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A-5 Chapter 5 Foreclosure, Carryback Documents & Financing > Vocabulary for Foreclosure > Flashcards

Vocabulary for Foreclosure Flashcards

1
Q

a debt that is not paid

A

Default

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2
Q

lender agrees to accept keys and deed in lieu of foreclosure; allows time to repay the lender; can occur in either mortgage or deed of trust foreclosures; friendly foreclosure

A

Deed in Lieu of Foreclosure

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3
Q

lender allows borrower to hold off payment until they can make the payment; might be used if someone just lost their job and is looking for another; can occur in either foreclosure types

A

Moratorium or forebearance

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4
Q

a soldier cannot be foreclosed upon while being deployed; can occur in both mortgage and deed of trust foreclosures

A

Soldiers and Sailor’s Act

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5
Q

the lender’s right to call the entire loan all due and payable; the minute you are late on a payment, you owe everything at once and this notice is given

A

Acceleration

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6
Q

a deed in lieu of foreclosure is provided, bankruptcy is filed or the property is sold and proceeds pay off the debt

A

Ways to stop acceleration

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7
Q

a lawsuit is filed in court within 90 days of notice of acceleration

A

Court Foreclosure Action

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8
Q

the waiting period between filing suit and a court date

A

Equitable period of redemption

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9
Q

once there is a judgment, this is issued authorizing a sheriff’s sale

A

Writ of Execution

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10
Q

once sold at auction, the purchaser receives this and i now the lien holder but not the owner

A

Certificate of Sale

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11
Q

a 6 month period mandated by law where mortgagor can attempt to redeem the property with a lump sum payment; during this time mortgagor may live in the property

A

Statutory Period of Redemption

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12
Q

a 30 day period where the mortgagor never lives on the property; if tis happens, the statutory period of redemption begins again

A

Abandonment

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13
Q

a deed that is issued after the statutory period of redemption is completed and redemption is not made

A

Sheriff’s deed

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14
Q

extra money after the loan, interest, taxes and attachments are paid

A

Excess Monies

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15
Q

if this occurs, a lender can go after anything in order to recoup its losses (only in certain circumstances) and not on single family residential or duplexes, or properties under 2.5 acres

A

Deficiency or Lender’s Loss

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16
Q

non-judicial foreclosure

A

Deed of Trust Foreclosure

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17
Q

judicial foreclosure

A

Mortgage Foreclosure

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18
Q

following default on a loan, this notice is provided to the trustee that a default has occurred and to begin foreclosure proceedings

A

Beneficiary’s Notice

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19
Q

the trustee initiates foreclosure proceedings under this clause of the deed of trust

A

Power of Sale

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20
Q

the trustee gives constructive notice by signing and recording this notice

A

Notice of Sale

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21
Q

the period between recording the default and the trustee sale, this 90 day period begins where the trustor can get the debt paid; constructive notice and actual notice must be given and the trustees sale can then occur after 90 days

A

90- Day Reinstatement Period

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22
Q

property is auctioned off to the highest bidder who is awarded the trustee’s deed and instant ownership; all cash must be paid by 5:00 the following day

A

Trustee’s Sale

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23
Q

seller “takes bac” the note or part of the note for part of the purchase price

A

Carryback

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24
Q

vendor (seller) extends credit to vendee, permitting buyer to make normal down payment and pay the balance in installments; buyer (vendee) has possession an equitable title ($ they put in and future interest) while seller has legal title; AKA Land Contract

A

Agreement for Sale AKA Land Contract

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25
Q

a mortgage given by a buyer (mortgagor) as part of the consideration for the price; usually carried by the seller; fills a gap between down payment and new first mortgage or assumable mortgage (PMM); mortgagor (buyer) holds title.

A

Purchase Money Mortgage

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26
Q

trustor (buyer) conveys legal title to trustee (3rd party) who holds it as security for beneficiary (seller)

A

Trust Deed or Deed of Trust

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27
Q

a lender that prefers short term customer or construction loans

A

Commercial Bank

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28
Q

a short term loan based on draws during the construction process

A

Construction Loan

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29
Q

real estate loans that are not insured by a governmental agency

A

Conventional Loan

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30
Q

a loan charge in addition to interest that increases the Lender’s yield

A

Discount Points

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31
Q

appraising net present value based on expected future income (in secondary mortgage market)

A

Discounting

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32
Q

like signing over a check, it is a signing over of a lien to a 3rd party (secondary markets);used in assignment of a loan

A

Endorsement

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33
Q

a document used to verify terms and balances of existing leases or loans; certification by the borrower of amount owed and interest rate on a loan

A

Estoppel Certificate

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34
Q

insures deposits for the depositor up to a certain dollar amount

A

FDIC (Federal Deposit Insurance Corporation)

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35
Q

purchases paper in the secondary market from primary lenders

A

FNMA (Fanny Mae) Federal National Mortgage Association

36
Q

insured the deposits of Savings and Loans until recently

A

FHLB (Federal home Loan Bank)

37
Q

determines how much money is in the system and what the discount rate is

A

FRB Federal Reserve Board

38
Q

an action taken by which property used as security is sold to pay the debt

A

Foreclosure

39
Q

a document given to the winner of a tax lien

A

Certificate of Purchase

40
Q

the legal right of the lender through court action to collect from a borrower the remaining debt still owed after foreclosure

