Which statement BEST describes the security instruments used to finance real estate in Arkansas?
Correct Answer
B) Both mortgages and deeds of trust are recognized and used, and Arkansas permits non-judicial foreclosure under either instrument when a power of sale is included.
Arkansas recognizes both mortgages and deeds of trust as security instruments, and the Arkansas Statutory Foreclosure Act allows non-judicial (power-of-sale) foreclosure under either when the instrument contains a power of sale clause.
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Related Topics & Key Terms
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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.
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