What is the exam-ready answer?
| Roadmap lesson | 165 of 500 |
|---|---|
| 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 |
| Law checked through | August 2, 2026 |
| Last verified | August 2, 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.
Complete lesson
Read these concepts as one Georgia decision system. A plausible national rule can still be the wrong answer when the stem supplies a Georgia statute, instrument, 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 1Which statement best states the Georgia rule for Promissory Note, Security Deed, Satisfaction, and Cancellation?
- A. The security deed is the borrower's personal promise to repay.
- B. Name the debt document, collateral instrument, title effect, default remedy, payoff evidence, and recorded cancellation separately.
- C. Loan payoff automatically removes every public record without further action.
- D. Georgia security deeds never convey legal title for security.
Show answer and explanation →
Answer: B. Name the debt document, collateral instrument, title effect, default remedy, payoff evidence, and recorded cancellation separately.
The correct choice states the controlling rule. The other choices either remove a required element, replace Georgia authority with a generic assumption, or expand an exception beyond the cited source.
Question 2A borrower pays the loan in full, but the security deed remains uncanceled in county records when the property is later sold.
- A. Ignore the Georgia-specific fact because good intentions control.
- B. Apply the nearest national rule without checking Georgia authority.
- C. Obtain and record the required cancellation rather than treating the payoff receipt as self-recording.
- D. Let the participant with the strongest preference decide without following the required process.
Show answer and explanation →
Answer: C. Obtain and record the required cancellation rather than treating the payoff receipt as self-recording.
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. The correct option follows that reasoning. The distractors ignore the controlling Georgia source, substitute intent for procedure, or give decision-making authority to the wrong person.
Question 3When solving Promissory Note, Security Deed, Satisfaction, and Cancellation, what should a candidate identify first?
- A. The answer choice that sounds most ethical, without classifying the actor or document.
- B. One familiar deadline, applied to every Georgia transaction regardless of the source.
- C. A national default, even when the stem identifies a Georgia statute or GREC rule.
- D. Follow the chain: note creates debt, security deed secures it, default may trigger remedies, payoff satisfies debt, and cancellation clears the record.
Show answer and explanation →
Answer: D. Follow the chain: note creates debt, security deed secures it, default may trigger remedies, payoff satisfies debt, and cancellation clears the record.
The decision rule identifies the facts that control this topic. The other choices reward tone, a memorized number, or a national default while skipping the Georgia actor, document, authority, or procedure.
Mastery tracking
Mark this Georgia lesson mastered only when every statement is true.
- State the direct answer and decision rule without notes.
- Explain all four concepts and identify the controlling Georgia source.
- Solve the worked example after changing one important fact.
- Reject every listed trap and explain what makes it tempting.
- Answer all three original questions correctly and explain every distractor.
- Repeat this topic in mixed Georgia practice on a later day.
Recommended next lesson
Continue with Georgia Loan Closing, Good Funds, Payoffs, and Wire-Fraud Prevention. Continue through the roadmap from lesson 165.
Return to the Finance and Closing hub for the complete official branch and every canonical lesson in this Georgia group.