In NC, a 'discharge of mortgage' or 'cancellation of deed of trust' is important at closing because it:
Why Removes the seller's existing lien from public record, providing the buyer with clean title Is Correct
Answer B: Removes the seller's existing lien from public record, providing the buyer with clean title
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
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA 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.
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Related North Carolina Questions
- In NC, a 'release deed' (deed of release or satisfaction of mortgage) removes which encumbrance from a property's title?Escrow & Title
- When a NC seller pays off their mortgage at closing, the deed of trust is released by recording a:Escrow & Title
- A deed of trust differs from a mortgage primarily because it:Finance
- In North Carolina, the deed of trust is used instead of a mortgage. The deed of trust involves how many parties?Escrow & Title
- A buyer and seller in North Carolina have signed a contract, but closing is delayed because the seller cannot produce clear title. This is an example of:Contracts
- North Carolina is primarily a 'deed of trust' state rather than a 'mortgage' state. What is the key difference?Finance
- In NC, a 'notice of satisfaction' (or 'cancellation of deed of trust') is recorded when:Escrow & Title
- In NC, the 'doctrine of merger' in real estate means that when a buyer receives the deed at closing:Property Ownership
Key Terms to Know
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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