Financing The Transaction And Settlement Flashcards
Priority of Liens is determined by
Recording date
Who usually has responsibility of providing evidence of good title during escrow?
The seller
Which of the following liens has the highest priority?
First mortgage, homeowners association dues, irrigation district assessment of real estate property taxes
Real estate property taxes
Which of the following items appears on the settlement statements?
Offer acceptance date, brokerage commission, square footage of the lot, agent commission split with their broker
Brokerage commission
When is flood insurance required?
If you use a federally regulated mortgage loan and live in a flood plain
An agreement whereby a holder of a superior mortgage agrees to give up their priority position to an existing or future lien
Subordination agreement
Using other people’s money to buy real estate is an example of
Leverage
What type of deed gives the most protection to the grantee?
Warranty deed
Which deed imposes the least liability to the grantor?
Quit claim deed
What step of the transfer of deed occurs last?
Giving actual notice to the grantee of a recording
Which set of words gives the least protection to the grantee?
“Convey, Release, Remise, Forever Quit Claim”
What is true of the bargain and sale deed?
It gives no warranties against prior encumbrances
An agent should do what with the preliminary title report
Read it and share it with their party
What type of loan has the buyer paying interest only for 8 years then the principal balance owed?
Straight loan
How do you release a deed trust when paid?
Deed of Reconveyance
What document evidences a debt?
Promissory note
This law limits legal interest rates
Usury Laws
Amortization means
Reducing debt through periodic payments of principal and interest
Where do you go get a VA loan?
An approved VA lender
If you are behind on a debt what right allows yo to catch up and keep your loan in place and avoid foreclosure
Reinstatement
What federal law prohibits kickbacks from lenders and title companies
RESPA
What is regulation Z designed to disclose?
The borrowers true cost of the loan
What type of foreclosure is the bank required to use to get the property back?
Non-judicial
What is pledging property as collateral called?
Hypothecation
Who is on the title in a lien theory state?
The mortgagor
What law is designated for disclose to borrowers the cost of their loans
Truth in lending
What does the acceleration clause do?
Calls the entire loan balance due
What private agency provides funds to buy loans on the secondary market
Fannie Mae
What type of loan includes personal property?
Package mortgage
In a land sale contract when does the buyer get title?
When they make the last payment
What does a usury law do?
Set legal interest rates
What can a lender seek after a loss from foreclosing on a property?
A deficiency judgment
What is the responsibility of the owner if they sell their property “subject to?”
To make sure the original loan is paid as agreed
Mortgages and Deeds of Trusts are considered
Security instruments
If a mortgage is a 600 acre farm is foreclosed on, how long does the mortgagor have to redeem
12 months
In a land sale contract who retains title to the property while the payments are being made
The vendor
Where does a borrower go to apply for a FHA loan?
Any FHA approved lender
Name the 4 advertising trigger words
Payment amount, APR, Term, Down payment
What federal law is designed to trigger certain disclosures at a real estate closing?
RESPA
A package mortgage has which feature
Real estate plus personal property
What is the prepayment penalty for VA loan
There is no penalty
How are prepaid HOA dues handled at closing?
A seller credit and buyer debt
If you put e-money deposit in your personal account and then write a check to your broker’s trust what has happened?
Commingling
FHA _____ loans
Insures
3-way lending agreements are called
Deeds of trust
RESPA governs which real estate closings?
Any I-4 residential using a federally related mortgage loan
What type of loan has buyer paying interest only for 3 years then the principal balance owed?
Straight loan
What type of loan allows the borrower to get more money during the loan without reapplying?
Open-end mortgage
The Veteran’s Administration (VA) _______ loans are made to qualified veterans
Guarantees
When must the lender supply to a borrower the Loan Estimator (LE)?
3 days after loan application
The HUD-1 and Truth in Lending Disclosure have been replaced with
Loan Estimator (LE)
If the loan’s interest rate goes up more than _____ from the Loan Estimator (LE) originally supplied to the borrower, the lender is re required to re-disclose to the borrower which will more time to escrow
1.25%
New federal laws governing mortgage lending is overseen by
CFPB
