Key Mortgage Closing Documents Flashcards
7 cards from real NSA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Key Mortgage Closing Documents flashcards as text
In states using a Mortgage (rather than a Deed of Trust), who holds legal title to the property during the loan term?
Answer: The borrower as mortgagor
In a two-party mortgage arrangement, the borrower retains legal title while granting the lender a lien as security for the debt.
Which document gives the trustee the power to conduct a non-judicial foreclosure if the borrower defaults?
Answer: Deed of Trust with Power of Sale clause
The Power of Sale clause in a Deed of Trust authorizes the trustee to sell the property without court involvement upon borrower default.
The Right of Rescission applies to which type of transaction?
Answer: Refinances and home equity loans on a primary residence
Under TILA, borrowers have a 3-business-day right to rescind only on non-purchase loans secured by their principal dwelling, such as refinances and HELOCs.
When a borrower exercises their Right of Rescission, who must the NSA notify immediately?
Answer: The title company or lender, not process the documents
If a borrower indicates intent to rescind, the NSA should stop the signing and immediately contact the lender or title company for instructions.
The Notice of Right to Cancel form must be signed and dated by the borrower AND:
Answer: Each borrower who has an ownership interest in the property
Each borrower with an ownership interest in the home must receive and sign their own Notice of Right to Cancel, not just the primary borrower.
The Compliance Agreement asks the borrower to agree to:
Answer: Cooperate with correcting minor errors or omissions in the loan documents after closing
The Compliance Agreement obligates the borrower to assist in correcting clerical errors discovered after closing that do not change the material loan terms.
What is the legal effect of recording the Deed of Trust in the county records?
Answer: It provides constructive notice of the lender's lien to all future parties
Recording the Deed of Trust gives constructive notice to the world of the lender's security interest, establishing lien priority.