ch 13-15 Flashcards
(159 cards)
1
Q
what is a contract
A
Is an agreement between two or more parties who in a “meeting of the minds” have pledged to perform or refrain from performing some act.
Can be enforceable and unenforceable
2
Q
what is a contract
A
Is an agreement between two or more parties who in a “meeting of the minds” have pledged to perform or refrain from performing some act.
Can be enforceable and unenforceable
3
Q
What is a valid contract
A
one which meets the legal requirements
4
Q
what is a void contract
A
is an agreement that does not meet the tests for validity and therefore is no contract at all
5
Q
what is a voidable contract
A
is one which initially appears to be valid but is subject to cancellation by a party to the contract who is believed to have acted under some kind of disability
6
Q
what is an express contract
A
is one in which all the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing
7
Q
what is an implied contract
A
is an unstated or unintentional agreement that may be considered to exist when the actions of any of the parties suggest the existence of an agreement
8
Q
what is a bilateral contract
A
is one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party
9
Q
what is a unilateral contract
A
only one party promises to do something provided the other party does something. For example a reward for a lost pet
10
Q
what is the longest a lease can be for before it has to be in writing to be enforceable
A
less than 2 years
11
Q
what is a executory contract
A
where 1 or more parties have not yet performed their duties as stipulated in the contract document. EX an ongoing lease agreement
12
Q
what is a merger clause
A
contract provision making previous promises null and void
13
Q
what is rescission
A
resets parties to pre-contract status
14
Q
what is rescission
A
resets parties to precontract status
15
Q
what is a void contract
A
is an agreement that does not meet the tests for validity and therefore is no contract at all
16
Q
what is a voidable contract
A
is one which initially appears to be valid but is subject to cancellation by a party to the contract who is believed to have acted under some kind of disability
17
Q
what is an express contract
A
is one in which all the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing
18
Q
what is an implied contract
A
is an unstated or unintentional agreement that may be considered to exist when the actions of any of the parties suggest the existence of an agreement
19
Q
what is a bilateral contract
A
is one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party
20
Q
what is a unilateral contract
A
only one party promises to do something provided the other party does something
21
Q
what is the longest a lease can be for before it has to be in writing to be enforceable
A
less than 2 years
22
Q
what is a executory contract
A
where 1 or more parties have not yet performed their duties as stipulated in the contract document. EX an ongoing lease agreement
23
Q
what is a merger clause
A
contract provision making previous promises null and void
24
Q
what is an assignment of contract
A
contract provision allows for the transfer of the contract to another party. Ideally, the assignor wants the assignee to step into his shoes and assume all of his contractual obligations and rights
25
what is rescission
resets parties to precontract status
26
what is apportionment
contract provision shows a division of expenses between buyers and sellers
27
what is the right of first refusal
right of person to have first opportunity to purchase or lease a property
28
A contract is valid if only it meets all of the following criteria
```
Competent parties
Mutual agreement
Lawful objective
Consideration
In writing
```
29
what is the statute of frauds
requires that certain contracts must be in writing to be enforceable
30
Termination of a contract, also called cancellation and discharge, may occur for any of the following causes
Performance
Infeasibility (not being doable)
Mutual agreement
Operation of law
31
what is the statute of limitations
restricts the time period for which an injured party in a contract has the right to bring a lawsuit against the other party. In NY, the time limit for bringing a legal action involving a real estate contract is 6 years
32
a real estate contract that is not a personal contract for services can be assigned to another party unless
the terms of the agreement specifically prohibit assignment
33
a breach of contract gives the damaged party the right to take legal action in one of these ways
Rescission (the revocation, cancellation, or repeal of a law, order, or agreement)
Forfeiture
Suit for damages
Suit for specific performance
34
what is a reformation
is necessary to correct or modify the contract that has a mechanical or clerical error
35
what is a binder
is an agreement that is formed between the buyers and the sellers whereby the buyers put down earnest money as evidence of their good faith and intention to complete the transaction. This agreement us used to bind the parties until a more formal sales contract can be prepared and executed
36
what is an installment sales contract
Contract in which the buyer takes possession of the property immediately but does not receive the deed and title until a series of payments (installments) have been made.
