National Real Estate Practice Exam

For a mortgage note to be valid, it must be:

1. A negotiable instrument

2. Signed by the mortgagor

3. Signed by the mortgagee

4. Recorded to be valid

The correct answer is: Signed by the mortgagor

A mortgage note must be signed by the mortgagor to be considered valid. The mortgagor is the party who borrows money and pledges their property as security for the loan. The signature of the mortgagor on the note serves as evidence of their agreement to the terms of the loan, including their promise to repay the borrowed amount. This signature is crucial, as it shows that the mortgagor acknowledges their debt and is legally bound to fulfill the terms outlined in the note. While other options may seem relevant, they do not specifically address the requirement for validity. For instance, while a mortgage note can be a negotiable instrument, it is not strictly necessary for it to be classified as such, meaning it doesn't impact its validity in the context of the agreement. The mortgagee, who lends the money, does not need to sign the mortgage note for it to be valid; the mortgagor's signature is sufficient. Similarly, recording the mortgage note is related to establishing public notice and protecting the lender's interest in the property, but it is not mandatory for the note itself to be valid. Therefore, the key element for the mortgage note's validity is the signature of the mortgagor.