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54 Cards in this Set

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  • Back
accelaration clause
allows the lender to demand immediate payment of the entire loan if the buyer defaults
deficiency judgement
a judgement against a borrower if the foreclosure sale does not bring enough to pay the balance owed
first mortage
the mortage loan with highest priority for repayment in the event of foreclosure
foreclosure
the procedure by which a persons property can be taken and sold to satisfy unpaid debt
junior mortage
any mortage on a property that is subordinate to the first mortage priority
mortage
a document tht makes property security for the repayment of debt
mortagee
the party receiving the mortage, THE lender
power of sale
allows a mortgagee to conduct a foreclosure sale without first going to court
promissory note
A written promise to repay debt
subordinate
voluntary acceptance of a lower mortage priority than one would otherwise be entitled to.
obligee
perso who is loaning money
obligor
person who is paying off loan
covenants
to pay taxes, removal of items, carry insurance, keep in good repair
partial release
releasing part of the property from mortage since it has been paid off by the buyer
"subject to "
buyer states that he is aware of the existence of a loan and the mortage that secures it, but takes no personal liability to it.
novation
releases seller from personal obligation created by promissory note, the lender can now only require only the buyer to repay the loan
estoppel
to stop up, were the amount is asked to verify what is owed and the rate of interest
first mortage
property that is free and clear of mortage debt; senior mortage
second mortage
the following mortage; junior mortage
power of sale
gives lender power to conduct foreclosure and sell the mortage property without taking the issue to court
assignment of rents
establishes the lenders rights to take possesion and collect rents in the event of loan default
beneficiary
one for whose beneit a trust is created the in a deed of trust arrangement
deed of trust
a document that conveys legal title to a nuetral third party as security for a debt
naked title
title that lacks rights and priveleges usually associated with ownership
reconveyance of release deed
a document used to reconvey title from the trustee back to the property ower once the debt hasbeen paid
trustee
one who holds property in trust for another
trustor
one who creates a trust, the borrower in a deed of trust arrangements
borrower
trustor
lender
beneficiary
nuetral 3rd party
trustee
amortized loan
a loan requiring periodic payments that include both interest and partial repayment principal
balloon loan
any loan in which the final payment is larger thann the preceding payment
conventional loans
real estate loans that are not insured by the FHA or guaranteed by the VA
equity
the market value of a property less the debt against it.
fha
ffederal housing admins. (insurance programs)
impound or reserve account
an account into which the lender places monthly tax and insurance payments
loan origination fee
the expenses a lender incurs in processing a mortage loan
loan to value ratio
a percentage reflecting what a lender will lend divided by the sale price or market value of the property whichever is less.
maturity
the end of the life of a loan
PITI payment
a loan payment that combines principal, interest, taxes, and insurance
term loan
a loan that requires only interest paymennts untils the last day of life at which full amount is due
amortized loans
used mostly in the US today and are not common elsewhere.
which is better term loan or amortized loan?
amortized loan because the borrower begins paying off the principal along wit hsome of the interest thus making the percentage of the loan APR decrease because of the decrease in size of the principal amount due.
discount points
points charged to raise the lenders monetary return on a loan
truth in lending act
requires that a borrower be clearly shown before committing to a loan how much being paid for credit in both dollars and percentage terms
APR
the annual percentage rate calculated under the truth in lending act
credit report
a report reflecting the creditworthiness of a borrower by showing past credit history
fair credit reporting act
federal lawgiving an individual the right to inspect his or her file with the credit buereau and correct any errors.
finance charge
the total amount the credit will cost over the life of the loann
liquid asset
asset that is in cash or is readily convertible into cash
redlining
a lenders refusal to make loans in certain neighborhoods
regulation Z
federal regulations that implement the enforcement of the truth in lending act
trust in lending act
a federal law that requires certain disclosures when extending or advertising credit
right to riscission
right to cancel credit transaction within 3 days which includes saturdays to back out of signing loan paper s