California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

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The best description of a holder in due course is?

  1. A mortgage broker

  2. A real estate agent

  3. A note purchaser

  4. A loan servicer

The correct answer is: A note purchaser

A holder in due course is someone who has taken possession of a negotiable instrument for value, in good faith, and without notice of any defects or issues. In comparison, a mortgage broker (A) typically arranges loans between borrowers and lenders, but does not hold the note itself. A real estate agent (B) assists buyers and sellers in the process of buying and selling property and is not typically involved in the note itself. A loan servicer (D) is responsible for collecting payments on a loan, but does not hold the note itself. Only a note purchaser (C) meets the criteria for a holder in due course.

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