Chap. 13 & 14

Question 0

Interest paid in advance one point equals 1% of the loan amount for the borrower and increases the yield for the investor approximately 1/8%

Answer 0

Discount point

Question 1

The interest or value an owner has in property over and above any indebtness.

Answer 1

Equity

Question 2

Any financing instruments by which real estate is used as a security for a debt. thus can take the form of either a lien or a deed of trust
Document that pledges to the lender as a security or collatoral for a debt

Answer 2

Mortgage

Question 3

The written promise or agreement to repay a debt in definte installmets with interest the mortgagor executes one or more of these to reflect the amount of the debt

Answer 3

Promissory note

Question 4

What clauses are in the promissory note?

Answer 4

1. Acceleration clause
2. Prepayment penalty clause
3. Due on sale clause (alienation clause)

Question 5

If borrower defaults the lender has the Right to accelerate the maturity of the day to declare the entire debt plus unpaid interest and costs

Answer 5

Acceleration clause

Question 6

A charge imposed on a borrower who pays off the loan principal early this penalty compensates the lender for the interest and other charges that would otherwise be lost due to payments made ahead of schedule

Answer 6

Prepayment penalty clause

Question 7

A provision in the mortgage that states that entire balance of the note is immediately due and payable if the mortgagor transfers the property(sells it)

Answer 7

Due on sale clause

Question 8

Foreclosure procedures

Answer 8

1. Judicial foreclosure (sold by court ,sufficient public notice)
2. Nonjudicial foreclosure (gives trustee power to sell property and use the proceeds to repay debt)
3. Strict foreclosure (not used in NC)

Question 9

A loan that is not backed-that is made,insured,or guaranteed by any gov. agency
Lender bears all risk

Answer 9

Conventional loan

Question 10

A loan insured by the federal housing administration and made by an approved private lender in accordance with FHA regulations

Answer 10

FHA LOAN

Question 11

Includes not only the real estate but also all fixtures and appliances installed on the premises
“Condo units”

Answer 11

Package loan

Question 12

Covers more than one parcel of land and usually used to fiancé subdivision developments
-partial release clause

Answer 12

Blanket mortgage

Question 13

Used as a method of refinancing real property or financing the purchase of real property when am existing mortgage cannot be prepaid
“Buddy system”

Answer 13

Wraparound loan

Question 14

Requires that when a loan is secured by a residence, lenders inform borrowers of the true cost of obtaining credit, advertising cannot discriminate

Answer 14

Truth in lending, regulation Z

Question 15

What does the seller pay?

Answer 15

Commission 
Deed prep fee
Excise tax
Recording fees to clear title 
Courier fee

Question 16

A debit to a buyer is a _____ to a seller; a _____ to a seller is a ____ to a buyer

Answer 16

Credit,debit,credit