Finance
In a deed of trust state, what happens when a borrower defaults on their mortgage loan?
AThe lender must file a lawsuit (judicial foreclosure)
BThe trustee may conduct a non-judicial foreclosure sale without court involvement✓ Correct
CThe property automatically reverts to the state
DThe borrower automatically loses title upon missing one payment
Explanation
In a deed of trust arrangement, a trustee holds title for the lender's benefit. When a borrower defaults, the trustee may proceed with a non-judicial (trustee's sale) foreclosure, which is generally faster and less expensive than a judicial foreclosure.
Related Rhode Island Finance Questions
- What is 'construction loan' financing in Rhode Island and how does it work?
- What is 'points' in the context of a Rhode Island mortgage loan?
- The Home Mortgage Disclosure Act (HMDA) requires lenders to:
- Private Mortgage Insurance (PMI) is typically required when the borrower's down payment is:
- A 5/1 adjustable-rate mortgage (ARM) means:
- A buyer in Providence uses a 203(k) rehabilitation loan. This loan is designed to:
- A construction-to-permanent loan is used to:
- A buyer's annual gross income is $90,000. Following a 28% front-end ratio guideline, what is the maximum monthly housing payment a conventional lender would typically allow?
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →