VOCAB ACTIVITY 1

Question 1

Assumption Clause

Answer 1

A clause in the mortgage contract that allows the mortgage to be assumed by another. It contains the conditions on how assumption can take place

Question 2

Deed-in-lieu

Answer 2

A deed given to a lender to avoid foreclosure and fulfill the obligation to repay the debt; the borrower cannot stay in the home but helps avoid foreclosure

Question 3

Deed of trust

Answer 3

In many states, a document used in place of a mortgage to secure the payment of a note

Question 4

Escape clause

Answer 4

A clause in the contract that allows one or both parties to back out without penalties if certain conditions occur

Question 5

Property flipping

Answer 5

A real estate investment strategy in which a property is purchased and quickly resold with no improvements and increased price WATCH OUT FOR FRAUD

Question 6

Warranty deed

Answer 6

A legal document that guarantees the seller is the true owner of the property has the right to sell and has no claims against the property

Question 7

Estoppel clause

Answer 7

A part of a legal agreement where a person acknowledges they understand what they are signing

Question 8

Reverse redlining

Answer 8

A lending practice that targets minority consumers in order to charge them more in costs then the amount that would be charged to majority of consumers

Question 9

General warranty deed

Answer 9

Conveys ownership from one party to another with the guarantee that there are no encumbrances on title

Question 10

Due on sale clause

Answer 10

A clause in a mortgage contract that requires payment in full of the mortgage debt if the property is being sold, or if ownership is transferred

Question 11

Alienation Clause

Answer 11

A clause the protects the lender by preventing the borrower from assigning debt to another person without lender’s approval

Question 12

General Warrant deed

Answer 12

This conveys ownership from one party to the other with the guarantee that there are no encumbrances (errors) on the title

Question 13

Special warranty deed

Answer 13

Conveys ownership from one party to another, but the seller of the property is only going to guarantee the history of ownership for the period of time that they owned it and nothing before it only guarantee a certain time frame of ownership

Question 14

Defesance Clause

Answer 14

A clause in the mortgage that allows for reconveyance once the mortgage that is paid in full it also states once a mortgage or pays off the mortgage. The mortgagee no longer has any legal ties to the property.

Question 15

A deed that the seller grantor uses to convey whatever interest that he has in the real property describe the deed. It also contains no guarantees or warrantees to the buyer that the seller has any interest or right to convey the same the deed transfers ownership of a property without making any guarantees typical and divorce to be removed from the ownership of a property

Answer 15

Quit claim deed

Question 16

Purchase money

Answer 16

A second mortgage to help cover the cost of a borrower’s down payment 

Question 17

Acceleration clause

Answer 17

A common provision of a mortgage or note providing the holder with the right to demand that the full outstanding balance is immediately due if the borrower defaults

Question 18

Assumption clause

Answer 18

A clause in the mortgage contract that allows the mortgage to be assumed by another. It contains the conditions on how assumption can take place.