Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Managing Broker > FINANCING > Flashcards

FINANCING Flashcards

1
Q

(Due on default clause) A mortgage clause where a lender calls a loan balance due and payable upon the happening of certain event, e.g., non-payment of mortgage

A

ACCELERATION CLAUSE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

(ARM) A note where the interest changes periodically, thereby possibly changing all terms of the loan

A

ADJUSTABLE RATE MORTGAGE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

(Due on Sale Clause) A mortgage clause where a lender calls a loan balance due and payable upon selling the property; makes loan non-assumable

A

ALIENATION CLAUSE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

(APR) Takes all costs of borrowing and expresses as a percentage

A

ANNUAL PERCENTAGE RATE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

At the end, e.g., May 1st house payment applies to April`s interest

A

ARREARS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

An assignment of a loan from the seller to the buyer where the buyer becomes primarily liable for debt and the seller remains secondarily liable

A

ASSUMPTION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Legal holder of the note (lender)

A

BENEFICIARY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Covers more than one property; used by developers, etc. Usually contains a partial release clause to release each property from the blanket mortgage as sold

A

BLANKET MORTGAGE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Creates the debt; a promise to pay back money that was borrowed; also referred to as a promissory note

A

BOND

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Similar to discount points; a buydown is where one pays extra money to a lender up front in order to lower the interest rate for the first several years of the loan term; helps buyer qualify for loan

A

BUYDOWN

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

(HUD booklet) A booklet that explains all about closing costs; must be given to buyer within 3 days of loan application

A

BUYER`S GUIDE TO SETTLEMENT COSTS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

A type of lender that historically specialized in making business loans

A

COMMERCIAL BANKS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

A payment plan where the total principal and interest payment remains the same each month; amount toward principal and interest changes monthly

A

CONSTANT MORTGAGE PAYMENT PLAN

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Typically, a short term loan; money is released as needed; usually riskiest type of loan

A

CONSTRUCTION LOAN

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as an installment contract or land contract.

A

CONTRACT FOR DEED

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

A type of loan where the borrower typically pays a down payment of 20%, thus receiving an 80% loan from the lender; there is no government involvement in this type of loan

A

CONVENTIONAL LOAN

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Principal and interest payments required to retire debt

A

DEBT SERVICE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

An agreement whereby the lender receives the deed to a property from the defaulting borrower rather than foreclosing; this is still referred to as an involuntary alienation; this does help save the borrowers credit

A

DEED IN LIEU OF FORECLOSURE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

A document verifying that a trust deed loan has been paid in full; should be recorded on the public record, thus releasing the property from the trust deed

A

DEED OF RECONVEYANCE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

(Null and Void Clause) A mortgage clause that voids the security upon the loan being paid off

A

DEFEASANCE CLAUSE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

A personal judgment against the defaulting borrower for any other debts owed and not satisfied by a foreclosure sale

A

DEFICIENCY JUDGMENT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

DVA or VA or GI; established by the government in the 1940`s, the VA guarantees loans made by lenders in case of default by the buyers

A

DEPARTMENT OF VETERAN`S AFFAIRS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Extra money paid up front in cash to a lender in order for the buyer to receive a lower interest rate; in essence, pre-paid interest; 1 point = 1 percent; discount points are always based on the loan amount

A

DISCOUNT POINTS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Interest rate banks pay to borrow money

A

DISCOUNT RATE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Selling a note for less than face value

A

DISCOUNTING

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Bans credit discrimination based on: Race, Color, Religion, National origin, Sex, Age & Marital status

A

EQUAL CREDIT OPPORTUNITY ACT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

The right to redeem property before the foreclosure sale

A

EQUITABLE REDEMPTION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

What a buyer receives upon buyer and seller signing a contract to purchase a property; allows buyer to receive deed (or legal title) at a later date, usually at closing

A

EQUITABLE TITLE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

A mortgage clause allowing a lender to increase the interest rate in the event of a late payment or default

A

ESCALATOR CLAUSE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

A separate account for holding other peoples` money; e.g., a broker holding earnest money in escrow or a lender holding pre-paid taxes and insurance in escrow

A

ESCROW ACCOUNT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

States the current loan balance on a note; used especially when notes are sold to others

A

ESTOPPEL CERTIFICATE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Government agency that insures deposits in banks and savings & loans

A

FEDERAL DEPOSIT INSURANCE CORPORATION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

FHLMC, Freddie Mac: An organization in the secondary mortgage market that primarily buys conventional loans from savings & loans

