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Real Estate Lesson 1 - Realty and Personal Property > Lesson 3 Part 1 - Ways to Obtain Realty > Flashcards

Lesson 3 Part 1 - Ways to Obtain Realty Flashcards

1
Q

Ways to Obtain Realty….

1. Cash

A

Given Deed on closing - should always obtain CLTA

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2
Q

Ways to Obtain Realty

2. Mortgage

A

Non-negotiable security instrument on realty

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3
Q

Lien Theory

A
  • Used in MidWest, East and Southern states

- Law considers that a mortgage creates a lien against real property pledged in the mortgage to secure payment of a debt

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4
Q

Note

A
  • Negotiable instrument on realty

- Typically FHA, VA or CONV conforming or non- conforming loans

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5
Q

Mortgagor

A
  • Becomes borrower/payer, the one getting a loan on their realty from a lender
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6
Q

Mortgagee

A

Becomes payee, the one giving a loan on the borrowers realty

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7
Q

Mortgage Clauses -

Acceleration

A

In the even of realty default, whole amount of principal and interested may be declared due and payable.

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8
Q

Mortgage Clauses -

Alienation

A
  • Balance of realty debt becomes immediately due and payable if property is sold of transferred
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9
Q

Mortgage Clauses -

Foreclosure

A

“Legal” procedure whereby realty used as security for debt is sold to satisfy debt.

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10
Q

Mortgage Clauses -

Prepayment

A

Terms upon which mortgagor may pay entire or stated amount of mortgage principal at some time prior to due date with or without penalty.

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11
Q

Mortgage Clauses -

Insurance

A

Indemnification on your realty against loss from a specific hazard or peril

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12
Q

Mortgage Clauses -

Impound

A

Establishing an account for purpose of paying annual tax and insurance bills.

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13
Q

Mortgage Clauses -

Defeasance Clause

A

States when payments are completed, mortgagee removes lien bt a satisfaction piece.

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14
Q

Mortgage Clauses -

Foreclosure (Court Action)

A

Allows the mortgagee to foreclose with a sheriff’s deed.

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15
Q

Mortgage Clauses -

Equitable Right of Redemption

A

A definite period in which mortgagor can make up late payments on their realty.

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16
Q

Mortgage Clauses -

Statutory Redemption Period

A

Original mortgagor may reclaim realty if full back payments are made within so many days after foreclosure( differs by state)

17
Q

Deed of Trust / Trust Deed

A

Security instrument on realty

18
Q

Title Theory

A
  • Used in Far West States

- Law considers that a trust deed conveys title of realty to a trustee until the note is paid off

19
Q

Trustor

A

Becomes “borrower and payer”, the one getting the loan on realty

20
Q

Beneficiary

A

Becomes “payee”, the one giving a loan on realty

21
Q

Trustee

A

Impartial holder of title on a trust deed (title only)

22
Q

Trustee’s Deed

A

A deed issued after a foreclosure

23
Q

Deed of Reconveyance

A
  • A deed issued by the trustee
  • States loan is paid in full
  • Gives all rights and privileges back to trustor
24
Q

Equitable Right of Redemption

A

Period in which trustor can make up late payments on note

25
Q

Acceleration

A
  • Default

- In the event of default, whole amount of principal and interest may be declared to be due and payable at once

26
Q

Alienation

A
  • Due on Sale

- Balance of debt becomes immediately due and payable if property is sold without permission of the note holder.

27
Q

Foreclosure

A
  • Non judicial

- Legal procedure whereby property used as security for debt, is sold to satisfy debt in the event of default

28
Q

Prepayment

A
  • Terms upon which mortgagor may pay entire or stated amount of mortgage principal at some time prior to due date.
29
Q

Insurance

A
  • Indemnification against loss from specific hazard or peril
30
Q

Impound

A

Establishing account for purpose of paying annual tax and insurance bills without having to come up with lump sum.

31
Q

Vendor / OWC

A
  • Seller finance
  • Real Estate purchased without a lender originated loan or cash
  • Terms synonymous and are the security instrument
  • Land Contract, Installment Contract, Contract for Deed
32
Q

OWC - Note or PMA

A
  • Purchase Money Agreement
  • Negotiable instrument on realty
  • Owner carries loan, no lender
33
Q

Vendor

A
  • MUST be the seller

* * Retains Legal Title only

34
Q

Vendee

A
  • MUST be the buyer

* ** Has Equitable Title and the bundle of rights

35
Q

Defeasance Clause in a PMA

A
  • Notification clause in PMA
  • States when payments are completed, vendor removes lien
  • Removed by a satisfaction piece
  • If vendee defaults, vendor asks for foreclosure through court
36
Q

Devise

A
  • Giving of realty in valid will
37
Q

Devisor

A
  • Died with will

- The deceased person giving realty in a vaild will

Real Estate Lesson 1 - Realty and Personal Property (4 decks)

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