CHCP CHCP Lien & Encumbrance Resolution 2

Question 1

When a closing agent discovers an outstanding judgment lien against the seller, the most common resolution at closing is to:

Accepted Answer

Pay off the lien from the seller's proceeds and obtain a release

Answer

Outstanding judgment liens are typically satisfied at closing from the seller's net proceeds, and the release is recorded to deliver clear title to the buyer.

Question 2

An IRS federal tax lien for unpaid taxes attaches to:

Accepted Answer

All real and personal property owned by the taxpayer nationwide

Answer

A federal tax lien under IRC Section 6321 attaches to all property and rights to property—real and personal—belonging to the delinquent taxpayer throughout the country.

Question 3

Which document does an HOA typically record to enforce unpaid assessments against a property?

Accepted Answer

HOA assessment lien

Answer

When a homeowner fails to pay HOA dues or special assessments, the association may record an assessment lien against the property, which must be resolved before clear title can pass.

Question 4

A subordination agreement allows which of the following?

Accepted Answer

A junior lien to move ahead of a senior lien in priority

Answer

A subordination agreement is a written contract in which a senior lienholder agrees to let a junior lien take a higher priority position, commonly used when refinancing.

Question 5

What is a 'lien waiver' in the context of real estate closings?

Accepted Answer

A document releasing a contractor's right to file a mechanic's lien once paid

Answer

A lien waiver is signed by contractors or subcontractors after receiving payment, surrendering their right to file a mechanic's lien for the work covered.

(CHCP) Certified Home Closing Professional Practice Test

(CHCP) Certified Home Closing Professional Practice Test

CHCP CHCP Lien & Encumbrance Resolution 2