Real Estate Financing Principles / Practice Flashcards
Note
the document used by a borrower where they promise to pay money back to a lender
Mortgage
collateral interest in real estate transferred from the borrow to the lender
Title Theory
technically a mortgage conveys title to the real estate from the borrower to the lender; actual mortgage document is referred to as a mortgage deed
CT Usury
mortgage loans for more than $5,000 are automatically exempted from usury regulations; no ceiling on the interest rates that may be charged on real estate loans
Recording of Mortgages
mortgages are considered deeds due to title theory and all deeds must be recorded under state law; in the event of default the date of recording establishes priority for the satisfaction of claims
Release of Mortgage
lender is required by law to execute and deliver once a mortgage loan has been fully paid; recorded and indexed by the town clerk under the names of the mortgagor/borrower and mortgagee/lender
Assignments
a lender may transfer its right in its interests in a mortgage to another party by completing an instrument of assignment
Mortgage Brokerage
requires licensing including mortgage broker at the company level and mortgage originator at the individual level licensed by the CT Department of Banking
Predatory Lending
illegal, unfair and /or abusive lending practices whereby lenders induce borrowers to take out loans that they cannot afford
Deed in lieu of foreclosure
a voluntary deed, the defaulting borrower would convey the title to the property to the lender outright rather than face the prospect of a strict foreclosure and its attendant costs
Strict Foreclosure
the lender/mortgagee first files a suit to foreclose, required to submit a current real estate appraisal on the property, and notice in the form of a summons is delivered to all parties having a recorded interest in the property
Certificate of Satisfaction
once a party redeems the property from foreclosure the plaintiff must execute and deliver to the defendant; evidences the fact that the debt and costs of foreclosure have been satisfied
Modifying Foreclosure Judgements
if no one redeems the property within the timeline established by the court - title goes to foreclosing creditor; after judgment it may be reopened at the court’s discretion at any time before the title to the property passes to the foreclosing creditor; once title has passed it cannot be reopened
Foreclosure by Sale
requested by a creditor whose claim is subordinate to that of the foreclosing lender / mortgagee; goes to the highest bidder - offers a junior lienholder the opportunity to acquire the property at a lesser cost than under strict foreclosure
Deficiency Judgment
if the sale fails to yield sufficient funds to satisfy the mortgage or lien foreclosed on; court order against the party liable for the mortgage or lien for payment
