Section 13 Re

Front 1

Acceleration clause

Back 1

Authorizes the mortgagee to accelerate or advance the due date of the entire unpaid balance and call the entire debt due and payable if the mortgagor defaults

Front 2

Assignment of mortgage

Back 2

Legal instrument that states that the mortgagee assigns the mortgage and promissory note to the purchaser

Front 3

Assumption

Back 3

Obligates the buyer to assume liability for the debt

Front 4

Blanket mortgages

Back 4

Pledge a number of parcels, usually building lots as security for the loan

Front 5

Buydown

Back 5

To temporarily lower the interest rate on a mortgage

Front 6

Contract for deed

Back 6

Financing method in which the title to the real property remains w the seller until the loan is repaid

Front 7

Deed in lieu of foreclosure

Back 7

Friendly foreclosure in which the mortgagor gives title to the mortgagee

Front 8

Default

Back 8

Occurs when a borrower fails to fulfill certain obligations agreed to in the promissory note

Front 9

Defeasance clause

Back 9

Requires lender to convey legal title to the borrower once the debt is repaid; in lien theory states the clause requires the lender to release the mortgage lien when the debt is repaid

Front 10

Discount points

Back 10

Are an extra up front fee charged by lenders to increase the real yield or the apr

Front 11

Due on sale clause

Back 11

Allows the mortgagee to call sue the outstanding loan balance plays accrued interest thereby preventing the loan assumption

Front 12

Equity

Back 12

The monetary interest the owner has in property over and above the mortgage indebtedness

Front 13

Equity of redemption

Back 13

Allows the mortgagor to prevent foreclosure from occurring by paying the mortgagee the principal and interest play any expenses the lender has incurred in attempting to collect the debt

Front 14

Escrow accounts

Back 14

Required by most lenders to set aside funds to cover future payments for taxes, assessments, private mortgage insurance, and hazard insurance

Front 15

Estoppel certificate

Back 15

Signed by the borrower verifying the amt of the unpaid balance, the rate of interest, and the date to which the interest has been paid prior to the assignment

Front 16

First mortgage

Back 16

The first mortgage loan to be executed and recorded

Front 17

Foreclosure

Back 17

Legal procedure whereby property used as security for a debt is sold to satisfy the debt owing to default in payment of the mortgage, note, or default of other terms in the mortgage document

Front 18

Hypothecation

Back 18

The pledging of property as security for payment of a loan without surrendering possession of the property

Front 19

Interest

Back 19

Cost for the use of borrowed funds

Front 20

Junior mortgage

Back 20

Mortgage that is behind in priority to the first mortgage

Front 21

Land development loans

Back 21

Finance the installation of the on site and off site improvements

Front 22

Lien theory

Back 22

Treats a mortgage solely as a security interest in the secured real property w title retained by the mortgagor

Front 23

Lis pendens

Back 23

Notice of pending legal action, filed before initiating a lawsuit

Front 24

Loan origination fee

Back 24

Finance fee charged by a lender for making a mortgage

Front 25

Loan servicing

Back 25

Extra source of income for lenders earned by handling the loan payment collection and record keeping for the mortgages it originates

Front 26

Loan to value ratio

Back 26

The relationship between the amount borrowed and the appraised value

Front 27

Mortgage

Back 27

Security instrument signed by the mortgagor to voluntarily pledge the property as collateral for the debt

Front 28

Mortgagee

Back 28

Lender who holds a mortgage on specific property as security for the money loans to the borrower

Front 29

Mortgagor

Back 29

The borrower who gives a mortgage on the property in order to obtain a loan from a lender

Front 30

Notenovati

Back 30

Legal instrument that represents the evidence of a debt and a promise to repay the debt

Front 31

Novation

Back 31

Substitution of a new debtor and release of a former debtor for an existing debt by mutual agreement and w approval of the mortgagee

Front 32

Partial release clauses

Back 32

Commonly used in blanket mortgages and provide for the release of individual parcels from the blanket mortgage upon payment of a specified amount

Front 33

PITI

Back 33

Monthly principal, interest, taxes, and insurance payment charged on a mortgage loan

Front 34

Prepayment clause

Back 34

Allows the borrower to pay off part or all of the mortgage debt, without penalty or other fees, prior to maturity

Front 35

Prepayment penalty

Back 35

Allows an extra charge if any amt of the loan is paid off early

Front 36

Receivership clause

Back 36

Allows a receiver to be appointed to collect income from a property and use the income to make mortgage payments

Front 37

Right to reinstate

Back 37

The mortgagor’s right to reinstate the original repayment terms in the note after the lender initiated the acceleration clause

Front 38

Satisfaction of mortgage

Back 38

Recordable instrument provided by the lender within 60 days of payoff as evidence the mortgage debt is paid in full

Front 39

Short sale

Back 39

Involves a real estate transaction where the net proceeds at closing will not satisfy the payoff amount of mortgages and other liens on the property

Front 40

Subject to the mortgage

Back 40

Occurs when a buyer makes regular periodic payments in the mortgage but does not assume responsibility for the mortgage note

Front 41

Subordination agreement

Back 41

Provides that the lender voluntarily will allow a subsequent mortgage to take priority over the lenders otherwise superior mortgage

Front 42

Takeout commitment

Back 42

Commitment by a permanent lender to take out the interim lender by paying off the construction loan leasing the developer w a permanent long term loan once the project is complete

Front 43

Title theory

Back 43

Consider the mortgagee to have legal title to the mortgaged property and the mortgagor has equitable title until the debt is repaid