California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

Practice this question and more.

The best description of a holder in due course is?

A mortgage broker
A real estate agent
A note purchaser
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.