California Real Estate Practice Exam

If a property is purchased subject to an existing mortgage loan, what will the escrow agent request from the lender?

1. Beneficiary statement

2. Closing statement

3. Title insurance

4. Mortgage statement

The correct answer is: Beneficiary statement

When a property is purchased subject to an existing mortgage loan, the escrow agent will request a beneficiary statement from the lender. This statement outlines the remaining balance of the loan and any other important information such as interest rate and payment schedule. If the lender is not a beneficiary or is not fully paid off at the time of the purchase, the buyer may be responsible for making payments to the lender. The other options given (closing statement, title insurance, and mortgage statement) are incorrect because they do not provide the necessary information about the existing mortgage loan. A closing statement details the buyer's expenses and seller's proceeds from the transaction, title insurance protects against any potential defects in the property's title, and a mortgage statement simply shows the amount due and paid on a mortgage loan. None of these options directly address the existing mortgage loan, making them incorrect choices for the escrow agent to request from the lender.