California NMLS Test 2025 – 400 Free Practice Questions to Pass the Exam

The correct choice highlights that a mortgage does not include an estate for years in real property. A mortgage specifically refers to a legal agreement where a borrower provides a lender a claim on real property as collateral for a loan. In contrast, an estate for years is a type of leasehold interest in real property, where a tenant has the right to occupy the property for a specified duration, but it does not involve a loan or security interest typical of a mortgage agreement. Therefore, an estate for years is fundamentally different from a mortgage, which is focused on financing and securing repayment through the property itself.

The other options involve various characteristics relating to mortgages. A hypothecation that requires a change in possession would imply the transfer of the property title, which is not typically encompassed by a mortgage, as the borrower retains possession while securing the loan. Mortgages created or renewed orally do not align with legal norms since most states, including California, require written documentation for a mortgage to be enforceable. Lastly, a mortgage created on property held adversely may still qualify as a valid mortgage; it simply indicates that the property is asserted without the consent of the owner. Hence, those alternatives present concepts that relate to mortgages but do not qualify for the same definition as an estate