Chapter 9 Flashcards
in California, based on lending tradition, trustees and other loans are commonly referred to as
mortgages
the party borrowing the money
trustor
the lender who is lending money for the purchase of real property
beneficiary
The third, disinterested party who holds naked legal title to the property
trustee
the charge for borrowing money
interest
this fee is based on the loan amount and is collected as compensation for processing the loan and setting it up on the books
loan origination fee
the rate charged on conventional loans
prevailing market rate
it charged to the borrower for paying off all or part of a loan balance before the due date
prepayment penalty
reserves to cover property taxes, insurance, and / or MIP
impound account
Savings Banks, commercial Banks, and life insurance companies
institutional lenders
direct lenders that underwrite for usually hundreds of investors
mortgage Banker
these Brokers shop for a lender for the borrowers in earn a fee by putting lender and borrower together
mortgage loan broker
what a loan on well-located properties to borrowers with good income and credit is called
Prime loan
this type of Insurance allows institutional lenders to make loans above the usual 75 to 80% of the sales price
private mortgage insurance
a loan for which the payments are usually the same each month for the life of the loan
fixed rate mortgage
a variable mortgage rate
adjustable rate mortgage
with this type of special purpose loan, the rate and term are fixed, but monthly payments are smaller at the beginning of the term and increase over time
graduated payment mortgage
this occurs when monthly installment payments are insufficient to pay the interest accruing on the principles balance, so the unpaid interest must be added to the principal due
negative amortization
this type of loan for senior citizens is a loan where the lender pays the bar or a fixed monthly payment based on the value of the property
reverse annuity loan
another name for the Federal National Mortgage Association that dominates the secondary mortgage Market
Fannie Mae
this gives lenders a fast objective measurement for your ability to repay a loan or make timely credit payments
credit scoring FICO
this act lets borrowers and customers know the cost of credit so they can compare cost with those of other credit sources and thereby avoid the uninformed use of credit
truth in Lending Act (reg Z)
in a trust deed, this Clause makes the entire note due and payable, should the property be sold or default occur
acceleration clause
charging more than the legally allowed percentage of Interest
usury
When A lender accepts less than what is owed in the loan
short sale
