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REE 3433 Exam3 Chapter 7-9.
REE 3433 Exam3 Chapter 7-9.
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REE 3433 Exam3 Chapter 7-9... - ANS-...
A "letter of intent" is an instrument that generally meant to convey an offer - ANS-False
A contract may be rescinded for misrepresentation when a party deliberately lies about
material fact, even though the fact could easily have been verified - ANS-False
A fraternity built a float on the back of a truck at the fraternity house for use in a parade.
During the parade, part of the float fell and injured a woman stationed on the float.
Assuming that the members of the fraternity were negligent in constructing the float, is
the insurer of the fraternity liable? Why? - ANS-The insurer is not liable. In Loker v
Tulane University, the court rule that the injury resulted from the use of a motor vehicle,
which was excluded from the fraternity's coverage
A grantor-grantee index is much easier to use in tracing title than a tract index -
ANS-False
A nonrecourse note: - ANS-is more advantageous to borrowers than to lenders.
A nonrecourse note: - ANS-Is more advantageous to borrowers than to lenders.
A note without a mortgage is usually worthless while a mortgage without a note has
considerable value - ANS-False
A person can acquire actual notice of a prior sale that is not recorded in the public
record simply by hearing about it in a conversation - ANS-True
A person purchasing a home should, to protect his investment, purchase the following -
ANS-Title insurance and homeowner's insurance
A real estate contract can successfully be avoided when: - ANS-all of the above
A real estate contract should provide proration of: - ANS-prepaid taxes and prepaid
insurance
A sale of property where the mortgage is assumed is similar to a sale of property
subject to a mortgage in its effect on the purchaser - ANS-False
, Al owned a farm. He borrowed $5000,000 from Mort gave Mort a mortgage on the farm.
Later Al sold the farm to Pete, who agreed to assume the mortgage. Al and Mort both
agreed to the terms of the purchase, but they did not discuss Al's liability. Who, if
anyone is personally liable on the mortgage after the sale of the farm to Pete? Why? -
ANS-Both Al and Pete are personally liable. Al is liable because the creditor, Mort, did
not agree to release him from liability, Pete is liable because he assumed the mortgage
All of the following are methods for sellers of real estate to prove they have good title,
except: - ANS-Basic Form homeowners insurance (HO-1)
All of the following are methods for sellers of real estate to prove they have good title,
except: - ANS-Basic Form homeowners insurance (HO-1)
Although a vendor may assign his insurance coverage to a vendee, the assignment is
not effective until the insurance company approves the assignment - ANS-True
Amy negotiated the sale of her property to Carrie. After the contract was signed, Amy
and Carrie also orally agree that Amy would pay to clear a large tree from the front yard.
Later, Amy refuses to remove the tree and Carrie sues her. Under the parol evidence
rule: - ANS-Amy's oral promise would be admissible in court since it was made after the
contract was signed
An "on or before" clause in a note is especially important for lenders - ANS-False
An attract of title lists and summarizes legal instruments, such as deeds and mortgages,
and renders an opinion as to their legal validity - ANS-False
An FHA mortgage is insured, but not guaranteed, by the Fair Housing Administration -
ANS-True
As a general rule, an agent must execute a purchase contract along with the seller and
purchaser. - ANS-False
Assume that State's A's Marketable Record Title Act provides that any legal claims
against property that are older than 30 years are invalid. Same, his father and
grandfather have been using a road to cross Peter's land for 50 years. Sam's claim will
stand despite the Act - ANS-True
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