrangement in which the owner of real property sells property to a purchaser and extends credit to the purchaser is known as ________.

A)lien release
B)credit release
C)accommodation
D)land sales contract

Question 59

The ________ requires a mortgage or deed of trust to be recorded in the county recorder's office of the county in which the real property is located.

A)recording statute
B)real property statute
C)mortgage statute
D)compilation statute

Question 60

If Roundwell defaults on their payment,what recourse is available to Home Providence with respect to recovery of the loan?

A)buy it from Roundwell
B)return it to Roundwell
C)foreclose it
D)hand it over to the government

Question 61

A(n)________ is an arrangement in which a third party promises to be secondarily liable for the payment of another's debt.

A)guaranty arrangement
B)surety arrangement
C)insolvency arrangement
D)accommodation

Question 62

An arrangement in which a third party promises to be primarily liable with the borrower for the payment of the borrower's debt is referred to as ________.

A)garnishment
B)accommodation
C)surety arrangement
D)guaranty arrangement

Question 63

Which of the following is true about the surety's liability to pay in a surety arrangement?

A)The surety is secondarily liable for payment.
B)The surety is primarily liable for payment.
C)The principal debtor must be in default before the surety can be approached.
D)The surety can only be approached as a last resort to the creditor.

Question 64

The term ________ refers to a written document signed by a contractor,subcontractor,laborer,or material person,waiving his or her statutory lien against real property.

A)garnishment
B)accommodation
C)lien release
D)notice of lien

Question 65

The term ________ refers to a contractor's,laborer's,and material person's statutory lien that makes the real property to which services or materials have been provided security for the payment of the services and materials.

A)material lien
B)judgment lien
C)tax liens
D)mechanic's lien

Question 66

Creditors that violate the Consumer Lease Act are subject to the civil and criminal penalties provided in the ________ Act.

A)Truth-in-Lending
B)Fair Credit Billing
C)Fair Credit and Charge Card Disclosure
D)Fair Debt Collection Practices

Question 67

Stanley lost a court case against Wade and was ordered to pay $50,000 in compensation to Wade.But the day after the judgment,Stanley went missing,leaving Wade with no direct contact to recover the money.Wade then obtained a writ that allowed the government to order the bank in which Stanley had his savings to pay Wade.Which of the following writ did Wade motion to obtain the payment order?

A)writ of garnishment
B)writ of attachment
C)writ of prohibition
D)writ of exigent

Question 68

Which of the following federal statutes requires creditors to disclose finance charge,including interest,points,and other fees paid for the extension of credit to debtors?

A)Fair Debt Collection Practices Act
B)Consumer Financial Protection Act of 2010
C)Mortgage Reform and Anti-Predatory Lending Act of 2010
D)Truth-in-Lending Act

Question 69

Gunther wins a $25,000 judgment against Krissa.Krissa refuses to pay the amount of the judgment to Gunther.Krissa works for Iniversal Electronics.Gunther obtains a postjudgment writ of garnishment from the court whereby the court orders Iniversal Electronics to pay 25 percent of Krissa's weekly disposable earnings directly to Gunther.However,Gunther is not satisfied with the verdict and tries to motion the court to increase Krissa's pay deduction to 50 percent,but his request is denied.Which federal Act allows Krissa to retain 75 percent or more of her earnings in a writ of garnishment?

A)Fair Credit Reporting Act
B)Fair Credit Billing Act
C)Title III of the Consumer Credit Protection Act
D)Fair Debt Collection Practices Act

Question 70

The ________ is a postjudgment court order that permits the seizure of the debtor's property that is in the possession of the debtor.

A)writ of execution
B)writ of garnishment
C)writ of exigent
D)writ of attachment

Question 71

Regulation Z is an administrative agency regulation that sets forth detailed rules for compliance with the ________ Act.

A)Fair Credit Reporting
B)Truth-in-Lending
C)Fair Credit Billing
D)Fair Debt Collection Practices

Question 72

Which of the following Acts protects debtors who are subject to writ of garnishment from excessive action?

A)Fair Credit Billing Act
B)Consumer Leasing Act
C)Truth-in-Lending Act
D)Title III of the Consumer Credit Protection Act

Question 73

Which of the following writs is a prejudgment writ?

A)writ of garnishment
B)writ of execution
C)writ of attachment
D)writ of exigent

Question 74

A postjudgment court order that permits the seizure of a debtor's property that is in the possession of third parties is known to as the ________.

A)writ of attachment
B)writ of prohibition
C)writ of exigent
D)writ of garnishment

Question 75

Alan wins a $50,000 judgment against Henderson.But Henderson refuses to pay the amount of the judgment to Alan.To counter Henderson,Alan obtained a postjudgment writ from the court whereby the court directs the town sheriff to seize Henderson's automobile and other property and have them publicly auctioned off to satisfy the judgment he owes Alan.Which of the following writs did Alan motion the court to seize Henderson's property?

A)writ of attachment
B)writ of garnishment
C)writ of execution
D)writ of exigent

Question 76

The ________ Act of 2010 is a federal statute that requires increased disclosure of credit information and terms to consumers and regulates consumer credit providers and others.

A)Fair Credit Billing
B)Consumer Leasing
C)Mortgage Reform and Anti-Predatory Lending
D)Consumer Financial Protection

Question 77

A prejudgment court order that permits the seizure of a debtor's property while a lawsuit is pending is known as the ________.

A)writ of exigent
B)writ of attachment
C)writ of execution
D)writ of garnishment

Question 78

Tara lost a large sum of money to Judy when she invested in what she alleged was a fraudulent investment scheme run by Judy.So Tara sued Judy for fraud.However,as it would take more than a year before the case was heard,Tara was afraid that Judy would transfer any money or property she had to avoid having to pay a judgment if she lost at trial.Which of the following writ motions would help Tara stop Judy from doing so?

A)writ of attachment
B)writ of execution
C)writ of garnishment
D)writ of exigent

Question 79

Which of the following Acts is particularly designed to regulate the home loan market,and put the burden on lenders to verify that a borrower can afford to repay the loan for which he or she has applied?

A)Fair Credit Reporting Act
B)Consumer Financial Protection Act of 2010
C)Truth-in-Lending Act
D)Mortgage Reform and Anti-Predatory Lending

Question 80

Which of the following is true of a guarantor in a guaranty arrangement?

A)The guarantor is primarily liable to the principal debtor's debt when it is due.
B)The guarantor can be approached even if the principal debtor is not in default.
C)The creditor can seek first remedy from a guarantor.
D)The guarantor has full legal rights to possession of the real property in this type of arrangement.