COLORADO REAL ESTATE CONTRACTS AND REGULATIONS EXAM QUESTIONS AND ANSWERS, GRADED A+/ VERIFIED/ | latest update 2024/25|

COLORADO REAL ESTATE CONTRACTS AND REGULATIONS EXAM QUESTIONS AND ANSWERS, GRADED A+/ VERIFIED. Doctrine of Prior Appropriation: - -A theory of water law based on the principle, restated as "first in time is first in right" that regards the right to divert water from a water source. When writing a contract, you may be asked by the Buyer to use a note for earnest money. The Commission has created an _____________________ that you can use but most sellers will not agree to that. However, it might be used to cover a few days while buyers are having funds transferred to the state. - -Earnest Money Promissory Note Two types of promissory notes supplied by the Commission: - -a no default rate note a strict acceleration note. the no default rate note - -prevents borrowers from forcing the Seller to give a notice of acceleration. Example, the Buyer does not make the payment that causes the Seller to start the foreclosure process, but then the Buyer makes the payment which stops the foreclosure process. If the borrower is in default more than once in a 12-month period, the note can be foreclosed upon without redemption. A Promissory Note is _____________________ - -a written promise to repay a debt. The terms of a Promissory note shall usually include the following: - -1) Names of note holder and borrower 2) Total amount to be paid 3) Interest rate 4) How payment is to be made (monthly, quarterly, yearly) and amount of payment. 5) If there are charges for late payments 6) Date total indebtedness must be paid off. 7) If there is a prepayment penalty. 8) Statement that note is secured by deed of trust and the deed of trust contains additional rights for the note holder. A deed of trust is a document that conveys ________________________ to a third party as security for repayment of a debt. In Colorado it creates a lien on the property. However, if payments are not made on the note, it gives the "right to sell" the property to a third party (the public trustee) without having to go to court. - -"naked title" or "legal title" The deed of trust involves three parties: - -Borrower (Trustor) Lender (beneficiary of the trust) Public trustee (conveyance of the legal title to a public official). Deed of trust is foreclosed through __________________ - -a public trustee sale A deed of trust held by a _________________ would be treated like a mortgage and would be foreclosed only through a court sale. - -private trustee True or False: you can have more than one deed of trust on a property - -True If there is no clause that require the borrower to keep current any other outstanding debts that may have a prior claim state, borrowers could keep making payments on a note secured by a second deed of trust (a junior lien) while having the property foreclosed upon by a first deed of trust (thus losing the second note's security). The function of public trustee is to perform all duties and exercise all the power conferred upon them by the deeds of trust. This includes: - -Executing a "release of a deed of trust" when shown. Note signed by lender "paid in full," An original or copy of deed of trust A release of deed of trust signed by lender and must b