Chp 14 Real Estate Financing Principles

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Chp 14 Real Estate Financing Principles
2013-08-14 15:02:01
Real Estate

Real Estate
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  1. The clause in a mortgage or deed of trust that
    can be enforced to make the entire debt due immediately if the borrower
    defaults on an installment payment or other covenant.
    Acceleration clause
  2. The clause in a mortgage or deed of trust that
    states that the balance of the secured debt becomes immediately due and payable
    at the lender’s option if the property is sold by the borrower. In effect, this
    clause prevents the borrower from assigning the debt without the lender’s
    Alienation clause
  3. A buyer is personally obligated for the payment
    of the entire debt of a seller, that is, the buyer assumes the debt. The
    original seller is not liable for the debt if the property is foreclosed on.
  4. (1) The person for whom a trust operates or in
    whose behalf the income from a trust estate is drawn. (2) A lender in a deed of
    trust loan transaction.
  5. A deed given by the mortgagor to the mortgagee
    when the mortgagor is in default under the terms of the mortgage. This is a way
    for the mortgagor to avoid foreclosure.
    Deed in lieu of foreclosure
  6. A deed of trust (or deed in trust in some
    states) is the means by which a trustor conveys real estate to a trustee for
    the benefit of a beneficiary.
    Deed of trust
  7. A clause used in leases and mortgages that
    cancels a specified right upon the occurrence of a certain condition, such as
    cancellation of a mortgage upon repayment of the mortgage loan.
    Defeasance clause
  8. A personal judgment levied against the borrower
    when a foreclosure sale does not produce sufficient funds to pay the mortgage
    debt in full
    Deficiency judgment
  9. A unit of measurement used for various loan
    charges; one point equals 1 percent of the amount of the loan.
    Discount points
  10. The right of a defaulted property owner to
    recover the property prior to its sale by paying the appropriate fees and
    Equitable right of redemption
  11. A legal procedure where by property used as
    security for a debt is sold to satisfy the debt in the event of default in
    payment of the mortgage note or default of other terms in the mortgage
    document. The foreclosure procedure brings the rights of all parties to a
    conclusion and passes the title in the mortgaged property to either the holder
    of the mortgage or a third party who may purchase the realty at the foreclosure
    sale, free of all encumbrances affecting the property subsequent to the
  12. To Pledge property as security for an obligation
    or loan without giving up possession of it
  13. A charge made by a lender for the use of money.
  14. A fee charged to the borrower by the lender for
    making a mortgage loan. The fee is usually computed as a percentage of the loan
    Loan origination fee
  15. A lender in a mortgage loan transaction.
  16. A borrower in a mortgage loan transaction.
  17. A written promise or order to pay a specific sum
    of money that may be transferred by endorsement or delivery. The transferee
    then has the original payee’s right to payment.
    Negotiable instrument
  18. Substituting a new obligation for an old one or
    substituting new parties to an existing obligation.
  19. The seller is the primary lender securing his or
    her interest with the use of a deed. The buyer takes possession of the
    property, but the seller retains legal title until paid in full.
    Owner financing
  20. A charge imposed on a borrower who pays off the
    loan principal early. This penalty compensates the lender for interest and
    other charges that would otherwise be lost.
    Prepayment penalty
  21. A financing instrument that states the terms of
    the underlying obligation, is signed by its maker, and is negotiable
    (transferable to a third party).
    Promissory note
  22. A document, also known as a deed of
    reconveyance, that transfers all rights given a trustee under a deed of trust
    loan back to the grantor after the loan has been fully repaid.
    Release deed
  23. Release or discharge of when a note has been
    fully paid. This document returns to the borrower all interest in the real
    estate originally conveyed to the lender. Entering this release in the public
    record shows that the debt has been removed from the property.
  24. The right of a defaulted property owner to
    recover the property after its sale by paying the appropriate fees and charges.
    Statutory right of redemption
  25. Buyer takes title of property and makes payments
    on the existing loan but is not personally obligated to pay the debt in full.
    Original seller might continue to be liable for debt.
    Subject to
  26. Some states interpret a mortgage to mean that
    the lender is the owner of mortgaged land. Upon full payment of the mortgage
    debt, the borrower becomes the landowner.
    Title Theory
  27. A borrower in a deed of trust loan transaction,
    one who places property in a trust. Also called a grantor or settler.
  28. Charging interest at a higher rate than the
    maximum rate established by state law.