Chapter 12 Flashcards
Who owns a house in a lien theory state
The mortgagor
What is the name of the instrument that includes names of the parties rate of interest amount of money borrowed and loan repayment terms
Promissory note
What is a satisfaction of mortgage
Loan has been paid in full and should receive a letter of satisfaction from the mortgagee within 60 days
Which clause protects a borrower/mortgage or going into foreclosure
Only legally necessary clause in a mortgage
Defeasance clause
Which clause protects the lender/mortgagee
Escalation clause
What does the escalation clause allow the lender/mortgagee to do
Raise the interest rate
Exculpatory Clause
Protects mortgagee
Cannot garnish wages for late or unpaid mortgage
What is the term for loan origination fees
Points
How much does the rate of interest increase for each point charged up front by the lender
1/8%
What is involved in mortgage underwriting
Appraisal of the house qualifying the applicant and income
To qualify for an FHA loan a borrower must bot exceed housing expense ratio of
31%
To qualify for an FHA loan a borrower must not exceed a total obligation ratio of
43%
How do you get the loan to value ratio
Loan amount / purchased price or appraised value
What is equity of redemption
Pay balance in full and you don’t lose your house
What prevents a foreclosure on your credit
Equity of redemtion
