Chapter 26 Flashcards
Occurs when one party makes a loan to another party.
credit
the lender in a credit transaction
creditor
the borrower in a credit transaction
debtor
Credit that does not require any security (collateral) to protect the payment of the debt.
unsecured credit
The creditor in a credit transaction in which the debtor does not give security (collateral) to protect the payment of the debt.
unsecured creditor
A situation in which a defendant does not have the money to pay a civil judgment.
judgment proof
Security against repayment of a debt that lenders sometimes require; can be a car, a house, or other property. The property is subject to a security interest.
collateral
Credit that requires security (collateral) that secures payment of the loan
secured credit
A creditor who has a security interest in collateral
secured creditor (secured party)
An interest that is created when a party borrows money from a lender and pledges personal property as security for repayment of the loan; An interest in real property that arises if an owner of real property borrows money from a lender and pledges the real property as security for repayment of the loan.
security interest
An arrangement where an owner of real property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan
mortgage
The owner-debtor in a mortgage transaction
mortgagor
The creditor in a mortgage transaction
mortgagee
A written document filed by a lender or trustee with the county recorder’s office, which is proof that a mortgage or note secured by real property has been paid
reconveyance (satisfaction of a mortgage)
An instrument that is evidence of a borrower’s debt to the lender
note
An instrument that gives a creditor a security interest in the debtor’s real property that is pledged as collateral for a loan.
deed of trust
A party who holds legal title to real property where a deed of trust and note are used to obtain credit for the purchase of real property until the amount borrowed has been paid; A party who holds legal title to the trust corpus and manages the trust for the benefit of the beneficiary or beneficiaries
trustee
The owner-debtor where a deed of trust and note are used to obtain credit for the purchase of real property.
trustor
The lender-creditor of a three-party deed of trust in a real estate financing arrangement; A person or party designated in a will to receive all or a portion of the testator’s property at the time of the testator’s death; A person or party for whose benefit a trust is created; A person or party who is to receive the life insurance proceeds when the insured dies; A party who is designated to be paid funds by an issuing bank of a letter of credit.
beneficiary
A statute that requires a mortgage or deed of trust to be recorded in the county recorder’s office of the county in which the real property is located.
recording statute
A situation that occurs if a mortgage or deed of trust is not recorded in the county recorder’s office in the county in which the real property is located.
nonrecordation of a mortgage
A situation that occurs when a debtor does not make the required payments on a debt
default
A legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan.
foreclosure sale
A power stated in a mortgage or deed that permits foreclosure without court proceedings and sale of the property through an auction
power of sale
A judgment of a court that permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan.
deficiency judgment
A statute that prohibits deficiency judgments regarding certain types of mortgages, such as those on residential property.
anti-deficiency statute
A right that allows the mortgagor to redeem real property after default and before foreclosure. It requires the mortgagor to pay the full amount of the debt incurred by the mortgagee because of the mortgagor’s default
right of redemption
The specified period of time during which a state allows a mortgagor to redeem real property after foreclosure on the property because of default on a loan.
statutory period of redemption
A contractor’s, laborer’s, supplier’s, or design professional’s statutory lien that makes the real property to which services or materials have been provided security for the payment of the services and materials.
construction lien (mechanic’s lien)
Notice filed by a lienholder with the county recorder’s office in the county in which real property is located stating that a mechanic’s lien has been filed against the property.
notice of lien
A written document signed by a contractor, subcontractor, laborer, or material person, waiving his or her statutory lien against real property.
lien release
An arrangement in which the owner of real property sells property to a purchaser and extends credit to the purchaser.
land sale contract
An arrangement in which a third party promises to be primarily liable with the borrower for the payment of the borrower’s debt.
surety arrangement
A party in a surety arrangement who promises to be liable for the payment of another person’s debt. A surety is primarily liable on the debt, thus being equally liable on the debt with the borrower.
surety
A party who signs an instrument and lends his or her name (and credit) to another party to the instrument
accommodation party
Liability of a surety (co-debtor, co-signor) where the surety has co-signed another’s person’s debt and promises to be liable for paying the debt.
primarily liable
An arrangement in which a third party promises to be secondarily liable for the payment of another’s debt
guaranty arrangement
A person who agrees to pay a debt if the primary debtor does not; a third person who agrees to be liable in a guaranty arrangement. The guarantor is secondarily liable on the debt.
guarantor
Liability of a guarantor in which the guarantor agrees to pay the principal debtor’s debt if the principal fails to pay the debt when it is due.
secondarily liable
Procedures that can be used by plaintiffs to recover damages against defendants
collection remedies
A prejudgment court order that permits the seizure of a debtor’s property while the lawsuit is pending; A situation in which a creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral.
attachment
A prejudgment court order that permits the seizure of a debtor’s property while a lawsuit is pending
writ of attachment
A post-judgment court order that permits the seizure of the debtor’s property that is in the possession of the debtor.
execution
A postjudgment court order that permits the seizure of the debtor’s property that is in the possession of the debtor.
writ of execution
A post judgment court order that permits the seizure of a debtor’s property that is in the possession of third parties
garnishment
The creditor in a garnishment situation whose property in the hands of a third party is being garnished
garnishor
The third party in a garnishment situation who possesses property of the debtor who is subject to garnishment.
garnishee
A postjudgment court order that permits the seizure of a debtor’s property that is in the possession of third parties
writ of garnishment
A federal law that permits debtors who are subject to a writ of garnishment to retain a specified percentage or amount of their earnings.
Title III of the Consumer Credit Protection Act
A federal administrative agency that is responsible for enforcing federal consumer financial protection statutes.
Consumer Financial Protection Bureau (CFPB)
A federal statute that requires creditors to make certain disclosures to debtors in consumer transactions and real estate loans on the debtor’s principal dwelling.
Truth-in-Lending Act (TILA)
Credit that is extended to natural persons for personal, family, or household purposes
consumer credit
A regulation that sets forth detailed rules for compliance with the TILA.
Regulation Z
The annual interest rate that a debtor will pay on a debt, which includes in its calculation many of the fees charged by the lender.
annual percentage rate (APR)
A federal statute that extends the TILA’s coverage to lease terms in consumer leases.
Consumer Leasing act (CLA)
A federal statute requiring that creditors promptly acknowledge in writing consumer billing complaints and investigate billing errors and that affords consumer-debtors other protection during billing disputes
Fair Credit Billing Act (FCBA)
A federal statute that requires disclosures to consumers concerning credit card terms, adds transparency to the creditor-debtor relationship, and eliminates many of the abusive practices of credit card issuers
Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act)
A rule that permits all credit card companies with whom a card holder has a credit card to raise the interest on their card if the card holder is late in making a payment to any credit card company
universal default rule
A federal statute that protects a consumer who is the subject of a credit report by setting rules for credit bureaus to follow and permitting consumers to obtain information from credit reporting businesses.
Fair Credit Reporting Act (FCRA)
Information about a person’s credit history that can be secured from a credit reporting agency
credit report
A federal statute that gives consumers the right to obtain one free credit report each year from credit reporting agencies, permits consumers to purchase their credit score, and allows consumers to place fraud alerts in their credit files.
Fair and Accurate Credit Transactions Act (FACTA)
A federal act that protects consumer-debtors from abusive, deceptive, and unfair practices used by debt collectors.
Fair Debt Collection Practices Act (FDCPA)
A federal statute that prohibits discrimination in the extension of credit based on sex, marital status, race, color, national origin, religion, age, or receipt of income from public assistance programs.
Equal Credit Opportunity Act (ECOA)
An amendment to the TILA that requires disclosure of certain credit terms on credit card and charge card solicitations and applications.
Fair Credit and Charge Card Disclosure Act
