Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
21 Cards in this Set
- Front
- Back
|
Acceleration Clause
|
gives the lender the right to call all sums immediately due and payable upon the happening of certain events, such as nonpayment of monthly obligations, nonpayment of real property taxes, or willful destruction of the subject property
|
|
|
Adjustable Rate
|
the rate may move up or down i.e. not fixed for the term of the loan.
|
|
|
Alienation (due-on- sale) Clause
|
a specific type of acceleration clause that gives the lender the right to call the loan due and payable if the borrower conveys legal title to a new owner
|
|
|
Annual Percentage Rate (APR)
|
not an interest rate, but rather a percentage rate that reflects the effective interest rate on the loan, including other prepaid financing charges such as loan fees, prepaid interest, and tax service fees.
|
|
|
Balloon Payment
|
Any payment more than twice the lowest payment amount is called a balloon payment
A balloon payment is prohibited if (1) the term of the loan is for six years or less and (2) the loan is secured by the dwelling place of the borrower. This provision does not apply to loans carried by sellers. |
|
|
Beneficiary
|
lender
|
|
|
Deed of Trust
|
a three-party instrument consisting of a borrower (trustor), a lender (beneficiary), and a neutral third party (trustee). Under a deed of trust (trust deed), the trustor deeds legal title (sometimes called bare legal title or naked title) to the trustee, who keeps the title as security until the promissory note is repaid
|
|
|
Deficiency Judgment
|
A lender sues a borrower after a foreclosure when the proceeds from a foreclosure are not enough to cover the outstanding loan amount
|
|
|
Equal Credit Opportunity Act
|
prohibits lenders from discriminating on the basis of race, color, religion, national origin, age, sex, family size, handicap, or marital status or on the grounds of receipt of income from a public assistance program
|
|
|
Installment Note
|
Most common type of real estate promissory note. An installment note requires payments that include both principal and interest.
|
|
|
Installment Sales Contract
|
an agreement between the seller, called the vendor, and the buyer, called the vendee, where the buyer is given possession and use of the property. In exchange for possession and use, the buyer agrees to make regular payments to the seller. Legal title to the property remains with the seller until an agreed amount has been paid, at which time the seller formally deeds title to the buyer.
|
|
|
Hypothecation
|
give something as security for a loan without giving possession
|
|
|
Junior Deed of Trust
|
Any trust deed other than a first
|
|
|
Leverage
|
using a small amount of your money (equity capital) and a large amount of someone else's money (borrowed capital) to buy real estate (or anything else)
|
|
|
Negative Amortized Loan
|
the loan payment does not cover even the monthly interest. Each month this shortage is added to the principal owed, resulting in an increased loan balance, which, in turn, incurs additional interest.
|
|
|
Real Estate Settlement Procedures Act (RESPA)
|
a fed- eral law requiring that certain forms be provided with regard to closing costs. The law applies whenever a person purchases an owner-occupied residence using funds obtained from institutional lenders that are regulated by a federal agency
|
|
|
Straight Note
|
Frequently referred to as an interest-only note. The borrower agrees to pay the interest, usually monthly, and to pay the entire principal in a lump sum on the due date.
|
|
|
Subordination Clause
|
Where the holder of a senior (first) deed of trust agrees to become a junior lien (second) to pave the way for a new senior (first) deed of trust.
|
|
|
Trustee
|
neutral third party
|
|
|
Trustor
|
borrower
|
|
|
Truth-In-Lending Law
|
The purpose of the law is to help borrowers understand how much it costs to borrow money. The law requires all lenders to show loan costs in the same way. This allows borrowers to compare one lender’s cost against another lender’s cost. The law requires lenders to quote the cost of borrowing, using what is called an annual percentage rate (APR)
Reg Z |
