To purchase her first home, Deb Torr borrowed money from her friend, Creed Itor, and agreed to repay the debt in a series of monthly payments over several years. After she moved into the house, Deb purchased new windows for the home from Windows Inc., and hired Stavros to install the windows. After her windows were installed, Deb took her furniture to Upholstery Inc.'s store to have it cleaned and stored in its warehouse until Deb pays for the cleaning services and picks up the furniture.

1) Suppose Deb's mother agreed in writing that, without getting paid, she would be "jointly and severally liable" for Deb's debt:

A) accommodation surety

B) guarantor

C) mortgagor

D) compensated surety

E) lienholder

2) Stavros has a _____ in the windows he installed in Deb's house:

A) mortgage

B) mechanic's lien

C) materialman's lien

D) deed of trust

E) possessory lien

3) Upholstery Inc. has a _____ in Deb's now-cleaned furniture stored in its warehouse:

A) deed of trust

B) materialman's lien

C) right of subrogation

D) mortgage

E) possessory lien

4) If Deb's debt is a mortgage and Creed pursuesstrict foreclosurewhen Deb defaults on it, which of the following is true?

A) If Deb owes $75,000 and the house is worth $100,000, Deb must file a lawsuit to recover the $25,000 difference.

B) If Deb owes $75,000 and the house is worth $50,000, Creed is entitled to recover the $25,000 difference, without the necessity of filing a lawsuit.

C) If Deb owes $75,000 and the house is worth $100,000, Deb is entitled to recover the $25,000 difference, without the necessity of filing a lawsuit.

D) If Deb owes $75,000 and the house is worth $50,000, Creed must file a lawsuit to recover the $25,000 difference.

E) If Deb owes $75,000 and the house is worth $100,000, Deb does not have a right to recover the $25,000 difference.

5) Which of the following is an example of an unsecured debt?

A) A farmer sells fruits and vegetables to a grocery store that promises to for them within 30 days after receipt.

B) A car dealer sells a car to a student whose father co-signs the loan.

C) An employee provides babysitting services to a customer for a fee that the customer's father agrees in writing to pay if the customer does not pay.

D) A bank makes a home mortgage loan to a person that includes the right to repossess the house if the person fails to make the payments.

E) A person gives her jewelry to a pawn shop as collateral for a short-term loan.

6) Which of the following is true of a mortgage?

A) A trustee holds title to the property until the debtor pays off the creditor, and can sell the property if the debtor defaults.

B) The debtor buys and takes title to property on credit, and makes periodic payments on the debt to the creditor.

C) The debtor makes periodic payments of the purchase price to the creditor, and the creditor does not convey title to the debtor until the full purchase price is paid.

D) Any person who supplies materials to improve the property obtains a mortgage on the property.

E) Any person who provides services to improve the property obtains a mortgage on the property.

7) For which of the following security instruments does a debtor not have a right to redeem the property after default?

A) Mortgage foreclosure by "action and sale"

B) "Strict foreclosure" of mortgage

C) Debtors have a right to redeem property under all of these security instruments.

D) Deed of trust

E) Mortgage foreclosure by "power of sale"

8) Which of the following is true of a land contract?

A) Any person who provides services to improve the property obtains a land contract on the property.

B) The debtor makes periodic payments of the purchase price to the creditor, and the creditor retains title to the property and does not convey it to the debtor until the full purchase price is paid.

C) The debtor buys and takes title to property on credit, and makes periodic payments on the debt to the creditor.

D) Any person who supplies materials to improve the property obtains a land contract on the property.

E) A trustee holds title to the property until the debtor pays off the creditor, and can sell the property if the debtor defaults.

9) Assume Will signed a guaranty for rent that Jack owes to Karen.Which of the following gives Will the ability to require Jack to pay the rent if Jack is able to do so and does not have a valid defense against paying the rent?

A) Right of exoneration

B) Right of subrogation

C) Right to redeem/equity of redemption

D) Right to reimbursement

E) Right to contribution

10) Which of the following is true of a deed of trust?

A) The debtor buys and takes title to property on credit, and makes periodic payments on the debt to the creditor.

B) A trustee holds title to the property until the debtor pays off the creditor, and can sell the property if the debtor defaults.

C) Any person who provides services to improve the property obtains a deed of trust on the property.

D) The debtor makes periodic payments of the purchase price to the creditor, and the creditor does not convey title to the debtor until the full purchase price is paid.

E) Any person who supplies materials to improve the property obtains a deed of trust on the property.