Section 12 Flashcards
When the lender holds the title to the property until the mortgage is paid.
title theory state
When the borrower is granted title to the property immediately upon purchase.
lien theory state
Florida is a ____ theory state
lien
a loan instrument that the borrower signs promising to repay a loan.
Promissory note
accompanies the mortgage and details the specific terms of the loan
Promissory note
a loan instrument that pledges the real estate property as collateral for a loan
mortgage
must be in writing and recorded with the clerk of the courts to be valid
Mortgage
a release of mortgage indicating that a property is free of an original lien
satisfaction of mortgage
the satisfaction of mortgage must be filed with the county office where the lien was officially registered within
60 days
the pledging of securities or other assets as collateral to secure a loan while not giving up possession of the property.
Hypothecation
Mortgages recorded after the first mortgage are
junior mortgages
A mortgage lien holder can give up priority over another lien holder by signing a
subordination agreement.
Who promises to pay property taxes, property insurance, and applicable homeowner association fees?
Mortgagors
allows for mortgage debt to be paid off ahead of the payment schedule without penalty.
prepayment clause
calls the entire balance of the mortgage due upon default of the borrower.
acceleration clause
Should the balance be called, the borrower would have __ days from date of notice to pay the loan
back in full.
30
means that the lender reserves the right to forgive the fact that the borrower defaulted.
right to reinstate
ensures that the lender will have the mortgage paid in full if the mortgagor sells the property to someone else.
due on sale clause
cancels the lien placed against the property once the mortgage is paid in full
defeasance clause
The percentage amount covered by the loan compared to the entire value of the home is known as
the
loan-to-value ratio
Current Market Value - Mortgage Debt =
Equity
Amount of the Loan ÷ Value =
Loan-to-value-ratio
the process to manage payments connected with a loan
Loan servicing
an account set up and held by the lender to collect money to pay property fees such as property taxes
and insurance.
Escrow (Impound) account
These are the four components of a mortgage payment: .
principal, interest, taxes, and insurance (PITI)
The acronym representing these four parts of a mortgage is
PITI (principal, interest, taxes, and insurance)
an upfront fee charged by lenders.
discount point
the amount the lender is profiting
Yield
expressed as an annual percentage rate or APR which allows borrowers to compare loans
Yield
one-time add-on fees ranging from 0.5_2%
Loan origination fees
a fee charged by a lender for making credit available for a borrower
Take-Out Commitment or Commitment Fees
a fee charged by a lender to temporarily lower the interest rate charged to the buyer
buydown
A loan against a set of lots. As property is sold, a partial release is obtained for just the lot sold.
blanket loan
The legal instrument that transfers the mortgage and promissory note to the purchaser
Assignment of Mortgage
issued to verify amounts of any unpaid balance, interest rate, and date to which interest has been paid prior to the assignment
Estoppel Certificate
agreement that relieves the original borrower from the debt
novation
creates equitable title for the new owner
contract for deed
a non-judicial process where the buyer agrees to give up the property.
deed in lieu of foreclosure
allows for a borrower to pay off a debt in full to stop foreclosure.
Right of redemption in Florida
Should a foreclosure auction result in surplus funds after all liens have been paid, the remaining funds are to be paid to the
mortgagor
Should the foreclosure sale not cover all the liens, this may be requested to be placed against the borrower
deficiency judgment
Junior liens on the property that are left unpaid by the auction are
released
Upon the property being sold at auction, the clerk of the court files this passing new title to the purchaser at the foreclosure auction
certificate of title
the sale of property releasing the mortgage lien even though the sale doesn’t cover the debt.
short sale
Calls the entire balance of the loan becomes due if the borrower defaults on the loan
acceleration clause
makes the new buyer responsible for the remaining debt
assumption
can be charged by a lender to temporarily lower the interest rate charged to the buyer
buydown
contract for deed is a form of
seller financing
also known as a friendly foreclosure
deed in lieu of foreclosure
an upfront fee that the lender charges the borrower that increases the lender’s yield
discount points
Lender calls the mortgage due in full upon the sale of the property
due on sale clause
the amount the owner has invested in the property
equity
The right of a property owner to redeem his or her property from foreclosure (or tax sale) by paying off the full amount owed
equity of redemption
an account held by the lender into which a homeowner pays money for taxes and insurance every month so that the money is available when the bill is due
escrow
verifies the amount of the unpaid balance, interest rate, and date to which interest has been paid prior to the assignment
estoppel certificate
the pledging of securities or other assets as collateral to secure a loan while not giving up possession of the property
hypothecation
The extra you pay to borrow money
interest
makes it more
difficult for a bank to foreclose on the property because the bank does not hold the title
lien theory
Used to finance improvements to land such as roads and sewers
land development loans
Processing payments, sending statements, managing the escrow accounts, providing collection services on delinquent loans, ensuring that the insurance and property tax payments are made on the property, handling pay-offs and assumptions, etc
loan serving
The % covered by the loan compared to the entire value of the property
loan to value ratio
the instrument that pledges the real estate property as collateral for a loan
mortgage
the document signed by the borrower promising to repay a loan under agreed-upon terms.
note
allows each property to be released as collateral from the mortgage as each property is sold
partial release clause
Allows a fee to be charged if the loan is paid off early
prepayment penalty
the mortgagee is allowed to be appointed to collect the income produced from the property to make the mortgage payments.
receivership clause
Lender reserves the right to forgive the fact that the borrower defaulted and move forward with the loan either with late payments paid or renegotiated.
right to reinstate
a release of mortgage that proves that a property is paid for free and clear of the original lien
satisfaction of mortgage
The sale of property for less than the outstanding mortgage debt
short sale
defined by a change in lien priority order
subordination agreement
a fee charged by a lender for holding credit available for a borrower
take-out commitment
