NSA Key Mortgage Closing Documents 3

Question 1

In states using a Mortgage (rather than a Deed of Trust), who holds legal title to the property during the loan term?

Accepted Answer

The borrower as mortgagor

Answer

In a two-party mortgage arrangement, the borrower retains legal title while granting the lender a lien as security for the debt.

Question 2

Which document gives the trustee the power to conduct a non-judicial foreclosure if the borrower defaults?

Accepted Answer

Deed of Trust with Power of Sale clause

Answer

The Power of Sale clause in a Deed of Trust authorizes the trustee to sell the property without court involvement upon borrower default.

Question 3

The Right of Rescission applies to which type of transaction?

Accepted Answer

Refinances and home equity loans on a primary residence

Answer

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.

Question 4

When a borrower exercises their Right of Rescission, who must the NSA notify immediately?

Accepted Answer

The title company or lender, not process the documents

Answer

If a borrower indicates intent to rescind, the NSA should stop the signing and immediately contact the lender or title company for instructions.

Question 5

The Notice of Right to Cancel form must be signed and dated by the borrower AND:

Accepted Answer

Each borrower who has an ownership interest in the property

Answer

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.

(NSA) Notary Signing Agent Certification Practice Test

(NSA) Notary Signing Agent Certification Practice Test

NSA Key Mortgage Closing Documents 3