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17 Cards in this Set
- Front
- Back
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Lien Theory |
The borrower keeps legal title to the property during the period of the loan and the lender places a lien against the property. (Florida is a lien theory state) |
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Title theory (deed of trust) |
The lender holds the title while giving the borrower equitable title and the possessory rights to the property. ( |
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Promissory note |
The promise to repay debt. |
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The promissory note is considered the lenders |
Personal property. |
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to mortgage a property is to |
pledge a property as collateral for the money borrowed on the property. |
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What are the two types of security instruments for a real estate loan? |
A promissory note and a mortgage. |
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What does it mean when a mortgage is "satisfied"? |
The mortgage is paid off |
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Priority of liens |
1. Ad valorem taxes 2. Special Assessment taxes 3. All other liens based on time of recording. |
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Suboordination agreement |
When the second lender has a larger loan balance than the first and gets the first lender to agree to switch positions in the line of priority. (ex lender 1 has 20,000 balance; lender 2 has 50,000 balance; lender 2 gets lender 1 to switch priorities[lender 2 now becomes lender 1]) |
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Junior mortgage |
The mortgage in the secondary position. |
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duties of a borrower in a mortgage |
1. Promise to pay 2. Taxes and Insurance 3. Covenant of good repair |
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Loan origination fee |
what lenders charge to prepare mortgage paperwork |
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Estoppel certificate |
Shows the current balance of a loan (used for selling a loan to another lender) |
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Novation |
a new contract substituted for a first contract |
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wraparound mortgage |
A type of loan that enables a borrower who is paying off an existing mortgage to obtain more financing from a second lender or seller. |
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deficiency judgment |
Issued by the court (during a foreclosure) when there isn't enough money for the debt to be paid. Total assets of the borrower are available for collection by the debt holder. |
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Equitable right of redemption |
The last chance borrowers have to retain their home before foreclosure. Borrowers must come up with full amount of missed payments. |
