Escrow & Title
A 'vendor's lien' or 'purchase money mortgage' is a lien created when:
AA contractor is not paid for construction work
BThe seller of a property takes back a mortgage from the buyer as part of the sale financing✓ Correct
CThe government imposes a tax lien on the property
DA judgment is recorded against the property owner
Explanation
A purchase money mortgage (vendor's lien) arises when the seller provides financing to the buyer, retaining a lien on the property as security for the deferred purchase price.
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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.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
Math Concepts
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