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90 Cards in this Set
- Front
- Back
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What is a Lien
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A lien is a charge or a claim against a persons property, made to enforce the payment of money. Whenever someone borrows money, the lender generally requires some form of security (collateral). Security is something of value that the borrower promises to give the lender if the borrower fails to repay the debt
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What is a mechanic Lien
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represents an effort to recover payment for work performed. It is basically a lien for workers on the house.
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Encumbrance
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represents any change or claim that attaches to real property and lessens its value or impairs its use
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Voluntary Lien
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is created intentionally by the property owner’s action, such as when someone takes out a mortgage loan
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Involuntary Lien
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is not a matter of choice: it is created by law. It may be either statutory or equitable
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Statutory Lien
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is created by statute. A real estate tax lien is an involuntary statutory lien which is created by statue without any action by the property owner
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Equitable Lien
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arises out of common law. It is created by a court based on fairness. A court-ordered judgment that requires a debtor to pay the balance on a delinquent charge account, for instance, would be an involuntary equitable lien on the debtors real estate
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General Lien
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affect all the property, both real and personal, of a debtor
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Specific Lien
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are secured by specific property and affect only that particular propertye4
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Priority of Liens
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• Refers to the order in which claims against the property will be satisfied. In general, the rule for priority of liens is “first come, first served.” Liens take priority from the date they are recorded in the public records of the county in the county in which it is located. “Ohio is a ‘race’ state, first in time is first in right.”
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General Real Estate Tax
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Is made up of the taxes levied on real estate by various governmental agencies and municipalities. These taxing bodies include: states; counties; cities, towns, villages; school districts; drainage districts; water districts; sanitary districts; parks, forest preserves, recreation districts
General real estate taxes are based on the value of the property being taxed. |
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Judgements
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The formal decision of a court on the respective rights and claims of the parties to an action or suit. After a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant
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Redemption
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The right of a defaulted property owner to recover his or her property by curing the default
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Express Contract
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• An oral or written contract in which the parties state the contract’s terms and express their intentions in words
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Implied Contract
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a contract under which the agreement of the parties is demonstrated by their acts and conduct
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Consideration
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• (1)That received by the grantor in exchange for his or her deed. (2) Something of value that induces a person to enter into a contract.
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Statute of limitations
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• That law pertaining to the period of time with in which certain actions must be brought to court. Or how long a person has to sue in a court. In Ohio the maximum time is 15 years.
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Earnest Money
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• Money deposited by a buyer under the terms of a contract to be forfeited if the buyer defaults but applied to the purchase price if the sale is closed. Basically a down payment.
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Contingencies
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What ifs and escape clauses in a contract
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Bilateral Contract
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Where all parties to the instrument are legally bound to act as prescribed
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Unilateral Contract
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Where only one party is bound to act
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Novation
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Substituting a new obligation for an old one or substituting new parties to an existing obligation
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Listing Agreement
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A contract between an owner (as principle) and a real estate broker (as agent) by which the broker is employed as agent to find a buyer for the owner’s real estate on the owner’s terms, for which service the owners agrees to pay a commission
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Equitable Title
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• The interest held by a vendee under an installment contract or agreement of sale; the equitable right to obtain absolute ownership to property when legal title is held in another’s name. In other words, when the buyer and seller agree to a sales contract, the buyer receives interest in the land but not the title until the deed is handed over
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Title
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(1) The right to or ownership of land. (2) The evidence of ownership of land.
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Granting Clause
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Words in a deed of conveyance that state the grantor’s intention to convey the property at the present time. This clause is generally worded as “convey and warrant,” “grant,” “grant, bargain, and sell,” or the like
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General Warranty Deed
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Has the best and highest protection
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Special Warranty Deed
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good title when ‘I’ owned it
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Quit Claim
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Transfer Title and Guarentee nothing.
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Trustee's Deed
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a deed executed by a trustee conveying land held in a trust
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Deed pursuant to court order
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Foreclosure
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Alienation
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voluntary-willingly transferred property/involuntary-against will of property transferred
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Testate
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having made and left a valid will
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Testator
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a person who has made a valid will
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Recordation
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The act of recording something legally and officially
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Probate
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A legal process by which a court determines who will inherit a descendents’ property and what the estate’s assets are
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Recording
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The act of entering or recording documents affecting or conveying interest in real estate in the recorder’s office established in each county
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Title Search
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The examination of public records relating to real estate to determine the current state of the ownership
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Title Insurance
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A policy insuring the owner or mortgagee against loss by reason of defects in the title to a parcel of real estate, other than encumbrances, defects, and matters specifically excluded by the policy
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Torrens System
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A method of evidencing title by registration with the proper public authority, generally called the registrar, named for its founder, Sir Rolbert Torrens
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Constructive Notice
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Shows the world a notice of recorded documents
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Chain of title
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The succession of conveyances from some accepted starting point, whereby the present holder of real property derives his or her title
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Abstract of title
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The condensed history of a title to a particular parcel of real estate consisting of a summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification by the abstractor that the history is complete and accurate
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Title Guranty
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Often is furnished by a title insurance company as evidence of
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Uniform Commercial Code
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Is a commercial law statue that has been adopted, to some extent, in all 50 states. It is concerned with personal property transactions, it does not apply to real estate. The UCC governs the documents when personal property is used as a security for a loan.
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The borrower is the?
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mortgagor, who pledges the land to the lender, or mortgagee.
