Class 11 - Liens, the loan process, and financial math Flashcards
A note makes a borrower…..
personally liable for a debt
Discounts when used in financing can be best described as…
an amount paid to increase a lender’s yield
A mortgage lien would be classified as a _________, _________ lien
specific, voluntary lien
Notice given to the public of a possible future litigation against a property is called…
lis pendens
A note that removes personal liability is known as…
non-recourse note
An acceleration clause in a note would allow a lender to…
demand full payment of the debt
An underwriter can be best described as a person who…
reviews loan applications and makes recommendations to a lender
An open note or mortgage is one that
allows the borrower to prepay the loan without penalty
A property owner who sold his land discovered that he had to pay a penalty of $4,000 for paying off the loan before the termination date of the note. The owner most likely had a….
97% conventional mortgage
A lender who charges a usurious rate of interest is most likely charging a rate of….
interest in violation of the law
The payment of principal on a mortgage debt increases the property owner’s:
equity
When an investor purchases a property for $95,000 after putting $5,000 down and then sells the property for $120,000 it can be said that the profit was made through the use of…
someone else’s money
The rate of interest on a loan can be found by:
dividing the interest by the loan amount.
A _________ secures your _________ and becomes effective upon recording
Mortgage
debt
A _____ is a claim against property made to secure a debt. This is also called an _____ against the property, which is something that burdens a title
Lien
encumbrance
General Lien vs Specific Lien
General lean covers both real and personal property. Examples: judgment lien, inheritance tax lien, etc.
Specific lien covers a specific property: Examples: mortgage, mechanic’s lien, real estate tax liens, special assessments, etc.
What is the priority of liens?
- Real estate taxes
- special assessments
- Liens in order of recording
Real estate tax liens are also called ________ (according to value), and are charged to help pay for state and local services. Who is exempt from paying this type of tax?
Ad Valorem tax - a tax on property according to its value
cities, schools, gov’t property, churches, hospitals,
If a buyer at a tax sale has paid the owners taxes, what does he get?
A tax certificate indicating paid
Special Assessment
a tax charged on properties that benefit from a public improvement like a sidewalk or sewer.
When you get a loan from a lender, what is used to secure the payment of a debt
voluntary mortgage lien
A _________ lien is a lien for the non-payment of work or materials. When recorded, what is the start date
Mechanic’s lien
A mechanic’s lien dates back to the day the work began or when material was delivered.
A lien placed on real or personal property by court order
jugdment lien
**Judgment liens are not effective against personal proeprty until the proeprty is seized
A _______ is used to legally seize property. It is to prevent a property owner from selling the property during a legal action against the property. This gives the court custody of the property.
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