[Compliance with Laws and Regulations Title Insurance] Which statement about a mortgagee's title insurance policy is TRUE?
Answer(s): D
A mortgagee's (lender's) title insurance policy protects the lender from financial loss caused by title defects that were not discovered before the mortgage was issued. The policy coverage lasts until the loan is repaid. The borrower pays a one-time premium at closing--it is not part of the monthly mortgage. Claims are based on the unpaid balance of the loan, not necessarily the full loan amount.Therefore, the correct answer is D.
[Compliance with Laws and Regulations Fair Housing Enforcement] A North Carolina resident who believes they were refused a lease in a new apartment building because of their sexual orientation can file a complaint with the North Carolina Human Relations Commission, but they must do so within ________ of the alleged discrimination.
Answer(s): C
Under both federal and North Carolina law, individuals who believe they have experienced housing discrimination must file a complaint within one year of the alleged act to seek administrative remedies through the North Carolina Human Relations Commission or HUD. Discrimination based on sexual orientation is protected under federal fair housing law via interpretation of "sex" as a protected class. Therefore, the correct answer is C.
[Offers and Negotiations Contract Formation]On Monday morning, a buyer agent who works for ABC Realty submits a buyer client's offer to the listing agent at XYZ Realty. Later that day, the listing agent presents the offer to the seller. On Tuesday morning, the seller signs the offer with no changes, and on Tuesday evening, the listing agent calls the buyer agent to tell them the offer is signed and accepted. The buyer agent finally gets in contact with the buyer Wednesday morning to communicate the good news. On Wednesday afternoon, the listing agent delivers the signed offer to the buyer agent, and the buyer agent delivers it to the buyer that evening. At what point was there a valid, binding contract between buyer and seller?
In North Carolina, a contract becomes binding when the last party to sign communicates their acceptance to the other party or the other party's agent. Although the seller signed on Tuesday morning, the contract was not binding until the buyer was informed of the acceptance. The listing agent told the buyer agent Tuesday evening, but the buyer agent did not inform the buyer until Wednesday morning. Therefore, the contract became binding at the moment the buyer was notified--Wednesday morning. Correct answer: C.
[Compliance with Laws and Regulations Lien Priority] In North Carolina, which lien has the highest priority when property is sold to recover a debt?
Answer(s): A
In North Carolina, and in most states, ad valorem (real estate) property tax liens have "superior lien" status. They take precedence over all other liens, regardless of recording date. This includes mortgage liens and judgment liens. Therefore, even if a mortgage was recorded first, a property tax lien takes priority. Correct answer: A.
[Listing Price and Terms Types of Financing]A buyer bought a house on an installment land contract, also called a contract for deed. Which statement about this transaction is TRUE?
Answer(s): B
In an installment land contract (contract for deed), the buyer receives equitable title upon signing and possession of the property. Legal title remains with the seller until the full purchase price is paid or the contract conditions are met. The buyer typically takes possession and lives in the property during the installment period. This is a form of seller financing covering both land and improvements. Therefore, the correct answer is B.
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