What is the exam-ready answer?
| Official syllabus topic | Finance and Closing: Finance; Closing Procedures |
|---|---|
| Official PSI group | Finance and Closing |
| Published group count | 15 of the 52 Georgia questions |
| Exam portion | Georgia salesperson supplement |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes 16, 21, and 15 items for the three Georgia groups. It does not publish a guaranteed subtopic count. The statute, current GREC rule, contract, or other cited primary authority controls each lesson.
The lesson
Georgia questions reward the Georgia rule. A national rule that sounds right can still be the wrong answer when the question names a Georgia statute, document, role or procedure.
Promissory note
The note states the debt, payment terms, interest, default, and personal obligation. Recording the note itself is not what conveys real estate title.
Security deed
The security deed connects the debt to Georgia real estate, conveys legal title for security, and commonly grants a contractual power of sale.
Payoff
The lender or servicer supplies an accurate payoff and applies cleared funds to satisfy the debt. The closing lawyer coordinates the payoff in a sale or refinance.
Cancellation
A cancellation or satisfaction must reach the public record so the security deed no longer appears as an outstanding title encumbrance.
Decision rule
Georgia rule and national contrast
Worked Georgia example
Scenario. A borrower pays the loan in full, but the security deed remains uncanceled in county records when the property is later sold.
Reason it through. The debt may be paid, yet the public record still shows an encumbrance. The closing lawyer needs the proper cancellation or other cure before conveying clean title.
Answer. Obtain and record the required cancellation rather than treating the payoff receipt as self-recording.
Common exam traps
- Calling the security deed the promise to pay
- Treating payoff as automatic record cancellation
- Using mortgage theory without Georgia distinction
- Ignoring the power-of-sale clause
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or a live examination. Choose an answer before opening the explanation.
Question 1In a Georgia home loan, which document is the borrower's personal promise to repay the debt?
- A. The security deed
- B. The warranty deed
- C. The promissory note
- D. The Closing Disclosure
Show answer and explanation →
Answer: C. The promissory note
The promissory note creates the debt and the borrower's personal obligation to repay it. The security deed ties that debt to the real estate by conveying legal title as collateral. Calling the security deed the promise to pay is the usual mix-up, since both are signed at the same closing.
Question 2Under a Georgia security deed, what does the borrower hold while the loan is outstanding?
- A. Legal title, while the lender holds only a lien on it
- B. Possession and equity, with legal title in the lender
- C. No interest in the property until the loan is fully paid off
- D. Legal title held jointly with the lender as co-owners
Show answer and explanation →
Answer: B. Possession and equity, with legal title in the lender
Georgia is a title theory state: the security deed conveys legal title to the lender as security, usually with a power of sale. The borrower keeps possession and equitable rights under the agreement. The lien answer describes a mortgage in a lien theory state, which is the national default the Georgia supplement tests against.
Question 3A borrower pays off the loan in full, but the security deed still appears uncanceled in county records when the property is later sold. What should happen before closing?
- A. A proper cancellation is obtained and recorded
- B. Nothing, because payoff releases the deed on its own
- C. The buyer takes title subject to the deed and sorts it out later
- D. The payoff receipt is recorded as proof the debt is gone
Show answer and explanation →
Answer: A. A proper cancellation is obtained and recorded
Paying the debt and clearing the public record are separate events. Until a cancellation or satisfaction is recorded, the security deed still shows as an encumbrance on title, and the closing lawyer needs that cure to convey clean title. The automatic-release answer looks plausible because the debt is gone, but the record does not update itself.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Promissory Note, Security Deed, Satisfaction, and Cancellation in one clear answer without notes.
- Separate Promissory note from Security deed using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
Recommended next lesson
Continue with Georgia Loan Closing, Good Funds, Payoffs, and Wire-Fraud Prevention. With the note, security deed, and payoff sorted out, the next lesson follows the money at closing: verified payoffs, cleared funds, disbursement by the closing lawyer, and how to stop a wire-fraud email before it redirects the buyer's funds.
Return to the Finance and Closing hub for the complete official branch and the full lesson list for this Georgia group.