Re Ch.14

Front 1

Hypothecation

Back 1

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

Front 2

Defeasance clause

Back 2

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

Front 3

Title Theory

Back 3

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

Front 4

Power of sale clause

Back 4

Allows foreclosure auction sale without going to court

Front 5

Lien Thoery

Back 5

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

Front 6

Satisfaction

Back 6

Lien removed once loan has been repaid

Front 7

Promissory Note

Back 7

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

Front 8

Holder in due course

Back 8

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

Front 9

Security Instrument

Back 9

Provides collateral security for a loan such as a mortgage

Front 10

Trust deed

Back 10

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

Front 11

Naked title

Back 11

Held by trustee in a trust deed and has authority only for such tasks which are necessary to fulfill terms of the trust

Front 12

Security deed

Back 12

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

Front 13

Equity of redemption

Back 13

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

Front 14

Statutory right of redemption

Back 14

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

Front 15

Deed in lieu of foreclosure

Back 15

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

Front 16

Mortgaging/granting clause

Back 16

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

Front 17

Acceleration clause

Back 17

Lender can call entire amount due when borrower defaults

Front 18

Receiver clause

Back 18

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

Front 19

Alienation clause

Back 19

Due on sale

Front 20

Escalation clause

Back 20

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

Front 21

Exculpatory clause

Back 21

Says that Mortgage property is the only security for the debt

Front 22

Subordination clause

Back 22

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

Front 23

Straight-term mortgage

Back 23

Interest only with a balloon at end of term

Front 24

Graduated payment mortgage

Back 24

Lower monthly payments early in the loan and higher payments later

Front 25

Budget mortgage loan

Back 25

Includes all piti in monthly payment

Front 26

Impounds

Back 26

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

Front 27

Reverse annuity mortgage

Back 27

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

Front 28

Blanket mortgage

Back 28

For subdivisions to secure a loan with more than one parcel

Front 29

Partial release clause

Back 29

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

Front 30

Package mortgage loan

Back 30

Pledges real and personal property as security for a loan

Front 31

Conventional loan

Back 31

Not insured or guaranteed by the government

Front 32

Certificate of reasonable value

Back 32

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

Front 33

Fannie mae

Back 33

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

Front 34

Mortgage-backed securities (mbs)

Back 34

Loans pooled by fnma and sold as investments

Front 35

Ginnie mae

Back 35

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

Front 36

Freddie mac

Back 36

Independent agency that buys conventional loans

Front 37

Federal Equal Credit Opportunity Act

Back 37

Prohibits discrimination in lending practices

Front 38

Federal Truth-in-Lending Law

Back 38

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

Front 39

Real Estate Settlement Procedures Act (RESPA)

Back 39

Provides consumers with timely disclosures regarding closing costs, prohibits kickbacks and referral fees and places limitations on the use of escrow accounts

Front 40

Right of rescission

Back 40

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

Front 41

Regulation z

Back 41

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

Front 42

Good faith estimate

Back 42

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

Front 43

Truth in Lending/RESPA Integrated Disclosure Rule (TRID)

Back 43

Requires borrower to receive a loan estimate and closing disclosure