Chapter 26: Credit, Real Property Financing, and Debtors' Rights Flashcards
credit
a situation in which one party makes a loan to another party
unsecured credit
credit that does not require any security (collateral) to protect the payment of the debt
judgment proof
a situation in which a defendant does not have the money to pay a civil judgment
secured credit
credit that requires security (collateral) to secure payment of the loan
security interest
an interest that is created when a party borrows money from a lender and pledges personal property as security for repayment of the loan
mortgage
an interest in real property given to a lender as security for the repayment of a loan
reconveyance / satisfaction of a mortgage
a written document filed by a lender or trustee within the county recorder’s office, which is proof that a mortgage or note secured by real property has been paid
note
an instrument that evidences the borrower’s debt to the lender; a debt security with a maturity of five years or less
deed of trust
an instrument that gives a creditor a security interest in the debtor’s property that is pledged as collateral
beneficiary
the lender-creditor of a three-party deed of trust in a real estate financing arrangement
recording statute
a state 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
nonrecordation of a mortgage
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
default
a situation that occurs when a debtor does not make thr required payments on a debt
foreclosure sale
a legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan
power of sale
a power stated in a mortgage or deed that permits foreclosure without court proceedings and sale of the property through an auction
deficiency judgment
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
anti-deficiency statute
a statute that prohibits deficiency judgments regarding certain types of mortgages, such as those on residential property
first purchase money mortgage
a mortgage (or deed of trust and note) taken out to purchase a house
right of redemption
the right of a mortgagor to recover real property that is collateral for a mortgage after the debtor’s default and before foreclosure by paying the mortgagee the full amount of the debt plus costs
statutory period 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
construction lien / mechanic’s lien
a contractor’s, laborer’s, and material person’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
notice of 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
release of lien / lien release
a written document signed by a contractor, subcontractor, laborer, or material person, waiving their statutory lien against real property
surety arrangement
an arrangement in which a third party promises to be primarily liable with the borrower for the payment of the borrower’s debt
surety / co-debtor / accommodation party / co-signor
a party in a surety arrangement who promises to be liable for the payment of another person’s debt. they are primarily liable on the debt, thus being equally liable on the debt with the borrower
guaranty arrangement / guaranty contract
an arragement in which a third party promises to be secondarily liable for the payment of another’s debt
guarantor
a person who agrees to pay a debt if the primary debtor does not. they are secondarily liable on the debt
collection remedies
procedures that can be used by plaintiffs to recover damages against defendants
writ of attachment
a prejudgment court order that permits the seizure of a debtor’s property while the lawsuit is pending
writ of execution
a post judgment court order that permits the seizure of the debtor’s property that is in the possession of the debtor
writ of garnishment
a post judgment court order that permits the seizure of a debtor’s property that is in the possession of third parties
garnishor
the creditor in a garnishment situation whose property is in the hands of a third party is being garnished
garnishee
the third party in a garnishment situation who possesses property of the debtor who is subject to garnishment
title iii of the consumer credit protection act
a title of a federal statute that allows debtors who are subject to a writ of garnishment to retain the greater of (1) 75% of their weekly disposable earnings (after taxes) or (2) an amount equal to 30 hours of work paid at federal minimum wage
consumer financial protection
a set of government laws that protect consumer-debtors in credit transactions
consumer financial protection bureau (cfpb)
a federal regulatory agency that has broad authority to regulate consumer financial products and services
truth-in-lending act (tila)
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
consumer credit
credit that is extended to natural persons for personal, family, or household purposes
regulation z
a regulation that sets forth detailed rules for compliance with the tila
consumer leasing act (cla)
an amendment to the truth-in-lending act (tila) that extends the tila’s coverage to lease terms in consumer leases
fair credit billing act (fcba)
a federal statute that regulates billing errors involving consumer credit and requires that creditors prompty acknowledge in writing consumer billing complains and investigate billing errors
credit card accountability responsibility and disclosure act (credit card act)
a federal statute that requires disclosures to consumers, adds transparency to the creditor-debtor relationship, and eliminates many of the abusive practces of credit card issuers
universal default rule
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
fair credit reporting act (fcra)
an amendment to the truth-in-lending act (tila) that protects consumers who are subjects of a credit report by setting out guidelines for credit bureaus
credit report
information about a person’s credit history that can be secured from a credit bureau
fair and accurate credit transactions act (facta)
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 debt collection practices act (fdcpa)
a federal statute that protects consumer debtors from abusive, deceptive, and unfair practices used by debt collectors
equal credit opportunity act (ecoa)
a federal statute that prohibits discrimination of credit based on sex, marital status, race, color, national origin, religion, age, or receipt of income from public assistance programs
fair credit and charge card disclosure act
an amendment to the truth-in-lending act (tila) that requires disclosure of certain credit terms on credit- and charge-card solicitations and applications
