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a USE THIS ONE 2 > Chapter 15: Real Estate Financing Principles > Flashcards

Chapter 15: Real Estate Financing Principles Flashcards

1
Q

Charging more interest than is legally allowed is called?

A

Usury

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2
Q

A promissory note…

A

Is the primary evidence of a debt

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3
Q

A land contract provides for the…

A

Conveyance of legal title at a future date.

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4
Q

The finance fee charged by the lender to make the loan is?

A

A loan origination fee

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5
Q

A man just purchased his first home with a fixed-rate loan. The interest he will pay over the life of the loan is?

A

Simple interest

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6
Q

The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the?

A

Loan to value ratio

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7
Q

If the amount realized at a sheriffs sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to…

A

The mortgagor

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8
Q

If a borrower defaults and the court simply awards the ledger full legal title, what kind of foreclosure has taken place?

A

Strict

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9
Q

A homeowner has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records an?

A

Satisfaction of mortgage

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10
Q

An existing mortgage loan can have its lien priority lowered through the use of a?

A

Subordination agreement

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11
Q

If a property sold as a mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for?

A

A deficiency judgement

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12
Q

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is what clause?

A

Acceleration

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13
Q

When a mortgage loan has been paid in full, it is important for borrowers to be sure that?

A

Satisfaction of mortgage is recorded

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14
Q

A deed of trust differs from a mortgage in what ways?

A

Number of parties involved in the loan Redemption rights allowed after foreclosure Time period Permitted to cure a default

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15
Q

Person who assumes an existing mortgage loan is?

A

Personally responsible for paying the principal balance

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16
Q

Interest in the property held by the owner in excess of any liens against it is called?

A

Equity

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17
Q

The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $229,000. The unpaid balance of the loan at the time of the sale was $240,000. What must the lender so to recover the $11,000 the borrower still owes?

A

Seek a deficiency judgment

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18
Q

The right a mortgagor has to regain the property by paying the debt after foreclosure sale is called?

A

Redemption

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19
Q

The clause in a mortgage instrument that would prevent the assumption of the mortgage buy a new purchaser is a?

A

Due on sale clause

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20
Q

The defeasance clause in a mortgage requires the mortgagee to execute?

A

Satisfaction of mortgage

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21
Q

Seller agrees to sell the house to the buyer for $200,000. The buyer was unable to qualify for a mortgage loan for this amount so the seller and the buyer enter into a contract for deed. The interested buyer has in the property under contract for deed is?

A

Equitable title

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22
Q

A friendly foreclosure enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by?

A

Deed in Lieu of foreclosure

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23
Q

Mortgage lenders one assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to?

A

Pay into an impound account

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24
Q

When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title?

A

Is kept by the seller until the purchase price is paid according to the contract

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25
Q

What is true about a land contract?

A

The buyers given possession

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26
Q

If a buyer of $185,000 home obtains $150,000 mortgage with 4 points, how much will the lender charge a closing?

A

$6000

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27
Q

If they yield on a 30 year loan is 10 1/4% and the mortgage lender charges 3 points, what is the interest rate on the mortgage note?

A

9 7/8%

28
Q

In absence of an agreement to the contrary, the mortgage having priority will be the one?

A

Was recorded first

29
Q

The pledging of property as security for payment of the loan is called?

A

Hypothecation

30
Q

Purpose of the mortgage is to?

A

Provide security for the loan

31
Q

What is not associated with mortgage or deed of trust foreclosure?

A

Remainder

32
Q

The clause in a mortgage that best describes the requirement of the mortgagee to execute a satisfaction of mortgage when the note has been fully paid is?

A

Defeasance

33
Q

Under the lien theory, the equitable title to the property is held by the?

A

Mortgagor

34
Q

Usury

A

Charging more interest than is legally allowed is called?

35
Q

Is the primary evidence of a debt

A

A promissory note…

36
Q

Conveyance of legal title at a future date.

A

A land contract provides for the…

37
Q

A loan origination fee

A

The finance fee charged by the lender to make the loan is?

38
Q

Simple interest

A

A man just purchased his first home with a fixed-rate loan. The interest he will pay over the life of the loan is?

39
Q

Loan to value ratio

A

The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the?

40
Q

The mortgagor

A

If the amount realized at a sheriffs sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to…

41
Q

Strict

A

If a borrower defaults and the court simply awards the ledger full legal title, what kind of foreclosure has taken place?

42
Q

Satisfaction of mortgage

A

A homeowner has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records an?

43
Q

Subordination agreement

A

An existing mortgage loan can have its lien priority lowered through the use of a?

44
Q

A deficiency judgement

A

If a property sold as a mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for?

45
Q

Acceleration

A

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is what clause?

46
Q

Satisfaction of mortgage is recorded

A

When a mortgage loan has been paid in full, it is important for borrowers to be sure that?

47
Q

Number of parties involved in the loan Redemption rights allowed after foreclosure Time period Permitted to cure a default

A

A deed of trust differs from a mortgage in what ways?

48
Q

Personally responsible for paying the principal balance

A

Person who assumes an existing mortgage loan is?

49
Q

Equity

A

Interest in the property held by the owner in excess of any liens against it is called?

50
Q

Seek a deficiency judgment

A

The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $229,000. The unpaid balance of the loan at the time of the sale was $240,000. What must the lender so to recover the $11,000 the borrower still owes?

51
Q

Redemption

A

The right a mortgagor has to regain the property by paying the debt after foreclosure sale is called?

52
Q

Due on sale clause

A

The clause in a mortgage instrument that would prevent the assumption of the mortgage buy a new purchaser is a?

53
Q

Satisfaction of mortgage

A

The defeasance clause in a mortgage requires the mortgagee to execute?

54
Q

Equitable title

A

Seller agrees to sell the house to the buyer for $200,000. The buyer was unable to qualify for a mortgage loan for this amount so the seller and the buyer enter into a contract for deed. The interested buyer has in the property under contract for deed is?

55
Q

Deed in Lieu of foreclosure

A

A friendly foreclosure enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by?

56
Q

Pay into an impound account

A

Mortgage lenders one assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to?

57
Q

Is kept by the seller until the purchase price is paid according to the contract

A

When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title?

58
Q

The buyers given possession

A

What is true about a land contract?

59
Q

$6000

A

If a buyer of $185,000 home obtains $150,000 mortgage with 4 points, how much will the lender charge a closing?

60
Q

9 7/8%

A

If they yield on a 30 year loan is 10 1/4% and the mortgage lender charges 3 points, what is the interest rate on the mortgage note?

61
Q

Was recorded first

A

In absence of an agreement to the contrary, the mortgage having priority will be the one?

62
Q

Hypothecation

A

The pledging of property as security for payment of the loan is called?

63
Q

Provide security for the loan

A

Purpose of the mortgage is to?

64
Q

Remainder

A

What is not associated with mortgage or deed of trust foreclosure?

65
Q

Defeasance

A

The clause in a mortgage that best describes the requirement of the mortgagee to execute a satisfaction of mortgage when the note has been fully paid is?

66
Q

Mortgagor

A

Under the lien theory, the equitable title to the property is held by the?

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