With regard to lien theory versus title theory, which of the following statements is FALSE? Statement #1: In some states, the borrower who finances the purchase of property hypothecates title to a property and does not actually keep title to the property during the term of the loan. States that employ this custom are lien theory states. Statement #2: In some states, the borrower who finances the purchase of property holds both actual title and equitable title to a property during the term of the loan, and the lender's interest is secured with a deed of trust. These states are title theory states. Statement #3: In some states, the seller gives title to the buyer, and the buyer/borrower then signs a deed of trust which conveys only naked title to a trustee; and the lender is the beneficiary in the deed of trust. These states are lien theory states.

All states in the United States require real estate brokers to take an exam to get licensed.  Such subjects as operation of a brokerage, contract law and agency concepts and others.