Mortgages Flashcards
mortgage
a pledge of real property that serves as security or collateral for a loan
note
the financing instrument signed by the borrower stating that they are personally liable for the entire amount borrowed
mortgagor/mortgagee
owner of the property/lender
hypothecation
the pledging of property as security for payment of a loan without surrendering possession of the property
trust deed
a deed of conveyance creating and setting out the conditions of a trust.
can more promptly gain possession during foreclosure
what is stated in the note executed by a borrower?
- amount of debt
- time and method of payment
- rate of interest
duties of mortgager
- pay debt in accordance with terms of the note
- pay all real estate taxes on property
- maintain insurance on the property
- obtain authorization before any major alterations
- maintain property
- secure permission before getting 2nd mortgage within 30 days
acceleration clause
assists lenders in a foreclosure by accelerating the maturity of the debt and declare the entire debt due and owing immediately
defeasance clause
ensures that when debt is repaid, the mortgagee has no further claim on the property
estoppel certificate
document that verifies the amount that remains to be repaid and the interest rate
used when assigning a mortgage
where should mortgage documents recorded?
in the paper office of the county in which the real estate is located
usury
charging of an unreasonably high rate of interest
imputed interest
interest that the tax code assumes you collected but you didn’t actually collect
first mortgage
a mortgage on land that has no prior mortgage
second mortgage
a lien taken out against a property that already has a loan on it
subordination agreement
first lender agrees to subordinate first loan to second lender
sometimes done to allow further financing
satisfaction of mortgage
when all mortgage loan payments have been made and the note is paid in full
reduction certificate
a document provided by a lender that clearly outlines and breaks down the remaining balance on a mortgage loan
alienation clause
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
foreclosure
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
sheriffs sale
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.
sheriff’s deed
conveys the ownership rights of the property to the winner of the foreclosure auction
statutory right of redemption
give the borrower time after the sale to reclaim the property by paying the foreclosure price and any other additional charges
friendly foreclosure
a document that transfers the title of a property from the property owner to their lender in exchange for relief from the mortgage debt.
short sale
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
deficiency judgement
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
real estate owned (REO)
used to describe properties acquired by lenders through foreclosure
what are the two documents involved in mortgages/
- note
- mortgage
mortgage (as a loan instrument)
a security instrument signed by the borrower letting the lender foreclose if they do not repay
In New Jersey what is the max interest rate a bank can charge you by law?
there is no maximum
foreclosure
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
