Finance Flashcards
Index
Publically published number used as the basis for adjusting interest rates of adjustable-rate mortgages (ARMS)
Land Contract
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; AKA contract of sale or agreement of sale
Equal Credit Opportunity Act
Federal law that requires lenders to assure that credit is available with fairness, impartiality, and without discrimination
Release Clause
Provision found in many blanket loans enabling the borrower to obtain a partial release of specific parcels form the loan
Legal Title
Title that is complete and perfect in regard to the right of ownership; can be hold by a trustee
Beneficiary
Lender under a deed of trust
Adjustable Rate Mortgage (ARM)
Note whose interest rate is tied to a flexible index
Usury
Act of charging a rate of interest in excess of that permitted by law
Prepayment Clause
Clause in a trust deed that allows a lender to collect a certain percentage of a loan as a penalty for an early payoff
Truth in Lending Act (Reg Z)
Federal Law that requires borrowers to be informed about the cost of borrowing money
Principal
Original amount borrowed
Request for Notice
Notice that is sent, upon request, to any parties interested in a mortgage or deed of trust informing them of a default
Default
Failure to pay a debt or honor a contract
Interest
The charge for the use of money
Security Instrument
Evidence of obligation to pay money, such as a deed of trust or mortgage
Fully Amortizing Note
Promissory note that is fully repaid at maturity by periodic reduction of the principal; usually paid in equal monthly installments
Grace Period
Agreement upon time after the payment of a debt is past due during which a party can perform without being considered in default; usually 10-15 days
Reinstate
bring current and restore
Foreclosure
legal procedure by which mortgaged property in which there has been a default on the part of the borrower is sold to satisfy the debt
Alienation Clause
clause in the loan doc that allows the lender to call the entire loan due upon the sale of the property; type of acceleration clause
PITI
Principal, interest, tax and insurance
Promissory Note
Written promise or order to pay money, evidence of a debt
Deed of Trust
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)
Notice of Trustee’s Sale
Notice given, and published, that a trustee’s sale will be held to sell a property to satisfy debt
Notice of Default
Notice to a defaulting party that there has been a nonpayment of debt
Intermediation
Process of transferring capital from those who invest funds to those who wish to borrow
Trustee
Holds bare legal title to property as a neutral third party where there is a deed of trust used as security for a loan
Mortgage
Legal doc used as security for a debt
Partially Amortizing Note
Promissory note with repayment that is not sufficient to amortize the loan over its term; usually a balloon payment at the end
Trustee’s Deed
Deed given to a buyer of real property at a trustee’s sale
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 (auto and home loans)
Rollover Mortgage
Loan that allows the rewriting of a new loan at the termination of the prior loan
Or More Clause
Clause in a promissory note that allows a borrower to pay a loan off early without penalty
Vendor
Seller under a contract of sale (land contract)