Chapter 9: Real Estate Finance Flashcards
In a sheriff’s sale, any excess money received from the sale beyond the lender’s judgment and costs
must be given to the foreclosed upon borrower.
Any excess money received after the sale of the foreclosed property must be given to the foreclosed upon owner.
Sean owns five parcels of property that he is willing to hypothecate for a loan to develop all the parcels. Sean will be required to execute a:
blanket mortgage.
A blanket mortgage encumbers more than one parcel of land as security for one loan.
When obtaining financing for undeveloped land upon which the borrower intends to construct a house, he/she should make sure the loan has:
a subordination clause.
A subordination clause in a loan allows a subsequent lien to take lien priority.
The period within which a mortgagor may reclaim ownership after foreclosure and sheriff’s sale is known as the:
statutory period of redemption
A judicial foreclosure and sheriff’s sale provides an opportunity for a foreclosed property owner to redeem the property following the sale. This is called the statutory period of redemption.
To slow down an escalating rate of inflation, the Federal Reserve could:
raise the discount rate charged to member banks.
In an inflationary trend, the government would want to slow down the economy. Raising the discount rate charged to member banks is one method for doing this.
If the Fed wants to heat up the economy, it buys government securities, which puts money back into the hands of consumers and businesses and back into circulation within the economy. More money in circulation means more spending and, in turn, an increase in economic growth; the opposite of decreasing an inflationary trend.
A state in which a loan secured by the real property creates an encumbrance on title to the property, rather than title being held by the lender until the debt is fully retired, is known as:
a lien theory state.
In a lien theory state, a loan creates a lien on the property and the borrower receives title at closing. In a title theory state, the lender retains title until the debt is retired in full.
When a trustee’s sale has been held, and the successful bidder is given a trustee’s deed, the alienated homeowner has no:
Check all that apply …
-further liability to the lender.
-statutory right of redemption.
A non-judicial foreclosure under a trust deed provides no statutory right of redemption nor can a lender obtain a deficiency judgment if the proceeds do not cover the amount owing to the lender.
In a tight money market one would generally find:
a buyers market
In a tight money market, there are less buyers competing for properties and sellers must make concessions to sell.
When a property secured by a deed of trust has been paid in full, the beneficiary will direct the trustee to execute a:
Deed of Reconveyance.
Within 30 days of loan payoff under a deed of trust, the beneficiary (lender) must send the trustee a request for reconveyance to the trustor (property owner). Within 21 days of receipt, the trustee must execute and record a deed of reconveyance and notify the parties. This extinguishes the lien and deeds back to the owner the right of sale given to the trustee under the deed of trust.
The mortgage market is made of the primary and __________ mortgage market.
secondary
The real estate mortgage lending system is composed of a primary and secondary mortgage market. The originating lender is known as the primary lender. The lender who buys the loan from the primary lender is known as the secondary lender.
