Chapter 13 - Mortgages Flashcards
Aleination clause
Provides that on sale of property, the lender has the choice of either declaring the entire debt to be immediately due and owing or permitting the buyer to assume the loan.
Acceleration clause
Assists lender in foreclosure. If a borrow defaults the lender may step in and do so to protect his or her security.,. Any money advanced by lender to cure such defaults is either added to the unpaid debt or declared immediately due and owing from the borrower.
Bond
In some areas a similar document known as a note. Financing instrument signed by the borrower, who states I promise to repay the money you have just lent me. it is the note that makes the the borrower personally liable for the entire amount borrowed. While The mortgage creates the lien, the note creates the personal obligation.
Default
Failure to meet duties of the mortgager obligation results in borrowers default on the note.
Defeasance clause
In New Jesrsey mortgages, a defeasance clause ensures that when the debt is repaid,the mortgagee has no further claim on the property.
Deficiency judgement
If the the foreclosure sale does not produce sufficient cash to pay the loan in full after deducting expenses and accrued interest, the mortgagee may be entitled to seek a personal judgement against the signer of the unpaid balance. Such a judgement is called a deficiency judgement.
Estopple certificate
A note or bond is usually a negotiable instrument; as such it may be sold by the lender to a third party,or assignee. An estoppel certificate executed by the borrower verifies the amount that remains to be repaid and the interest rate. On payment in full, or satisfaction or satisfaction of the debt, the assignee is required to execute the satisfaction,or release of the mortgage. In the event of a foreclosure, the assignee (not the original mortgagee) files the suit.
Foreclosure
The mortgagee can ask the court to order a sale when the borrower defaults.
Hypothecation
term used to describe the pledging of property as security for payment of a loan without surrendering possession of the property.
Mortgage
Pledge of real property that serves as security or collateral for a loan.
Mortgagee
The lender who receives the mortgage.
Mortgagor
Individual who signs the mortgage.
Note
See bond. In some areas a similar document known as a bond. Financing instrument signed by the borrower, who states I promise to repay the money you have just lent me. It is the note that makes the the borrower personally liable for the entire amount borrowed. While The mortgage creates the lien, the note creates the personal obligation.
Real estate owned (REO)
Used to describe such properties acquired by lenders through foreclosure. Some real estate brokers specialize in handling.
Reduction certificate
When a mortgage is being paid off, the borrower requires a statement from the mortgagee detailing the amount currently due not to be confused with an estoppel certificate.
Satisfaction of mortgage
When all mortgage loan payments have been made and the the note paid in full, the mortgagee(lender) is usually required to execute a release of te mortgage, or satisfaction of mortgage.
Sheriff’s deed
See sheriff’s sale.
Sheriff’s sale
The successful bidder must pay cash at least equal to 20% of the auction and the rest within 10 days.until a sheriffs deed is delivered to the buyer at the end of the ten days, the defaulting borrower can redeem the property by paying the full amount due, including back taxes and legal costs. After that time, no further right of redemption.exists in New Jersey.
Short sale
A sale in which the the lender agrees to accept whatever the property brings in the open market and lift the mortgage lien sothe sale can close.
Subordination agreement
Change in priority of mortgage liens in which the first lender subordinates their lien.
Usuary
Charging of an unreasonably high interest rate. the federal government, in an effort to make mortgage money freely available, has exempted most lending institutions from mortgage limits. Two private sources for mortgage money, however are bound by state laws: The who takes back financing or holds the mortgage, and third parties (real estate broker, grandfather, who may lend the buyer money to purchase someone else’s property. In new jersey no more than 16% on a first mortgage, however, they may charge as much as 30% when they are selling their own primary residences. If the seller is taking back a second mortgage, the limits are 16% on the first $50,000 and up to 30% beyond that amount.
