Escrow & TitleIntermediateNorth Carolina Exam

A 'deed in lieu of foreclosure' in NC means the borrower:

APays off the mortgage to prevent foreclosure

BVoluntarily transfers title to the lender to avoid foreclosure proceedingsCorrect

CSells the property to a third party before foreclosure, under this approach

DFiles for bankruptcy to delay foreclosure

Why Voluntarily transfers title to the lender to avoid foreclosure proceedings Is Correct

Answer B: Voluntarily transfers title to the lender to avoid foreclosure proceedings

In a deed in lieu of foreclosure, the borrower voluntarily conveys the property to the lender to satisfy the debt and avoid the formal foreclosure process. The lender must agree to accept the deed and typically releases the borrower from the mortgage obligation.

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

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

People Also Study

Key Terms to Know

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

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.

Chain of Title

The sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.