A

FEDERAL HOME LOAN MORTGAGE CORPORATION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

FHA; Established by the government in the early 1930`s, FHA insures loans made by lenders in case of default by the buyers

A

FEDERAL HOUSING ADMINISTRATION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

FNMA, Fannie Mae: The largest organization in the secondary mortgage market that buys notes from lenders, thus providing liquidity for lenders; even though a private organization, FNMA raises money by selling government guaranteed bonds; buys all types of loans

A

FEDERAL NATIONAL MORTGAGE ASSOCIATION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

First lender to record a mortgage is first in rights

A

FIRST MORTGAGE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

A loan where the payments apply to principal and interest; the entire principal loan balance is totally paid off over the term

A

FULLY AMORTIZED NOTE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

A preliminary estimate of expected closing costs given to buyer within 3 days of loan application

A

GOOD FAITH ESTIMATE OF SETTLEMENT COSTS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

GNMA, Ginnie Mae: An organization in the secondary mortgage market that buys notes from local lenders; government corporation under HUD; buys notes in depressed areas of country; primarily buys FHA & VA loans

A

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

A note where payments start out lower than normal, then go up yearly typically for 5 years, then leveling off for the remaining term; the FHA245 is a type of graduated payment note; sometimes can result in negative amortization

A

GRADUATED PAYMENT NOTE

41
Q

A type of mortgage where predetermined amounts, in addition to regular principal and interest payments, apply to principal each month, thus growing equity faster than normal

A

GROWING EQUITY MORTGAGE

42
Q

The borrower retains item used as security for loan; e.g., house or car loan

A

HYPOTHECATE

43
Q

Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as a contract for deed or land contract.

A

INSTALLMENT CONTRACT

44
Q

Primarily make large loans

A

INSURANCE COMPANIES

45
Q

Rental charge for using someone else`s money

A

INTEREST

46
Q

Where a mortgagee/lender has to go to court to foreclose upon breach of contract

A

JUDICIAL FORECLOSURE

47
Q

Any mortgage other than a first; also called a second mortgage

A

JUNIOR MORTGAGE

48
Q

Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as a contract for deed or installment contract.

A

LAND CONTRACT

49
Q

Refers to party who actually is in possession of warranty deed

A

LEGAL TITLE

50
Q

Using borrowed money to make money

A

LEVERAGE

51
Q

States that honor this recognize that a homeowner has title; the lender has mortgage lien against property

A

LIEN THEORY

52
Q

A fee charged by a lender for originating and processing a loan

A

LOAN ORIGINATION FEE

53
Q

The percent the loan is to the total value; e.g., a loan of $80,000 on a property valued at $100,000 would result in an 80% loan to value ratio

A

LOAN TO VALUE RATIO

54
Q

A lender guarantees a borrower a fixed interest rate and a fixed amount of discount points for a certain time period

A

LOCK-IN COMMITMENT

55
Q

Basically, a lenders` profit; the margin is added to an index in an adjustable rate mortgage to come up with the actual interest rate charged to the borrower; the margin remains the same for the life the loan

A

MARGIN

56
Q

A document where property is used as security for the debt

A

MORTGAGE

57
Q

Acts as a middleman between lender and borrower; mortgage bankers actually make the loans to the borrowers; earns money by servicing loans

A

MORTGAGE BANKER

58
Q

Earns money by bringing lenders and borrowers together; normally does not actually make loans

A

MORTGAGE BROKER

59
Q

A document verifying that a mortgage loan has been paid in full; should be recorded on the public record, thus releasing the property from the mortgage

A

MORTGAGE RELEASE

60
Q

The receiver of a mortgage (lender)

A

MORTGAGEE

61
Q

The giver of a mortgage (borrower)

A

MORTGAGOR

62
Q

An instrument that can be bought and sold

A

NEGOTIABLE

63
Q

In a trust deed state, the trustee sells the property and pays of f the beneficiary (lender) without having to go to court

A

NON-JUDICIAL FORECLOSURE

64
Q

New contract takes place of old contract; e.g., an assumption of a loan with a release of liability given by the lender to the seller

A

NOVATION

65
Q

Line of Credit; can borrow again and again on the same loan; e.g., home equity loan; works like a credit card

A

OPEN END MORTGAGE

66
Q

Federal Reserve transactions in buying and selling securities

A

OPEN MARKET OPERATIONS

67
Q

Uses both real and personal property as security

A

PACKAGE MORTGAGE

68
Q

A clause in a blanket mortgage allowing each property to be released from the blanket mortgage as sold; however, loan balance must be reduced

A

PARTIAL RELEASE CLAUSE

69
Q

A loan where the payments apply to principal and interest; however, the principal loan balance is only partially paid down, thus usually requiring a balloon payment at the end of the loan term

A

PARTIALLY AMORTIZED NOTE

70
Q

The lender retains item used as security for loan; e.g., stocks, bonds, etc.

