REAL ESTATE CHAPTER 12 TERMS

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  1. Acceleration clause
    A contract provision that allows a lender to require a borrower to repay all or part of an outstanding loan if certain requirements are not met. An ___ ___outlines the reasons that the lender can demand loan repayment.
  2. Assumption
    When a purchaser of real property assumes the mortgage of the seller, he or she agrees to adopt the mortgage debt,becoming personally liable for its full repayment in case of default.
  3. Contract for deed (land contract)
    is a tool that can allow buyers who either don't qualify for traditional lending options or who want a faster financing option to purchase property.
  4. Defeasance clause
    A mortgage provision indicating that the borrower will be given the title to the property once all mortgage terms are met. The ___ clause is not required in states using property liens as collateral for a mortgage. In this sense, the clause is a substitute for collateral.
  5. Deed in lieu of foreclosure
    is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.
  6. Discount points
    are a type of prepaid interest or fees mortgage borrowers can purchase that lowers the amount of interest they have to pay on subsequent payments. ... ___ ___ are tax deductible only for the year in which they were paid.
  7. Due-on-sale clause
    is a clause in a loan or promissory note that stipulates that the full balance of the loan may be called due (repaid in full) upon sale or transfer of ownership of the property used to secure the note. The lender has the right, but not the obligation, to call the note due in such a circumstance.
  8. Equity
    Home ___ is the value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments.
  9. Equity of redemption
    the right of a mortgagor over the mortgaged property, especially the right to redeem the property on payment of the principal, interest, and costs.
  10. Escrow
    money held by a third-party on behalf of transacting parties.
  11. Estoppel certificate
    is a document used in mortgage negotiations to establish facts and financial obligations, such as outstanding amounts due that can affect the settlement of a loan. It is required by a lender of a third party in a real estate transaction.
  12. Hypothecation
    is legal term that refers to the granting of a hypothec to a lender by a borrower. In practice, the borrower pledges an asset as collateral for a loan, while retaining ownership of the assets and enjoying the benefits therefrom.
  13. Interest
    money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
  14. Lien theory
    A property-law doctrine that a mortgage transfers title to a property to the mortgagee, who holds it until the mortgage has been paid off, at which time title passes to the mortgagor. Only a few American states have adopted this theory, and they are known as title states or title theory jurisdictions.
  15. Lis pendens
    In United States law, a ___ ___ is a written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county land records office. ...___ ___ is Latin for "suit pending".
  16. Loan origination fee
    An ___ ___ is an upfront fee charged by a lender for processing a new loan application, used as compensation for putting the loan in place. ___ ___are quoted as a percentage of the total loan and are generally between 0.5 and 1% on mortgage loans in the United States.
  17. Loan servicing
    is the process by which a company (mortgage bank, servicing firm, etc.) collects interest, principal and escrow payments from a borrower.
  18. Loan-to-value ratio
    The ___-__-___ (LTV) ___ is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage line as a percentage of the total appraised value of real property.
  19. Mortgage
    a legal agreement by which a bank or other creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt
  20. Mortgagee
    the lender in a mortgage, typically a bank.
  21. Mortgagor
    the borrower in a mortgage, typically a homeowner.
  22. Note
    In the United States, a mortgage ___ (also known as a real estate lien ___, borrower's note) is a promissory ___ secured by a specified mortgage loan; it is a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise.
  23. Novation
    the substitution of a new contract in place of an old one.
  24. PITI
    In relation to a mortgage, ___ (pronounced like the word "pity") is an acronym for a mortgage payment that is the sum of monthly principal, interest, taxes, and insurance.
  25. Prepayment clause
    is a clause in a mortgage contract stating that a penalty will be assessed if the mortgage is prepaid within a certain time period.
  26. Prepayment penalty clause
    A ___ ___ ___ in a mortgage contract states that a penalty will be assessed if the mortgage is prepaid within a certain time period. The penalty is based on a percentage of the remaining mortgage balance or a certain number of months' worth of interest.
  27. Receivership clause
    a provision in a mortgage related to income producing property that is designed to require that income derived shall be used to meet mortgage payments in the event the mortgagor defaults.
  28. Right to re-instate
    is the process of re-establishing the status of a person, company or law.
  29. Satisfaction of mortgage
    Whenever the amount of money due on any mortgage, lien, or judgment has been fully paid to the person or party entitled to the payment thereof, the mortgagee, creditor, or assignee, or the attorney of record in the case of a judgment, to whom the payment was made, shall execute in writing an instrument acknowledging satisfaction of the mortgage, lien, or judgment and have the instrument acknowledged, or proven, and duly entered in the official records of the proper county.
  30. Short sale
    is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.
  31. Subject to
    it means subject to the existing mortgage that is already in place on the property. The terms of the note that were initially created with the lender stay the same. That includes the name the loan was purchased in. In other words, you are not assuming the loan.
  32. Subordination agreement
    A mortgage ___ ___ is a document frequently used when there are two mortgages on a home, and the homeowner is looking to refinance the first mortgage. The mortgage ___ ___ specifies which mortgage takes precedence over the other.
  33. Take-out commitment
    Written promise by a lender to provide a long-term financing (permanent financing) arrangement to replace an interim, short-term, or bridge loan, usually when a project reaches a specified milestone or stage.
  34. Title theory
    is a doctrine of property law that a mortgage transfers legal title of the property to the mortgagee, who holds it until the mortgage has been satisfied . Only a few American states have adopted this theory, and they are known as title states or title theory jurisdictions.

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Author:
mccullochhelen
ID:
332046
Filename:
REAL ESTATE CHAPTER 12 TERMS
Updated:
2017-06-16 23:12:20
Tags:
terminology
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Description:
CHAPTER 12 TERMINOLOGY
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