Chaper 12 vocab

Question 1

Percentage of the loan amount charge to a borrower for the cost of generating a loan

Answer 1

Loan origination fee

Question 2

The part of a financing agreement that requires the lender to execute a satisfaction or release when the note has been paid in full

Answer 2

Defeasance clause

Question 3

A provision in a financing agreement that permits, the lender to declare the entire debt due immediately in the event the property is sold

Answer 3

Alienation clause

Question 4

A device by which one lender agrees to change the priority of its loan relative to another lender

Answer 4

Subordination agreement

Question 5

A legal procedure, in which property pledged as security is taken from the borrower to satisfy the debt

Answer 5

Foreclosure

Question 6

A document by which property is transferred to the lender by mutual agreement, rather than by lawsuit

Answer 6

Deed in lieu of foreclosure

Question 7

A sale in which the sales price is less than the remaining indebtedness

Answer 7

short sale

Question 8

A type of loan, where each payment partially pays off both principal and interest

Answer 8

Amortized loan

Question 9

A procedure for obtaining the unpaid balance of a debt, where the foreclosure sale does not generate sufficient funds

Answer 9

Deficiency judgment

Question 10

Idea that a mortgage is purely a lien on real property

Answer 10

Lien theory

Question 11

concept that the borrower actually gives legal title to the lender(or other party) and retains equitable title

Answer 11

Title theory

Question 12

Fee that a borrower pays on any payment made ahead of schedule(if allowed)

Answer 12

Pre-payment penalty

Question 13

The borrower in a mortgage loan cause

Answer 13

mortgagor

Question 14

The lender in a mortgage loan

Answer 14

mortgagee

Question 15

A borrower’s personal pledge to repay a debt according to agreed-upon terms

Answer 15

Promissory note

Question 16

The pledging of a property as security for payment of a loan without actually surrendering the property itself

Answer 16

Hypothecation

Question 17

A charge for the use of money

Answer 17

Interest

Question 18

The act of charging interest in excess of the maximum legal rate

Answer 18

Usury

Question 19

A charge imposed by lenders to adjust for the difference between a loan’s interest rate, and the yield an investor demands

Answer 19

Discount points

Question 20

The part of a financing agreement that gives the lender the right to declare the entire debt due and payable immediately on default

Answer 20

Acceleration clause