Ch 35 Mortgages Flashcards
Acceleration Clause
a clause in a mortgage or note that causes the entire balance of the loan to become due when a default occurs
Adjustable Rate Mortgage
a mortgage with an interest rate that fluctuates according to changes in an indez to which it is connected
Amortization
reducing or decreasing over time. in a loan, it shows how the loan balance is reduced until it is paid off
Balloon Mortgage
a mortgage with low fixed payments during the life of the loan, ending with one large final payment
Collateral
someting lenders can sell to get their money back in case of default, security interest for a loan
common Law Theory of Mortgages
the legal theory that a mortgage is a conveyance of title, which becomes void on payment of the obligatoin
Court of Equity
a court that administers justice according to the system of equity
Deed of Release
a deed releasing property from an encumbrance
Deed of trust
an instrument used in some states that replaces a mortgage, by which the legal title to real property is placed in a trustee to secure the repayment of a debt
defualt
a failure to perform a legal duty
defeasance clause
a clause in a mortgage providing that the mortgage deed shall be void on payment of the obligation
deficiency judgment
a judgment for the amount reaming due to the mortgagee after a foreclosure sale
equitable theory of mortgages
the legal theory that a mortgage is not a conveyance of title, but merely a lien against the property
equity of redemtion
the right of a mortgagor to redeem the property at any time before the completion of a foreclosure proceeding by paying the amount of the debt, interest, and cost.
fixed-rate mortgage
a mortgage with an interest rate that does not change during the life of the morgage
foreclose
to shut out, bar, or terminate
graduated-payment mortgage
a mortgage under which payments increase gradually over the life of the loan
junior mortgage
a mortgage subject to a prior mortgage
lien
a claim or charge on property for the payment of a debt
lien theory of mortgages
the legal theory that a mortgage is not a conveyance of title, but merely a lien against the property
mortgage
a conveyance of real property for the purpose of securing a debt
mortgage assignmet
the transfer of a mortgagees interest in a mortgage to another person
mortgage assumption
an agreement by a new owner of real property to pay the former owners mortgage
mortgage deed
a conveyance of real property for the purpose of securing a devt
mortgage discharge
a document stating that a mortgage debt is satisfied
mortgagee
one who lends money and takes back a mortgage as security for the loan
mortgage take-over
an agreement by a new owner of real property to pay the former owners mortgage
mortgagor
one who borrows money and gives a ortgage that is pledges property tot he lender as security for the loan
partial release
a document stating that specified parcels of property are released form an ecumbrance
power of sale clause
a clause in a mortgage allowing the mortgagee to hold a foreclosure sale without involving the court when a default in payment of the mortgage occurs
promissory note
written promise by the borrower to pay a sum of money to the lender
redeem
buy back
refinance
to extinguish a debt obligation and replace it with new debt that has different terms, such as a different interest rate or amortization schedule
reverse mortgage
a mortgage in which a bank pays a homeowner the equity in the home in exchange for the title to the home
right of redemtpion
the right to take property back, a statutory right to redeem the property even after a foreclosure sale
second mortgage
a mortgage subject to a prior mortgage
security
assurance usually in the form of a pledge or deposit given by a debtor to a creditor to make sure that a debt is paid
short sale
the sale of a home for a price lower than the loan balance: occurs only if the lender allows it
title theory of mortgages
the legal theory that a mortgage is a conveyance of title, which becomes void on payment of the obligation.
variable-rate mortgage
a mortgage with an interest rate that fluctuates according to changes in an index to which it is connected
