Real Estate Financing (Ch. 6)

Question 1

Acceleration Clause

Answer 1

Breach of Contract. Must pay remaining balance

Question 2

Secondary Mortgage Market

Answer 2

Loan are bought and sold only after they have been funded by primary lenders
Fannie Mae
Ginnie Mae
Freddie Mac

Question 3

Purchase Money Mortgage

Answer 3

Seller agrees to finance all or part or the purchase price and consist of a first or junior lien depending on whether prior mortgage liens exist

Question 4

Satisfaction of Lien

Answer 4

When all payments are made, the borrower has to record the satisfaction of lien

Question 5

Installment contract/Land Contract

Answer 5

Seller retains legal title to the property during contract, at the end of the loan term, the seller delivers clear title

Question 6

HA- Insured Loans

Answer 6

Loan that is insured by the agency. Provides security to the lender FHA insures lenders against loss from borrower default

Question 7

Promissory Notes

Answer 7

Notes or financing instrument, is the borrowers personal promise to repay a debt according to agreed terms

Question 8

Regulation Z Advertising

Answer 8

consumer must be fully informed of all finance charges and the true interest rate before a transaction is completed

Question 9

Due on Sale/Alienation Clause

Answer 9

The lender may declare the entire debt due immediately