Homework # 3 Real Estate 12a, Spring 2010. Answer on a Scantron Form 882.
1.What is the result when the grantee records a deed that states that it cannot be recorded?
a.The recordation does not give constructive notice.
b.The deed has been voided.
c.The title reverts to the grantor.
d.The recording gives constructive notice.
2.A person who states that his or her signing is a free act would be making a(n)
a.affirmation.c.notarization.
b.acknowledgment.d.verification.
3.A sold property to B. B took possession but did not record his deed. A learned of this and immediately sold to C. C recorded his deed. Which of the following decisions would a court of law most likely render?
a.C wins because he did the proper thing by recording his deed.
b.C wins because he had no notice.
c.B wins because he was in possession.
d.B wins because he purchased first.
4.Which of this following is not true of recording?
a.It provides constructive notice of the recorded instrument.
b.It provides actual notice of an interest.
c.It determines the priority of liens.
d.It creates a presumption of delivery.
5.Priority of trust deeds can easily be ascertained by the
a.date of recording.c.heading of the instrument.
b.date of the instrument.d.date of the note.
6.A sold to B on January 1. B took possession on January 15 and recorded her deed on February 1. A obtained a home equity loan on the same property on January 10. The lender, C, recorded the same day. On January 20, A sold the same property to D who recorded on January 21. What are the rights of the parties?
a. D has title subject to C’s lien.c.B has title but C has a valid lien against it.
b.B has title clear of any lien.d.None of the above.
7.A recorded gift deed would not take priority over
a.subsequent recorded deeds for value.
b.a prior unrecorded deed given for valuable consideration.
c.subsequent trust deeds.
d.prior unrecorded gifts deeds.
8.Which of the following would result when Albert deeded to Henry but Henry inadvertently recorded in the wrong county?
a.Albert would retain title.
b.Between Henry and Albert, Henry would have title.
c.The minor defect in recording would not affect the constructive notice.
d.The deed could be voided upon return of consideration.
9.The county recorder indexes deeds by.
a.time received.b.location.
c.grantor’s and grantee’s names.c.tax assessor’s number.
10.Which of the following is true regarding recordation?
a. A document can be recorded in more than one county.
b.To be recorded, deeds must include the name and address where tax statements a are to be sent.
c.The duty to see that the instrument is properly recorded falls with the person recording the instrument.
d.All of the above.
11.After a deed was signed by the grantor, the grantee made a slight unauthorized alteration that increased the size of the property conveyed from 600 acres to 620 acres. The effect of this modification was that
a.the entire deed became void.
b.only 600 acres would be transferred, because the alteration cannot pass title.
c.620 acres were transferred, but the grantee could be liable for damages.
d.the grantor has one year to discover the forgery and void the transfer.
12.Title transfers with a deed at the time of
a.delivery.c.acknowledgment.
b.signing.d.recording.
13.The most important factor in the delivery of a deed is
a.the intent of the grantor.c.possession.
b.physical conveyance.d.recording.
14.After a man’s death a deed giving his home to a nephew is discovered in the same envelope as his will. The will, dated prior to the deed, gave the house to his church. Who gets the house?
a.The church, because the will was dated prior to the deed.
b.The church, because the deed was never delivered.
c.The nephew, because the deed was dated later and thus modified the will.
d.The nephew, because deeds have priority over wills.
15.Which of the following deeds would fail to transfer title?
a.A deed to John Jones using his stage name “Mr. Marvelous”.
b.A deed made to Henry Schmidt and wife.
c.A deed made to Henry or Henrietta Schmidt.
d.A deed to Tom Brown, an emancipated minor.
16.Acknowledgment is necessary to
a.deliver a deed.c.have a formal will.
b.validate a deed for recording.d.convey legal title.
17.Which of the following is (are) characteristic(s) of a recorded deed?
a.It must be acknowledged.
b.It is presumed to have been delivered.
c.It provides constructive knowledge of the transfer.
d.All of the above.
18.Which of the following is a requirement for a valid deed?
a.Acknowledgment.c.Witnesses
d.Dated.d.None of the above.