A

PLEDGE

71
Q

A mortgage clause where a lender charges a penalty if the loan is paid off early

A

PRE-PAYMENT PENALTY CLAUSE

72
Q

Creates the debt; a promise to pay back money that was borrowed; also referred to as a bond

A

PROMISSORY NOTE

73
Q

Owner financing; typically where a seller carries a second mortgage on behalf of the buyer

A

PURCHASE MONEY MORTGAGE

74
Q

(RESPA) A federal law whose purpose is to inform borrowers ahead of time total closing costs so borrowers can shop around to get the best deal

A

REAL ESTATE SETTLEMENT PROCEDURES ACT

75
Q

Redeem = buy back; defaulting borrower has a certain time period to buy property back at foreclosure sale price plus any other costs owed

A

REDEMPTION

76
Q

A federal law pertaining to lenders having to disclose all loan costs to borrowers; also referred to as Truth-In-Lending Laws

A

REGULATION Z

77
Q

Percent of funds banks must keep on hand

A

RESERVE CONTROLS

78
Q

RAM; A type of mortgage where the mortgagee (lender) pays the mortgagor (borrower) a fixed amount every month; usually for retired people with home completely paid off

A

REVERSE ANNUITY MORTGAGE

79
Q

Allows for a party to rescind or back out of a contract. On many loans, a borrower has a 3-day right to rescind (back out). However, there is no right of rescission with a real estate sales contract.

A

RIGHT OF RESCISSION

80
Q

This is used when owner needs capital (money); owner sells property to a buyer and then leases the same property back from the purchaser

A

SALE / LEASEBACK

81
Q

A type of lender with their largest investment in residential home loans

A

SAVINGS & LOANS

82
Q

Any mortgage other than a first; also called a junior mortgage

A

SECOND MORTGAGE

83
Q

A place where loans already made by local lenders are bought and sold; the purpose is to provide liquidity for lenders

A

SECONDARY MORTGAGE MARKET

84
Q

SAM; A type of mortgage where the lender shares in appreciation plus interest; a form of a participation loan

A

SHARED APPRECIATION MORTGAGE

85
Q

The right to redeem property after the foreclosure sale

A

STATUTORY REDEMPTION

86
Q

(Term Loan) A loan where the payments apply to interest only; usually short-term; e.g., used on construction loans

A

STRAIGHT NOTE

87
Q

An assignment of a loan from the seller to the buyer where the seller remains solely liable for debt

A

SUBJECT TO

88
Q

A mortgage clause where lenders change the lien priority that is different than recording date; lender waives their right in favor of another

A

SUBORDINATION CLAUSE

89
Q

States that honor this recognize that generally, the lender has title until debt is paid off

A

TITLE THEORY

90
Q

A document where property is used as security for the debt

A

TRUST DEED

91
Q

The receiver of a trust deed; a neutral third party whose primary job is to foreclose if payments are not made to the lender or beneficiary

A

TRUSTEE

92
Q

The giver of the trust deed (borrower)

A

TRUSTOR

93
Q

A federal law pertaining to lenders having to disclose all loan costs to borrowers; also referred to as Regulation Z

A

TRUTH-IN-LENDING LAWS

94
Q

(HUD - 1 Form) Lists actual final closing costs for seller and buyer

A

UNIFORM SETTLEMENT STATEMENT

95
Q

Set the maximum interest rate that can be charged by law; states have their own unique usury laws

A

USURY LAWS

96
Q

Buyer of property; in a contract for deed, buyer is one who gets possession of property and pays “installments” to the seller until the contract is paid off

A

VENDEE

97
Q

Seller of property; in a contract for deed, seller is one who retains legal title

A

VENDOR

98
Q

A financing arrangement where typically a 2nd lender assumes the note of a 1st lender on behalf the buyer, advances the buyer additional funds to purchase the property with the buyer then making payments on the entire new mortgage made to 2nd lender

A

WRAPAROUND MORTGAGE

Managing Broker (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions