Question

Star Bank provided cash to a customer, J. Brown, to pay for a building. Star required that Brown also sign a(n)_____________ (mortgage/installment/bond) note payable, which allows the bank to be paid by the cash proceeds of the sale of the building if Brown fails to pay on the note.

Answer 1

Answer: Mortgage

Explanation: Mortgage is a legal debt instrument signed by a borrower to the lender for credit to purchase a property.

Mortgage is a secured loan which the security is the property being bought.

On the event of non payment of the loan, the property is sold and money realised is used in paying the lender the principal amount as well as accrued interest on the loan.