37
what is an option to buy
is an enforceable contract in which a potential seller, the optionor, grants a potential buyer, the optionee, the right to purchase a property before stated time for a stated price and terms. An option to buy places to optionee under no obligation to purchase the property. However, the seller must perform under the terms of the contract if the buyer exercises the option
38
what is the right of first refusal
is the right of a person to have the first opportunity to purchase or lease a property
39
list five provisions typically found in NY sales contracts
```
Identification of parties
Legal description
Personal property provision
Consideration
Terms of payment
```
40
where can one get the contracts used for real estate transactions
available from local real estate boards, mls, or attorny bar association
41
documents that are instrumental in preparing for closings
```
Prior deed
Prior title insurance policy
Survey
Certificate of occupancy
Personal data
Tax bills
```
42
difference between upstate and downstate contracts
In UPSTATE, the buyer's agent or broker typically fills in either a preprinted binder or a preprinted sales contract
In DOWNSTATE, the buyer;s agent or broker typically fills out a binder that outlines the fundamental terms of the agreement and then sends the binder to the seller's attorney who then prepares the sales contract
43
contingency clause
purchase agreements may contain this clause which allows the buyer to terminate contract and get a refund of their deposit if contingency terms don't happen (contigent financing)
44
down payment
Is the amount of money the buyer pays from cash on hand that is not part of the mortgage loan. In NY, it is customary for that earnest money deposit to equal up to 10 percent of the purchase price of the property
The down payment can be held by an attorney or by the broker. In either case, the money must be deposited into a separate escrow account that is used ONLY for the purpose of holding money belonging to others
45
what is the lawyer's fund for client protection
created in 1982 by NY legislatures to protect consumers from dishonest law practices. The fund my reimburse losses caused by the dishonest conduct of lawyers up to a maximum of $300k for each client loss
46
what is the attorney review clause
contract provision that contract is subject to approval of each of the client's attorney when broker uses preprinted forms
47
what is a mortgage
is a financing instrument that creates a lien against a property. A promissory note establishes legal evidence of the debt incurred. A mortgage always needs a note to be legally valid
Monthly mortgage payment is usually made up of four parts: principal, interest, taxes, and insurance. Lenders refer to this as PITI
Lender also charge fees: loan origination fees and points
48
what is foreclosure
the lender has the right to bring legal action trhough the ourts to satisfy the debt. this is done through foreclusure (the process that leads up to selling the property that was pledged to secure the debt)
49
what if a grantee takes title to a property subject to a mortgage
that person is not personally liable to the lender for payment of the mortgage. The seller is still responsible for making the mortgage payments
50
what is a mortgage assumption
is the act of acquiring title to a property that already has an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including the payments
51
when a mortgage is paid in full
the lender will issue a certificate called a satisfaction of mortgages
52
what is due on sale/alienation clause
borrower to pay off the entire mortgage debt when the property is sold
53
what is right of redemption
the right to reclaim a property that has been foreclosed on by paying off the amount owed to creditors including interest and costs
54
what is judicial foreclosure
lender to bring legal action through the courts to satisfy debts
55
what is acceleration clause
borrower defaults on mortgage and lender requires loan to be paid in full. For example, a borrower who fails to make a payment or who breaks a covenant may be required to pay the lender the balance on a loan. In this case, the borrower is considered in breach of contract
56
what are the most common types of repayment plans
Straight (interest only)-monthly payments are allocated to interest. If property doesn't appreciate in value over time, the borrowed could end up with less in proceeds on the sale than what he needs to pay off
Amortized- a borrower makes a periodic payment of principal and interest
Ballon payment- a loan that has one large final payment due when the loan matures
Adjustible rate- interest rates change periodically. Tied to index
57
What are the two categories of loans available to buyers in the marketplace
Conventional loan: is most common type of loand ans is generally viewed as the most secure. Most conventional loans require the borrower to make a down payment of 20% or more making the loan 80% or less of the property's sale price. Typically uninsured following underwriting standards outlined by Freddie Mac and Fannie Mae. Traditionally fixed rate loans (most commonly 30 year mortgages, that typically carey prepayment penalties). A borrower can get a conventional loan with a lower down payment insuring the loan through a private mortgage insurance program. the PMI payments will terminate once the loan has been repaid to a certain level
58
What is a graduated payment mortgage
The monthly payment for principal and interest gradually increases by a certain percentage each year for a certain number of years and then it levels off for the remaining term of the mortgage
59
what is a pledged account mortgage
is a type of graduated payment mortgage under which the owner/borrower contributes a sum of money into an account that is pledged to the lender
