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2018 California Brokers Exam-All > Exam Cram Vocabulary - Finance > Flashcards

Exam Cram Vocabulary - Finance Flashcards

1
Q

A promissory with repayment

that is not sufficient to

amortize the loan over its

term; usually contains a

balloon payment at the end

A

PARTIALLY - AMORTIZED

INSTALLMENT NOTE

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2
Q

A document in which title to

a property is transferred to a

third party trustee as security

for a debt owed by the

trustor (borrower) to the

beneficiary (lender)

A

TRUST DEED

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3
Q

Holds bare legal title to

property as a neutral third

party where there is a deed

of trust used as secruity for a

loan

A

TRUSTEE

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4
Q

The interest held by the trustor (borrower)

or vendee

A

EQUITABLE

TITLE

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5
Q

A promissory note in which

payments of interest only are made

perdiodically during the term of the

note, with the principal payment

due in one lump sum upon maturity;

May also be a note with no

payments on either principle or

interest until the entire sum is due

A

STRAIGHT

NOTE

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6
Q

A note whose interest rate is

tied to a flexible index

A

ADJUSTABLE - RATE

MORTGAGE

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7
Q

The lender under a deed of

trust

A

BENEFICIARY

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8
Q

An agreement between a

property owner and the holder

of a trust deed or mortgage by

which the holder receives, as

security, the right to collect rents

from tenants of the property in the

event of default by the borrower

HINT: AOR

A

ASSIGNMENT

OF RENTS

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9
Q

A person who has obtained a

negotiable instrument (promissory note, check)

in the ordinary course of business

  1. before it is due,
  2. in good faith and for value, and
  3. without knowledge that it has been previously dishonored

and without notice of any defect or set off at the

time it is negotiated

A

HOLDER IN

DUE COURSE

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10
Q

A note that is fully repaid at

maturity by peridodic

reduction of the principal;

usually paid in equal

monthly installments

A

FULLY AMORTIZED

NOTE

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11
Q

The borrower under a deed of trust

HINT: T

A

TRUSTOR

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12
Q

A clause in a trust deed or

mortgage that gives the

holder the right to sell the

property in the event of

default by the borrower

A

POWER OF

SALE

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13
Q

Failure to pay a debt or

honor a contract

A

DEFAULT

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14
Q

Evidence of obligations to

pay money

A

SECURITY

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15
Q

Something of value given

as security for a debt

A

COLLATERAL

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16
Q

To give real proeprty as

security for a debt without

giving up possession

A

HYPOTHECATION

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17
Q

The transfer of property to a

lender as a security for repayment

of a debt.

The lender takes possession

of the property.

A

PLEDGE

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18
Q

Value remaining in a

property after payment of

all liens; the difference

between the amount that is

owed and the fair market

value

A

EQUITY

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19
Q

A mortgage on which the

interest rate varies according

to an agreed-upon index, varying upwards and downwards

thus resulting in a change

in the borrower’s monthly

payments

(VlRs or VMRs, Variable Mortgage Rates.) An interest rate in a real estate loan which by the terms of the note varies upward and downward over the term of the loan depending on money market conditions.

A

VARIABLE RATE

MORTGAGE

(VIR-VARIABLE INTEREST RATE)

(VMR-VARIABLE MORTGAGE RATE)

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20
Q

The right of the debtor,

before a foreclosure sale, to

reclaim property that had

been given up due to

mortgage default;

also known as right of redemption

A

EQUITY OF

REDEMPTION

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21
Q

Any written instrument that

may be transferred by

endorsement or delivery

A

NEGOTIABLE

INSTRUMENT

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22
Q

A written promise or order

to pay money; evidence of

a debt

A

PROMISSORY

NOTE

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23
Q

The use of borrowed money

to purchase proeprty

A

LEVERAGE

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24
Q

The party to whom a

promissory note is made

payable; the person

holding the note

A

HOLDER

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25
Q

A loan that allows the

rewriting of a new loan at

the termination of the prior

loan

HINT:

A

ROLLOVER

MORTGAGE

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26
Q

A loan that enables elderly homeowners

to borrow against the equity

in their homes by receiving monthly

payment, from a lender, that are

needed to help meet living costs;

due upon a specific date or upon the occurence of a specific event, such as the sale of the property or the

death of the borrower.

