Chapter 13: Mortgages. Key Terms Flashcards
Acceleration clause
A clause stating that in case of default, the whole debt is immediately payable.
Alienation cause
A clause stating that if a property is sold, that it’s debt is immediately payable.
Bond
A personal promise to repay money; similar to a note.
Default
A failure to live up to any part of a mortgage agreement.
Defeasance clause
A clause ensuring that after repayment, a lender has no claim on the property.
Estoppel certificate
A borrowers statement of how much remains on mortgage debt.
Foreclosure
to seize and sell property pledged for a debt
Deficiency judgment
A court order that the borrower pay money lost by lender after foreclosure.
Hypothecation
A pledging of property as security without surrendering the possession.
Mortgage
A written pledge of real estate as security for a loan.
Mortgagee
This is the lender. For example: banks and lending institutions sometimes investors.
Mortgagors
This is considered the borrower.
Note
A personal promise to repay a loan; similar to a bond.
Reduction certificate
A lender statement of how much remains on the debt.
Real estate owned or REO
A term used in the United States to describe a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. Property acquired by lenders after a foreclosure.
Satisfaction of mortgage
A lenders statement that debt has been repaid in full.
Sheriffs deed
A document given to purchaser of foreclose property.
Sheriff’s sale
A proceeding to auction foreclosed real estate.
Short sale
A lender agrees to except sale proceeds, even if less than the debt.
Subordination agreement
An arrangement by which mortgage holder gives up priority.
In a subordination agreement, a prior lienholder agrees that its lien will be subordinate (junior) to a subsequently recorded lien. Example: Let’s say you want to refinance your primary mortgage, which is in the amount of $300,000 with 7.5% interest, to get a lower interest rate, by doing this the initial loan is paid off and the refinance loan becomes second in line, the originator of the refinanced mortgage will ask the second lender if they would subordinate their position allowing the refinancee to take first place.
Usary
The charging of a higher interest rate then is allowable by law.