19.Which of the following is a characteristic of a quitclaim deed?
a.It conveys after-acquired interests.
b.It can convey a partial interest.
c.It warrants that the grantor has not previously conveyed the property.
d.It warrants that there is nothing against the property that the grantor knows about that has not been disclosed.
20.What type of deed is received by a purchaser after a sheriff’s sale?
a.Limited warranty deed.c.Sheriff’s deed.
b.Quitclaim deed.d.Grant deed.
21.When you receive and record a gift deed, which of the following could adversely affect your title?
a.Creditors of the grantor
b.Rights of parties in possession
c.Prior unrecorded deeds given for valuable consideration.
d.All of the above.
22.A grantor retained an easement over land previously conveyed. What is this called?
a.A reservationc.A codicil
b.An exceptiond.An after-acquired interest
23.In obtaining title by adverse possession it is not necessary to
a.live on the property.c.have open and notorious use.
b.actually pay taxes.d.have use that is hostile to the interests of the owner.
24.Tacking on refers to
a.an additional party to an agreement.
b.additionally acquired security.
c.adverse use of a previous or subsequent user.
d.None of the above.
25.Able’s property was taken by the city for a new civic center. Baker was Able’s tenant in the property and had five years remaining on an advantageous lease. Which of the following is true of Baker’s rights?
a.Baker’s only right is to 30-day notification.
b.Baker has rights against Able for the value of his lease interest.
c.Baker has rights against the city for the value of his lease interest.
d.Both b and c.
26.Loss of value of remaining land caused by a taking under eminent domain is known as
a.inverse condemnation.c.severance damage.
b.the police power of the stated.exemplary damage.
27.An owner’s property was seized because it was used for drug sales. Which of the following statements is correct?
a.The owner is entitled to the fair market value of the property.
b.If the owner is not found guilty of a felony, the property must be returned.
c.Innocence of any knowledge of the use would be a defense against seizure.
d.None of the above.
28.A codicil providing for transfer of real property is a(n)
a.type of deed.c.original government transfer.
b.amendment to a deed.d.amendment to a will.
29.Alex’s inheritance of a house from his uncle George would be called a
a.bequest.c.legacy.
b.devise.d.dedication.
30.Which of the following is a requirement of a holographic will?
a.Verbal dispositionc.Witnessed
b.Handwrittend.Dated
31.Agnes sold her house and purchased stocks and bonds with the proceeds. Upon her death a will was found giving her house to her best friend, Mildred. What is Mildred entitled to?
a.The stocks and bonds.
b.The value of the house at the time Agnes died.
c.The price Agnes received for the house.
d.Nothing.
32.Alice and Jack, a married couple, hold all of their property as community property. When Alice dies intestate, each of the couple’s five children will receive
a.one-fifth of her property.c.one-tenth of her property.
b.one-fifth of two-thirds of her propertyd.nothing.
33.A woman died intestate, leaving one living son and two grandchildren (by a deceased daughter) as her only living relatives. The disposition of her property would be
a.one-half to her son and one-quarter to each of the grandchildren.
b.one-third to her son and one-third to each grandchild.
c.to the state by escheat.
d.None of the above.
34.A will provided that all of an unmarried testator’s estate would go to his only child. His child predeceased the testator, but the child left a spouse and three children. The estate would
a.escheat to the state.
b.pass one-third to the spouse and two-thirds to the grandchildren.
c.pass one-half to the spouse and one-half to the grandchildren.
d.pass one-third to each of the grandchildren.
35.The executor brought a bid of $190,000.00 to the probate court for approval. The court will not consider late bids less than
a.$190,001.c.$200,000.
b.$191,000.d.None of the above.
36.To be a negotiable instrument a note or draft need not be
a.a sum certain.c.an unconditional promise or order.
b.signed by the payee.d.in writing.
37.Angie signed a negotiable note to Baxter. Baxter knows she cannot legally collect on the note so she transfers the note to Clarence for consideration. Clarence can collect from Angie because he is
a.the payee.c. a holder in due course.
b.the maker.d.the negotiator.
