Chap 12 Addition

Question 1

Two common types of junior mortgages are

Answer 1

Home Equity Loan
Home Equity Line of Credit

Question 2

A written contract in which a lender who has secured a loan by a mortgage or deed of trust agrees to subordinate the first lien loan to a new loan

Answer 2

Subordination agreement

Question 3

Name some Mortgage clauses

Answer 3

Acceleration
Cognovit
Defeasance
Due on sale
Escalation
Insurance
Open End
Prepayment

Question 4

Clauses are also called

Answer 4

Covenants

Question 5

This clause allows the lender to declare the entire balance whenever default occurs

Answer 5

Acceleration clause

Question 6

This clause gives a lender the right to foreclose by requiring thr borrower admits to any future default

Answer 6

Cognotive Clause

Question 7

Thi

Question 8

This Clause provides protection for the borrower as it requires the lender to acknowledge performance by the borrower like the borrower is paying lease on time

Answer 8

Defeasance clause

Question 9

A due on sale clause is also called

Answer 9

Alienation clause

Question 10

Allows a lender to increase interest rate based on the occurrence of an event such as consistently late payments

Answer 10

Escalation Clause

Question 11

This clause limits the lenders rights in a foreclosure to the amount received from the sale of the foreclosed property

Answer 11

Exculpatory clause

Question 12

This clause requires the borrower to maintain the property properly during the term of the loan

Answer 12

Maintenance Clause

Question 13

Allows borrower to pay off loan early

Answer 13

Prepayment Clause

Question 14

Allows a borrower to borrow additional funds based on the same mortgage after the loan balance

Answer 14

Open - End Clause

Question 15

This clause is used in mortgages on income producing real estate
If the investor should default the lender may ask the court to appoint a trustee

Answer 15

Receiverorship Clause

Question 16

This Clause is found in mortgages that cover more than one parcel of land

Answer 16

Release clause

Question 17

A loan that gives a borrower a right to cure a loan

Answer 17

Right to Reinstate

Question 18

Allows a lien recorded earlier to be placed in a secondary position to a new lien

Answer 18

Subordination Clause

Question 19

The difference between the current market value of a property and the amount the owner still owes

Answer 19

Equity

Question 20

The compensation a borrower pays a lender for the use of the lenders money to purchase a property

Answer 20

Mortgage Interest

Question 21

The administration of a loan from the time the money is borrowed to the time it is paid off

Answer 21

Loan Servicing

Question 22

This account holds money collected by the lender from the borrower to pay hazard insurance and property taxes when they become due

Answer 22

Escrow account

Question 23

An impound account is also called

Answer 23

Escrow account

Question 24

Fees that are charged by the lender and paid by the borrower to cover overhead & administrative costs and to provide some amount of profit for the lender

Answer 24

Mortgage Loan Fees

Question 25

The fee to process a loan is called

Answer 25

Loan origination fee

Question 26

An upfront payment to the lender in exchange for a lower mortgage rate is called a

Answer 26

Discount point

Question 27

A discount point is typically how much percentage

Answer 27

1

Question 28

The rate actually received by the lender is called

Answer 28

Effective Yield

Question 29

The percentage of the properties value that is represented by the loan

Answer 29

Loan to Value Ratio

Question 32

Methods of purchasing a mortgage d property

Answer 32

Cash Sale Assumption of the mortgage Assumption with Novation Subject to mortgage

Question 33

Mortgages that do not contain a due on sale clause can be assumed by a buyer without permission of the lender

Answer 33

Assumption of the mortgage

Question 34

Assumption of the mortgage is also called

Answer 34

Non qualifying mortgages

Question 35

Mortgages that contain a due on sale clause cannot be sold with an assumption without the knowledge and approval of the lender

Answer 35

Assumption with Novation

Question 36

Substituting the sellers name with the borrowers name is referred to as

Answer 36

Novation Agreement

Question 37

Releases sellers name from any further liability for the debt

Answer 37

Novation

Question 38

When the original borrower remains liable for the balance of the promissory note

Answer 38

Subject to mortgage

Question 39

An agreement between a property and a potential buyer in which the owner agrees to deliver a deed to the purchaser after certain conditions have been met

Answer 39

Contract for deed

Question 40

A contract for deed is also called a

Answer 40

Land contract Installment sales contract Agreement for deed Conditional Sales Contract

Question 42

A single mortgage given by a borrower that pledges two or more parcels as security for a loan

Answer 42

Blanket Mortgage

Question 44

A long term investor agrees to buy a mortgage from a mortgage banker at a specific date in the future

Answer 44

Take Out Commitment

Question 45

A letter that verifies the principal balance owed on the loan

Answer 45

Estopell letter Or estopell certificate

Question 46

What is used to transfer the rights in a property

Answer 46

Assignment

Question 47

Failure to perform as agreed in the promissory note is called

Answer 47

A default

Question 48

A right stop foreclosure is called

Answer 48

Equity of redemption

Question 49

The right that allows a borrower to redeem from a foreclosure for a period of time after a foreclosure sale

Answer 49

Statutory right of redemption

Question 50

The 3 foreclosure process

Answer 50

Strict foreclosure Judical foreclosure A deed in lieu of foreclosure

Question 51

A non Judical foreclosure allows a lender to take full possession of property after a default occurs this process is harsh and not allowed in Florida

Answer 51

Strict foreclosure

Question 52

Requires a Lender to bring suit in court to prove default has occurred the borrower has the right to defend against the suit

Answer 52

Judical foreclosure

Question 53

A mortgage who is in default can voluntarily deed a property to a lien holder in lieu of payment

Answer 53

A deed in lieu of foreclosure

Question 54

A transaction in which a seller is confronted with the threat of a forclosure..enters into a settlement agreement with the lender where the lender consents to a sales price lower than outstanding balance

Answer 54

Short sale