Which of the following is true about mortgage assumptions?
Answer(s): B
Comprehensive and Detailed Explanation (150250 words):When a mortgage is assumed, the buyer takes over the existing loan obligations. The buyer typically becomes personally liable for the debt if the lender approves the assumption, but the seller remains liable unless formally released by the lender through a novation.Thus, the seller "may or may not be released" depending on lender approval. The assumption is different from a "subject to" transaction, where the buyer makes payments but is not personally liable.A is incorrect: the buyer is not relieved of liability--they are assuming it.C is incorrect: a new note is not signed; the existing obligation is assumed.D is incorrect: transfer of a deed does not release liability; only lender approval/novation does.Therefore, the correct answer is B.
Massachusetts Real Estate Salesperson Candidate Handbook Financing; Assumptions vs."Subject To" Mortgages.
The two clauses in a mortgage which allow the lender to proceed with a foreclosure sale are which of the following?
Answer(s): D
Comprehensive and Detailed Explanation (150250 words):Two key clauses permit a lender to enforce foreclosure:Acceleration clause allows the lender to declare the entire debt immediately due and payable if the borrower defaults. Without this clause, the lender could only sue for past-due installments.Power of sale clause common in Massachusetts "title theory" mortgages, it authorizes the lender to sell the property at public auction without going through full judicial foreclosure.The alienation clause (also called a "due-on-sale" clause) allows the lender to demand payoff when the property is transferred, not for foreclosure. The escalation clause allows interest rate or payment adjustments, not foreclosure.Therefore, the correct pair that authorizes foreclosure is D: acceleration clause and power of sale clause.
Massachusetts Real Estate Salesperson Candidate Handbook Financing Instruments; M.G.L. c.183 §21 (Power of Sale Foreclosure).
Rules for Truth in Lending and RESPA call for disclosure documents to borrowers. How can a managing broker best prepare associated licensees to manage these disclosures?
Comprehensive and Detailed Explanation (150250 words):Under TILA-RESPA Integrated Disclosure (TRID) rules, lenders are responsible for providing the Loan Estimate (LE) within three business days of application and the Closing Disclosure (CD) at least three business days before closing. Brokers and agents do not prepare these forms but must understand their content so they can answer client questions and ensure compliance.The managing broker's best preparation is to train licensees to be knowledgeable about the disclosures and timelines, and to understand what information lenders require from buyers to complete them. This helps prevent delays and ensures borrowers are protected.Options A, C, and D are incorrect because licensees neither prepare the LE/CD nor advise acceptance "right away." The lender bears responsibility; brokers must only ensure that clients understand their rights and obligations.Thus, the correct answer is B.
CFPB TRID Rule (12 C.F.R. §1026); Massachusetts Real Estate Salesperson Candidate Handbook Financing/RESPA.
The heir to a large estate will be of legal age within 30 days. The heir lists for sale with a broker one of the properties held by the estate. The broker knows of a buyer for the property and sells it within 24 hours of listing, with closing to be in 45 days. Both listing and sale contracts are
Answer(s): C
Comprehensive and Detailed Explanation (150250 words):Contracts entered into by a minor (a person not yet of legal age) are generally voidable at the option of the minor. In this case, the heir is still underage when signing both the listing and the sales contract. Although enforceable by the minor, they may be disaffirmed before reaching majority age or within a reasonable time thereafter.Fulfilled (A) applies only once all terms have been performed.Executed (B) means fully performed; here, the contracts are not.Executory (D) means still in progress, which is true, but the critical legal issue is that the contracts are voidable due to minority.Therefore, both contracts are voidable.
Massachusetts Real Estate Salesperson Candidate Handbook Contracts; M.G.L. c.231 §85O (contracts with minors).
Prospective buyers for a house want to operate a recycling center in their backyard. Local zoning laws do not allow this. What do they need to do first?
Comprehensive and Detailed Explanation (150250 words):When a property use is prohibited by zoning, the property owner must apply for a variance or special exception/permit through the local zoning board of appeals. These are administrative remedies that allow deviations from zoning requirements in specific circumstances.Variance: granted when strict application of zoning causes hardship.Special exception: allows certain uses if standards are met.A building permit (A) only authorizes construction consistent with zoning and cannot override use restrictions. A modification to the master plan (B) is a long legislative process, not an individual remedy. A court appeal (D) may follow if variance or exception requests are denied, but it is not the first step.Thus, the correct first action is C: variance or special exception.
Massachusetts Real Estate Salesperson Candidate Handbook Land Use Controls; M.G.L.c.40A (Zoning Act).
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