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Notary Signing Agent (Loan Signing) Practice Test

Loan documents: practice questions

Our Notary signing agent bank has 54 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.

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Question 1

Who usually pays for the lender's title insurance policy?

  1. The notary
  2. The county
  3. The buyer or borrower, as part of closing costs
  4. The appraiser
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C. The buyer or borrower, as part of closing costs — Cornell: the lender generally requires the buyer to pay for a title search and insurance in the lender's name.

Question 2

Under 24 CFR 206.41, at initial contact the HECM lender must give the prospective borrower:

  1. A list of HUD-approved HECM counselors
  2. A blank deed of trust
  3. A list of signing agents
  4. A copy of the HUD-1
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A. A list of HUD-approved HECM counselors — 24 CFR 206.41(a).

Question 3

How does a deed of trust differ from a mortgage?

  1. A trustee is named to hold title to the property as security for the loan
  2. It is signed only by the lender, not the borrower
  3. It transfers ownership of the property from the seller to the buyer
  4. It is never recorded in the county records, so it remains private
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A. A trustee is named to hold title to the property as security for the loan — A deed of trust has three parties: the borrower transfers a property interest to a third-party trustee (usually a title company) as security for the lender; in most states the trustee holds legal title.

Question 4

Joint tenancy differs from tenancy in common mainly because joint tenants have:

  1. Unequal shares by default
  2. No right to occupy
  3. No ability to sell
  4. A right of survivorship
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D. A right of survivorship — Joint tenants have survivorship rights.

Question 5

A deed of trust involves three parties. They are:

  1. Buyer, seller and notary
  2. Borrower, appraiser and lender
  3. Lender, insurer and county recorder
  4. Borrower, lender and trustee
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D. Borrower, lender and trustee — A deed of trust has a borrower (trustor), a lender (beneficiary) and a third-party trustee.

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