Escrow & TitleIntermediateCalifornia Exam

A 'mechanic's lien' can be filed by:

AA car mechanic owed money for auto repairs, as typically handled by an escrow officer

BA contractor or supplier who has not been paid for work done on a propertyCorrect

CA lender whose mortgage is unpaid, consistent with standard title insurance practice

DThe government for unpaid property taxes, per customary closing procedure in California

Why A contractor or supplier who has not been paid for work done on a property Is Correct

Answer B: A contractor or supplier who has not been paid for work done on a property

A mechanic's lien (materialman's lien) is filed by contractors, subcontractors, or suppliers who have not been paid for labor or materials provided for improvements to a property.

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.

Key Escrow & Title Terms in This Question

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

Escrow

A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.

People Also Study

Key Terms to Know

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Short Sale

A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.

Discount Points

Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.

Private Mortgage Insurance (PMI)

Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.

State-Specific Concepts

Mechanic's Lien

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