Ch 9 - Mortgage Theiry Flashcards Preview

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Flashcards in Ch 9 - Mortgage Theiry Deck (22)
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1

A formal notice of a pending legal proceeding

Lis pendens

2

This clause allows the holder of the mortgage to sell the property at public auction without court involvement should the borrower default

Power of sale clause

3

This instrument executed by the mortgagor sets forth the exact unpaid balance of the mortgage and the interest rate

Estoppel certificate

4

The practice by which a borrower offers collateral to secure a debt or a borrower, as a condition precedent to a loan, or has a third party pledge collateral for the borrower

Hypothecation

5

A document that the lender returns with the promissory note to the borrower once the loan is paid

Satisfaction of mortgage

6

This procedure allows the lender to proceed against the borrowers unsecured assets

Deficiency judgment

7

To give up possession of the property to the lender while it serves as collateral

Pledging

8

A legal procedure whereby the mortgage property is either sold to a third-party or transferred to the lender in order to satisfy the debt

Foreclosure

9

The deed in Lieu of foreclosure is also called a...

Friendly foreclosure

10

True or false:

At any time before the property goes on sale, the borrower may redeem his/her property by paying off the debt

True

11

True or false:

The promissory note is a contract between a borrower and a lender

True

12

States in which ownership is subject to defeat upon full payment of the debt or performance of the obligation

Title theory states

*** VA is a title theory state ***

13

True or false:

A loan may not be pre-paid without a pre-payment clause allowing for it

True

14

True or false:

The basic purpose of a deed of trust is the same as a mortgage

True

15

What are the three types of foreclosure?

- judicial
- non-judicial
- strict

16

When does the borrower agree to uphold these covenants:
- Covenant to pay indebtedness
- Covenant to pay taxes
- Covenant to pay insurance
- Covenant of good repair
- Covenant against removal
- Covenant to acknowledge indebtedness
- Covenant to pay legal expenses

When he/she signs the mortgage

17

What is the lender‘s preferred method of sale because it simplifies the foreclosure process and is less expensive than filing a lawsuit?

Non-judicial foreclosure, also known as sale by advertisement

18

What are five clauses typically found in mortgage contracts?

CASED

- condemnation
- alienation
- subordination
- escalation
- defeasance

19

A note that serves as the written evidence of that must have what features to be valid?

- be in writing
- be between a borrower and a lender who both have contractual capacity
- State the borrowers promise to pay a certain sum of money
- show the terms of payment
- be signed by the borrower (principal)
- be voluntarily delivered by the borrower and accepted by the lender

20

The _________ allows the lender to demand that the entire loan balance be immediately paid in full should the borrower fail to make timely payments or comply with the other covenants in the mortgage contract and promissory

Acceleration clause

21

What three parties are involved with a note is secured by a deed of trust?

- the borrower (the trustor)
- the lender (the beneficiary)
- a neutral 3rd party (the trustee)

22

When a satisfaction or release is recorded, a recording office employee makes a note of its book and page location on the margin of the recorded mortgage, called a…

Marginal release