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RE Study > RE Study 2 > Flashcards

RE Study 2 Flashcards

1
Q

PITI

A

Principal; interest; taxes; insurance

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2
Q

Loan to Value

A

Amount of loan as percent of purchase price

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3
Q

Promissory Note

A

Borrower’s promise to repay

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4
Q

In Arrears

A

Payments made at end of a period

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5
Q

In Advance

A

Payments made at the beginning

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6
Q

Usury

A

Interest in excess of max allowed loan

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7
Q

Discount Points

A

Increases lender’s yield; 1% of borrowed amount NOT purchase price

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8
Q

2 Parts of Mortgage Loans

A

Debt itself; security for the debt

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9
Q

Hypothecation

A

Debtor retains right of possession and control while creditor receives equitable right

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10
Q

Satisfaction of Mortgage

A

Document issued when mortgage is paid in full

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11
Q

Lien Theory

A

States that mortgagor retains legal and equitable title that serves as a security

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12
Q

Deed of Trust

A

Conveys naked title (title w/o right of possession)

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13
Q

Acceleration Clause

A

Assists lender in foreclosure; entire balance due immediately

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14
Q

Assumption of Mortgage

A

Buyer assumes the mortgage and agrees to take over the debt

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15
Q

Alienation Clause

A

Prevents future purchaser from assuming the loan

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16
Q

Straight Loan

A

Interest only payments then paid in full

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17
Q

Amortized Loan

A

10-30yrs interest and principal; each payment first goes to interest and then principal

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18
Q

Adjustable Rate (ARM)

A

Interest fluctuates throughout loan life

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19
Q

Negative Amortization

A

Loan under water

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20
Q

Growing Equity Mortgage

A

Mortgage payments increase based on income

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21
Q

Judicial Foreclosure

A

Sold by courts

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22
Q

Non-Judicial Foreclosure

A

Power of sale clause; no court; used when borrower fails to cure

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23
Q

Strict Foreclosure

A

No sale; court gives property to lender

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24
Q

Deed In Lieu of Foreclosure

A

Mutual agreement between parties; hand property back over; no court

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25
Q

Deficiency Judgement

A

Sale of the property doesn’t cover the debt

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26
Q

Short Sale

A

Sale of property for less than what is owed

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27
Q

FHA

A

Neither builds nor lends loans but insures them

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28
Q

Package Loans

A

Covers furnished properties (ie new builds)

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29
Q

Blanket Loan

A

Covers more than one lot

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30
Q

Regulation Z

A

Truth in Lending Act (TILA); requires creditors to inform borrowers the true cost of obtaining financing

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31
Q

Community Reinvestment Act (CRA)

A

Lenders must invest in the communities in which they’re located

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32
Q

Real Estate Settlement Procedures Act (RESPA)

A

Ensures the seller and buyer are fully informed of all costs related to closing

33
Q

Closing

A

Title is transferred in exchange for payment

34
Q

TILA-RESPA

A

Know before you owe

35
Q

Loan Estimate Form

A

This form must be provided 3 days after loan application is submitted

36
Q

Closing Disclosure

A

Itemizes charges for buyer and seller; borrower must receive 3 days before closing

37
Q

Home Loan Toolkit

A

This form must be provided as part of the loan application

38
Q

Mortgage Disclosure Improvement Act

A

Prevents consumer from receiving a low interest loan at initial application and then at settlement the lender charges more

39
Q

Closing Statement

A

Accounting of the parties’ debits and credits

40
Q

Prorations

A

How allowances are allocated between the parties

41
Q

Accrued Items

A

Buyer credits

42
Q

Prepaid Items

A

Seller credits

43
Q

Lien

A

Charge or claim against property

44
Q

Types of Liens

A

“VISE”; voluntary, involuntary, statutory, equitable

45
Q

General Lien

A

Affects all property; judgements and taxes

46
Q

Specific Lien

A

Secured by specific property; vendor and mechanic’s liens

47
Q

Priority of Liens

A

First to record, first in right

48
Q

Ad Valorem Tax

A

According to value; specific; involuntary and statutory

49
Q

Assessment

A

Based on sales prices of comparable properties

50
Q

Tax Rate

A

Expressed in mills; a mill is $0.001; 10 mills in a penny

51
Q

Special Assessment

A

Charge to fund public improvements

52
Q

Mechanic’s Lien

A

Construction loan

53
Q

Judgement

A

Decree issued by a court

54
Q

Appraisal

A

Opinion of value based on supportable evidence and approved methods

55
Q

Title 9 FIRREA

A

Requires a licensed appraiser for homes of 250k or more

56
Q

Broker’s Price Opinion

A

Less expensive than appraisals and used by lenders working w/ home equity lines

57
Q

Value

A

Determined by “DUST”; demand, utility, scarcity, transferability

58
Q

Market Value

A

Most probable price that property should bring in a market sale

59
Q

Market Price

A

Asking offer, sales price

60
Q

Cost does not equal…

A

Market value

61
Q

Principles of Value

A

Anticipation, conformity, change, contribution, competition, highest and best use

62
Q

Plottage

A

Value of 2 adjacent lots may be greater if combined

63
Q

Assemblage

A

Act of combining 2 lots under one owner

64
Q

Regression

A

Lavish home in modest neighborhood

65
Q

Progression

A

Modest house in lavish area

66
Q

Net Operating Income

A

Gross income minus operating expenses

67
Q

Capitalization Rate

A

NOI divided by sell price

68
Q

Leasehold Estate

A

Tenant’s rights are for a term

69
Q

Estate for Years

A

Estate for a definite period; no notice required for termination

70
Q

Estate from Period to Period

A

Lasts an indefinite time; month to month

71
Q

Estate at Will

A

Indefinite; continued until either party terminates

72
Q

Estate at Sufferance

A

Tenant stays past allowed time

73
Q

Nondisturbance Clause

A

Tenants are not affected if landlord defaults

74
Q

Gross Lease

A

Tenant pays fixed rent and some or all of utilities

75
Q

Net Lease

A

Tenant pays rent plus most or all of expenses

76
Q

Percent Lease

A

Used for businesses; minimum fixed rent plus a percentage of income

77
Q

Graduated Lease

A

Rent increases at set future dates

78
Q

Index Lease

A

Increased or decreased rent based on changes in consumer price index

79
Q

Constructive Eviction

A

Landlord is negligent and tenant can vacate/breach the contract

RE Study (3 decks)

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