60
What is a buydown
it is a lump sum payment that is made to the lender at closing usually comes from a builder as an incentive to the buyer or from a family member trying to help out
61
what is an open end loan
is an expandable loan which gives a borrower a limit up to which he or she may borrow
62
what is a blanket mortgage
a loan covers more than one piece of property. Land developers commonly use blanket mortgages when they buy a plot of land and divide it into many separate lots
63
what is a wraparound mortgage
it allows borrowers who has an existing loan to get another loan from a second lender without paying off the first loan
64
what is a bridge loan
it is a short term loan that covers the period between the end of one loan and the beginning of another. Often used when a seller will not accept a property sale contingency
65
what is a purchase money mortgage
is most commonly a technique in which the buyer borrows from the seller in addition to the lender. Sometimes happens when a buyer can't qualify for the full amount; so seller takes back a portion of the purchase price as a 2nd mortgage
66
what is a construction mortgage
to finance the construction of improvements to property, such as homes, apartments and office buildings
67
what is a home equity loan
owners have the ability to borrow against the equity they have built up in their homes, apartments, office buildings
68
what is a package mortgage
is one that includes all the personal property and appliances that are installed on the property
69
what is a reverse annuity mortgage
is one in which the lender is making payments to the borrower. Allows older property owners to receive regular monthly payments from the equity in their paid off property w/o having to sell
70
what is a shared equity mortgage
is a form of participation in which the lender shares in the appreciation of a mortgaged property if and when the property sells
71
what is an impound account
FHA backed escrow account
72
government-backed loans include those loans offered by the following
The federal housing administration (FHA)
The dept of veterans affairs (DVA)-sometimes simply referred to as VA
Rural housing service (RHS)
State of NY mortgage association (SONYMA)
73
the federal housing administration (FHA)
does not build homes of loan money directly. They insure loans made by approved lending institutions, including qualified mortgage companies, savings and loan association and commercial banks. FHA-insured loans protect lenders against any loss they would suffer from a borrower's default
74
The veterans administration (VA)
offers the opportunity for veterans to purchase a home with no money down. In order to make this VA mortgage loan acceptable to lenders, the VA agreed to guarantee the top portion of the loan. Loan origination fee on a VA loan cannot exceed 1%
75
USDA rural housing service
has various programs available to aid low-to-moderate interest rate mortgages to low-and-moderate-income households who must be first-time home buyers except in target areas. SONYMA mortgages insured by private mortgage insurance.
76
what kind of problem can result from a straight loan
a straight loan is an interest only loan. If the property doesn't appreciate in value over time, the borrower could end up with less in proceeds on the sale than what he needs to pay off the loan.
77
what kinds of limits are on the interest rate in an adjustable rate mortgage (ARM)
Interest rate caps limit the amt of interest the borrower can be charged. Periodic caps limit the amount the rate can change at any one time. Overall (or aggregate) caps limit the amount the interest can increase over the life of the loan
78
list two advantages of conventional loans over govt -backed loans
1. Processing a conventional loan usually takes less time. Loan approval from a conventional lender can take 30 days or less, while approval on a govt-backed loan seldom, if ever, can be done in less than 30 days
2. There is usually no legal limit on loan amts with conventional loans; however, govt-backed loans have dollar limits that vary by agency
79
what does federal law say about the termination of private mortgage insurance
Fed law requires that any loans originated after July 1999 must have the PMI terminated after the borrower has accumulated 22% of equity in the property (loan to value ratio is 78%) and is current with all loan payments. However, the law also states that a borrower whose equity equals 20% of the purchase price or appraised value may request that the lender cancel the PMI
80
what is a release clause and in what type of mortgage would you find this clause
This clause found in a blanket mortgage allows the borrower to obtain a release of any individual lot from the lien by repaying a certain part of the loan. The lender will issue the partial release for the one lot, with the provision that the mortgage will continue to cover the remaining lots
81
what kind of insurance does the FHA require borrowers to pay
As of 2006, the borrower must pay 2 insurance premiums. The first is the upfront mortgage insurance premium (MIP), which is a percentage of the loan amount. The borrower can pay this one time premium at closing or the charge could be financed with the loan. The second premium, called Mutual Mortgage Insurance (MMI), is a monthly premium that is paid with the monthly principal, interest, taxes and insurnace payment. MMI premiums may be dropped when the remaining loan balance is 80 percent loan to value ratio or less
82
what is a certificate of reasonable value and what is it used for
a certificate of reasonable value shows the value of a property in relation to its sales price. It is issued by an approved VA appraiser when a veteran is seeking a DVA loan.
