RE Finance Unit 11: Processing Real Estate Loans Flashcards
Abstract
A condensed history of the title to a property, consisting of a summary of the original grant and all subsequent conveyances and encumbrances relating to the particular parcel of real estate.
Actual Notices
In a real estate transaction a presumption of knowledge (e.g., tenants in possession of housing being sold).
ALTA Policy
American Land Title Association title insurance policy; the most comprehensive form.
Annual Percentage Rate (APR)
The effective interest rate.
Assignment
The transfer of an interest in a bond, mortgage, lease, or other instrument, in writing, by the assignor to the assignee.
California Land Title Association (CCLTA)
Issues title insurance policies for California properties.
Chain of Title
History of recordings against a specific property.
Closing Statements
Final arrangements to transfer title of property, as well as allocate charges and credits.
Cloud
A claim or encumbrance that affects the ownership of a property and can potentially discourage future parties from purchasing it. These claims or encumbrances can arise from easements or mortgages on the land, or they can arise from a defect in a deed or a lien that may yield title to a third party.
Constructive Notice
In a real estate transaction, matters of public record.
Disclosures
Information pertinent to a property’s value required to be imparted to buyers and borrowers in California.
Escrow Funds
Monies collected for property taxes and insurance premiums.
Good-Faith Estimate
An estimate of total costs for securing a real estate loan. Given to borrowers prior to closing.
Hazard Insurance
Insurance covering physical damage to property.
Hazardous Waste
Toxic waste materials jeopardizing the value of real estate.
Impound Funds
Fund set up by a lender to collect and hold monthly payments from the borrower for taxes and hazard insurance until they are due.
Mortgagee’s Title Insurance
An insurance policy protecting the lender for the amount of the loan in the event of a future title dispute.
Origination Fee
Fee charged by a lender or other agent for processing a loan application.
Owner’s Title Insurance
An insurance policy protecting the buyer for the amount of the purchase price in the event of a future title dispute.
Points
Amount of discount on a mortgage loan stated as a percentage; one point equals 1% of the face amount of the loan; a discount of one point raises the net yield on the loan by one-eighth of 1%.
Preliminary Report
A report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land, together with the liens and encumbrances thereon which will not be covered under a subsequent title insurance policy.
Proration
At a real estate sale and/or loan closing, the allocation of charges and credits to the appropriate parties.
Suit to Quiet Title
A technique to clear any clouds from a property’s title.
Survey
An engineer’s description of a property’s boundaries.
