Chapter 5

used to evidence the basic obligation or debt, the promise to pay back the money.

• Mortgagor = borrower
• Mortgagee = lender

Mortgagor retains full legal title to property

• Trustor = Borrower 
• Trustee = Holder of limited Title
• Beneficiary = Lender

Vendor = seller = holder of legal title

vendee = buyer = holder of equitable title

I.E. Cal_Vet

Principal payment not made during term of the loan. Involve more interest payment than installment loan.

Liquidation of financial obligation on an installment basic.

Partially Amortized

-Unpaid principal balance due

-Last Payment

Monthly payment not adequate to cover interest due on loan.

unemployment rate

Mortgage

Innocent 3rd party

Simple interest

-Interest charged on a decreasing balance

rate can be increased or decreased

Interest Rate named in note

• rate actually paid
• (Including nominal rate + discount rate)

discount rate = prepaid interest

5%

Buyer is liable, seller is relieved of any liability

Seller remains liable, buyer accepts no liability. Buyer takes over payment while loan remains in seller's name.

Not assumable. Permits lender to demand full payment of loan upon transfer of title.

-no prepayment penalty

-lender would not likely to enforce when deflation occurs

unpaid loan principal sum is due.

Lienholder's priority steps back

benefits trustor

Allows future loan to have priority.

accelerated payoff without prepayment penalty.

permits borrower to borrow additional money without rewritting the mortgage.

record of consistent payments on the loan.

current unpaid principal balance

no government insured

to borrow the maximum as you can to get the loan

• 1) Consumerism
• 2) Land use control
• 3) Economic inflation affects outstanding balance of Loan: benefits the trustor(Owner)

value of money increase

1/8 yield or 0.25%