Humber/Ontario Real Estate Course 4 Exam Practice

Mr. and Mrs. Jones are experiencing financial difficulties and their mortgage balance is 90% of their home's value. What legal means can the private investor use to take title and release them as mortgagors?

1. Foreclosure

2. Power Of Sale

3. Quit Claim Deed

4. Judicial Sale

5. Equitable Redemption

6. Trustee Sale

The correct answer is: Quit Claim Deed

The correct answer involves understanding the nuances of how title transfer and debt resolution works in the context of real estate finance, especially when homeowners face financial difficulties. A quit claim deed is a legal instrument that allows a person to transfer any interest they may have in the property to another party. In the case of Mr. and Mrs. Jones, should the private investor obtain a quit claim deed, they would be able to take title to the home without needing to go through the lengthy processes associated with foreclosures or power of sale situations. This means that the investor is assuming the risk and responsibility for eliminating the original owners from the mortgage obligation, allowing them to walk away from their financial troubles. The option does not require court intervention or a formal foreclosure process, making it a faster and often less complex method for the investor to assume control of the property. The other options typically involve additional legal proceedings or do not facilitate the direct transfer of title. Understanding this allows investors and those in real estate to use quit claim deeds effectively when navigating complex financial scenarios.