Real Estate Finance Flashcards
What is lien priority?
Lien priority determines the order in which liens are paid during a foreclosure or closing of the property.
What is the priority of the following liens?
• Cost of Sale
• Property Taxes
• Payment on federal and state tax liens
• The cost of the sale (in the case of foreclosure)
• First Mortgage or Deed of Trust
• Special assessments due to the government.
• All other liens and junior mortgages.
- Payment on federal and state tax liens
- The cost of the sale (in the case of foreclosure)
- Special assessments due to the government.
- Cost of Sale
- Property Taxes
- First Mortgage or Deed of Trust
- All other liens and junior mortgages
What are the two type of satisfaction pieces?
- Release Deed
* Deed of Reconveyance.
When is a Release Deed and Deed of Reconveyance used?
When a Deed of Trust has been paid in full.
What does the recording of a Deed of Trust and a Satisfaction of Mortgage trigger?
These items release the lender’s lien and interest in the property.
What is the difference between a Judicial Foreclosure, and a Non Judicial Foreclosure?
Judicial Foreclosure requires court action while Non Judicial Foreclosure only requires the action of the trustee on a deed of trust.
What are the time periods before and after a foreclosure when a borrower can redeem his property called?
Equitable Redemption is the time period prior to foreclosure while Statutory Redemption is the period allowed after foreclosure for a borrower to redeem their property.
If the proceeds of a sale does not allow the lender to collect all that is owed to them, what judicial judgement will allow the lender collect the balance of their debt from the borrowers other assets?
a Deficiency Judgment
How can the borrower allow the lender to take the property back without having to go through the foreclosure process?
The borrower may wish to execute a Deed In Lieu Of Foreclosure instead of walking through the actual foreclosure process.
This Prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act.
Equal Credit Opportunity Act (ECOA)
This act has two main purposes: (1) to mandate certain disclosures in connection with the real estate settlement process so home purchasers can make informed decisions regarding their real estate transactions; and (2) to prohibit certain unlawful practices by real estate settlement providers, such as kickbacks and referral fees, that can drive up settlement costs for home buyers.
Real Estate Procedures Act (RESPA)
Passed in 1968, this law requires lenders to explain the actual cost of borrowing money in terms the consumer understands. It includes several important laws, including the Truth in Lending Act, Fair Credit Reporting Act, and Fair Debt Collection Practices Act.
Consumer Credit Protection Act
The Truth in Lending Act (TILA) protects consumers against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide borrowers with loan cost information so that they can comparison shop for certain types of loans.
Truth in Lending Act
This law is part of the Truth in Lending Act of 1968 and requires lenders to make meaningful credit disclosures to individual borrowers for certain types of consumer loans. This covers many mortgage lenders, as they are in the business of providing consumer loans.
Regulation Z
What three things must meet a lender’s qualifications in order to loan money to a borrower?
The borrower, the property and the properties title.
