In North Dakota, which security instrument is used to pledge real property as collateral for a mortgage loan?
Correct Answer
B) Mortgage, where the borrower retains title and grants a lien to the lender
North Dakota uses the mortgage as its standard security instrument for real property loans. Under a mortgage, the borrower (mortgagor) retains legal title to the property and grants the lender (mortgagee) a lien against it. Because the borrower holds title, foreclosure requires judicial action through the courts — North Dakota is exclusively a judicial foreclosure state. This is directly tested under NDCC Chapter 32-19 and the state exam content outline for ND Financing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
More Financing Questions
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- → A Utah property has both a first mortgage and a second mortgage. If the first mortgage is foreclosed, what happens to the second mortgage?
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