CHAMPIONS REAL ESTATE FINANCE
EXAM PREP 2026 QUESTIONS WITH
ANSWERS GRADED A+
◉Deed of Trust ANSWER: - A three party loan instrument - borrower,
lender and trustee.
◉Note, Promissory Note ANSWER: - A personal promise to repay a
debt.
◉Mortgagor ANSWER: - Borrower under a mortgage
◉Mortgagee ANSWER: - Lender under a mortgage
◉Beneficiary ANSWER: - Lender under a deed of trust
◉Trustor ANSWER: - Borrower under a deed of trust
◉Trustee ANSWER: - A third party under a deed of trust who acts as an
agent for the lender
, ◉Power of Sale ANSWER: - A clause in a deed of trust allowing non-
judicial foreclosure
◉Non-judicial foreclosure ANSWER: - Foreclosure that does not
require court proceedings or a judgment of foreclosure - the result of
power of sale clause in a deed of trust
◉Hypothecation ANSWER: - The action of pledging real property as
security for a debt
◉Acceleration Clause ANSWER: - A clause in a mortgage allowing the
lender to declare the whole amount of the principal due and payable in
the event of default by the borrower.
◉Alienation Clause ANSWER: - "Due on Sale" clause stating that the
balance of the debt becomes due if the property is sold by the mortgagor
◉Defeasance Clause ANSWER: - A clause stating that the lien on the
property is defeated when the debt is repaid
◉Escalation Clause ANSWER: - A clause allowing the lender to raise
the existing interest rate - although most often associated with an
Adjustable Rate Mortgage, it can be used to overcome an alienation
clause
EXAM PREP 2026 QUESTIONS WITH
ANSWERS GRADED A+
◉Deed of Trust ANSWER: - A three party loan instrument - borrower,
lender and trustee.
◉Note, Promissory Note ANSWER: - A personal promise to repay a
debt.
◉Mortgagor ANSWER: - Borrower under a mortgage
◉Mortgagee ANSWER: - Lender under a mortgage
◉Beneficiary ANSWER: - Lender under a deed of trust
◉Trustor ANSWER: - Borrower under a deed of trust
◉Trustee ANSWER: - A third party under a deed of trust who acts as an
agent for the lender
, ◉Power of Sale ANSWER: - A clause in a deed of trust allowing non-
judicial foreclosure
◉Non-judicial foreclosure ANSWER: - Foreclosure that does not
require court proceedings or a judgment of foreclosure - the result of
power of sale clause in a deed of trust
◉Hypothecation ANSWER: - The action of pledging real property as
security for a debt
◉Acceleration Clause ANSWER: - A clause in a mortgage allowing the
lender to declare the whole amount of the principal due and payable in
the event of default by the borrower.
◉Alienation Clause ANSWER: - "Due on Sale" clause stating that the
balance of the debt becomes due if the property is sold by the mortgagor
◉Defeasance Clause ANSWER: - A clause stating that the lien on the
property is defeated when the debt is repaid
◉Escalation Clause ANSWER: - A clause allowing the lender to raise
the existing interest rate - although most often associated with an
Adjustable Rate Mortgage, it can be used to overcome an alienation
clause
