Chapter 13 - Mortgages

Question 1

An ___ 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.

Answer 1

Alienation clause

Question 2

A ___ is an instrument that creates a personal obligationfor a debt that is secured by a mortgage or other lien on real estate.

Answer 2

Bond

Question 3

Failure to meet duties of the mortgager obligation results in borrowers ___ on the note.

Answer 3

Default

Question 4

In New Jesrsey mortgages, a ___ clause ensures that when the debt is repaid,the mortgagee has no further claim on the property.

Answer 4

Defeasance clause

Question 5

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 ___ judgement.

Answer 5

Deficiency judgement

Question 6

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 ___ 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.

Answer 6

Estopple certificate

Question 7

The mortgagee can ask the court to order a sale when the borrower defaults this is called ___.

Answer 7

Foreclosure

Question 8

___ is a term used to describe the pledging of property as security for payment of a loan without surrendering possession of the property.

Answer 8

Hypothecation

Question 9

Pledge of real property that serves as security or collateral for a loan is a ___.

Name (4) mortgage clauses:

Answer 9

Mortgage

• Acceleration
• Defeasance
• Alienation
• Subordination

Question 10

The lender who receives the mortgage is a ___.

Answer 10

Mortgagee

Question 11

Individual who signs the mortgage is a ___.

Answer 11

Mortgagor

Question 12

A ___ is an instrument of credit given to attest a debt.

Answer 12

Note

Question 13

__ __ ___ is used to describe such properties acquired by lenders through foreclosure. Some real estate brokers specialize in handling.

Answer 13

Real estate owned (REO)

Question 14

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, this is known as a ___ certificate.

Answer 14

Reduction certificate

Question 15

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 the mortgage is a ___ of mortgage.

Answer 15

Satisfaction of mortgage

Question 16

Auction of foreclosed property is a ___ ___.

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.

Answer 16

Sheriff’s sale

Question 17

A ___ deed is a deed that gives ownership rights in property bought at a sheriff’s sale. A sheriff’s sale is a sale conducted by a sheriff upon order of a court after a failure to pay a judgment. Often, property that is involved in a mortgage foreclosure is subject to being sold at a sheriff’s sale.

Note title will be wiped clean with the exception of back taxes owed.

Answer 17

Sheriff’s deed

Question 18

A sale in which the the lender agrees to accept whatever the property brings in the open market and lift the mortgage lien so the sale can close is a ___ ___.

Answer 18

Short sale

Question 19

Change in priority of mortgage liens in which the first lender rellegates to a lesser position of their lien, is called a ___ Agreement.

Answer 19

Subordination Agreement

Question 20

Charging of an unreasonably high interest rate, higher than the maximum established by the federal government is ___.

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.

Answer 20

Usuary

Question 21

An ___ 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.

Answer 21

Acceleration clause

Question 22

What are the duties of a borrower?

Answer 22

• Pay debt
• Pay Taxes
• Pay Insurance
• Keep property in good repair.