Nm Re Course

Front 1

Acceleration Clause

Back 1

The clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installment payment or other covenant.

Front 2

Alienation Clause (Due on Sale Clause)

Back 2

The clause in a mortgage or deed of trust that states that the balance of the secured debt becomes immediately due and payable at the lender’s option if the property is sold by the borrower. In effect this clause prevents the borrower from assigning the debt without the lender’s approval.

Front 3

Amortized Loan

Back 3

A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan.

Front 4

Assumption of Mortgage

Back 4

Acquiring title to property on which there is an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including payments.

Front 5

Blanket Loan

Back 5

A mortgage covering more than one parcel of real estate, providing for each parcel’s partial release from the mortgage lien upon repayment of a definite portion of the debt.

Front 6

Budget Mortgage

Back 6

A mortgage with payments set up to cover more than interest and principles reductions.

Front 7

Default

Back 7

The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due.

Front 8

Defeasance Clause

Back 8

A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage loan.

Front 9

Estoppel Certificate

Back 9

A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.

Front 10

Foreclosure

Back 10

A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the mortgage document.

Front 11

Installment Contract

Back 11

A contract for the sale of real estate whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though title is retained by the seller until a future date, which may not be until final payment. Also called a contract for deed or articles of agreement for warranty deed.

Front 12

Mortgage

Back 12

A conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.

Front 13

Novation

Back 13

Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Front 14

Package Loan

Back 14

A real estate loan used to finance the purchase of both real property and personal property, such as in the purchase of a new home that includes carpeting, window coverings, and major appliances.

Front 15

Promissary Note

Back 15

A financing instrument that states the terms of the underlying obligation, signed by its maker, and is negotiable (transferable to a third party).

Front 16

Purchase Money Mortgage (PMM)

Back 16

A note secured by a mortgage or deed of trust given by a buyer, as borrower, to a seller, as lender, as part of the purchase price of the real estate.

Front 17

Redemption

Back 17

The right of a defaulted property owner to recover his or her property by curing the default.

Front 18

Subordination Agreement (Clause)

Back 18

A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.

Front 19

Trust Deed

Back 19

An instrument used to create a mortgage lien by which the borrower conveys title to a trustee, who holds it as security for the benefit of the note holder (the lender); also called a deed of trust.

Front 20

Wraparound Loan

Back 20

A method of refinancing in which the new mortgage is placed in a secondary, or subordinate, position; the new mortgage includes both the unpaid principal balance of the first mortgage and whatever additional sums are advanced by the lender.