Test Your Knowledge

In My Different Classes There Are Many Questions That A Majority Of The Students Fail To Answer Correctly

I would like to present a few of them here for your enjoyment. The answers follow the questions.

  1. In California our loans involve a lender- Beneficiary, a borrower-Trustor, and a Trustee who handles reconveyance or any trustee sale if needed.  In Eastern states they have a Mortgagee and a Mortgagor.  Which one is the borrower?
  2. Commingling is putting any of my personal money in my trust fund.  True or False
  3. Which is worse, commingling or conversion?
  4. In almost all cases on a property an IRS would be a junior or a senior lien?
  5. Bank reconciliations must be completed monthly on all trust funds.  True or False
  6. You are a Notary, and I come into your office to get my Trust Deed notarized.  I had signed it last night.  Do you have to ask me to sign it again?
  7. You looked at an apartment house property and were told that the Gross Multiplier was 8 at that time.  The following year you looked at the same property and the income had not changed, but the Gross Multiplier was now 7.  The price would be lower or higher?
  8. There is a two year experience requirement to become a broker. Can a person who has two years experience as an escrow officer qualify?
  9. All written offers must be submitted promptly?
  10. If the cap rate on a property goes from 6% to 7%, does the price go up or down?


  1. The mortgagor is the borrower.  There is one good rule to remember.  Normally, “or” means the signer or giver.  For example, Grantor signs the Grant Deed, Vendor signs the Bill of Sale, Trustor signs the Trust Deed.
  2. False:  I can put $200 of my own money in the fund for expenses, etc.
  3. Conversion is stealing the money from the fund.
  4. Junior or senior status is decided by when the item was recorded.  IRS liens will normally be the last lien recorded because very few lenders will make a loan after an IRS lien is recorded.  Consequently, when there is a foreclosure, the IRS lien is wiped off the property.  The IRS does have one final option that they hardly ever exercise. They can buy the property back from the winning bidder within 120 days after the sale by paying the bid price.
  5. False, you do not have to reconcile if there has been no activity.
  6. A trust deed is acknowledged so that it can be recorded.  A document to be acknowledged does not have to be signed in front of the notary.
  7. When a gross multiplier goes down, the price goes down.
  8. Yes, it is called equivalent experience.
  9. You do not have to present patently frivolous offers, offers received after an escrow has closed, or when a seller says no more.
  10. When a cap rate goes up, the price goes down, etc.

One Response to Test Your Knowledge

  1. Bill Coté October 4, 2018 at 10:17 am #

    Mr Gomer
    When and where are we having lunch this month?
    Bill Coté

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