83
A contract that conveys an interest in real estate must
contain a legal description of the property.
84
In New York, the practice of law by a non-attorney is
a misdemeanor.
85
What is the difference between an express contract and an implied contract?
An implied contract is an unstated or unintentional agreement that may be considered to exist when the actions of any of the parties suggest the existence of an agreement.
An express contract is one in which all the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing.
86
What are the five criteria of a valid contract?
```
Competent parties
Mutual agreement
Lawful objective
Consideration
In writing
```
87
When must a suit for damages be initiated?
The suit must be initiated within the time period allowed by the Statute of Limitations.
88
List five provisions typically found in New York sales contracts. (See screens 15 and 16 for other correct answers.)
```
Identification of parties
Legal description
Personal property provision
Consideration
Terms of payment
```
Issues that are not covered in the purchase and sale agreement itself are usually dealt with using preprinted rider
89
What does "time is of the essence" mean?
This phrase emphasizes the requirement that events related to the contract must be performed on time.
90
What is the difference between a sales contract and a binder?
A binder is an agreement whereby the buyers put down earnest money as evidence of their good faith and intention to complete the transaction. This agreement is used to bind the parties until they can prepare a more formal sales contract.
A sales contract is an agreement whereby the buyers agree to purchase a property and the sellers agree to transfer title to the property.
91
Contract
is an agreement between two or more parties who, in a "meeting of the minds," have pledged to perform or refrain from performing some act.
92
valid, void, and voidable contracts
A valid contract is one which meets the legal requirements for validity.
A void contract is an agreement that does not meet the tests for validity and therefore is no contract at all.
A voidable contract is one which initially appears to be valid, but is subject to cancellation by a party to the contract who is believed to have acted under some kind of disability.
93
express contract
is one in which all the terms and covenants of the agreement have been clearly stated and agreed to by all parties, whether verbally or in writing.
94
implied contract
is an unstated or unintentional agreement that may be considered to exist when the actions of any of the parties suggest the existence of an agreement.
95
bilateral contract
is one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party.
96
unilateral contract
only one party promises to do something, provided the other party does something. For example a reward for a lost pet
97
A contract is valid only if it meets all of the following criteria:
```
Competent parties
Mutual agreement
Lawful objective
Consideration
In writing
```
98
Statute of Frauds
requires that certain contracts must be in writing to be enforceable
99
Termination of a contract, also called cancellation and discharge, may occur for any of the following causes:
Performance
Infeasibility
Mutual agreement
Operation of Law
100
Statute of Limitations
restricts the time period for which an injured party in a contract has the right to bring a lawsuit against the other party. In New York, the time limit for bringing a legal action involving a real estate contract is six years.
101
assignment
A real estate contract that is not a personal contract for services can be assigned to another party unless the terms of the agreement specifically prohibit assignment.
102
A breach of contract gives the damaged party the right to take legal action in one of these ways:
Rescission
Forfeiture
Suit for damages
Suit for specific performance
103
reformation
is necessary to correct or modify the contract that has a mechanical or clerical error
104
binder
is an agreement that is formed between the buyers and the sellers whereby the buyers put down earnest money as evidence of their good faith and intention to complete the transaction. This agreement is used to bind the parties until a more formal sales contract can be prepared and executed.
105
installment sales contract
is a bilateral agreement between a seller (the vendor) and a buyer (the vendee) in which the vendor defers receipt of some or the entire purchase price of a property over a specified period of time
106
option to buy
is an enforceable contract in which a potential seller, the optionor, grants a potential buyer, the optionee, the right to purchase a property before a stated time for a stated price and terms. An option to buy places the optionee under no obligation to purchase the property. However, the seller must perform under the terms of the contract if the buyer exercises the option.
107
what is a merger clause
makes previous promises null and void
108
Apportionments
shows a division of expenses between buyers and sellers
109
Neighbor Sam told seller Jake that he would buy 2 adjoining acres if Jake ever decides to sell. This is an example of a
valid but unenforceable contract.
