Escrow & TitleIntermediateAlaska Exam

In Alaska, when a mortgage company goes bankrupt, the mortgages it originated and still holds are:

AAutomatically cancelled
BTreated as assets of the bankruptcy estate and transferred to a new servicer or sold to investorsCorrect
CAutomatically assumed by the Alaska Housing Finance Corporation, as is typical in most transactions
DReturned to the original borrowers free and clear

Why Treated as assets of the bankruptcy estate and transferred to a new servicer or sold to investors Is Correct

Answer B: Treated as assets of the bankruptcy estate and transferred to a new servicer or sold to investors

Mortgage loans are financial assets. When a mortgage company declares bankruptcy, its loan portfolio is treated as a bankruptcy estate asset.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

People Also Study

Study This Topic

Practice More Alaska Real Estate Questions

1,400+ questions covering all exam topics. Start free — no signup required.

Take the Free Alaska Quiz →