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43 Cards in this Set

  • Front
  • Back

Hypothecation

Borrower allowed to retain possession and control of property when loan is made

Defeasance clause

Obligates the lender to relinquish the title when the debt is repaid

Title Theory

Lender gets title until loan paid and can foreclose without going to court

Power of sale clause

Allows foreclosure auction sale without going to court

Lien Thoery

Lien created by lender for monetary claim on property. Must sue borrower in court to foreclose

Satisfaction

Lien removed once loan has been repaid

Promissory Note

Contract serving as evidence of the debt and borrowers promise to pay

Holder in due course

Buyer of a note who pays valuable consideration to receive it before it is due

Security Instrument

Provides collateral security for a loan such as a mortgage

Trust deed

Neutral 3rd party holds the deed until the loan is paid off

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

Security deed

Used in GA and conveys title to lender until borrower pays debt

Equity of redemption

Before the sale, the buyer may pay off all debt to get property back

Statutory right of redemption

In some states, after the sale, borrower can pay off all debt to get the property back

Deed in lieu of foreclosure

If both parties agree, the borrower can convey title to lender without a public foreclosure

Mortgaging/granting clause

Pledges property as security for a debt and conveys title to the lender or trustee

Acceleration clause

Lender can call entire amount due when borrower defaults

Receiver clause

Court can appoint an impartial receiver to ensure rents are collected and operating expenses paid after default and prior to foreclosure

Alienation clause

Due on sale

Escalation clause

Allows lender to increase the interest rate at certain times for certain reasons

Exculpatory clause

Says that Mortgage property is the only security for the debt

Subordination clause

Holder of first lien agrees to take a lower position to an anticipated lien to be recorded later

Straight-term mortgage

Interest only with a balloon at end of term

Graduated payment mortgage

Lower monthly payments early in the loan and higher payments later

Budget mortgage loan

Includes all piti in monthly payment

Impounds

Funds held from Budget mortgage in an escrow account to pay taxes and insurance when due

Reverse annuity mortgage

Elderly/retired people can borrow equity from their home as tax free monthly income, lump sum or line of credit

Blanket mortgage

For subdivisions to secure a loan with more than one parcel

Partial release clause

Used in blanket mortgage to allow the release of individual parcels upon payment of a certain amount

Package mortgage loan

Pledges real and personal property as security for a loan

Conventional loan

Not insured or guaranteed by the government

Certificate of reasonable value

Given by Dept of vet affairs that establishes the ceiling permitted for the VA loan amount

Fannie mae

Public company that Provides stability for FHA and va loans by buying loans and reselling

Mortgage-backed securities (mbs)

Loans pooled by fnma and sold as investments

Ginnie mae

Federal agency to buy loans that are not profitable but in the public interest

Freddie mac

Independent agency that buys conventional loans

Federal Equal Credit Opportunity Act

Prohibits discrimination in lending practices

Federal Truth-in-Lending Law

Primarily focusing on regulation z, APR and TIP disclosure, the right of rescission and advertising disclosures

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

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

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

Good faith estimate

Required by RESPA to provide borrower within 3 days of loan app info about costs

Truth in Lending/RESPA Integrated Disclosure Rule (TRID)

Requires borrower to receive a loan estimate and closing disclosure