• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/53

Click to flip

53 Cards in this Set

  • Front
  • Back
A(n) __ __ 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.
acceleration clause
Under the __ rate plan, the rate
may move up or down. Therefore, the monthly payment may decrease
or increase over the life of the loan.
adjustable
The distance between the actual rate paid by the borrower and the index
is called the __. A typically, it's 2 percent to 3 percent.
margin
Although not required, most lenders place a(n) __ on how high the
rate of an ARM can climb.
cap
A maximum change of 1 percent per
__-month adjustment period being typical for an ARM
six
Usually, the maximum term to which a 30-year ARM (to allow the borrower to keep the same payment when interest rates rise) may be extended is __ years.
forty
Some ARMs may be __ amortized loans. This means the
payments may not cover the annual interest.
negative
Some lenders offer a convertible feature that allows the borrower
to convert an ARM loan to a fixed interest rate loan or a fixed rate
loan to an ARM. The conversion is only offered during a certain
“window period,” usually from the beginning of the second year
through the end of the __ year.
fifth
________ is 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.
alienation (due-on sale) clause
All due-on sale clauses are enforceable, except for transfers between spouses and __ trusts.
family
The __ is 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.
APR
If the monthly payment isn't enough to cover the principal, then on the due date the remaining unpaid principal must be paid in a
lump sum, often referred to as a(n) __ payment. (Any payment more than twice the lowest payment amount is called this).
balloon
A deed of trust is a three-party instrument consisting of a borrower (__), a lender (__), and a neutral third party (__).
trustor; beneficiary; trustee
The __ __ Opportunity Act prohibits lenders from discriminating on the basis of race, color, religion, national origin, age, sex, family __, handicap, or marital __, or because of using welfare.
Equal Credit; size; status
For purposes of the law, unmarried means single, __, or widowed.
divorced
ECOA: A lender cannot ask if the borrower is divorced or __. The lender CAN ask if the borrower is married, unmarried, or separated.
widowed
ECOA: lender cannot ask the borrower about receiving alimony
or child support unless the borrower is first __ that the information need not be revealed.
notified
ECOA: the lender can ask about __ to pay alimony or child support.
obligations
ECOA: A lender cannot ask about birth __ practices or childbearing.
control
ECOA: A lender must notify the borrower within __ days about
what action has been taken on his or her loan application. In case of __, if requested, the reason must be given.
thirty; disapproval
A(n) __ note requires payments
that include both principal and interest. It is by far the most common type of note.
installment
The __ note is frequently referred to as an interest-only note. Under this note, the borrower agrees to pay the interest, usually monthly, and to pay the entire principal in a lump sum on the due date.
straight
In essence, under a(n) __ sales contract, the seller (vendor) becomes the lender. Outside lending institutions, such as banks and mortgage companies, are not needed in such a transaction.
installment
To pledge something as security for a loan without giving possession of it is called __. In a mortgage agreement, the consumer's __ becomes collateral until the mortgage loan is paid off.
hypothecation
house
Any trust deed other than a first is called a __ deed of trust or loan or lien.
junior
__can be described as using a small amount of your money (equity capital) and a large amount of someone else’s money (borrowed capital) to buy real estate.
Leverage
A negative __ loan means that 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 __.
amortized; interest
A(n) __ penalty clause allows a lender to charge the borrower a penalty if the loan is paid before the scheduled due date.A typical prepayment penalty is 80% of six months’ interest on the remaining balance of the loan.
prepayment
The Real Estate __ Procedures Act (RESPA) is a federal law requiring that certain forms be provided with regard to
closing costs.
Settlement
RESPA applies whenever a person purchases an owner-occupied residence using funds obtained from institutional lenders that are regulated by a(n) __ agency. (almost all loans that are not from private individuals)
federal
RESPA rules require the lender to furnish the borrower with a
special information __ and a good faith estimate of closing costs __ days from the time the prospective borrower files an application for a real estate loan.
booklet; three
A(n) __ clause is 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.
This is most common when the holder of the first loan on vacant
land agrees to allow a new construction loan to be put on record as a __ deed of trust.
subordination; first
Truth-in-__Law, which resulted in a provision called Regulation __, requires lenders to quote an APR which is an effective interest rate (includes costs and fees)
Lending, Z
If the first trust deed lender begins to foreclose, the second trust deed lender can step in and make the __s due on the first loan. This will stop
the first lender from foreclosing.
payments
After making payments for the first deed holder, the holder of the second trust deed loan then demands repayment from the borrower. If the borrower fails to repay, the holder of the second
trust deed __s.
forecloses
Trust deeds contain a __-of-sale clause, which empowers the trustee, in the event of default by the trustor, to sell the property at public auction.
power
Foreclosure Notice of default (NOD): After 90 day grace period, the beneficiary orders the trustee to record a notice of default in the county where the property is located. This begins a __ period.
reinstatement
Foreclosure Notice of default (NOD): Within ten days after filing the notice of __, a copy must be sent by registered or certified mail to the borrower, junior lienholders, and anyone whose “request for notice” appears on record.
default
Foreclosure Notice of default (NOD): During this reinstatement period, which runs until five days before the date of __, the trustor (borrower) can reinstate the loan by paying all delinquent installments + foreclosure costs + trustee’s fees. This is referred to as the right of __.
sale; reinstatement
Foreclosure: In addition to recording a notice of default, a trustee must also record a notice of sale, which is filed if the borrower fails to __ the loan.
reinstate
Foreclosure: The notice of sale must be posted in a __ place, such as a courthouse, and in some conspicuous place on the property, such as the front door.
public
Foreclosure: At final sale, ANY person may bid on the property via public auction. The lender foreclosing can submit the amount owed the lender as a bid in lieu of __. Highest bidder wins.
cash
Foreclosure: If the trustor waits until the 5 days before final sale, the lender can demand past due __ + foreclosure costs + the ENTIRE BALANCE of the loan!!
payments
A(n) __ mortgage (or "deed of trust"), also called an all-inclusive
trust deed (AITD),
wraparound
An all-inclusive trust deed (AITD), is a financing device used to increase the lender’s __ upon the sale of real property and to make it easier for the __ to finance the purchase.
yield; buyer
Under 3 financing instruments, the seller is known as the vendor:
- An __ sales contract
- __ of sale
- __ of sale
installment
contract
agreement
The Real Property __ Law is a California law that requires full disclosure when a borrower procures a loan through a mortgage loan __.
Loan; broker
The Real Property Loan Law does
NOT apply to first deed of trust loans of $__ or more or second deed of trust loans of $__ or more.
$30,000; $20,000
The Real Property Loan Law, max loan broker commission:
__ deed term: <2 yr, 2-3 yr, >3: 5%, 5%, 10%
__ deed term: <2 yr, 2-3 yr, >3: 5%, 10%, 15%
First; Second
The Real Property Loan Law also limits in the amount of costs and expenses, other than commissions to __%, but NO LESS than $__.
5%; $390
A(n) __ judgment is where a lender sues a borrower after a foreclosure when the proceeds from a foreclosure are not enough to cover the outstanding loan amount.
deficiency
If a buyer purchased SUBJECT TO a seller’s existing loan, the __ is primarily liable and the deficiency action would be brought against them.
seller
A(n) __ mortgage or deed of trust, also called an all-inclusive
trust deed (__), is a financing device used to increase the lender’s
yield upon the sale of real property and to make it easier for the buyer
to finance the purchase.
wraparound; AITD