Chapter 13: Mortgages

Question 1

the clause in a note or mortgage that can be enforced to make the entire debt due immediately if the mortgagor defaults

Answer 1

acceleration clause

Question 2

the clause in a mortgage stating that the balances of the secured debt becomes immediately due and payable at the mortgagee’s option if the property is sold or title is otherwise transferred

Answer 2

alienation clause

Question 3

the instrument that creates a personal obligation for a debt that is secured by a mortgage or other lien on real estate

Answer 3

bond

Question 4

the nonperformance of a duty whether arising under a contract or otherwise; failure to meet an obligation when due

Answer 4

default

Question 5

clause ensuring that after repayment,lender has no claim on property

Answer 5

defeasance clause

Question 6

a personal judgement levied against the mortgagor when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full

Answer 6

deficiency judgement

Question 7

a document in which a borrower certifies the amount he or she owes on a mortgage loan and the rate of interest

Answer 7

estoppel certificate

Question 8

a procedure whereby property pledged as security for a debt is sold to pay the debt in the event of default in payments or terms

Answer 8

foreclosure

Question 9

a pledge of property as security for a loan without giving up possession of it

Answer 9

hypothecation

Question 10

a conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien

Answer 10

mortgage

Question 11

a lender in a mortgage loan transaction

Answer 11

mortgagee

Question 12

a borrower who conveys his or her property as security for a loan

Answer 12

mortgagor

Question 13

an instrument of credit given to attest a debt

Answer 13

note

Question 14

a clause in a mortgage that gives the mortagor the privilege of paying the mortgage indebtedness before it becomes due

Answer 14

prepayment

Question 15

property acquired by lenders

Answer 15

real estate owned (REO)

Question 16

lenders statement of how much remains on a debt

Answer 16

reduction certificate

Question 17

lenders statement that the debt has been paid in full

Answer 17

satisfaction of mortgage

Question 18

document given to purchaser of foreclosed property

Answer 18

Sheriff’s deed

Question 19

auction of foreclosed property

Answer 19

Sheriff’s sale

Question 20

a sale in which the lender agrees to accept whatever the property brings on the open market and lift the mortgage liens so the sale can close

Answer 20

short sale

Question 21

lien holder’s agreement to give up priority

Answer 21

subordination agreement

Question 22

charging interest at a rate higher than the maximum established by law

Answer 22

usury