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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Under what condition does California law protect homeowners when the sale of the property cannot cover the outstanding mortgage balance?

  1. Only on the original purchase mortgage loan

  2. On all refinance loans

  3. When the homeowner declares bankruptcy

  4. Regardless of the mortgage type

The correct answer is: Only on the original purchase mortgage loan

California law only protects homeowners in the case of an original purchase mortgage loan, meaning the loan used to initially purchase the property. This means that any refinanced loans or mortgages taken out for other purposes may not be protected under California law. Additionally, declaring bankruptcy does not automatically trigger this protection for homeowners. Therefore, option B and C are incorrect. Option D is also incorrect as the type of mortgage can impact whether or not the homeowner is protected under California law, so this protection is not guaranteed regardless of the mortgage type.

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