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25 Cards in this Set
- Front
- Back
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PITI |
principal, Interest, Taxes, insurance |
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promissory Note |
Borrower's personal promise to repay a debt according to the agreed terms |
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Interest |
A Charge for use of money, expressed as a percentage ofthe remaining balance of the loan. The amount of borrowed money that has Yet been repaid |
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usury |
limiting the interest rate that maybe Charged on loans. Charging interest in excess of the max rate allowed law |
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Loan origination fee |
The fee to process loans Charged by most lenders to cover the expenses involved in generating the loan. |
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Discount points |
used to increase the lender's yield (rate of return) on its Investment |
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Prepayment Penalty |
money collected if borrower repays loan before the end of the term |
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Hypothecation |
To pledge property as Security for an obligation or loan without giving up possession of it |
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lien Theory |
mortgagor retains both legal and equitable title to property that serves as security for a debt |
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Acceleration Clause |
If a borrower defaults, the lender has the right to accelerate the maturity of the debt. The lender may declare the entire principal balance due and payable immediately |
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Defeasance clause |
A Clause that cancels a specified Right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment |
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Alienation clause |
when property is sold, the lender may either declare the entire debtclue immediately or permit the buyer to assume the loan |
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Straight Loan (interest_only loan) |
Borrower makes periodic payments on The interest only |
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Amortized Loan |
partially pays interest as well as portion ofthe principal owed |
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Adjustable-rate martgage (ARM) |
Begins at one rate of Interest, then fluctuates up or clown during the loan term based on specific economic indicator |
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Negative amortization |
The amount of the loan actually increases (instead of decreasing) |
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Growing - equity mortgage |
uses a fixed interest rate, but payments of principal are increased according to an index or Schedule. (rapid_payoff mortgage) |
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Balloon Payment |
Final payment is bigger than the rest |
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Reverse Mortgage |
Allows a homeowner aged 62 or older to borrow money against the equity built up in the home. Pay in a lump sum or monthly |
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Forclosure |
A legal procedure in which property pledged as security for a debt is sold to satisfy a debt when a borrower defaults |
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Judicial Foreclosure |
Allows The property to be sold by court order after the mortgagee has given public notice |
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Nonjudicial foreclosure |
No court action is required. Notice of foreclosure will be sent if borrower fails to cure the default. |
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Deed in lieu of foreclosure |
carried out by mutual agreement rather than by lawsuit. Eliminates any equity that the homeowner may have had in the property |
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Deficiency Judgement |
If foreclosure sale does not produce enough cash to pay loan balance, the mortgages be entitled to a personal judgment against the borrower for the unpaid balance |
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Short Sale |
The sale price is less than the remaining indebtedness |
