Finance Flashcards
Reinstate
Bring current and restore
Usury
The act of charging a rate of interest in excess of that permitted by law
Deed of Trust
A security instrument 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)
Mortgagee
The lender under a mortgage
Fully Amortizing Note
A promissory note that is fully repaid at maturity by periodic reduction of the principal; usually paid in equal monthly installments
Trustee’s Sale
The forced sale of real property, by a lender, to satisfy a debt
Adjustable-Rate Mortgage
A note whose interest rate is tied to a flexible index
Assumption Clause
A buyer takes over the existing loan and agrees to be liable for the repayment of the loan
Mortgage Loan Originator (MLO)
A natural person who takes a residential mortgage loan application or negotiates terms of a residential mortgage loan for compensation
Closed-End Loan
Loan in which the borrower receives all loan proceeds in one lump sum at the time of closing. These loans are secured with collateral, i.e., auto and home loans.
Power of Sale
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
Equity
Value remaining in a property after payment of all liens; the difference between the amount that is owed and the fair market value
Third Party Originator (TPO)
Person who takes mortgage applications from borrowers, but does not underwrite or fund loans
Contract for Deed
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
Pledge
The transfer of property to a lender as a security for re-payment of a debt. The lender takes possession of the property.
Subordination Clause
A clause in which the holder of a trust deed permits a subsequent loan to take priority
Homeowner Equity Loan
A cash loan made against the equity in the borrower’s home
Purchase Money Loan
A trust deed created as evidence of a debt at the time of the sale of real property
Junior or 2nd Lien Loan
Any deed of trust or mortgage that is recorded after a first deed of trust or mortgage, and whose priority is less than the first lien
Deregulation
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
Default
Failure to pay a debt or honor a contract
Notice of Trustee’s Sale
Notice given, and published, that a trustee’s sale will be held to sell a property to satisfy a debt
Subject to Clause
A buyer takes over the existing loan payments but assumes no personal liability for the loan
Reconveyance Deed
Conveys title to property from a trustee back to the borrower (trustor) upon payment in full of the debt secured by the trust deed