GENERAL MORTGAGE KNOWLEDGE Flashcards
Value
Amount of goods or
services offered in the marketplace in exchange for something.
Table funding
Occurs when a mortgage loan is funded by an advance of loan funds and
an assignment of the loan to the same entity advancing the funds.
Generally undertaken by correspondent lenders.
Eminent Domain
The government’s constitutional power to take (appropriate or condemn) private property for public use,
as long as the owner is paid just compensation.
(Government taking of private land is called condemnation.)
Earnest Money
Money offered as an indication of good faith regarding the future performance of a purchase agreement.
Profit
The difference between the money made from an investment and the money actually invested.
Arm’s Length Transaction
A transaction that occurred under typical conditions in the marketplace where each of the parties were acting in their own best interests.
Seller’s Market
A situation in the housing market when a large number of buyers are looking for housing in an area of limited availability.
Contingency Clause
A provision in a contract, deed, law, regulation, guideline, etc. that makes the parties’ rights and obligations depend on the occurrence
(or nonoccurrence) of a specified event.
Also called Condition, Escape Clause, Subject to Clause, or Kick-Out Clause.
Reverse Mortgage
A vehicle for a borrower who has substantial equity in a property to convert that accumulated equity-at a cost-to cash and additional debt without selling the property and without making payments to the lender.
With a typical reverse mortgage, the balance of the loan rises as the borrower receives money from the lender and incurs interest to the outstanding loan balance.
Also called a reverse equity mortgage or reverse annuity mortgage.
Buyer’s Market
A situation in the housing market when there are many homes available for sale, but few buyers.
Encroachment
A physical object intruding onto neighboring property, often due to a mistake regarding the boundary.
Vendee
The buyer in a land contract.
Vendor
The seller in a land contract.
Acceleration Clause
A contract clause that gives the lender the right to
declare all outstanding payments immediately due
upon a default by the borrower.
Buydown
Additional funds in the form of points paid to a lender at the beginning of a loan to lower the interest rate and monthly payments
