Property

Question 1

What is lien theory?

Answer 1

The mortgagor (borrower) is considered the owner of the mortgaged property, so the lender cannot take possession prior to foreclosure.

This theory emphasizes the borrower’s rights until foreclosure occurs.

Question 2

In lien theory, who is considered the owner of the mortgaged property?

Answer 2

The mortgagor (borrower)

The lender has no right to take possession until foreclosure.

Question 3

What is title theory?

Answer 3

The lender is considered the owner of the mortgaged property until the mortgage has been paid in full, so the lender may take possession at any time.

This theory gives more rights to the lender compared to the borrower.

Question 4

In title theory, who owns the mortgaged property?

Answer 4

The lender

The lender retains ownership rights until the mortgage is fully satisfied.

Question 5

What is intermediate theory?

Answer 5

The mortgagor is considered the owner of the mortgaged property until default, at which point the lender obtains legal title to the property upon default.

This theory balances the rights of both the borrower and the lender.

Question 6

Under intermediate theory, when does the lender obtain legal title to the property?

Answer 6

Upon default

This reflects a shift in ownership rights based on the borrower’s payment status.

Question 7

Fill in the blank: In lien theory, the lender cannot take possession prior to _______.

Answer 7

foreclosure

This underscores the borrower’s protection until the legal process of foreclosure begins.

Question 8

True or False: In title theory, the mortgagor is considered the owner of the mortgaged property until payment in full.

Answer 8

False

The lender is considered the owner until the mortgage is paid in full.

Question 10

What does a general warranty deed guarantee?

Answer 10

The grantor holds six covenants of title

Question 11

What are the three present covenants in a general warranty deed?

Answer 11

• Covenant of seisin
• Covenant of the right to convey
• Covenant against encumbrances

Question 12

What does the covenant of seisin warrant?

Answer 12

The grantor owns the land as described in the deed

Question 13

What does the covenant of the right to convey guarantee?

Answer 13

The grantor has the right to transfer title

Question 14

What does the covenant against encumbrances guarantee?

Answer 14

The deed contains no undisclosed encumbrances

Question 15

When does the statute of limitations begin to run for present covenants?

Answer 15

At the time of conveyance

Question 16

Can a trustee sell land placed in a trust?

Answer 16

Not always, because the beneficiary has equitable title

Question 17

What are the three future covenants in a general warranty deed?

Answer 17

• Covenant of quiet enjoyment
• Covenant of warranty
• Covenant for further assurances

Question 18

What does the covenant of quiet enjoyment guarantee?

Answer 18

The grantee’s possession will not be interfered with by a third party’s lawful claim for title

Question 19

What does the covenant of warranty guarantee?

Answer 19

The grantor will defend against a third party’s lawful claim for title

Question 20

What does the covenant for further assurances guarantee?

Answer 20

The grantor will do whatever is necessary to perfect title should it turn out to be defective

Question 21

Do future covenants run with the land?

Answer 21

Yes, and can be enforced by remote grantees

Question 22

When does the statute of limitations begin to run for future covenants?

Answer 22

Until the grantee’s rights are encroached

Question 23

True or False: The covenant for further assurances is recognized in all states.

Answer 23

False