Mastering Real Estate Principles ch 21 Flashcards
Occurs when someone other than the original borrower becomes primarily liable for the loan.
Assumption of Mortgage
Given to the winner at a foreclosure sale. It entitles the winner to a deed after the redemption period is over.
Certificate of Sale
Banks that are either federally or state chartered and that make mortgages, construction, and home improvement loans.
Commercial Banks
Loans that follow the established guidelines of the secondary mortgage market.
Conforming Loans
Associations that maintain savings accounts for their members while providing primarily home improvement and home equity real estate loans.
Credit Unions
A type of nonjudicial foreclosure in which the lender accepts title to the property from the borrower in exchange for ending the debt
Deed in Lieu Of Foreclosure
A Judgement against the debtor’s person assets if the sale of real estate is not sufficient to satisfy the loan.
Deficiency Judgment
Interest points charged by a lender to raise the yield on a loan. One point is equal to 1 percent of the loan amount.
Discount Points
The rapid outflow of funds from savings institutions.
Disintermediation
A borrower’s right to redeem property before a foreclosure sale.
Equitable Right of Redemption
And account maintained with a lender to hold money to pay real estate taxes and insurance. Also used by brokers to buyers’ earnest money that comes into the brokers’ possession during real estate transactions.
Escrow Account
Formerly know as the …… Operates in the secondary mortgage market. It handles FHA, VA and conventional loans and is the larger mortgage purchaser.
Fannie Mae (FNMA)
A government agency that works closely with thrifts to provide a secondary market for their loans. Also known as …
Freddie Mac (FHLMC) Federal Home Loan Mortgage Corp
The process of liquidating a borrower’s assets to satisfy a debt.
Foreclosure
A wholly owned government corporation that provides a secondary market for VA and FHA loans also known as…..
Ginny Mae (GNMA) Government National Mortgage Assoc.
Foreclosure procedures that use the courts. These procedures include judicial sale and strict foreclosure.
Judicial Foreclosure
A notice in the public records of a lawsuit involving a particular property that may result in a claim against the property
Lis pendens
The relationship between the amount of a loan and the appraised value of the property. The ratio is expressed as a percent of the appraised value.
Loan-to-Value ratio
Originates loans and packages them to investors, who may use their own money or may borrowed from other lenders. They also service loans.
Mortgage Banking Company
The process of selling tax-exempt bonds by municipalities to raise money for the low-rate loans to first -time buyers.
Mortgage Bond Financing
One who arranges a loan between a lender (mortgagee) and a borrower (mortgagor) for fee.
Mortgage Broker
Similar to savings banks, they use most of they funds for residential real estate loans.
Mutual Savings Bank
Foreclosure procedures used by lenders that do not involve the courts. common types are power of sale clauses and deed in lieu of foreclosure.
Nonjudicial foreclosure
Acronym describing principal, Interest, taxes, and insurance the moms common components of a mortgage payment.
PITI
Points are interest, usually payable at closing. A point is 1 percent of the loan amount.
Points
Lenders who hold loans they originate rather than selling them to investors.
Portfolio Lenders
Insurance written by a private company that protects a mortgage lender against loss if a borrower defaults. The insurance is usually used when the loan-to-value ration exceeds 80%. PMI insures the top 20 %to 25% of the loan, and borrowers are charged a fee at closing as well as an annual fee.
Private Mortgage Insurance (PMI)
Private conduits are also active in the secondary market. These organizations purchase and pool mortgages from loan originators for sale in the secondary market. Some specialize in areas not serviced by Fannie Mae,GNMA, or HLMC, such as jumbo loans (loans with limits set by Fannie May, GNMA and FHLMC) Private mortgage packagers include Sears and GE
Private Mortgage Packagers
Allows small investors to participate in real estate investments. Investors transfer title to real estate to a trustee, who manages the property for the benefit and profit of the investors. Funds from the issuance of investment trust certificates to investors are used to purchase real estate investments for the benefit of the investors.
REIT (Real Estate Investment Trust)
Also known as thrifts. Lenders that have traditionally been and important source of loans for residential property. their role has greatly diminished in the recent year
Savings Banks
A market where existing mortgages are bought and sold. Mortgages are originated in the primary mortgage market
Secondary Mortgage Market
The borrower’s right to redeem property after the foreclosure sale.
Statutory Right of Redemption
A foreclosure procedure in which the court awards the lender title and all equity to the property.
Strict Foreclosure
An arrangement in which the buyer assumes the seller’s mortgage and makes payment but is not personally liable for the debt.
Subject-to Mortgage
