CHAPTER 12 Flashcards
The oldest form of mortgaging
Title Theory
What is used in title theory states instead of mortgage
A deed of trust
Who is called a trustor
The borrower
Who is called the beneficiary
The lender
When a loan is satisfied in a title theory state what deed is executed to the borrower
A reconveyance deed
What theory state allows the borrower to retain the title during the loan period
Lien theory state
When money is borrowed to buy real estate, the lender requires the borrower to sign what?
A promissory note
A promissory note is also called a
A note or a bond
What does a promissory note typically have on it
Names of parties
Rate of interest
Amount of money borrowed
Loan repayment terms
A promissory note that is secured by a mortgage is referred to as a
Secured Note
A pledge of property as security for a loan is called
Hypothecation
What accompanies a note & is also a security for repayment
A mortgage
A valid mortgage must have what info on it
Be in writing
Be signed by a mortgage
Legal description of property
Same requirements as a valid contract
Witnessed by two people
The mortgaee is the
Lender
When a loan is paid in full in a lien theory .. the mortgagor should receive a letter of satisfaction within how many days
60
The first mortgage is also referred to as the
First lien
The pledge of property as a security for a loan is called
Hypothecation
PITI stands for
Principal…interest…taxes….insurance
Fees that are charged by the lender is paid by the borrower to cover overhead and administrative costs and to provide some amount of profit for the lender is called
Mortgage loan fees
A fee to proceed a loan is called
Loan origination fee
One point on a loan origination fee is
1 percent
A escrow account is also called
Impound account
When an account is created to hold money collected by the lender from the borrower to pay hazard …insurance…and property taxes a when they are due
Escrow account
The administration of a loan from the time the money is borrowed until when the loan is paid off
Loan servicing