Retake Recovery Practice Set Preview

1. A.Declare the entire unpaid balance immediately due
2. B.Increase the interest rate to the usury ceiling
3. C.Take possession of the property without a foreclosure sale
4. D.Charge the borrower a prepayment penalty

Why each choice works or fails

• A. Correct. Acceleration of the full balance is the remedy the clause provides.
• B. Misconception: the clause reprices the loan. It accelerates the debt; it does not rewrite the interest rate.
• C. Misconception: acceleration equals repossession. The lender must still foreclose under the power of sale with statutory notice.
• D. Misconception: confusing it with a prepayment clause. A prepayment penalty is a separate provision; this clause calls the loan due.

Rule to remember: A due-on-sale clause permits acceleration for an unprotected transfer without consent; federal exceptions still apply.

1. A.Immediately, because the seller has signed and delivered the deed
2. B.Only once the lender's wire lands in the escrow account
3. C.Only after the deed is recorded and returned by the clerk
4. D.Only after a three-day waiting period that applies to all sales

Why each choice works or fails

• A. Misconception: signing equals funding. The attorney cannot pay out money the account does not yet hold.
• B. Correct. Disbursement follows receipt of good (collected) funds, such as a completed wire, in the escrow account.
• C. Misconception: recording comes first. Recording commonly follows disbursement and is not a precondition to paying the seller.
• D. Misconception: blending the Closing Disclosure timing or refinance rescission rules into sales. No general three-day wait applies.

Rule to remember: A Georgia settlement agent may disburse closing proceeds only after good (collected) funds are in its escrow account.

1. A.A court order authorizing the sale before it may be advertised
2. B.Conducting the sale on the first Tuesday of the month during legal sale hours
3. C.Giving the debtor the prescribed notice at least 30 days before the sale date
4. D.Publication of the notice of sale in the county's legal organ once a week for four weeks before the sale

Why each choice works or fails

• A. No court order is needed; the power of sale supplies the authority.
• B. Sales follow sheriff's-sale timing: the first Tuesday of the month during legal sale hours.
• C. The creditor must give the prescribed notice at least 30 days before the proposed sale. Proper mailing completes notice on the official postmark date.
• D. The notice runs in the county legal organ once a week for the four weeks before the sale.

Rule to remember: Georgia power-of-sale foreclosure requires statutory notice, four weeks of publication, and a first-Tuesday sale, but no court order.

1. A.Eliminates the need to notify the borrower
2. B.Prevents the borrower from curing the default at any point
3. C.Guarantees the lender will recover the full loan balance
4. D.Avoids filing suit, which shortens the timeline and reduces cost

Why each choice works or fails

• A. Misconception: non-judicial means no notice. Written notice to the debtor is mandatory, and skipping it can invalidate the sale.
• B. Misconception: power of sale shuts out the borrower. The borrower can still pay off, or reinstate if the loan documents allow, before the sale.
• C. Misconception: the sale always covers the debt. Recovery depends on the bid, and a deficiency claim needs court confirmation.
• D. Correct. Avoiding litigation is the point of the non-judicial process.

Rule to remember: Power-of-sale foreclosure skips a lawsuit, so it is faster and cheaper, but notice and advertising rules still apply.

1. A.Say it is unnecessary because the lender's policy protects the buyer
2. B.Promise that the policy will cover any title defect that arises
3. C.Explain the option and refer coverage questions to the closing attorney
4. D.Stay silent, since title insurance is outside brokerage duties

Why each choice works or fails

• A. Misconception: one policy covers both. The lender's policy protects the lender's loan, not the buyer's equity.
• B. Misconception: title insurance covers everything. Policies carry exclusions and exceptions, and an agent cannot promise coverage.
• C. Correct. Raise the option, then send coverage questions to the closing attorney or title insurer.
• D. Misconception: title is outside the agent's lane. Silence about a material protection is a failure of diligence.

Rule to remember: A lender's title policy protects only the lender; the owner's policy is optional and protects the buyer.