Chapter 3 Study Guide (Marketing)

Front 1

accelaration clause

Back 1

allows the lender to demand immediate payment of the entire loan if the buyer defaults

Front 2

deficiency judgement

Back 2

a judgement against a borrower if the foreclosure sale does not bring enough to pay the balance owed

Front 3

first mortage

Back 3

the mortage loan with highest priority for repayment in the event of foreclosure

Front 4

foreclosure

Back 4

the procedure by which a persons property can be taken and sold to satisfy unpaid debt

Front 5

junior mortage

Back 5

any mortage on a property that is subordinate to the first mortage priority

Front 6

mortage

Back 6

a document tht makes property security for the repayment of debt

Front 7

mortagee

Back 7

the party receiving the mortage, THE lender

Front 8

power of sale

Back 8

allows a mortgagee to conduct a foreclosure sale without first going to court

Front 9

promissory note

Back 9

A written promise to repay debt

Front 10

subordinate

Back 10

voluntary acceptance of a lower mortage priority than one would otherwise be entitled to.

Front 11

obligee

Back 11

perso who is loaning money

Front 12

obligor

Back 12

person who is paying off loan

Front 13

covenants

Back 13

to pay taxes, removal of items, carry insurance, keep in good repair

Front 14

partial release

Back 14

releasing part of the property from mortage since it has been paid off by the buyer

Front 15

"subject to "

Back 15

buyer states that he is aware of the existence of a loan and the mortage that secures it, but takes no personal liability to it.

Front 16

novation

Back 16

releases seller from personal obligation created by promissory note, the lender can now only require only the buyer to repay the loan

Front 17

estoppel

Back 17

to stop up, were the amount is asked to verify what is owed and the rate of interest

Front 18

first mortage

Back 18

property that is free and clear of mortage debt; senior mortage

Front 19

second mortage

Back 19

the following mortage; junior mortage

Front 20

power of sale

Back 20

gives lender power to conduct foreclosure and sell the mortage property without taking the issue to court

Front 21

assignment of rents

Back 21

establishes the lenders rights to take possesion and collect rents in the event of loan default

Front 22

beneficiary

Back 22

one for whose beneit a trust is created the in a deed of trust arrangement

Front 23

deed of trust

Back 23

a document that conveys legal title to a nuetral third party as security for a debt

Front 24

naked title

Back 24

title that lacks rights and priveleges usually associated with ownership

Front 25

reconveyance of release deed

Back 25

a document used to reconvey title from the trustee back to the property ower once the debt hasbeen paid

Front 26

trustee

Back 26

one who holds property in trust for another

Front 27

trustor

Back 27

one who creates a trust, the borrower in a deed of trust arrangements

Front 28

borrower

Back 28

trustor

Front 29

lender

Back 29

beneficiary

Front 30

nuetral 3rd party

Back 30

trustee

Front 31

amortized loan

Back 31

a loan requiring periodic payments that include both interest and partial repayment principal

Front 32

balloon loan

Back 32

any loan in which the final payment is larger thann the preceding payment

Front 33

conventional loans

Back 33

real estate loans that are not insured by the FHA or guaranteed by the VA

Front 34

equity

Back 34

the market value of a property less the debt against it.

Front 35

fha

Back 35

ffederal housing admins. (insurance programs)

Front 36

impound or reserve account

Back 36

an account into which the lender places monthly tax and insurance payments

Front 37

loan origination fee

Back 37

the expenses a lender incurs in processing a mortage loan

Front 38

loan to value ratio

Back 38

a percentage reflecting what a lender will lend divided by the sale price or market value of the property whichever is less.

Front 39

maturity

Back 39

the end of the life of a loan

Front 40

PITI payment

Back 40

a loan payment that combines principal, interest, taxes, and insurance

Front 41

term loan

Back 41

a loan that requires only interest paymennts untils the last day of life at which full amount is due

Front 42

amortized loans

Back 42

used mostly in the US today and are not common elsewhere.

Front 43

which is better term loan or amortized loan?

Back 43

amortized loan because the borrower begins paying off the principal along wit hsome of the interest thus making the percentage of the loan APR decrease because of the decrease in size of the principal amount due.

Front 44

discount points

Back 44

points charged to raise the lenders monetary return on a loan

Front 45

truth in lending act

Back 45

requires that a borrower be clearly shown before committing to a loan how much being paid for credit in both dollars and percentage terms

Front 46

APR

Back 46

the annual percentage rate calculated under the truth in lending act

Front 47

credit report

Back 47

a report reflecting the creditworthiness of a borrower by showing past credit history

Front 48

fair credit reporting act

Back 48

federal lawgiving an individual the right to inspect his or her file with the credit buereau and correct any errors.

Front 49

finance charge

Back 49

the total amount the credit will cost over the life of the loann

Front 50

liquid asset

Back 50

asset that is in cash or is readily convertible into cash

Front 51

redlining

Back 51

a lenders refusal to make loans in certain neighborhoods

Front 52

regulation Z

Back 52

federal regulations that implement the enforcement of the truth in lending act

Front 53

trust in lending act

Back 53

a federal law that requires certain disclosures when extending or advertising credit

Front 54

right to riscission

Back 54

right to cancel credit transaction within 3 days which includes saturdays to back out of signing loan paper s