3. Five (5) Ways To Obtain Realty Flashcards
CASH
Given deed on closing - should always obtain CLTA (California Land Title)
Five ways to obtain realty
Cash … Mortgage …Deed of Trust/Trust Deed
Vendor/Owner Will Carry (OWC) … By Will
MORTGAGE
Non negotiable security instrument on realty
LIEN THEORY
Used in Midwest, East, and Southern states
Law considers that a mortgage creates a lien against real property
pledged in the mortgage to secure payment of a debt
NOTE
Negotiable instrument on realty
Typically FHA, VA, or conventional conforming or non-conforming loans
MORTGAGOR
Becomes borrower payer, the one getting a loan on their realty from a lender
MORTGAGEE
Becomes a payer, the one giving a loan on the borrower’s realty
CLAUSES IN A MORTGAGE
Acceleration … Alienation … Foreclosure … Prepayment … Insurance … Impound … Defeasance Clause … Foreclosure (court Action) … Equitable Right of Redemption … Statutory Redemption Period
ACCELERATION
In the event of realty default, whole amount of principal and interest may be declared due and payable
ALIENATION
Balance of realty debt becomes immediately due and payable if property sold or transferred
FORECLOSURE
Legal procedure whereby realty used as security for debt is sold to satisfy debt
PREPAYMENT
Terms upon which Mortgagor may pay entire or stated amount of mortgage principal at some time prior to due date with or without penalty
INSURANCE
Indemnification on your realty against loss from specific hazard or peril
IMPOUND
Establishing an account for purpose of paying annual tax and insurance bills
DEFEASANCE CLAUSE
States when payments are completed, mortgagee removes lien by a satisfaction piece
FORECLOSURE (Court Action)
Allows the mortgagee to foreclose with a sheriff’s deed
EQUITABLE RIGHT of REDEMPTION
A definite period in which a Mortgagor can make up late payments on their realty
STATUTORY REDEMPTION PERIOD
Original Mortgagor may reclaim realty if full back payments are made within so many days after foreclosure (each state is different)
DEED OF TRUST/TRUST DEED … components
Security instrument on realty
Title Theory … Note … Trustor … Beneficiary … Trustee … Trustee’s Deed … Deed of Reconveyance … Equitable Right of Redemption …
Clauses in a Trust Deed
TITLE THEORY
Used in the far west states
Law considers that a trust deed conveys title of realty to a trustee until the note is paid off
NOTE
Negotiable instrument on realty
Typically FHA,VA, or conventional conforming or non-conforming loans
TRUSTOR
Becomes borrower and payer, the one getting a loan on realty
BENEFICIARY
Becomes payee, the one giving a loan on realty
TRUSTEE
Impartial holder of title on a trust deed (title only)
TRUSTEE’S DEED
A deed issued after a foreclosure
DEED OF RECONVEYANCE
A deed issued by the trustee
States loan is paid in full
Gives all rights and privileges back to Trustor
EQUITABLE RIGHT OF REDEMPTION
Period in which a trustor can make up late payments on a note
Trust Deed … clauses
Acceleration … Alienation … Foreclosure … Prepayment … Insurance … Impound