Real Estate Chpt 12

Front 1

Florida is a _theory state

Back 1

Lien theory

Front 2

Allows the Borrower to retain the ownership of the property during the loan period, the lender records the mortgage creating a lien against the property

Back 2

Lien theory

Front 3

__ note is a legal instrument that includes the borrower's promise to repay the loan with interest

Back 3

Promissory note

Front 4

A promissory note that is secured by a mortgage is referred to as a

Back 4

Secured note

Front 5

Hypothecation is

Back 5

The pledge of property as security for a loan

Front 6

The mortgagor is the

Back 6

property owner

Front 7

The mortgagee is

Back 7

The lender/ the party receiving the mortgage from the property owner

Front 8

A mortgage lien gives the lender the ability to __ on the property

Back 8

Foreclose

Front 9

When a loan has been paid in full the mortgagor should receive a letter from the mortgagee/ lender in _ days

Back 9

60 days

Front 10

The clause that allows the lender to declare the entire outstanding balance due and payable immediately is

Back 10

The Acceleration Clause

Front 11

The only legally necessary clause in a mortgage is the

Back 11

Defeasance Clause

Front 12

The clause that stipulates if the property is sold the entire loan balance is due immediately

Back 12

Due on Sale Clause

Front 13

Clause that keeps the lender in check as long as the borrower performs as agreed in the note and mortgage

Back 13

Defeasance Clause

Front 14

Clause that allows lender to increase the interest rate based on the occurrence of an event such as consistant late payments

Back 14

Escalation clause

Front 15

Clause that limits the lenders rights in a foreclosure to the amount received from the sale of the foreclosed property

Back 15

Exculpatory Clause

Front 16

Clause that allows the borrower to borrow additional funds as the balance is paid down similar to a revolving line of credit

Back 16

Open end clause

Front 17

Clause that allows the borrower to pay off the loan early

Back 17

Prepayment clause

Front 18

A __ clause is used in mortgages on income producing real estate

Back 18

Receivership

Front 19

Clause that is found in mortgages covering more than one parcel of land usually for builders and developers.

Back 19

Release clause- allows release of individual lot for payment to the construction lender of a specified amount of money.

Front 20

The clause that asks the court to appoint a trustee/ receiver to manage property in cause the investor defaults

Back 20

Receivership Clause

Front 21

Loan clause that gives a borrower the right to cure a defaulted loan by paing loan payment in arrears

Back 21

Right to Reinstate Clause

Front 22

Clause that allows a lien reocrded earlier to be palced in a secondary position to a new lien

Back 22

Subordination Clause

Front 23

The difference between the current market value of a property and the amount the owner still owes on the mortgage

Back 23

Equity

Front 24

The degree to which a property is financed, as equity increases the __ percentage decreases

Back 24

Loan to Value

Front 25

Money collected by the lender from the borrower to pay hazard insurance and property taxes when they become due is held in a

Back 25

Escrow/ Impound Account

Front 26

Administrative and overhead fees charged by the lender

Back 26

Mortgage Loan Fees

Front 27

For Loan origination fees 1 point is equal to __% of the amount borrowd

Back 27

1%

Front 28

The loan process of risk evaluation is called

Back 28

Mortgage Underwirting

Front 29

The loan application is generally taked by a _

Back 29

Loan Processor

Front 30

The mortgage ___ reviews and verifies loan application information and determines if the applicant is qualified and is low risk

Back 30

Underwriter

Front 31

The ___ ____ Opportunity Act requires lenders to judge every loan applicant on the basis of the applicants own credit rating and income

Back 31

Equal Credit

Front 32

IF a spouse is required for a loan application both parties become ____ and ___ liable for the debt

Back 32

Jointly and Severally

Front 33

To determine if a property is of sufficient value the underwriter is concerned withe the appraiser's _

Back 33

Estimate

Front 34

A loan applicant is evaluated on 3 criteria

Back 34

Credit History, Income and Other Assests

Front 35

Upfront payment to the lender in exchange for a lower mortgage rate, which decreases the monthly mortgage payment for the life of the loan

Back 35

Discount Points

Front 36

The rate actually received by the lender after any points are applied is the

Back 36

Effective Yield

Front 37

Principal Interest Taxes and Insurance / Monthly Gross Income =

Back 37

Housing Expense Ratio

Front 38

PITI + Other monthly obligations/ Monthly Gross Income=

Back 38

Total Obligations Ratio

Front 39

Conventional housing ratio expense ratio is

Back 39

28%

Front 40

Conventional total obligations ratio is

Back 40

36%

Front 41

FHA housing expense ratio is

Back 41

31%

Front 42

FHA total obligations ratio is

Back 42

43%

Front 43

The percentage of the property's value that is represented by the loan

Back 43

Loan to Value Ratio

Front 44

Loan Amount/ Purchase Price or Appraised Value =

Back 44

Loan to Value Ratio

Front 45

Mortgages that do not contain a due on sale clause can be assumed by a buyer without permission of the lender this is called

Back 45

Assumption of the motgage

Front 46

Subsituting the sellers name with the borrower's name on the loan is called

Back 46

Novation

Front 47

When the property is sold and the original borrower (the seller) remains liable for the balance of the original loan

Back 47

Subject to the mortgage

Front 48

A lender can sell a loan through assignment. The lendor becomes the

Back 48

Assignor

Front 49

The investor who obtaines the right to receive the income of the loan assigned is the

Back 49

Assignee

Front 50

The right of the borrower to cure the default before foreclosure is called

Back 50

Equity of Redemption

Front 51

Lis Pendens means

Back 51

Pending Litigation

Front 52

When the lender brings suit in court agains the borrower in default requesting a judgment

Back 52

Foreclosure Process

Front 53

Lien holders not paid from the proceeds of the foreclosure may obtain a

Back 53

Deficiency judgment

Front 54

When the lender brings suit in court to prove default it is called a ___ foreclosure

Back 54

Judicial

Front 55

An alternative to a foreclosure sale the borrower in default can voluntarily deed a property to the lien holder in lieu of payment of a debt

Back 55

Deed in Lieu of Foreclosure

Front 56

A sale transaction in which a seller confronted with foreclosure enters a settlement to a sales price that is below the outstanding loan balance

Back 56

Short Sale

Front 57

A _ letter can verify the outstanding balance of a mortgage

Back 57

Estoppel