In a Deed of Trust Transaction,when a Trustee Sells the Property

question 32

Multiple Choice

In a deed of trust transaction,when a trustee sells the property and the proceeds generate a deficiency:

• A)the borrower is relieved of all obligations to the lender.
• B)the lender may sue the borrower on the debt and recover a judgment.
• C)the lender may sue the trustee.
• D)the trustee may sue the borrower.

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Definitions:

GAAP

Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards for financial reporting.

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.

Write-down

An accounting procedure reducing the book value of an asset when its market value drops below the recorded cost, resulting in a non-cash expense.

Impaired Asset

An asset that has a market value less than its carrying value on the balance sheet, indicating that it may not generate future benefits worth its listed value.