1 A mortgagor has an equity of redemption in the mortgaged property, with an absolute right to discharge the mortgage when due.

A.True

B.False

2 John stayed at Madeline Inn for seven nights. John refused to pay his bill. Madeline Inn has a right at common law to claim a lien on John's luggage.

A.True

B.False

3 Reseda Lumber sold lumber used to build mortgaged premises. Under these circumstances, Reseda Lumber can obtain a mechanic's lien on the property.

A.True

B.False

4 Rea bought real property subject to the mortgage of $320,000. She then defaulted and the property was sold for $300,000. Under these circumstances

A.Rea is liable for the remaining $20,000 since she assumed the mortgage.

B.Rea is liable for the remaining $20,000 since she bought subject to the mortgage

.C.Rea is not liable for the remaining $20,000 since she assumed the mortgage.

D.Rea is not liable for the remaining $20,000 since she bought subject to the mortgage.

5 Jan cosigned a promissory note for $500 at the credit union for her sister Amy. Amy defaulted on the note, and the credit union collected $500 from Jan. Jan may collect $500 from Amy under

A.Rights of contribution

B.Rights of subrogation

C.Rights asunder

D.Rights to reimbursement

6 As a surety for a principal, the surety may use any defenses against the third party creditor that the principal may have.

A.True

B.False

7 If a debtor defaults on a secured debt, the creditor

A.is estopped from foreclosure

B.is permitted to foreclose

C.is estopped from indemnity

D.is permitted indemnity

8 Tom and Dorothy are co-sureties on a loan for their mother. After their mother defaults, Tom paid the loan. Under these circumstances, Tom

A.is released from liability for any other obligations on which he is the surety for his mother.

B.acquires all of the rights the creditor had against his mother.

C.acquires the right to demand of contribution from Dorothy

.D.Both a and b

E.Both b and c

9 In order for a mortgage to be valid, it must be recorded against the secured land.

A.True

B.False

10 Kim tells Sam, owner of Sam's Auto, "I will guarantee payment of my daughter Deb's debt to you for the purchase of the Sam's SUV if she does not pay it." Kim:

A.May be held liable for the debt even if Sam has not asked Deb to pay first.

B.Is a guarantor

C.Is a beneficiary

D.Is a surety