38.A maker could not use which of the following as defense against a holder in due course?
a.A raised note.
b.Prior payment of the maker to a previous holder.
c.A note given for an illegal purpose.
d.Legal incapacity of the maker.
39.The usury law interest regulations do not apply to
a.seller purchase-money financing.
b.cash loans.
c.loans made or arranged by mortgage loan brokers.
d.Both a and c.
40.For loans on one to four residential units not made or arranged by a real estate broker, prepayment charges can
a.be charged only for five years.
b.not be charged on payments up to 20 percent of the original loan in one year.
c.not exceed six months’ interest.
d.All of the above.
41.The maximum period after a judicial foreclosure sale during which a mortgagor has the right to possession is
a.30 daysc.6 months.
b.90 days. d.1 year.
42.Which of the following is more closely related to trust deeds than to mortgages?
a.Redemption rights after sale.c.Deficiency judgments.
b.Nonjudicial sale.d.Legal title with borrower.
43.Which of the following constitutes default by a mortgagor?
a.Failure to pay taxes.c.Failure to pay insurance.
b.Failure to make monthly payments.d.All of the above.
44.Which of the following is a true statement regarding trust deeds?
a.A trust deed is a two-party instrument.
b.Legal title is held by the beneficiary.
c.Trustor can reinstate up to five business days prior to sale.
d.Foreclosure would wipe out all other encumbrances.
45.The total required foreclosure time under a trust deed (power of sale) is most nearly
a.4 months.c.1 year.
b.9 months.d.18 months.
46.The beneficiary of a second trust deed would be most likely to insist on a
a.subordination clause.c.subrogation clause.
b.request for notification of default.d.financing statement.
47.A junior lienholder was worried that a prior lienholder would delay foreclosure until the amount owed was so great that redemption by the junior lienholder would be difficult. To protect against this situation, the junior lienholder should record a
a.request for notice of default.c.notice of nonresponsibility.
b.request for notice of delinquencyd.lis pendens.
48.A financing instrument whereby the seller retains the legal title is a
a.trust deed.c.real property sales contract.
b.mortgage.d.none of the above.
49.Which of the following need not be included in a real property sales contract?
a.The number of years required to pay it off.
b. A legal description.
c.A subordination agreement.
d.The basis for tax payments when taxes are included.
50.A dragnet clause in a trust deed covers
a.any contingency.c.additional parties.
b.future advances.d.increases in the interest rate.
51.A subordinate loan that includes the amount of other loans is known as a(n)
a.purchase-money loan.c.open-end loan.
b.wraparound loan.d.usurious loan.
52.Seller financing disclosure requires that the broker disclose
a.whether the purchaser will receive cash from the transaction.
b.the date and amount of any balloon payment.
c.both a and b.
d.neither a nor b.
53.A subordination clause in a trust deed is of greatest benefit to the
a.trustor.c.trustee.
b. beneficiary.d.tenant.
54.Chattel liens would be located in the records of the
a.Franchise Tax Board.c.Secretary of State.
b.Board of Equalization.d.Department of Real Estate.
55.A financing statement is removed from the records by
a.final payment of the debtc.a notice of abandonment.
b.a reconveyance deed.d.the filing of a termination statement.
56.Which of the following is (are) true of beneficiary statements?
a.There can be a $60 charge by the beneficiary.
b.Failure to provide a statement within 21 days of request could result in a $300 penalty.
c.Both a and b.
d.Neither a nor b.
57.RESPA disclosure is the responsibility of the
a.lender.c.escrow holder.
b.broker.d.title insurer.
58.A lender can properly refuse to grant a loan to a borrower based on
a.the high rate of loan defaults in the area.
b.the borrower’s public assistance income.
c.the fact that the borrower is a single person.
d.none of the above.
59.TheTruth-in-Lending Act (Regulation Z) requires that the lender provide the borrower with the
a.annual percentage rate.c.taxes.
b. finance chargesd.both a and b.
60.The Truth-in-Lending Act (Regulation Z) provides that a borrower under a contract that places a lien on his or her residence has a period of rescission of
a.24 hours.c.48 hours.
b.three business days.d.30 days.