HINT: RAL

A

REVERSE

ANNUITY LOAN

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27
Q

A loan in which the borrower

is given a limit up to which

may be borrowed, with each

advance secured by the

same trust deed

HINT:

A mortgage containing a clause which permits the mortgagor to borrow additional money after the loan has been reduced without rewriting the mortgage.

A

OPEN END

LOAN

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28
Q

A method of financing in which a

new loan is placed in a secondary position;

the new loan includes both

the unpaid principal balance of the first loan and whatever

sums are loaned by the lender;

sometimes call an All Inclusive Trust Deed (AITD)

A

WRAP-AROUND

LOAN

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29
Q

A loan that is secured by

several properties

A

BLANKET

LOAN

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30
Q

A cash loan made against

the equity in the borrower’s

home

A

HOMEOWNER

EQUITY LOAN

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31
Q

A purchase money deed of

trust subordinate to, but

still including, the original

loan

A

ALL INCLUSIVE

TRUST DEED (AITD)

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32
Q

A buyer takes over the

exiting loan and agrees to

be liable for the repayment

of the loan

A

ASSUMPTION

CLAUSE

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33
Q

A buyer takes over the

exisitng loan payments

but assumes no personal

liability for the loan

A

SUBJECT TO

CLAUSE

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34
Q

The buyer under a contract

  • of sale (land contract)*
  • HINT: Picture buyer at vending machine on empty land*
A

VENDEE

35
Q

The seller under a contract

  • of sale (land contract)*
  • HINT: picture seller as a vending machine on empty land*
A

VENDOR

36
Q

A contract for the sale of

real property in which the

seller gives up possession of

the property but retains title

until the total of the purchase

price is paid off

A

CONTRACT FOR

DEED

37
Q

A legal procedure by which

mortgaged property, in which

there has been default on

the part of the borrower, is

sold to satisfy the debt

A

FORECLOSURE

38
Q

Conveys title to property from

a trustee back to the

borrower (trustor) upon

payment in full of the debt

secured by the trust deed

A

RECONVEYANCE

DEED

39
Q

Title that is complete and

perfect in regard to the right

of ownership; can be held by

a trustee

A

LEGAL

TITLE

40
Q

Notice given, and published,

that a trustee’s sale will be

held to sell a property

to satisfy a debt

A

NOTICE OF

TRUSTEE’S SALE

41
Q

Bring current and restore

A

REINSTATE

42
Q

A notice to a defaulting

party that there has been a

nonpayment of debt

A

NOTICE OF

DEFAULT

43
Q

A judgment against a

borrower for the balance of

a debt owed when the

security for the loan is not

sufficient enough to pay a

debt

A

DEFICIENCY

JUDGMENT

44
Q

A deed given to a buyer of

real property at a trustee’s

sale

A

TRUSTEE’S

DEED

45
Q

The forced sale of real

property, by a lender, to

satisfy a debt

A

TRUSTEE’S

SALE

46
Q

Foreclosure by court action

A

JUDICIAL

FORECLOSURE

47
Q

The borrower under a

mortgage

A

MORTGAGOR

48
Q

A legal document used as

security for a debt

A

MORTGAGE

49
Q

A sale during which

property is sold to satisy a debt

A

FORECLOSURE

SALE

50
Q

The lender under a mortgage

A

MORTGAGEE

51
Q

A notice that is sent, upon

request, to any parties

interest in a trust deed

informing them of a

default

A

REQUEST FOR

NOTICE

52
Q

The evidence of a debt that

is recorded after a first

trust deed; a junior trust

deed

A

SECOND TRUST

DEED

53
Q

Any trust deed that is

recorded after a first trust

deed, and whose priority

is less than the first trust

deed

A

JUNIOR TRUST

DEED

54
Q

A loan in which the monthly

payment that is graduated by

a certain percentage each

year for a specific number

of years and then levels off

for the remaining term of

the loan

A

GRADUATED

PAYMENT ADJUSTABLE

MORTGAGE (GPAM)

