CHAPTER FOUR: MORTGAGE

Question 1

___An instrument recognized by law by which property is hypothecated to secure the payment of a debt or obligation. IS NOT A HOME LOAN- refers to the financial product used to make the purchase. “refers to the legal proceess involved in securing the loan and getting collateral.”

Answer 1

Mortgage

Question 2

___ theory state- the home buyer will hold the deed to the property during the term of the loan. makes foreclosure harder.

Answer 2

Lien theory state

Question 3

___ theory state- use a Deed of Trust. Here, the buyer signs a Deed of Trust. This makes the lender the beneficiary in the agreement. The trustee holds the legal title to the property. The trustee’s job is to sell the property at an auction if the borrower defaults on the loan.
no legal proceeding in the court room so speeds up foreclosure.

Answer 3

Title theory state

Question 4

In ____ states- the borrower will hypothecate the property to a lender. this means the borrower uses the home as collateral. If the owner defaults on the loan, the collateral is seized to repay the debt owned.

Answer 4

mortgage states. aka lien theory states

Question 5

____- To pledge a thing as security without the necessity of giving up possession of it.

Answer 5

Hypothecate

Question 6

____- One who gives a mortgage on his or her property to secure a loan or assure performance of an obligation

Answer 6

Mortgagor

Question 7

____- One to whom a mortgagor gives a mortgage to secure a loan or performance of an obligation

Answer 7

Mortgagee

Question 8

____ clause- A condition in a real estate finance instrument giving the lender the power to declare all sums owing the lender immediately due and payable upon the happening of an event, such as sale of the property, or a delinquency in the repayment of the note.

Answer 8

Acceleration Clause

Question 9

____ clause- A clause in a contract giving the lender certain rights in the event of a sale or other transfer of a mortgaged property.

Answer 9

Alienation Clause

Question 10

____- The transfer to another of any property in possession or in action, or of any estate or right therein. A transfer by a person of that person’s rights under a contract.

Answer 10

Assignment

Question 11

___ of ____- The discharge of a mortgage from the records upon payment of the debt.

Answer 11

Satisfaction of Mortgage (Release of Mortgage)

Question 12

___- The interest earned by an investor on an investment (or by a bank on money it has loaned). Also, called return.

Answer 12

Yield