← Real Estate Finance – Broker Exam Flashcards

Real Estate Broker Exam Practice Test

Free 5-question sample test with instant feedback. See how ready you are.

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Sample Questions

Question 1

What is the legal document that pledges real property as security for a loan without transferring title to the lender?

Answer: A mortgage (also called a deed of trust in some states) is the security instrument that pledges the property as collateral while the borrower retains title.

Question 2

In a deed of trust arrangement, who holds bare legal title to the property until the loan is repaid?

Answer: A neutral third party called the trustee holds bare legal title. The borrower (trustor) retains equitable title and the lender (beneficiary) holds the beneficial interest.

Question 3

What is the difference between the mortgagor and the mortgagee?

Answer: The mortgagor is the borrower who pledges the property as collateral. The mortgagee is the lender who receives the mortgage as security for the loan.

Question 4

What clause in a mortgage allows the lender to demand full repayment of the loan if the property is sold or transferred?

Answer: The due-on-sale clause (also called an alienation clause) prevents loan assumption without lender approval and requires full payoff upon transfer of ownership.

Question 5

What is the purpose of the defeasance clause in a mortgage?

Answer: The defeasance clause requires the lender to release the mortgage lien and return clear title to the borrower once the loan has been fully repaid.