Ch 9 - Mortgage Theiry Flashcards
A formal notice of a pending legal proceeding
Lis pendens
This clause allows the holder of the mortgage to sell the property at public auction without court involvement should the borrower default
Power of sale clause
This instrument executed by the mortgagor sets forth the exact unpaid balance of the mortgage and the interest rate
Estoppel certificate
The practice by which a borrower offers collateral to secure a debt or a borrower, as a condition precedent to a loan, or has a third party pledge collateral for the borrower
Hypothecation
A document that the lender returns with the promissory note to the borrower once the loan is paid
Satisfaction of mortgage
This procedure allows the lender to proceed against the borrowers unsecured assets
Deficiency judgment
To give up possession of the property to the lender while it serves as collateral
Pledging
A legal procedure whereby the mortgage property is either sold to a third-party or transferred to the lender in order to satisfy the debt
Foreclosure
The deed in Lieu of foreclosure is also called a…
Friendly foreclosure
True or false:
At any time before the property goes on sale, the borrower may redeem his/her property by paying off the debt
True
True or false:
The promissory note is a contract between a borrower and a lender
True
States in which ownership is subject to defeat upon full payment of the debt or performance of the obligation
Title theory states
** VA is a title theory state **
True or false:
A loan may not be pre-paid without a pre-payment clause allowing for it
True
True or false:
The basic purpose of a deed of trust is the same as a mortgage
True
What are the three types of foreclosure?
- judicial
- non-judicial
- strict
When does the borrower agree to uphold these covenants:
- Covenant to pay indebtedness
- Covenant to pay taxes
- Covenant to pay insurance
- Covenant of good repair
- Covenant against removal
- Covenant to acknowledge indebtedness
- Covenant to pay legal expenses
When he/she signs the mortgage
What is the lender‘s preferred method of sale because it simplifies the foreclosure process and is less expensive than filing a lawsuit?
Non-judicial foreclosure, also known as sale by advertisement
What are five clauses typically found in mortgage contracts?
CASED
- condemnation
- alienation
- subordination
- escalation
- defeasance
A note that serves as the written evidence of that must have what features to be valid?
- be in writing
- be between a borrower and a lender who both have contractual capacity
- State the borrowers promise to pay a certain sum of money
- show the terms of payment
- be signed by the borrower (principal)
- be voluntarily delivered by the borrower and accepted by the lender
The _________ allows the lender to demand that the entire loan balance be immediately paid in full should the borrower fail to make timely payments or comply with the other covenants in the mortgage contract and promissory
Acceleration clause
What three parties are involved with a note is secured by a deed of trust?
- the borrower (the trustor)
- the lender (the beneficiary)
- a neutral 3rd party (the trustee)
When a satisfaction or release is recorded, a recording office employee makes a note of its book and page location on the margin of the recorded mortgage, called a…
Marginal release