61.After escrow instructions have been signed, the escrow agent may
a.fill in blanks left by the parties.
b. return the deposit to the buyer if the escrow fails to close on time.
c.refuse to obey instructions received from the broker.
d.none of the above.
62.If escrow instructions fail to provide for the date of possession, possession will be given
a.within 30 days of close of escrow.c.at close of escrow.
b.within a reasonable time.d.prior to close of escrow.
63.An amendment to the escrow instructions requires the agreement of
a.the buyer and the escrow.c.the buyer, seller, agent, and escrow.
b.the agent and the escrow.d.none of the above.
64.When the signed escrow instructions differ from the purchase agreement
a.the escrow takes precedence.
b.the purchase agreement takes precedence.
c.the contract becomes void for lack of certainty.
d.the escrow is required to commence an interpleader action.
65.Duties of an escrow do not include
a. ordering preliminary title reports.c.drafting deeds.
b.mediating buyer-seller disputes.d.issuing closing statements.
66.Exempt from the licensing requirements are escrows conducted by
a. a real estate broker in transactions in which the broker represents either the buyer or seller.
b.title insurance companies.
c.banks.
d.all of the above.
67.A real estate broker, not licensed as an escrow, can conduct an escrow when he or she
a.represents the seller.c.is a principal to the transaction.
b.represents the buyer.d.any of the above.
68.Which of the following actions of an escrow would be improper?
a.Accepting fees from both buyer and seller.
b.Refusing to pay a commission for referral to the escrow.
c.Refusing to handle an escrow.
d.accepting escrow instructions with blanks to be filled in by the escrow after the instructions are signed.
69.Which of the following is proper for a broker who, while not licensed as an escrow, conducts escrows on his or her sales?
a.Delegating the escrow function to another.
b.Using the name “Jones Realty and Escrow Company”.
c.Charging for the escrow services.
d.None of the above.
70.A buyer given possession by the seller one week prior to close of escrow should be most concerned about.
a.the impound account.c.extended title coverage.
b.risk of loss.d.designation of the escrow holder.
71.Which statement is true of the rights and obligations during escrow?
a.The seller retains risk of property loss.
b.Rents belong to the seller.
c.Property expenses are the responsibility of the seller.
d.All of the above.
72.Which of the following would not terminate an escrow?
a.Full performance of escrow duties.c.The broker’s order to terminate.
b.Mutual agreement of the parties.d.Impossibility of performance.
73.When both buyer and seller make demands on escrow for the buyer’s deposit after the escrow failed to close, the escrow holder should
a.deduct its fees and return the deposit to the person who made it.
b.deduct its fees and return the deposit to the seller.
c.file an interpleader action.
d.give the deposit to the first party making a claim to it.
74.Which of the following best describes an abstract of title?
a.The complete legal description.
b.An abbreviated description such as a street address.
c.A recorded history of title.
d.An opinion of title.
75.Which of the following is (are) true regarding title insurance?
a.Executors and heirs are protected by the title insurance of the deceased insured.
b.A buyer obtains greater title protection if the lender is issued an extended-coverage policy.
c.Both a and b.
d.Neither a nor b.
76.A title insurer will not be liable for a loss if
a.its negligence was not the cause of the loss.
b.the person suffering the loss was not the insured or his or her estate or heirs.
c.Either a or b.
d.Neither a nor b.
77.To issue a standard title policy, the insurer must
a.have a survey.c.provide an abstract.
b.determine whether title is good.d.none of the above.
78.Which of the following is true of the preliminary title report?
a.It provides interim coverage.c.It provides no insurance.
b.It shows the condition of title.d.Both b and c.
79.A standard policy of title insurance protects against
a. rights of parties in possession.c.zoning restrictions.
b.unrecorded easements.d.forgery in the chain of title.
80.A standard policy of title insurance does not cover
a.unknown spousal interests.c.forgery.
b.rights of parties in possession.d.lack of capacity of grantor.
81.A standard policy of title insurance covers
a.unrecorded mechanics’ liens.
b.instruments outside the chain of title.
c.easements that are not a matter of public record.
d.none of the above.