Definitions

Question 1

LAND CONTRACT (aka contract for deed or installment contract)

Answer 1

Seller holds onto deed until buyer completely pays off the house

Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as a contract for deed or installment contract.

Question 2

Usury Laws

Answer 2

Sets the maximum interest that a lender can charge

protects the borrower

Question 3

REGULATION Z (aka truth in lending laws)

Answer 3

Federal law pertaining to lenders having to disclose all loan costs to borrowers

Doesn’t apply to commercial loans

Also referred to as Truth-In-Lending Laws

Question 4

REAL ESTATE SETTLEMENT PROCEDURES ACT

(RESPA

Answer 4

Federal law whose purpose is to inform borrowers ahead of time total closing costs so borrowers can shop around to get the best deal

Question 5

FULLY AMORTIZED NOTE

Answer 5

Loan where the payments apply to principal and interest; the entire principal loan balance is totally paid off over the term

Question 6

Blanket Mortgage

Answer 6

Covers more than 1 property

A blanket mortgage is a single mortgage that covers two or more pieces of real estate. The real estate is held together as collateral, but the individual properties may be sold without retiring the entire mortgage. Blanket mortgages are commonly used by developers, real estate investors, and flippers

Question 7

Package Mortgage

Answer 7

Uses both real and personal property as security

A package mortgage uses real and personal property as security

Question 8

Tenancy at Sufferance

Answer 8

A lease where the tenant stays over without permission; landlord suffers

A tenancy at sufferance is when the tenant stays over without permission and the landlord has to evict.

Question 9

Right of Redemption

Answer 9

Right of the owner to buy back his house after foreclosure

Redemption is an owner’s right to buy a property back after foreclosure

Question 10

Net Lease

Answer 10

Tenant pays expenses such as taxes and insurance.

Question 11

Gross Lease

Answer 11

Landlord pays expenses such as taxes and insurance.

Question 12

Blockbusting

Answer 12

trying to scare owners to sell by telling them that persons of a protected class are moving into the area

Question 13

Reversion

Answer 13

Right of an owner to get a property back when someone else`s rights expire.

A landlord getting his property back after tenants lease expires

Question 14

Assumable Mortgage

Answer 14

An outstanding mortgage and its terms are transferred from the current owner to a buyer

By assuming the previous owner’s remaining debt, the buyer can avoid obtaining their own mortgage.

Question 15

Encumbrance

Answer 15

A claim against a property by a party that is not the owner

Question 16

Appurtenance

Answer 16

It “runs with the land”

A right privilege or improvement that passes with the land

Question 17

Real property

Answer 17

Real estate and the bundle of rights associated with owning the real estate.

Question 18

Personal property

Answer 18

Ownership of anything that is not real estate, and the rights associated with owning the personal property item. Items of personal property are also called chattels or personalty.

Question 19

Tangible property

Answer 19

Physical, visible, and material. Real estate, by its physical nature, is tangible property. Personal property may be tangible or intangible. Boats, jewelry, coins, appliances, computers, and art work are examples of tangible personal property.

Question 20

Emblements

Answer 20

Plants and crops requiring human intervention and labor are called emblements.

Despite their attachment to land, are considered personal property

Question 21

Tie-in arrangement

Answer 21

Violates anti-trust

Says “u have to buy this stuff too if u want to purchase that”

Question 22

Price Fixing

Answer 22

Collusion between or among members of a particular trade to maintain prices at a set level.

Violates anti-trust

Question 23

Group Boycotts

Answer 23

Agreements between or among members of a particular trade that would prevent other members from fair participation in the trade’s activities.

Violates anti-trust

Question 24

Market Allocation

Answer 24

Agreements between or among members of a trade to avoid doing business in specific market areas.

Violates anti-trust

Question 25

Tie-in Arrangements

Answer 25

Arrangements that requires a buyer to purchase additional or unrelated products or services when making a product purchase. Violates anti-trust

Question 26

Acceleration Clause

Answer 26

If a borrower defaults on the loan, the lender can call the entire balance due and payable immediately.

Question 27

Alienation Clause (due on sale)

Answer 27

Prevents sale of the property without lender's approval.

Question 28

Prepayment Clause

Answer 28

Allows the lender to charge extra interest if the loan is paid off before the normal completion date.

Question 29

Adjustable rate mortgage (ARM)

Answer 29

Allows the lender to change the interest rate at specified intervals and by a specified amount.

Question 30

Loan Type: Firm commitment

Answer 30

A straightforward offer to make a specific loan at a specific interest rate for a specific term.

Question 31

Loan Type: Lock-in commitment

Answer 31

An offer to lend a specific amount for a specific term at a specific interest rate.

Question 32

Loan Type: Conditional commitment

Answer 32

Offers to make a loan if certain provisions are met.

Question 33

Loan Type: Take-out commitment

Answer 33

Offers to make a loan that will "take out" another lender's loan.

Question 34

Deed of trust

Answer 34

A deed of trust is an agreement between a home buyer and a lender at the closing of a property. It states that the home buyer will repay the loan and that the mortgage lender will hold the legal title to the property until the loan is fully paid.

Question 35

Lis Pendens

Answer 35

A written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it.

Question 36

Net listing

Answer 36

Owner sets a minimum amount that he wants to receive from the sale of the property and lets the brokerage firm have as commission any amount above the set minimum. Net listings are not illegal in Illinois, but they are discouraged.

Question 37

Void contract

Answer 37

An agreement that does not meet the tests for validity, and therefore is no contract at all. If a contract is void, neither party can enforce it.

