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20 Cards in this Set

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Acceleration Clause
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.
Alienation Clause (Due on Sale Clause)
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.
Amortized Loan
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.
Assumption of Mortgage
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.
Blanket Loan
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.
Budget Mortgage
A mortgage with payments set up to cover more than interest and principles reductions.
Default
The nonperformance of a duty, whether arising under a contract or otherwise; failure to meet an obligation when due.
Defeasance Clause
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.
Estoppel Certificate
A document in which a borrower certifies the amount owed on a mortgage loan and the rate of interest.
Foreclosure
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.
Installment Contract
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.
Mortgage
A conditional transfer or pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.
Novation
Substituting a new obligation for an old one or substituting new parties to an existing obligation.
Package Loan
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.
Promissary Note
A financing instrument that states the terms of the underlying obligation, signed by its maker, and is negotiable (transferable to a third party).
Purchase Money Mortgage (PMM)
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.
Redemption
The right of a defaulted property owner to recover his or her property by curing the default.
Subordination Agreement (Clause)
A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.
Trust Deed
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.
Wraparound Loan
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.