Foreclosure

Question 1

________ is an agreement whereby an individual puts up collateral to secure the debt of another
A: Hypothecation
B: Liens
C: Loan Agreement
D: Both B & C

Answer 1

A: Hypothecation

Question 2

Foreclosure

Answer 2

the action of taking possession of a property that is mortgaged when the current owner fails to make their mortgage payment

Question 3

Hypothecation is……..

Answer 3

• Hypothecation means offering an asset as a collateral security to the lender whereby the ownership lies with a lender and the possession is enjoyed by the borrower.
• In a case of default by the borrower, the lender can exercise his ownership rights to seize the asset
• Is the act of pledging an property as an collateral as a debt

Question 4

Judicial Foreclosure

Answer 4

• Judicial foreclosure refers to foreclosure cases that go through the court system.
• Foreclosure occurs when a home is sold to pay off an unpaid debt.
• Many states require foreclosures to be judicial or to be processed through the state court system
• Some states foreclosures can be either non-judicial or judicial.

Question 5

Non-Judicial Foreclosure

Answer 5

• What is Non-Judicial Foreclosure
• Non-judicial foreclosures happen when a mortgage agreement has a “power of sale” clause that gives the
  lender the right to foreclose on a property by itself.
• Without that clause, the lender has to take the borrower to court in order to foreclose.
• Many states require judicial foreclosures

Question 6

Mortgage

Answer 6

Parties:
*Mortgagor (the person who is Borrowing the money) *Mortgagee (Lender or the bank involved)

Question 7

Trust Deed

Answer 7

• Trust Deed would be foreclosed non-judicially
• Trust deeds has three parties (trustor, trustee, beneficiary)

Question 8

Deed of Trust

Answer 8

The Three Parties involved:
*Trustor (Borrower)
*Trustee
*Beneficiary (Lender)

Question 9

______is a term used to describe a class of property owned by a lender, it is usually a bank or it can be a government agency
A: LE0 - Lender Estate Owned
B: REO - Real Estate Owned
C: Both A & B
D: None Of The Above

Answer 9

B: REO - Real Estate Owned

Question 10

Lien Priority is………

Answer 10

• The general rule in property law is that liens have priority in the order that they are filed in the county records office.
• This is referred to as the first in time, first in right rule. * Based on this concept, a recorded interest has priority over later recorded interest
• “The priority that lien carries on title”

Question 11

HOA/Super Lien

Answer 11

• Super lien refers to that quantity of a homeowners’ association lien that is given higher priority than even the first- mortgage holder
• The super lien places the interest of the HOA in front of the first mortgage.

Question 12

REO

Answer 12

• Real estate owned or REO is a term used in the United States to describe a class of property owned by a lender-typically a bank, government agency, or government loan insurer-after an unsuccessful sale at a foreclosure auction.

Question 13

Things that survive foreclosure

Answer 13

• Property taxes
• IRS Lien (federal tax lien)
• Federal Judgement

Question 14

Lien Theory

Answer 14

• Utah is a lien theory state
• Utah adapted trust deed act in 1961
• The bank does not own the house
• If you fail to make the payment, then the bank can foreclose on your house
• The bank has a lien on your house if you have a mortgage
• Once you have fulfilled all your payments, the bank records a deed of reconveyance which releases the lien.

Question 15

Pledging an asset as collateral for loan is also referred to as:
A: Novation
B: Hypothecation
C: Assumption
D: Pledge

Answer 15

B: Hypothecation

Question 16

Under a deed of trust, the lender can also be referred to as:
A: Vendee
B: Vendor
C: Trustee
D: Beneficiary

Answer 16

D: Beneficiary

Question 17

Under a deed of trust, the buyer can also be referred to as the:
A: Vendee
B: Trustor
C: Trustee
D: Beneficiary

Answer 17

B: Trustor

Question 18

In a mortgage, the clause that states that in the event of buyer default, the lender has the right to call the note due and payable is called the:
A: Subordination Clause
B: Acceleration Clause
C: Escalation Clause
D: Defeasance Clause

Answer 18

B: Acceleration Clause

Question 19

In order to avoid foreclosure, if a homeowner deeds their interest to the lender voluntarily, it is called:
A: Deed In Lieu Of Foreclosure
B: Redemption
C: Non-Judicial Foreclosure
D: Judicial Foreclosure

Answer 19

A: Deed In Lieu Of Foreclosure

Question 20

In Utah, when the borrower holds title to real property even if they have a lien against the property, this is called:
A: Title Theory
B: Mortgage Theory
C: Lien Theory
D: Redemption Theory

Answer 20

C: Lien Theory

Question 21

Tim has had a notice of default filed against their home for failure to pay his mortgage. Tim is in
A: Default
B: Bankruptcy
C: Deed In Lieu
D: Non Judicial Foreclosure

Answer 21

A: Default

Question 22

Buyer default begins with
A: 1 Missed Payment
B: 2 Consecutive Payments
C: 3 Consecutive Payments
D: 4 Consecutive Payments

Answer 22

A: 1 Missed Payment

Question 23

Foreclosure proceedings begin with:
A: Buyer Default
B: Redemption
C: Deed In Lieu
D: Sherriff’s Sale

Answer 23

A: Buyer Default