If a Bank as Chattel Mortgagee Fails to Register the Mortgage

question 37

Multiple Choice

If a bank as chattel mortgagee fails to register the mortgage of a car,which of the following is false?

• A) The failure to register would not affect the rights of the chattel mortgagee against the chattel mortgagor if no third party is involved.
• B) If the chattel mortgagor would sell the car to a third party and not pay the chattel mortgagee, the third party's claim would override that of the chattel mortgagee.
• C) If a trustee in bankruptcy seizes the car from the chattel mortgagor, the trustee's claim would override that of the chattel mortgagee.
• D) A potential purchaser of the car from the chattel mortgagor would not find the bank's interest recorded in the central registry.
• E) The chattel mortgagee has lost his security and thus all his legal rights.

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Definitions:

Excess Reserves

The reserves that banks hold over and above the legal requirement set by the central bank, available to lend or invest.

Income-producing Assets

Assets that generate revenue over time, such as rental properties, stocks, or bonds.

Banking Regulators

Agencies or bodies responsible for overseeing banks and ensuring the stability, safety, and compliance of the banking sector.

Federal Funds Market

A financial market that allows banks to borrow or lend excess reserves to one another, typically overnight, at an interest rate called the federal funds rate.