Mortgages

Question 1

mortgage

Answer 1

a pledge of real property that serves as security or collateral for a loan

Question 2

note

Answer 2

the financing instrument signed by the borrower stating that they are personally liable for the entire amount borrowed

Question 3

mortgagor/mortgagee

Answer 3

owner of the property/lender

Question 4

hypothecation

Answer 4

the pledging of property as security for payment of a loan without surrendering possession of the property

Question 5

trust deed

Answer 5

a deed of conveyance creating and setting out the conditions of a trust.

can more promptly gain possession during foreclosure

Question 6

what is stated in the note executed by a borrower?

Answer 6

1. amount of debt
2. time and method of payment
3. rate of interest

Question 7

duties of mortgager

Answer 7

1. pay debt in accordance with terms of the note
2. pay all real estate taxes on property
3. maintain insurance on the property
4. obtain authorization before any major alterations
5. maintain property
6. secure permission before getting 2nd mortgage within 30 days

Question 8

acceleration clause

Answer 8

assists lenders in a foreclosure by accelerating the maturity of the debt and declare the entire debt due and owing immediately

Question 9

defeasance clause

Answer 9

ensures that when debt is repaid, the mortgagee has no further claim on the property

Question 10

estoppel certificate

Answer 10

document that verifies the amount that remains to be repaid and the interest rate

used when assigning a mortgage

Question 11

where should mortgage documents recorded?

Answer 11

in the paper office of the county in which the real estate is located

Question 12

usury

Answer 12

charging of an unreasonably high rate of interest

Question 13

imputed interest

Answer 13

interest that the tax code assumes you collected but you didn’t actually collect

Question 14

first mortgage

Answer 14

a mortgage on land that has no prior mortgage

Question 15

second mortgage

Answer 15

a lien taken out against a property that already has a loan on it

Question 16

subordination agreement

Answer 16

first lender agrees to subordinate first loan to second lender

sometimes done to allow further financing

Question 17

satisfaction of mortgage

Answer 17

when all mortgage loan payments have been made and the note is paid in full

Question 18

reduction certificate

Answer 18

a document provided by a lender that clearly outlines and breaks down the remaining balance on a mortgage loan

Question 19

alienation clause

Answer 19

provides that on the sale of the property, the lender has the choice of declaring the entire debt to be immediately due or permitting the buyer to assume the loan

aka resale clause or due-on-sale clause

Question 20

foreclosure

Answer 20

a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan

Question 21

sheriffs sale

Answer 21

a public auction where a property is repossessed. The proceeds from the sale are used to pay mortgage lenders, banks, tax collectors, and others who have lost money on the property due to lack of payment by the original owner.

Question 22

sheriff’s deed

Answer 22

conveys the ownership rights of the property to the winner of the foreclosure auction

Question 23

statutory right of redemption

Answer 23

give the borrower time after the sale to reclaim the property by paying the foreclosure price and any other additional charges

Question 24

friendly foreclosure

Answer 24

a document that transfers the title of a property from the property owner to their lender in exchange for relief from the mortgage debt.

Question 25

short sale

Answer 25

an offer of a property at an asking price that is less than the amount due on the current owner’s mortgage.

all proceeds go to the lender

Question 26

deficiency judgement

Answer 26

a judgement passed if foreclosure sale does not pay the loan balance in full, and hte mortgagee can seek the remaining balance from the mortgagor

Question 27

real estate owned (REO)

Answer 27

used to describe properties acquired by lenders through foreclosure

Question 28

what are the two documents involved in mortgages/

Answer 28

1. note
2. mortgage

Question 29

mortgage (as a loan instrument)

Answer 29

a security instrument signed by the borrower letting the lender foreclose if they do not repay

Question 30

In New Jersey what is the max interest rate a bank can charge you by law?

Answer 30

there is no maximum

Question 31

foreclosure

Answer 31

a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset