Financing - Chapter 6

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  1. Mortgage is viewed as a lien on real property
    Lien Theory
  2. lender is viewed as the conditional owner of mortgaged land
    Title Theory
  3. Lender to take possession of the mortgaged real estate on default
    Intermediate Theory
  4. Qualifies the borrower, orders the appraisal, FNMA application, origination fee
    Mortgage Origination
  5. Mortgage required to execute  the release or satisfaction of Mtg when note is fully paid
    Defeasance Clause
  6. If borrower sells, lender has choice of either declaring the entire debt due & payable or allowing the buyer to assume the loan
    Alienation (Due-on Sale) Clause
  7. Grants or permits a subsequent mortgagor to take priority in lien structure
    Subordination Agreement
  8. Mortgagor gives deed to mortgage when mortgagor is in default; allows foreclosure
    Deed in lieu of foreclosure
  9. A procedure to prevent foreclosure that a bank uses in an effort to minimize the financial loss
    Short Sale
  10. Process by which borrower regains interest in the property
  11. Property sold & proceeds are insufficient to pay the difference
    Deficiency Judgement
  12. Given by the buyer to the seller as part of the purchase price
    Purchase Money Mortgage
  13. Covers more than one property or lot, generally includes partial-release clause
    Blanket Mortgage
  14. Includes real estate & all fixtures and appliances on the property
    Package Mortgage
  15. Lender receives interest & an equity position in a project, known as equity kicker or a percentage of the income of the property
    Participation Mortgage
  16. To help buyer qualify for the loan by subsidizing the buyers PI payment
  17. Originate loans for other lenders but do not service loan
    Mortgage Brokers
  18. Market in which loans are bought & sold after they have been originated and funded
    Secondary Mortgage Market
  19. Required to obtain mortgage, figured annually & often budgeted monthly
    Property Insurance
  20. Charging a rate of interest in excess of the maximum rate allowed by state law
  21. Lenders experience a rapid withdrawl of funds into alternative investments which weakens the lender's position in the money market
  22. Profitable difference between interest rates in financing arrangements such as wraparound mortgages
  23. Pledging property as security for the loan w/o losing possession of it
  24. Trust account created to set aside funds for the future needs of the property
    Impound Account
  25. Smaller payments in the early years and increased payments in the later years
    Graduated Payment Mortgage
  26. Payments of interest only w/ a lump sum payment of principal at maturity
    Balloon Payment
  27. Payment of debt based solely on the borrower's ability to pay, with security provided by the mortgage; (Not insured or guaranteed by gov't agency)
    Conventional Loan
  28. Financed by a deed of trust, _______ holds title until paid off.
  29. Market in which loans are bought & sold after they have been originated & funded
    Secondary Mortgage Market
  30. FNMA purchase high risk , low-yield loans at full market rates while GNMA guarantees absorbs difference (Involves FNMA and GNMA)
    Tandem Plan
  31. Higher yield is relized from the difference in interest rates charged for the same money a second time
  32. Second mortgage wrapped around a first mortgage
    Wraparound mortgage
  33. Allows for future advances of funds by the lender to the borrower
    Open-end Mortgage
  34. Insurance report that tells about previous insurance claims is
    (CLUE) Comprehensive Loss Underwriting Exchange report
  35. Due-on-Sale clause
    alienation Clause
Card Set:
Financing - Chapter 6
2013-10-21 02:27:12

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