Mortgages Start to Finish Flashcards
What is hazard insurance?
paid by homeowner to protect condition of property
What does a subordination agreement do?
lienholder agrees to take subordinate position to another lienholder
What is proper way to record mortgage documents?
record deed then DOT; promissory note doesnt get recorded
How may a tenant withhold rent in NC?
a tenant may not do so
Give 2 examples of unenforceable lease terms.
LL wont make repairs; excessive late fees
Give the 4 grounds for eviction in NC.
holdover; criminal activity at property; breach of lease; withholding rent
What is the purpose of the Promissory Note?
a contract between the borrower and the lender for the money owed
What is rent abatement?
T convinces judge that living conditions not worth rent paid; judge lowers the rent; only legal way of ‘withholding’ rent
Which type of deed will the buyer typically get in a ML transaction?
General Warranty
What is the purpose of the Deed of Trust?
creates the lien on a property
Define ‘self-help eviction’.
evicting a tenant without a court order
Explain ‘retaliatory eviction’.
evicting tenant for engaging in protected activity & uses pretext to justify it
Define life estate.
conveyance where person owns home for life, and when she dies it goes to another person
Give 2 examples of real property liens.
mortgage loan, unpaid county taxes
Name the contract that must be in writing.
conveyance of real property
Whom can the realtor represent in a closing?
both buyer and seller, or each individually
Which party is responsible for providing valuation of the home?
appraiser
What is the Metes and Bounds description of a property?
establishes boundaries of property; created by surveyor as he walks the property
What is the purpose of the HUD-1?
breakdown of all money that will change hands in sale of the property
What are the documents in the mortgage triangle?
promissory note - deed of trust - deed
What is real property?
land plus everything attached to it
What is a quit claim deed?
seller is giving title to a buyer without a warranty
What are the characteristics of a Liar’s Loan?
few or no underwriting docs
Is a fee tail conveyance still allowed in NC?
No
What is the legal principle that says certain contracts must be in writing?
statute of frauds
Name 2 places where you would look when doing a title search.
register of deeds; clerk of court
Name 3 types of deeds.
general warranty, quit claim, special warranty
What is PMI, and what does it do?
Private Mortgage Insurance; paid for by borrower; protects lender in case of default
Which professionals ensure the boundaries of a property are accurate?
Surveyors
What are the characteristics of a housing bubble?
fast generation of money that doesnt exist; bubble pops when borrowers no longer able to make payments
What is subprime lending?
lending to subprime borrowers who are at higher credit risk / more likely to default
What does an originator do in securitization?
first execution of lending $ to borrowers, sells these loans to sponsors
What is the origination of a mortgage loan?
initial lending of funds from lender to borrower, creation of lien on RP the borrower owns
What is the servicing of a ML?
day to day tasks related to a loan, like issuing statements or applying payments
