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
The compensation that is borrowed pays a lender for the use of the lenders money to purchase a property
Mortgage interest
The percentage of the loan that mus5 be paid in addition to the loan amount or principal is calked
Interest rate
This clause is used in mortgages on income producing real estate
Receivership clause
This clause is used in mortgages on income producing real estate
Receiveror clause
This clause is found in mortgages that cover more than one parcels or land
Release clause
Gives a right to cure a loan that is in default
Right to reinstate clause
This clause allows a lien recorded earlier to be placed in a secondary position subordination
Subordination lien
When there is a difference between the current market value of a property and the amount the owner still owes
Equity
The two types of junior mortgages are
Home equity loan
Home equity line of credit (heloc)
What type of agreement is a written contract where a lender who has a secured loan by a mortgage or dee of trust agrees with the property owner to subordinate the first loan
Subordination agreement
What clause allows the lender to receive the entire balance when default happens
Acceleration clause
What clause allows a lender the right to forclose at its option by requiring a borrower to admit any future default at the time the loan is obtained
Cognovit clause
This clause acknowledges that the borrower is paying the lease on time
Defeasance clause
This clause allows a borrower to pay off loan early
Prepayment clause
This clause allows a borrower to borrow additional funds based on mortgage after the loan balance has been paid down
Open & end clause
This clause allows a borrower to borrow additional funds based on mortgage after the loan balance has been paid down
Open & end clause
This allows lender to increase interest rate
Escalation clause
What clause is also called a alienation clause
Due on sale clause
The only legally necessary clause in a mortgage is
Defeasance clause
When a borrower is paying the lease on time
Defeasance clause
This clause is presented upon transfer of ownership to prevent the borrower from transferring interest in property without permission
Due On Sale Clause
What type of agreement is a written contract where a lender who has a secured loan by a mortgage or deed of trust agrees with the property owner to subordinate the first loan
Subordination agreement
This clause is used on income producing real estate
Receiverorship clause
This clause is found in mortgages that cover more than one parcel or land
Release clause
This clause cures a loan that is in default
Right to reinstate clause
This clause allows a lien recorded earlier to be placed in secondary position to a new lien
Subordination lien
What is it called when there is a difference between the current marjo value of a property and the amount the owner still owed
Equity
A escrow account is also called
Impound account
What account is established to hold money collected by the lender from the borrower to pay hazard insurance and property taxes when they become due
Escrow account
The administration of a loan from the time the money is borrowed until the loan is paid off is called
Loan servicing
The percentage of a loan that must be paid in addition to the loan amount or principal is called
Interest Rate
The compensation a borrower pays a lender for the use of the lenders money to purchase a property is called
Mortgage interest
A fee to process a loan is called
A Loan origination fee
A type of mortgage where a long term investor agrees to buy a mortgage from a banker at a specific date in the future is called a
Take out Commitment
A letter that verifies the principal balance owed on the loan is called a
Estoppel letter
To transfer the rights of a mortgage loan is called an
Assignment
The original lender that transfers the rights is called an
Assignor
Failure to perform as agreed in thr promissory note is called
Default
Right to stop foreclosure is called
Equity in Redemption
The right to redeem from a foreclosure for a period of time after a foreclosure sale is called
Statutory right of Redemption
A personal Judgement against tgr borrower based on three promissory note is called
Deficiency Judgement
Types of foreclosures
Strict foreclosure
Judical foreclosure
A deed in lieu foreclosure
When a lender brings a suit in court to prove that default has occurred this is called
Judical foreclosure
A harsh foreclosure that is not permitted in Florida which allows a lien holder to take possession of property after a borrower has a default on a debt & returns all money recieved
Strict foreclosure
A mortgage can voluntarily deed a property to a lien holder in lieu of payments of a debt .this foreclosure is called
A Deed In Lieu foreclosure
The right to redeem from a foreclosure for a period of time after a foreclosure sale is called..this is called
Statutory right of redemption
An upfront payment to a lenderin exchange for a lower mortgage rate is called
Discount point
The down payment plus the mortgage loan amount is called
Purchase price
The rate actually received by the lender is called
Effective yield
The percentage of the property’s value is represented by the loan is called
Loan to value ratio
The percentage of the property’s value is represented by the loan is called
Loan to value ratio
Methods of purchasing a house
Cash sale
Assumption of the mortgage
Assumption with novacation
Mortgages that do not contain a due on sale clause can be assumed by a buyer without permission of the lender is called
Assumption of the mortgage
Substituting the sellers name with the borrowers name is referred to as
Novation
When a sellers name is removed from any further liability for the debt it is called
Novation
When a mortgaged property is sold and the new owner aquires ownership without assuming person responsibility for the promissory note this is called
Subject to mortgage
An agreement between a property owner and a potential buyer in which the owner agrees to deliver to the purchaser after certain conditions have been met this is
Contract for deed
A contract for deed is also called
Land contract
Installment sales contract
Agreement for deed
Conditional sales contract
A mortgage that is a single mortgage given by a borrower that pledges two or more parcels as a security for a loan is called
Blanket mortgage
When a seller is confronted to sell their house to avoid foreclosure and to sell their property for less than the remaining balance this is called a
Short sale
A fee to process a loan is called a
Loan origination fee
Fees that are charged and paid by borrower to cover overhead and administrative costs
Mortgage loan fees
P .I.T.I means
Principal…interest..taxes..insurance
One point on a loan origination fee is
1%
A personal Judgement against the borrower based on the promissory note is called
Deficiency Judgement
A personal Judgement against the borrower based on the promissory note is called
Deficiency Judgement
Types of foreclosures
Strict foreclosures
Judical foreclosures
A deed in lieu foreclosure
What harsh foreclosure is not permitted in Florida
Strict foreclosure
