Chapter 15: Real Estate Financing Principles Flashcards Preview

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Flashcards in Chapter 15: Real Estate Financing Principles Deck (66):
1

Charging more interest than is legally allowed is called?

Usury

2

A promissory note...

Is the primary evidence of a debt

3

A land contract provides for the...

Conveyance of legal title at a future date.

4

The finance fee charged by the lender to make the loan is?

A loan origination fee

5

A man just purchased his first home with a fixed-rate loan. The interest he will pay over the life of the loan is?

Simple interest

6

The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the?

Loan to value ratio

7

If the amount realized at a sheriffs sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to...

The mortgagor

8

If a borrower defaults and the court simply awards the ledger full legal title, what kind of foreclosure has taken place?

Strict

9

A homeowner has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records an?

Satisfaction of mortgage

10

An existing mortgage loan can have its lien priority lowered through the use of a?

Subordination agreement

11

If a property sold as a mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for?

A deficiency judgement

12

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is what clause?

Acceleration

13

When a mortgage loan has been paid in full, it is important for borrowers to be sure that?

Satisfaction of mortgage is recorded

14

A deed of trust differs from a mortgage in what ways?

Number of parties involved in the loan Redemption rights allowed after foreclosure Time period Permitted to cure a default

15

Person who assumes an existing mortgage loan is?

Personally responsible for paying the principal balance

16

Interest in the property held by the owner in excess of any liens against it is called?

Equity

17

The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $229,000. The unpaid balance of the loan at the time of the sale was $240,000. What must the lender so to recover the $11,000 the borrower still owes?

Seek a deficiency judgment

18

The right a mortgagor has to regain the property by paying the debt after foreclosure sale is called?

Redemption

19

The clause in a mortgage instrument that would prevent the assumption of the mortgage buy a new purchaser is a?

Due on sale clause

20

The defeasance clause in a mortgage requires the mortgagee to execute?

Satisfaction of mortgage

21

Seller agrees to sell the house to the buyer for $200,000. The buyer was unable to qualify for a mortgage loan for this amount so the seller and the buyer enter into a contract for deed. The interested buyer has in the property under contract for deed is?

Equitable title

22

A friendly foreclosure enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by?

Deed in Lieu of foreclosure

23

Mortgage lenders one assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to?

Pay into an impound account

24

When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title?

Is kept by the seller until the purchase price is paid according to the contract

25

What is true about a land contract?

The buyers given possession

26

If a buyer of $185,000 home obtains $150,000 mortgage with 4 points, how much will the lender charge a closing?

$6000

27

If they yield on a 30 year loan is 10 1/4% and the mortgage lender charges 3 points, what is the interest rate on the mortgage note?

9 7/8%

28

In absence of an agreement to the contrary, the mortgage having priority will be the one?

Was recorded first

29

The pledging of property as security for payment of the loan is called?

Hypothecation

30

Purpose of the mortgage is to?

Provide security for the loan

31

What is not associated with mortgage or deed of trust foreclosure?

Remainder

32

The clause in a mortgage that best describes the requirement of the mortgagee to execute a satisfaction of mortgage when the note has been fully paid is?

Defeasance

33

Under the lien theory, the equitable title to the property is held by the?

Mortgagor

34

Usury

Charging more interest than is legally allowed is called?

35

Is the primary evidence of a debt

A promissory note...

36

Conveyance of legal title at a future date.

A land contract provides for the...

37

A loan origination fee

The finance fee charged by the lender to make the loan is?

38

Simple interest

A man just purchased his first home with a fixed-rate loan. The interest he will pay over the life of the loan is?

39

Loan to value ratio

The amount of a loan expressed as a percentage of the value of the real estate offered as collateral is the?

40

The mortgagor

If the amount realized at a sheriffs sale as part of a mortgage foreclosure is more than the amount of the indebtedness and expenses, then the excess belongs to...

41

Strict

If a borrower defaults and the court simply awards the ledger full legal title, what kind of foreclosure has taken place?

42

Satisfaction of mortgage

A homeowner has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records an?

43

Subordination agreement

An existing mortgage loan can have its lien priority lowered through the use of a?

44

A deficiency judgement

If a property sold as a mortgage foreclosure does not sell for an amount sufficient to satisfy the outstanding mortgage debt, the mortgagor may be responsible for?

45

Acceleration

The clause in a deed of trust or mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is what clause?

46

Satisfaction of mortgage is recorded

When a mortgage loan has been paid in full, it is important for borrowers to be sure that?

47

Number of parties involved in the loan Redemption rights allowed after foreclosure Time period Permitted to cure a default

A deed of trust differs from a mortgage in what ways?

48

Personally responsible for paying the principal balance

Person who assumes an existing mortgage loan is?

49

Equity

Interest in the property held by the owner in excess of any liens against it is called?

50

Seek a deficiency judgment

The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $229,000. The unpaid balance of the loan at the time of the sale was $240,000. What must the lender so to recover the $11,000 the borrower still owes?

51

Redemption

The right a mortgagor has to regain the property by paying the debt after foreclosure sale is called?

52

Due on sale clause

The clause in a mortgage instrument that would prevent the assumption of the mortgage buy a new purchaser is a?

53

Satisfaction of mortgage

The defeasance clause in a mortgage requires the mortgagee to execute?

54

Equitable title

Seller agrees to sell the house to the buyer for $200,000. The buyer was unable to qualify for a mortgage loan for this amount so the seller and the buyer enter into a contract for deed. The interested buyer has in the property under contract for deed is?

55

Deed in Lieu of foreclosure

A friendly foreclosure enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by?

56

Pay into an impound account

Mortgage lenders one assurance that future real estate taxes will be paid. The most common way to do this is to require the borrower to?

57

Is kept by the seller until the purchase price is paid according to the contract

When real estate is sold under an installment land contract and the buyer takes possession of the property, the legal title?

58

The buyers given possession

What is true about a land contract?

59

$6000

If a buyer of $185,000 home obtains $150,000 mortgage with 4 points, how much will the lender charge a closing?

60

9 7/8%

If they yield on a 30 year loan is 10 1/4% and the mortgage lender charges 3 points, what is the interest rate on the mortgage note?

61

Was recorded first

In absence of an agreement to the contrary, the mortgage having priority will be the one?

62

Hypothecation

The pledging of property as security for payment of the loan is called?

63

Provide security for the loan

Purpose of the mortgage is to?

64

Remainder

What is not associated with mortgage or deed of trust foreclosure?

65

Defeasance

The clause in a mortgage that best describes the requirement of the mortgagee to execute a satisfaction of mortgage when the note has been fully paid is?

66

Mortgagor

Under the lien theory, the equitable title to the property is held by the?