Questions and Answers
Which of the following is a voluntary, specific lien?
Which of the following is a specific, involuntary, statutory lien?
Which of the following is a voluntary lien?
Priority of liens refers to which of the following?
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Which tax targets homeowners in particular?
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A mechanic's lien would be available to all of the following EXCEPT
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Which lien usually would be given highest priority in disbursing funds from a foreclosure sale?
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Which statement is TRUE of both a mortgage lien and a judgment lien?
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What is the tax bill for a specific parcel of real estate assessed at 75% of a market value of $160,000 with a tax rate of 40 mills?
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Study Notes
Liens Overview
- Voluntary Specific Lien: A mortgage lien is a voluntary, specific lien created by a borrower naming specific property to secure the lender.
- Involuntary Statutory Lien: A real estate tax lien is specific, involuntary, and statutory, created without property owner permission and imposed by law.
- General Voluntary Lien: Another example of a voluntary lien is the mortgage lien, which reflects intentional action by the property owner.
Priority of Liens
- Definition: Priority of liens determines the order of claims against a property that will be paid off during a sale.
- Order of Payment: Generally follows "first come, first served" principle, with exceptions for statutory liens such as taxes and assessments.
Real Property Tax
- Target Group: Real property taxes specifically target homeowners, known as ad valorem taxes, based on the value of real estate.
Mechanic's Lien
- Eligibility: Mechanic's liens can be sought by contractors, subcontractors, and surveyors, but not by real estate professionals not owed commissions.
Foreclosure Sale Priority
- Highest Priority Lien: Unpaid real estate taxes take precedence in foreclosure sales, being a statutory lien superior to other contractual liens like mortgages.
Debtor-Creditor Relationship
- Commonality: Both mortgage liens and judgment liens establish a debtor-creditor relationship, despite differing in nature and origin.
Tax Calculation
- Market Value Assessment: For a property valued at $160,000, assessed at 75% (i.e., $120,000), with a county tax rate of 40 mills, the resulting tax bill is $4,800.
- Mill Rate Explanation: A mill represents 1/1000 of a dollar; thus, a 40-mill rate implies a tax of $0.040 for every dollar assessed.
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Description
Test your knowledge on real estate taxes and various types of liens with these flashcards. Dive into concepts such as voluntary and involuntary liens, and enhance your understanding of mortgage agreements and other related terms.
