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Establishing Proper Authority in Business Transactions-Ch2

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Establishing Proper Authority in Business Transactions-Ch2

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Questions and Answers

How does a collateral assignment differ from an assignment of a mortgage?

A collateral assignment is only used in commercial transactions, while an assignment can be used in both residential and commercial.

A collateral assignment involves transferring the mortgage to a third party, while an assignment retains ownership within the same party.

A collateral assignment involves pledging the right to collect under a mortgage as security, not transferring the mortgage itself. (correct)

A collateral assignment transfers all rights and ownership of the mortgage, while an assignment only transfers partial rights.

Why is it important for seller's affidavits to contain factual information without qualifiers?

To shift the responsibility of property disclosure from the seller to the buyer.

To speed up the closing process and ensure efficiency in real estate deals.

To protect the buyer from acquiring property with undisclosed issues or liabilities. (correct)

To minimize legal fees associated with drafting detailed affidavits for sellers.

In what scenario would lenders typically not accept a general plat exception in a transaction?

When the property has undergone significant construction changes.

When there are multiple ownership disputes concerning the property.

When there are undisclosed liens or judgments on the property.

When there are only easements on the plat. (correct)

What distinguishes a collateral assignment from an assignment of a mortgage in commercial transactions?

A collateral assignment involves pledging the right to collect under the mortgage, not the mortgage itself. Signup and view all the answers

Why is it important for seller's affidavits to contain clear, unqualified statements?

To ensure buyers have accurate and reliable information about the property. Signup and view all the answers

Why is it important to review articles of organization and operating agreements of an LLC?

To establish who has authority within the LLC Signup and view all the answers

What is the purpose of recording an LLC affidavit?

To certify key details about the LLC and its members/managers Signup and view all the answers

Why is it necessary to have LLC affidavits recorded even if some resist?

To avoid future authorization issues Signup and view all the answers

Why are clear and unqualified statements important in seller's affidavits?

To ensure the buyer has recourse under the affidavit. Signup and view all the answers

Why does it matter for satisfaction of a mortgage in a commercial transaction if it is collaterally assigned?

It requires additional parties to sign off on satisfaction. Signup and view all the answers