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35 Cards in this Set

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Acceleration Clause
A clause in a mortgage, land purchase contract or lease stating that, upon default of any terms of original contract, the balance of the obligation should at once become due and payable.
Adjustable Rate Mortage
A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.
Ballon Mortage
One in which the scheduled payment will not fully amortize the loan over the mortgage term. Therefore, it requires a final pay called a balloon payment, larger than the uniform payments, to fully satisfy the debt
Conventional Loan
A loan made with real estate as security, and not involving government participation in the form of insuring (FHA) or guaranteeing (VA) the loan. The lender (institution or private party) looks solely to the credit of the borrower and the security of the property to assure payment of the debt.
Deed of Trust
An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary), and reconveyed upon payment in full.
Defeasance Clause
A clause to terminate a partys rights in an instrument under specified conditions" such as reconveyance of title upon payment of debt. """
Due on Sale Clause
Provision in a mortgage or deed of trust allowing the lender to demand immediate payment of the loan balance upon sale of the property. See ALIENATION CLAUSE.
Equal Credit Opportunity Act
Federal law passed in 1974, to prohibit lenders from discrimination in the granting of credit on the basis of race, creed, color, religion, national origin, sex, marital status, age, or because income comes from public assistance programs.
Construction Loan
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
FNMA (Fannie Mae)
See Federal National Mortgage Association.
Amortized Loan
A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal. Also called a Level Payment Loan.
Assumed to Agree and Pay
An agreement to become personally liable for the terms and conditions of a mortgage, including the payments.
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
Good Faith Estimate
Any act done with honest intent. Bona Fide.
Graduated Payment Mortage
A mortgage that has payments beginning at less than interest only, and gradually increase at specified times (usually once each year for seven years), then level off and stay the same for the balance of the loan term.
Holder in Due Course
Person who, in good faith and for value, obtains a promissory note or check before it was overdue, and who does not have notice that it had been previously dishonored, and does not have knowledge of any defects.
Installment Land Contract
Purchase of real estate wherein the purchase price is paid in installments over a long period of time and title is retained by seller. Upon default, the payments are forfeited. See also LAND
Land Contract
A contract for the sale of real or personal property in which possession is delivered to the buyer, title to remain vested in the seller until all the conditions of the contract have been fulfilled. (See CONDITIONAL SALES CONTRACT)
Loan Commitment
1) Title insurance term for the preliminary report issued before the actual policy. Said report shows the condition of title and the steps necessary to complete the transfer of title as contemplated by buyer and seller. (2) A written promise to make or insure a loan for a specified amount and on specified terms. (See COMMITMENT)
Lock in Clause
A clause in a note, mortgage, or trust deed that prevents prepayment.
1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for the repayment of a loan.
A bank or other financial institution that lends money to the borrower. The borrower is considered the mortgagor.
The person who borrows money to purchase. The lender is called the mortgagee
Package Mortgage
A trust deed or mortgage, secured by both real property and personal property (appliances, carpeting, etc.).
Prepayment Privilage
The right a debtor has to pay off all, or a part of, the debt, without a penalty or fee being charged, before the debt becomes due.
Promissory Note
A written promise to repay a specified amount over a specified period of time.
Purchase Money Mortgage
Deed of trust, mortgage or land contract given to the seller to secure payment of the balance of the purchase price or a deed of trust, mortgage or land contract on an owner-occupied dwelling of four units or less, given to a lender to secure repayment of a loan that was used to purchase the property.
Savings and Loan Associations
Established to promote "thrift" and home ownership by loaning out the depositors' deposits, in the form of residential home mortgages.
Seasoned Loan
A loan with good payment record.
Secondary Mortgage Market
Market place for the sale and purchase of existing trust deeds and mortgages. See also FNMA, GNMA, FHLMC, etc.
Straight Note
A note in which the principal is paid in one sum.
Subject To
The transfer of rights to pay a debt from one party to another, with the original party remaining liable for the debt if the second party defaults.
When the purchase of real estate is made primarily for investment purposes financing is often conducted by a group instead of by an individual. One person may not have sufficient capital for the purchase of the desired equity, therefore, two or more persons may join in the purchase and take title in common (trusteeships are often used). Pooling money in this fashion makes it possible for a person of limited financial means to share in the profits of a real estate investment.
The Federal Reserve Boards "Regulation Z"" which requires disclosure of certain loan terms to the borrower" before the obligation is effective. "
Wrap-Around Mortage
A loan given to a buyer for the remaining balance on a seller's first mortgage and an additional amount requested by the seller. Payments on both amounts are made to the lender who holds the wraparound loan