Unit 7: Subprime/Predatory Loans & Seller Financing Flashcards
Who is offered subprime loans?
Those with less-than-ideal credit.
What is a subprime loan?
It is a category of loans that have high interest rates and fees.
Why are borrowers at a higher risk of foreclosure with a subprime loan?
Because these loans often include flexible-rate loans and while the borrower qualified at a lower rate, once the rate adjusts it will be beyond the borrowers ability to pay.
What is predatory lending?
It is an umbrella term for unfair or illegal lending practices.
What is a purchase money mortgage?
A mortgage issued to the buyer by the seller.
What is another name for purchase money mortgage?
“seller carryback” or seller-carry second
What is a contract for deed?
The purchase price is paid in installments to the seller, and the seller delivers title, via a deed, when the final payment is made.
What are the 2 other names for a contract for deed?
Land contract or installment contract
