Real Estate Ch 10 Test 3 Set 2

Front 1

Right of lender to require prepayment. Common for commercial banks.

Back 1

demand clause

Front 2

is a special contract by which the borrower conveys to the lender a security interest in the mortgaged property.

Back 2

mortgage

Front 3

mortgagor = what? mortgagee = what?

Back 3

borrower, lender

Front 4

replaced title theory. under this theory the mortgage gives the lender the right to rely on the property as security for the debt obligation defined in the note, only can be exercised in event of default on note

Back 4

lien theory

Front 5

must be described unambiguously. Descriptions by metes and bonds, by government rectangular survey, or by recorded subdivision plat lot and block number.

Back 5

• Description of the property

Front 6

requires a borrower/mortgagor to maintain property casualty insurance accepting to the lender, giving the lender joint control in the use of the proceeds in case of major damage to the property.

Back 6

insurance clause

Front 7

or impound clause, requires a borrower to make monthly deposits into an escrow account of money to pay such obligations as property taxes, casualty insurance premiums, or community association fees.

Back 7

escrow clause

Front 8

enables the lender to declare the entire loan balance due and payable if default occurs

Back 8

acceleration clause

Front 9

gives the lender the right to “accelerate” the loan, requiring the borrower to pay it off if the property is sold

Back 9

due-on-sale clause

Front 10

This arrangement works as follows:
• The borrower conveys a deed of trust to a trustee, who holds the deed on behalf of both borrower and lender.

Back 10

deed of trust

Front 11

happens when payments are missed (typically for 90 days)

Back 11

foreclosure

Front 12

the lender may allow the borrower simply to convey the property to the lender.

Back 12

Deed in lieu of foreclosure

Front 13

is the ultimate recourse of the lender.
• It is a legal process of terminating all claims of ownership by the borrower, and al liens inferior to the foreclosing lien.

Back 13

foreclosure

Front 14

mortgagor has the right to stop the foreclosure process by producing the amount of the loan balance and paying the costs of the foreclosure process.

Back 14

o Equity of redemption

Front 15

varies among states, typically between six months and a year. However it can range from a few days to as much as 2 years.

Back 15

the period of Statutory right of redemption

Front 16

Property taxes, property assessments, and previous mortgages have ---------` the mortgage of a lender.

Back 16

priority

Front 17

• Because a mortgage loan involves both a note and a mortgage, the lender may have the option, in addition to foreclosure, of simply suing the defaulting borrower on the note.

Back 17

Deficiency judgment

Front 18

the sale of the foreclosure property must be through a Court-administered public auction

Back 18

judicial foreclosure

Front 19

Public auction conducted by trustee or mortgagee for a deed of trust (preferred by lenders)

Back 19

Power of sale/ non-judicial foreclosure

Front 20

No form of bankruptcy can set aside a

Back 20

mortgage lien