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22 Cards in this Set

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Term Loan or
Straight Loan
no interest

usually will have ballon payment (final payment principal & interest)
Fully Amortimized
fixed, flat, level, constant payment
equal payment paid monthly.
payment lower the principal
Partially Amortimized Loan
schedule of amortimized payments, followed by a ballon payment at maturity.
i.e. 10 years
Loan To Value (LTV)
What a lender is willing to lend according to precentage of appraised market value
i.e. 80% of 100,000 would be 80,000
Usary
the limit of amount of interest that can be charged

N/A in all states
Va. doesn't have this law
Yield
The return on a loan or the amount of profit that lender makes, stated as a percentage of the amount interest rate loaned.
Mortgage
voluntary lien on real estate, given to secure a debt on the repayment of a obligation(mortage)
Lien Theory
Some states see a mortgage as being purely a lien on real property. The mortgagee(lender) thus has no right of possession but must foreclose the property if the mortgagor(borrower) defaults
Title Theory
States split the title of mortgaged property into legal title, held by the (morgagee) lender, and equitable title, held by the (mortgagor) borrower. The borrower gains full title to the property after paying the mortgage Contrast with lien theory states
Promissory Note (note)
is a contract between a borrower(obligator), and a lender (obligee)
Promissory Note has 5 parts
To be valid

1 must be in writing
2 be between borrower & lender who have authority to sign
3 state promise of how much to pay
4 show terms of payment
5 be signed by the borrower(principal)
6 be voluntarily delivered
Co-Borrowers
both personally liable for debt.

each are jointly and severally liable, and not just a portion but the whole debt.
Exculpatory Clause
put in a mortgage when a lend holds property as security for debt.
REGAGRDLESS OF LENDER WOULD GET AT FORECLOSER SALE THEY MUST ACCEPT IT
Hypothecation
means borrower holds possession of property while paying debt. (property is collateral for debt)
Mortgagor / Obligator
Mortgagee / Obligee
Mortgagor / Obligator
is buyer

Mortgagee / Obligee
is lender
Defeasance Clause
lender must cancel mortgage after paid.

also called defeat the debt giving borrower full rights
Alienation Clause or due-on-sale clause
lender has right to entire balance if title is transfered

1 can approve the party who will assume loan
2 can demand balance paid immeadiately
Condemnation Clause
if property condemned the lender gets paid first
Subordination Clause
Lender allows a newer mortgage to be 1st, and take 2nd order (as long as there is another mortgage.
Subordination Agreement
Lender allows a future mortgage to go ahead

usuall found in purchase-money mortgage(owner finacing)i.e. constrution loan for a developer
Covenant to Pay Indebtedness
borrower promises to pay amount owed according to terms
Covenant to Pay Taxes
borrower promises to pay taxes & assessment in timely manner