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26 Cards in this Set

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  • Back
A MORTGAGE is:
The grant of an interest in real or personal property with a provision for the release
of that property upon repayment of the debt in
full.
The MORTGAGOR is:
A borrower who gives the mortgage.
The MORTGAGEE is:
The lender who receives the mortgage.
The PROMISSORY NOTE or BOND is:
The primary financing obligation and
makes the mortgagor personally liable for the
debt.
A PERSONAL JUDGEMENT is also called:
A deficiency judgment.
LIEN THEORY hols that:
The mortgage is not a conveyance of land but only a
security.
HYPOTHECATE means to:
Pledge property as
security for a loan without giving possession of
the property to the lender.
A JUNIOR MORTGAGE is:
Any mortgage that is subordinate to another.
The ACCELERATION CLAUSE allows the lender to:
Demand immediate payment of the entire loan if
the borrower defaults.
ALIENATION CLAUSE or DUE ON SALE CLAUSE is a type of:
Acceleration
clause that makes all future payments due when
a property is sold.
The DEFEASANCE CLAUSE:
Provides that the rights of the mortgagee will
come to an end, if and when the debt is repaid in
full.
A RELEASE or DISCHARGE OF MORTGAGE or SATISFACTION PIECE:
Is given to the
mortgagor, stating that the obligation to the mortgagee
has been fulfilled.
A SUBORDINATION CLAUSE:
May be included in a mortgage agreement in
which the lender agrees to allow a subsequently
acquired mortgage to have legal priority.
An ASSIGNMENT is:
The transfer of a mortgage to a third party called an ASSIGNEE.
When buying "SUBJECT TO THE MORTGAGE":
The buyer agrees to take over
the seller's remaining mortgage payments, after
having paid him the equity in the property.
EQUITY is:
The difference between the value of a property and anything owed on it.
A "REDUCTION CERTIFICATE" should be obtained by the buyer from:
The mortgagee verifying the
amount due and the terms of the mortgage when taking title "SUBJECT TO" an existing mortgage.
When "ASSUMPTION OF THE MORTGAGE" occurs, the buyer:
Personally obligates himself to payment of
the entire outstanding debt and becomes a cosigner
on the seller's note.
Novation is:
a three-party agreement under which one party is release from an obligation and another party is substituted.
A MORTGAGE COMMITMENT is:
A contractual promise by the lender to
the buyer promising to provide the funds necessary
to complete settlement, if the conditions
named in the commitment are met.
A REGULATION Z STATEMENT is:
Accompanied by the MORTGAGE COMMITMENT and is required by
the TRUTH IN LENDING ACT to advise borrowers of
the true cost of borrowing by listing loan costs
and disclosing the ANNUAL PERCENTAGE RATE (APR) of the
loan.
The LOAN-TO-VALUE RATIO is:
The ratio between the amount borrowed
and the sales price or appraised value of the
property, whichever is lower.
PRIVATE MORTGAGE INSURANCE (PMI) is:
An insurance
that mortgage lenders require from most homebuyers
who take out a mortgage loan in an
amount in excess of 80% of a home's appraised
value.
HOMEOWNERS PROTECTION ACT OF 1998:
Which
became effective in 1999, establishes rules for
automatic termination and borrower cancellation
of PRIVATE MORTGAGE INSURANCE (PMI) on home mortgages when home equity reaches 22% of the home's value.
A PREPAYMENT PENALTY is:
A special charge or
penalty demanded of a mortgagor when a mortgage
is repaid before it becomes due.
USURY RATE:
is an interest rate in excess of the legally
permitted rate.