Chapter 9 - Real Estate Finance Flashcards
an instrument used to transfer title back from a trustee to the equitable owner of Real Estate
reconveyance deed
a second trust deed for which the monthly payment includes the amount of monthly payment on the existing First Trust deed
wraparound trust deed
federal law granting women Financial Independence and preventing lenders from considering such negative credit aspects as the possibility of a woman having children and dropping out of the labor market
Equal Credit Opportunity
a mortgage or deed of trust for which the payments increase over the term of the loan. The payments may increase as the buyers earnings increase
graduated payment mortgage
the amount for which the borrower is personally liable for a note and mortgage if the Foreclosure sale does not bring enough to cover the debt
deficiency judgment
a penalty under a note, mortgage, or deed of trust imposed when the loan is paid before it is due
prepayment penalty
the total cost of financing expressed as one simple annual percentage rate. This rate must be clearly expressed on any loan agreement.
annual percentage rate
a promise in writing to pay a specified amount during a limited time, or on demand, to a named person
promissory note
clause used in a deed of trust that gives the lender the right to demand payment in full upon the happening of a certain event
acceleration clause
title held by one who does not have legal title, such as a vendee under a land contract or technically a trustor under a deed of trust
Equitable Title
a sale at auction by a trustee under a deed of trust, pursuant to foreclosure proceedings
trustee’s sale
a type of land that is subordinate to a prior lien
Junior lien or second trust deed
an instrument used in place of a mortgage in most western states that is based on the Spanish legal tradition. Property is transferred to a trustee by the borrower in favor of the lender and reconveyed upon payment in full
trust deed
a type of acceleration Clause, calling for a debt under a mortgage or deed of trust, to be due in its entirety upon transfer of ownership
alienation clause
the use of financing to allow a small amount of cash to purchase and control a large property investment
Leverage
a period of time past the due date for a payment during which a payment may be made and not considered delinquent
Grace period
purchaser or buyer, especially on a land contract
vendee
a non-amortized note for which the principal is due in a lump sum upon maturity
straight note
charging an illegal rate or amount of interest on a loan
usury
payment of debt in regular, periodic installments of principal and interest, as opposed to interest-only payments
amortization
the seller of property under a land contract
vendor
the kind of title held by the trustee under a deed of trust
naked legal title
an installment contract for the sale of land. The seller has legal title until Paid in Full. The buyer has Equitable Title during the contract term
land contract
if financing charge equal to 1% of the amount of the loan
point
money charged for the use of money
interest
a failure to perform the financial obligation to pay under a loan
default
a holder of a check or know who takes the note in good faith, or in the Assumption it is valid.
holder in due course
the borrower under a deed of trust
trustor
in a deed of trust, the person who acts as an intermediary between the trustor and the beneficiary
trustee
A lender for whose benefit a trust is created in those states were trustees are commonly used instead of mortgages
beneficiary
the ownership interest in Real Property, it is the market value minus any unpaid loan amount
equity
agreement by the buyer to take over the financial responsibility for Real Property under the existing note and Trust deed
assumption
an agreement by which a lender substitutes a junior loan position for a senior loan position
subordination clause
a schedule of monthly payments that varies according to interest rates and number of monthly payments
amortization chart
mortgage loans on which the interest rate is periodically adjusted to more closely coincide with current rates
adjustable rate mortgage
Regulation Z under the Federal Reserve regulations that requires a credit purchaser be advised, in writing, of all costs connected with the credit portion of their purchase
truth in Lending Act
the principle of using real property as security for a debt while the borrower retains possession
hypothecation
a recorded form requiring the trustee to notify other creditors in the event of a default on the deed of trust to a property
request for notice of default
a limited amount of time during which the trustor has the right to pay all past due payments and charges due on a loan to bring it current
reinstatement period
part of the truth in lending law that allows a borrower to resend a loan transaction until midnight of the third business day, on business loans and second trust deed secured by a borrower’s residence
right to cancel
the original loan taken out when purchasing a property not a refinance or Junior loan
purchase money instrument