110
According to contract law, every valid contract is also wha
Enforceable or unenforceable
111
rescission
resets parties to pre-contract status
112
Buyer Bill has agreed to pay for a computer system after all hardware has been installed and operational. What type of contract does Bill hold
Executory
113
List the documents that an agent can gather that will help the settlement officer prepare the closing documents
```
Prior deed
Prior title insurance policy
Survey
Certificate of occupancy
Personal data
Tax bills
```
114
Who typically prepares the sales contracts in downstate New York?
Seller's attorney
115
What does the mortgage contingency clause say will happen if the buyers cannot get financing?
If the buyers have cooperated with the lender and do not get financing, they can terminate the contract and get a refund of their earnest money deposit.
116
What is the customary amount of an earnest money deposit?
Up to 10 percent of the purchase price.
117
Why was the Lawyers' Fund for Client Protection created and what does it do?
It was created to protect consumers from dishonest law practices. The Fund may reimburse losses caused by the dishonest conduct of lawyers up to a maximum of $300,000 for each client loss.
118
Under what circumstances would the parties need to sign a lead-based paint disclosure?
If the property being transferred was built prior to 1978.
119
What is an attorney review clause?
A condition in the contract that says that the contract is subject to the approval of each of the client's attorneys.
120
binder
is also known as a receipt, a purchase offer or an agreement
prior Deed
Prior Title Insurance Policy - trace the title and cut down on the amount of time and work needed for the search.
Survey
Certificate of Occupancy - will make a report of the findings and point out any code violations.
Personal Data
Tax Bills
121
binder in upstate vs downstate
in upstate New York, the buyer's agent or broker fills in a preprinted binder or sales contract. In downstate New York, the buyer's agent or broker typically fills out a binder that outlines the fundamental terms of the agreement.
122
Lawyers' Fund for Client Protection
protects consumers from dishonest law practices.
123
Contract Procedures
Who Signs First? – Usually, the buyer signs the contract first.
Accuracy Review
Names of persons currently holding title to the property
The offering price
Personal items the seller will include or exclude from the sale
When the property will be available for closing
Riders
Lead-Based Paint Disclosures
Agency Disclosure Form
Mail Delivery
Sit-Down Signing
Delivery of Down Payments
Giving Legal Advice - It is against the law for a non-attorney to give legal advice.
124
Attorney Review Clause
A condition in the contract that says that the contract is subject to the approval of each of the client's attorneys.
125
In New York, the practice of law by a non-attorney is
misdemeanor
126
4 of 6 - Broker Amanda prepares a sales contract, collects the earnest money and deposits it in her business account. Which statement is TRUE?
Amanda has illegally commingled the earnest money with her own money.
127
What is a promissory note and what does it do?
A document that describes the amount of money borrowed, the terms under which it will be repaid, and any conditions that relate to either the borrowing of the money or the consequences in event of default. This document establishes legal evidence of the debt incurred.
128
What is the clause that requires the borrower to pay off the entire mortgage debt when the property is sold?
Due-on-sale or alienation clause.
129
What does it mean if a person takes title to a property "subject to" the mortgage?
What person is not personally liable to the lender for payment of the mortgage. The seller is still responsible for making the mortgage payments.
130
What kind of problem can result from a straight loan?
A straight loan is an interest-only loan. If the property doesn't appreciate in value over time, the borrower could end up with less in proceeds on the sale than what he needs to pay off the loan.
131
What kinds of limits are placed on the interest rate in an adjustable rate mortgage (ARM)?
Interest rate caps limit the amount of interest the borrower can be charged. Periodic caps limit the amount the rate can change at any one time. Overall (or aggregate) caps limit the amount the interest can increase over the life of the loan.
132
List two advantages of conventional loans over government-backed loans. (See other correct answers on screen 23.)
Processing a conventional loan usually takes less time. Loan approval from a conventional lender can take 30 days or less, while approval on a government-backed loan seldom, if ever, can be done in less than 30 days.
There is usually no legal limit on loan amounts with conventional loans; however, government-backed loans have dollar limits that vary by agency.
133
What does federal law say about the termination of private mortgage insurance?
Federal law requires that any loans originated after July 1999 must have the PMI terminated after the borrower has accumulated 22% of equity in the property (loan-to-value ratio is 78%) and is current with all loan payments. However, the law also states that a borrower whose equity equals 20% of the purchase price or appraised value may request that the lender cancel the PMI.
134
Greg and Joyce purchased a home from the builder who offered to pay $5,000 at closing as an incentive to get them to buy. What kind of mortgage will they get?