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Title Theory
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: The mortgagor actually gives legal title to the mortgagee and retains equitable title. Legal title is returned to the mortgagor only when the debt is paid in full
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Lien Theory
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states the mortgagor retains both legal and equitable title. The mortgage is nothing more but collateral for the loan.
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Promissory Note
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The borrower’s personal promise to repay a debt according to agreed-on terms.
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Hypothecation
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The term used to describe the pledging of property as security for payment of a loan without actually surrendering possession of the property.
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Mortgage
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A voluntary lien on real estate.
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Usury
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Charging interest in excess of the maximum rate
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Discount Points
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What the lender charges the borrower to make up the difference on money they lose from selling a mortgage to investors. Each point equals 1 percent of the loan amount and is charged as prepaid interest at the closing.
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Prepayment
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The act of paying a loan off early to avoid paying more in the long run through interest.
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Acceleration Clause
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assists the lender in foreclosure. If a borrower defaults, the lender has the right to accelerate the maturity of the debt
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Foreclosure
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When a borrower defaults on the payments of fail to fulfill any of the other obligations set fourth in the mortgage, the lender’s rights can be enforced through foreclosure.
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Deed in lieu of foreclosure:
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an alternative to foreclosure, sometimes known as a friendly foreclosure because it’s carried out by mutual agreement rather than lawsuite.
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Definceny Judgement
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When the foreclosure sale doesn’t produce enough cash to pay the loan balance in full after deducting expenses and accrued unpaid interest, the mortgagee may be entitled to a personal judgment against the borrower for the unpaid interest. This judgment is known as a deficiency judgment.
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Straight Loan
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essentially divides the loan into two amounts, to be paid off seperatly.
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Amortized Loan
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paid off slowly, over time. Most loans and mortgages are amortized loans.
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Baloon Payment Loan
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When the periodic payments are not enough to fully amortize the loan by the time the final payment is due, the final payment is larger than the others. This is a balloon payment.
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Adjustable-rate mortgage
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Originates at one rate of interest. The rate then fluctuates up or down during the loan term based on some objective economic indicator.
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Equity Mortgage
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can be taken out as a fixed loan amount or as an equity line of credit.
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Conventional Loan
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Viewed as the most secure loans because their loan-to-value ratios are the lowest. Security for loan provided solely by the mortgage.
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Private Mortgage Insurance
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One way a borrower can obtain a mortgage loan with a lower down payment. Because the loan-to-value ratio is higher than for other conventional loans, the lender requires additional security to minimize it’s risk.
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Reverse Annuity Mortgage
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Is one in which regular monthly payments are made by the lender to the borrower.
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FHA Loans
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A loan insured by the Federal Housing Administration
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VA Loans
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Loans given to eligible veterans and spouses of veterans from the department of Veterans Affairs.
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Purchase Money Mortgage
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A note and mortgage created at the time of purchase. Its purpose is to make the sale possible.
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Package Loan
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Includes not only the real estate but also all personal property and appliances installed on the premises.
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Blanket Loan
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Covers more than one parcel or lot. It usually is used to finance subdivision developments
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Buydowns
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A way to temporarily lower the initial interest rate on a mortgage or deed of trust loan.
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The Federal Reserve
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made to maintain sound credit conditions, help counteract inflationary and deflationary trends, and create a favorable economic climate.
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Primary Mortgage Market
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Made up of the lenders that originate mortgage loans. These lenders make money available directly to borrowers.
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Secondary Mortgage Market
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here, loans are bought and sold only after they have been funded.
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Regulation Z
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Requires that credit institutions inform borrowers of the true cost of obtaining credit.
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Apprasial
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an estimate or opinion of value based on supportable evidence and approved methods.
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Sales Comparison Approach
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In a sales comparison approach, an estimate of value is obtained by comparing the property being appraised with recently sold comparable properties.
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Cost Approach (5 Steps)
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1. Estimate the value of the land as if it were vacant and available to be put to it’s highest and best use.
2. Estimate the current cost of constructing buildings and improvements. 3. Estimate the amount of accrued depreciation resulting from the property’s physical deterioration. 4. Deduct the accrued depreciation from construction cost. 5. Add the estimated land value to the depreciated cost of the building and site improvements to arrive at the total property value. |
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Income Approach
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based on the present value of the rights to future income. It assumes that the income generated by a property will determine the property’s value.
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The apprasial process
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an orderly set of procedures used to collect and analyze data to arrive at an ultimate value conclusion.
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Restrictive Convenants
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are originated and recorded by a subdivider as a means of controlling and maintaining the desirable quality and character of the subdivision.
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Interstate land full disclosure act
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regulates the interstate sale of unimproved lots. The secretary of housing and Urban Development (HUD) through the office of interstate Land Sales Registration administers the act.
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Fair Housing Act
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Prohibits discrimination on the basis of race, color, religion, sex, handicap, familial status, or national origin
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ECOA
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Prohibits discrimination based on race, color, religion, national origin, sex, marital status, or age in the granting of credit.
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ADA
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Not a housing or credit law, still has a significant effect on the real estate industry. Requires that employers make reasonable accommodations that enable an individual with a disability to perform essential job functions.
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HUD
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Has established rules and regulations that further interpret the practices affected by the law. Administers the fair housing act.
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Escrow
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a method of closing in which a disinterested third party is authorized to act as escrow agent and to coordinate the closing activities
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RESPA
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Enacted to protect consumers from abusive lending practices
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Good Faith Estimate
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May be either a specific figure or a range of costs based on comparable past transactions in the area
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