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43 Cards in this Set
- Front
- Back
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Hypothecation |
Borrower allowed to retain possession and control of property when loan is made |
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Defeasance clause |
Obligates the lender to relinquish the title when the debt is repaid |
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Title Theory |
Lender gets title until loan paid and can foreclose without going to court |
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Power of sale clause |
Allows foreclosure auction sale without going to court |
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Lien Thoery |
Lien created by lender for monetary claim on property. Must sue borrower in court to foreclose |
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Satisfaction |
Lien removed once loan has been repaid |
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Promissory Note |
Contract serving as evidence of the debt and borrowers promise to pay |
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Holder in due course |
Buyer of a note who pays valuable consideration to receive it before it is due |
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Security Instrument |
Provides collateral security for a loan such as a mortgage |
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Trust deed |
Neutral 3rd party holds the deed until the loan is paid off |
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Naked title |
Held by trustee in a trust deed and has authority only for such tasks which are necessary to fulfill terms of the trust |
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Security deed |
Used in GA and conveys title to lender until borrower pays debt |
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Equity of redemption |
Before the sale, the buyer may pay off all debt to get property back |
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Statutory right of redemption |
In some states, after the sale, borrower can pay off all debt to get the property back |
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Deed in lieu of foreclosure |
If both parties agree, the borrower can convey title to lender without a public foreclosure |
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Mortgaging/granting clause |
Pledges property as security for a debt and conveys title to the lender or trustee |
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Acceleration clause |
Lender can call entire amount due when borrower defaults |
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Receiver clause |
Court can appoint an impartial receiver to ensure rents are collected and operating expenses paid after default and prior to foreclosure |
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Alienation clause |
Due on sale |
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Escalation clause |
Allows lender to increase the interest rate at certain times for certain reasons |
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Exculpatory clause |
Says that Mortgage property is the only security for the debt |
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Subordination clause |
Holder of first lien agrees to take a lower position to an anticipated lien to be recorded later |
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Straight-term mortgage |
Interest only with a balloon at end of term |
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Graduated payment mortgage |
Lower monthly payments early in the loan and higher payments later |
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Budget mortgage loan |
Includes all piti in monthly payment |
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Impounds |
Funds held from Budget mortgage in an escrow account to pay taxes and insurance when due |
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Reverse annuity mortgage |
Elderly/retired people can borrow equity from their home as tax free monthly income, lump sum or line of credit |
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Blanket mortgage |
For subdivisions to secure a loan with more than one parcel |
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Partial release clause |
Used in blanket mortgage to allow the release of individual parcels upon payment of a certain amount |
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Package mortgage loan |
Pledges real and personal property as security for a loan |
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Conventional loan |
Not insured or guaranteed by the government |
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Certificate of reasonable value |
Given by Dept of vet affairs that establishes the ceiling permitted for the VA loan amount |
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Fannie mae |
Public company that Provides stability for FHA and va loans by buying loans and reselling |
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Mortgage-backed securities (mbs) |
Loans pooled by fnma and sold as investments |
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Ginnie mae |
Federal agency to buy loans that are not profitable but in the public interest |
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Freddie mac |
Independent agency that buys conventional loans |
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Federal Equal Credit Opportunity Act |
Prohibits discrimination in lending practices |
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Federal Truth-in-Lending Law |
Primarily focusing on regulation z, APR and TIP disclosure, the right of rescission and advertising disclosures |
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Real Estate Settlement Procedures Act (RESPA) |
Provides consumers with timely disclosures regarding closing costs, prohibits kickbacks and referral fees and places limitations on the use of escrow accounts |
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Right of rescission |
Part of truth in lending law when dealing with refinancing. Lender must inform borrower they have the right to cancel for 3 days after closing or receiving the disclosure |
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Regulation z |
Requires disclosures on all personal loans up to $50k, all residential real estate transactions involving credit. Exemptions: corporation loans, farmland, commercial loans, and seller financing |
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Good faith estimate |
Required by RESPA to provide borrower within 3 days of loan app info about costs |
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Truth in Lending/RESPA Integrated Disclosure Rule (TRID) |
Requires borrower to receive a loan estimate and closing disclosure |