55
Q

The charge for the use of

money

A

INTEREST

56
Q

The evidence of a debt

given in exchange for cash

A

HARD MONEY

LOAN

57
Q

A trust deed created as

evidence of a debt at the

time of the sale of real

property

A

PURCHASE

MONEY LOAN

58
Q

Related to an adjustable-rate

loan; the lender may

alter the interest rate of a

loan based on an agreed

index

A

VARIABLE

INTEREST RATE

59
Q

The act of charging a rate

of interest in excess of that

permitted by law

A

USURY

60
Q

The relationship of the total

finance charge to the total

amount to be financed as

required under the Trust in

Lending Act

A

ANNUAL

PERCENTAGE RATE

(APR)

61
Q

An agreement upon time

after the payment of a debt is

past due during which a party

can perform without being

considered in default; usually

10 to 15 days

A

GRACE PERIOD

62
Q

The original amount

borrowed

A

PRINCIPAL

63
Q

A clause in a promissory note

that allows a borrower to pay

a loan off early without

penalty

A

OR MORE

CLAUSE

64
Q

An organization that obtains

funds through deposits and

then lends those funds to earn

a return; savings and loan

associations, commercial

banks, credit unions, and

mutual savings banks

HINT: FI

A

FINANCIAL

INTERMEDIARIES

65
Q

A process by which financial

institutions, that had formerly

been restrained in their

lending activities by the law,

are allowed to compete

freely for the profits in the

marketplace

A

DEREGULATION

66
Q

Abbreviation for principal,

interest, tax, and insurance

as commonly found in an

all-inclusive mortgage

payment

A

PITI

67
Q

A statement that informs the

buyer of all charges and

expenses related to a

particular loan

A

MORTGAGE LOAN

DISCLOSURE

STATEMENT

68
Q

The process of transferring

capital from those who

invest funds to those who

wish to borrow

A

INTERMEDIATION

69
Q

A written notice filed with the

county recorder by a creditor who

has extended credit for the

purchase of personal property;

establishes the creditor’s interest

in the personal property, which is

security for the debt

HINT: FS

A

FINANCING

STATEMENT

70
Q

The interest of a creditor (lender)

in the property of a debtor (borrower).

A

SECURITY INTEREST

71
Q

The device commonly used to

secure a loan on personal

property

A

SECURITY

AGREEMENT

72
Q

A way investors with a small

amount of capital can pool

their resources to buy

real estate

A

REAL ESTATE

INVESTMENT

TRUST (REIT)

73
Q

A contract for the sale of

real property in which the seller

gives up possession but

retains the title until the

purchase price is paid in full;

also known as a contract of sale or land contract

A

AGREEMENT OF

SALE

74
Q

A contract for the sale of real

property in which the seller

gives up possession but retains

the title until the purchase price

is paid in full; also known as a

contract of sale*** or ***agreement of sale

A

LAND

CONTRACT

75
Q

A short-term loan used to

enable the purchaser of a

new property to buy that

property on the strength of

the equity from the property

the purchaser is now selling

A

SWING LOAN

76
Q

A clause in the loan document

that allows the lender to call

the entire loan due upon the

sale of the proeprty; a type of

acceleration clause

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

A

ALIENATION

CLAUSE

77
Q

A clause in the loan document

describing certain events that

would cause the entire loan to

be due

A

ACCELERATION

CLAUSE

78
Q

Under an installment loan,

a final payment that is

substantially larger than the

other payments and repays

the debt in full

A

BALLOON

PAYMENT

79
Q

A provision found in many

blanket loans enabling the

borrower to obtain a partial

release of specific parcels

from the loan

A

RELEASE

CLAUSE

80
Q

A clause in a trust deed that

allows a lender to collect a

certain percentage of a loan

as penalty for an early

payoff

A

PREPAYMENT

CLAUSE

81
Q

A clause in which the holder

of a trust deed, permits a

subsequent loan to take

priorty

A

SUBORDINATION

CLAUSE

82
Q

A federal law designed to

protect persons in military

service from loss of property

when their ability to make the

payment has been affected by

their entering military service

A

SOLDIERS’ AND SAILORS’

RELIEF ACT

83
Q

A federal law that requires

lenders to assure that credit is

available with fairness,

impartiality, and without

discrimination

A

EQUAL CREDIT

OPPORTUNITY ACT

84
Q

A federal law that requires

borrowers to be informed

about the cost of borrowing

money

A

TRUTH IN

LENDING ACT

(REGULATION Z)

2018 California Brokers Exam-All (19 decks)

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