A

Deficiency or Deficiency Judgment

41
Q

in trust deed foreclosure, it is the type of notice required where the trustees notice to sell is recorded and published in a newspaper

A

Constructive Notice

42
Q

a copy of the trustees notice is delivered to the borrower (trustor) by egistered mail or by putting notice on door

A

Actual Notice

43
Q

beneficiary (lender) sends to trustee a notice to “wake up” and begin foreclosure proceedings

A

Beneficiary’s Notice to Trustee

44
Q

contract where seller finances buyer’s purchases of realty and retains legal title; vendee has equitable title; also know as Agreement for Sale

A

Land Contract AKA Agreement for Sale

45
Q

a clause in the deed of trust authorizing sale of the property by the trustee when in default

A

Power of Sale

46
Q

occurs in mortgages and not in deed of trust foreclosure

A

Judicial Procedure

47
Q

the party who is holding a note for value and has the protection of law for its enforcement; an entity or person who buys “bad paper” eg Bank of America

A

Holder in Due Course

48
Q

rent paid for the use of money

A

Interest

49
Q

the calculations of all financing charges pertaining to a loan, expressed as an annual rate

A

Annual Percentage Rate (APR)

50
Q

interest paid on interest

A

Compound Interest

51
Q

interest rate the court assigns to those documents that have no specified interest rate

A

Legal Rate

52
Q

minimum interest rate charged by commercial banks to their strongest clients; factors for fluctuation are the demand for new loans and decisions by FRB to increase or decrease money supply

A

Prime Rate

53
Q

interest that is computed only on principal balance

A

Simple Interest Rate

54
Q

a short term loan sometimes called a gap or bridge loan

A

Interim Financing

55
Q

mutual fund that trades in short term debt

A

Primary Money Market

56
Q

lenders who supply funds to borrowers directly

A

Primary Mortgage Market

57
Q

the entities that are sold the “paper” on loans; this creates funds for additional mortgages

A

Secondary Mortgage Market

58
Q

a banker who lends money for mortgages

A

Mortgage Banker

59
Q

like a dating service, this person puts together a borrower and lender and gets paid for the introduction

A

Mortgage Broker

60
Q

a security document given to ensure payment of a note

A

Mortgage

61
Q

the buyer assumes the seller’s mortgage and agrees to pay the debt

A

Assumption of Mortgage

62
Q

the party who gives and is the maker of the security

A

Mortgagor

63
Q

the lender under the mortgage-type transaction who receives the security instrument

A

Mortgagee

64
Q

grantee taking title is not personally liable to the mortgagee for payment of the note; if defaults, can lose the equity and the house but no deficiency payment

A

“Subject To” Mortgage

65
Q

a document that is evidence of a debt; an obligation

A

Note

66
Q

a repayment plan that includes principal and interest the total of which is the same amount

A

Level Payment

67
Q

Lender may adjust the interest on a loan based upon an index

A

Variable Rate

68
Q

a fee charged by the lender for processing a loan

A

Origination Fee

69
Q

a clause in a note that indicates no pre-payment penalty

A

“Or More” Clause

70
Q

a loan repayment record that is consistent

A

Seasoned loan

71
Q

a written promise by a person to pay a debt under the terms of the note

A

Promissory Note

72
Q

the original obligator is relieved of any further loan obligation

A

Novation Clause

73
Q

a written document that when endorsed can be assigned to another

A

Negotiable Instrument

74
Q

an additional charge for paying off a debt before it time

A

Prepayment Penalty

75
Q

a lending term referring to a note and security instrument; note is personal property

A

Paper

76
Q

authorizes holder of junior mortgage to protect that mortgage by curing any default under a prior mortgage; is concerned with default and foreclosure

A

Prior Mortgage Clause

77
Q

requires disclosures of closing costs to buyers and sellers within 72 hours of the loan application; residential up to 4 plex; HUD booklet Settlement Costs and You

A

RESPA or Real Estate Settlement Procedures Act

78
Q

a document issued by a lender bor buyer’s benefit stating the existing loan balance

A

Reduction Certificate

79
Q

a junior mortgage placed on the property to help finance the purchase price; a purchase-money second mortgage is an example

A

Secondary financing

80
Q

an increase in value on a property due to owner’s labor

A

Sweat Equity

81
Q

Truth in Lending Laws apply to residential financing; requires full disclosure of all financing charges; interest rates are expressed in APR

A

Truth in Lending - Regulation Z

82
Q

charging a higher rate in interest than the law allows

A

Usury

83
Q

a line of credit extended by a commercial lender to a mortgage banker; the banker warehouses a number of these loans to be sold later to larger financial institution; as these are sold the mortgage banker earns money over the life of these loans

A

Warehousing

84
Q

seller of a negotiable instrument may not be held responsible for it future payments; investor takes a loss if it goes bad

A

Without Recourse

85
Q

the financial benefit received from an investment

A

Yield

A-5 Chapter 5 Foreclosure, Carryback Documents & Financing (1 decks)

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