A buydown mortgage.
135
What is a release clause and in what type of mortgage would you find this clause?
This clause, found in a blanket mortgage, allows the borrower to obtain a release of any individual lot from the lien by repaying a certain part of the loan. The lender will issue the partial release for the one lot, with the provision that the mortgage will continue to cover the remaining lots.
136
Define a purchase money mortgage.
With a purchase money mortgage, the buyer borrows from the seller in addition to the lender. This is sometimes done when a buyer cannot qualify for a bank loan for the full amount; so the seller "takes back" a portion of the purchase price as a second mortgage.
137
Describe a reverse annuity mortgage.
With this type of mortgage, the lender makes payments to the borrower. This system allows older property owners to receive regular monthly payments from the equity in their paid-off property without having to sell.
138
FHA and VA loans differ from conventional loans in what important way?
FHA and VA do not loan funds directly. FHA insures loans and VA guarantees loans, but the loans themselves are made by approved, qualified lenders.
139
What kind of insurance does FHA require borrowers to pay?
As of 2006, the borrower must pay two insurance premiums. The first is the "upfront" Mortgage Insurance Premium (MIP), which is a percentage of the loan amount. The borrower can pay this one-time premium at closing or the charge could be financed with the loan. The second premium, called Mutual Mortgage Insurance (MMI), is a monthly premium that is paid with the monthly principal, interest, taxes and insurance payment. MMI premiums may be dropped when the remaining loan balance is 80 percent loan-to-value ratio or less.
140
What is a Certificate of Reasonable Value and what is it used for?
A Certificate of Reasonable Value (CRV) shows the value of a property in relation to its sales price. It is issued by an approved VA appraiser when a veteran is seeking a DVA loan.
141
What kinds of loans does SONYMA provide?
SONYMA offers below-market interest rate mortgages to low-and-moderate-income households who must be first-time homebuyers except in target areas.
142
A monthly mortgage payment is generally made up of four parts
principal, interest, taxes and insurance. Lenders refer to this as PITI.
143
mortgage assumption
s the act of acquiring title to a property that already has an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including the payments.
144
graduated payment mortgage
(GPM), the monthly payment for principal and interest gradually increases by a certain percentage each year for a certain number of years and then it levels off for the remaining term of the mortgage.
145
pledged account mortgage (PAM)
is a type of graduated payment mortgage under which the owner/borrower contributes a sum of money into an account that is pledged to the lender.
146
buydown
the lump sum payment that is made to the lender at closing usually comes from a builder as an incentive to the buyer or from a family member trying to help out.
147
open-end loan
is an expandable loan which gives a borrower a limit up to which he or she may borrow.
148
blanket mortgage
loan covers more than one piece of property. Land developers commonly use blanket mortgages when they buy a plot of land and divide it into many separate lots.
149
wraparound mortgage
allows a borrower who has an existing loan to get another loan from a second lender without paying off the first loan.
150
purchase money mortgage
is most commonly a technique in which the buyer borrows from the seller in addition to the lender.
151
package mortgage
is one that includes all the personal property and appliances that are installed on the property
152
reverse annuity mortgage
is one in which the lender is making payments to the borrower.
153
shared equity mortgage
is a form of participation mortgage in which the lender shares in the appreciation of a mortgaged property if and when the property sells.
154
FHA
does not build homes or loan money directly. They insure loans made by approved lending institutions, including qualified mortgage companies, savings and loan associations and commercial banks. FHA-insured loans protect lenders against any loss they would suffer from a borrower's default.
155
Veterans Administration
offers the opportunity for veterans to purchase a home with no money down. In order to make this VA mortgage loan acceptable to lenders, the VA agreed to guarantee the top portion of the loan.
156
USDA Rural Housing Service
has various programs available to aid low-to-moderate-income rural residents to purchase, construct, repair, or relocate a dwelling and related facilities. Qualified homebuyers can get loans with minimal closing costs and no down payment.
157
SONYMA (State of New York Mortgage Association)
Program offers below-market interest rate mortgages to low-and- moderate-income households who must be first-time homebuyers except in target areas. SONYMA mortgages are insured by private mortgage insurance
funding comes from Proceeds from tax exempt mortgage revenue bonds
158
impound account
FHA backed escrow account
159
term mortgage
In which type of loan is the payment allocated only to interest