Question 38

Reproduction value

Answer 38

The value based on the cost of constructing a precise duplicate of the subject property's improvements, assuming current construction costs.

Question 39

Exchange value

Answer 39

The value that results from comparing the property to other similar properties on the open market.

Question 40

Rental value

Answer 40

An estimate of the rental rate a property can command for a specific period of time.

Question 41

Depreciated value

Answer 41

A value established by subtracting accumulated depreciation from the purchase price of a property.

Question 42

Condemned value

Answer 42

The value set by a county or municipal authority for a property which may be taken by eminent domain.

Question 43

Salvage value

Answer 43

The nominal value of a property that has reached the end of its economic life.

Question 44

Assessed value

Answer 44

The value of a property as estimated by a taxing authority as the basis for ad valorem taxation.

Question 45

Replacement value

Answer 45

The value based on the cost of constructing a functional equivalent of the subject property's improvements, assuming current construction costs.

Question 46

Assemblage

Answer 46

Combining properties to create a value greater than the sum of the parts.

Question 47

Subdivision

Answer 47

Dividing a property to create a value greater than that of the single property.

Question 48

Straight term loan

Answer 48

Loan in which only interest is paid during the term of the loan, with the entire principal amount due with the final interest payment.

Question 49

Ministerial Acts.

Answer 49

These are acts that done for a customer that do not require any advice or use of judgment and therefore do not rise to client level services

Question 50

EXCLUSIVE AGENCY LISTING

Answer 50

A type of listing where the owner and one broker are authorized to sell and receive a commission

Question 51

Graduated Lease

Answer 51

Lease payments can go up or down. But this is predetermined | Unlike an index lease, which also goes up or down

Question 52

Ground Lease

Answer 52

Simply means leasing ground

Question 53

Mortgage/financing contingency clause

Answer 53

Says buyer can back out if he doesn't get financing

Question 54

MORTGAGOR

Answer 54

The giver of a mortgage (borrower)

Question 55

Plottage (or assemblage)

Answer 55

Plottage or assemblage is where combining properties together results in more value for all the properties than if being left separated.

Question 56

Lis pendens

Answer 56

In United States law, a lis pendens is a written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in

Question 57

Encumbrance

Answer 57

An encumbrance is a claim made against a property by someone other than the current titleholder. Some common claims are leases, liens, easements, and mortgages.

Question 58

RIGHT OF SURVIVORSHIP

Answer 58

Found in joint tenancy, when one owner dies, the ownership interest passes to the surviving owners

Question 59

Servitude

Answer 59

Right to use the land of another (such as an easement or license).

Question 60

Accretion

Answer 60

build up of soil he increase of the actual land on a stream, lake or sea by the action of water which deposits soil upon the shoreline. Accretion is Mother Nature's little gift to a landowner.

Question 61

"Voluntary alienation”

Answer 61

a normal transfer of real estate

Question 62

Wraparound mortgage

Answer 62

seller sells the property keeping the existing mortgage in place and loans extra money to the buyer.

Question 63

Equitable redemption

Answer 63

Borrower`s right to stop the foreclosure process by paying off the loan BEFORE the sale

Question 64

Attorney in fact

Answer 64

Person w/ power of attorney

Question 65

Protective period clause

Answer 65

If find buyer during listing but same buyer purchase after listing expires, brokerages still gets commission

Question 66

Alienation clause

Answer 66

Loan isn’t assumable, loan balance due on sale of property

Question 67

Fully amortized loan

Answer 67

Payments towards principal and interest, at end of term entire loan is paid off already

Question 68

Partially amortized loan

Answer 68

Payment goes to principal and interest ballon payment at end to pay off what wasn't paid already

Question 69

Chattel mortgage

Answer 69

Personal property secures loan Under a typical chattel mortgage, the purchaser borrows funds for the purchase of movable personal property from the lender

Question 70

Encroachment

Answer 70

Improvement or appurtenance that extends across the property line; e.g., fences, tree limbs, etc.

Question 71

defeasance clause

Answer 71

Whatever secures the loan is void once loan is paid off. Borrower “defeats” lender

Question 72

Avulsion

Answer 72

avulsion refers to a sudden loss of land, which results from the action of water. It differs from accretion, which describes a gradual addition to land resulting from the action of water.

Question 73

Subrogation

Answer 73

Signing over rights to an insurance company upon being paid for a claim. Insurance company goes after whoever the other pary at fault is - Subrogation is a term describing a legal right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured. - Generally, in most subrogation cases, an individual’s insurance company pays its client’s claim for losses directly, then seeks reimbursement from the other party's insurance company. - Subrogation is most common in an auto insurance policy but also occurs in property/casualty and healthcare policy claims.

Question 74

Proprietary lease

Answer 74

Lease in cooperative Also referred to as an occupancy agreement, gives a shareholder in a housing cooperative the right to occupy a particular dwelling unit. Homebuyers who join a co-op are purchasing shares in a corporation rather than acquiring real estate.

Question 75

Statutory redemption

Answer 75

Borrower redeems AFTER foreclosure sale The process, known as "statutory redemption," allows mortgagors (homeowners) a limited amount of time, often one year, to reclaim (or redeem) the property if they are able to pay what the property sold for at the foreclosure sale. (Equitable redemption - redeems property before foreclosure sale)

Question 76

Equitable redemption

Answer 76

Borrower redeems property BEFORE foreclosure sale Equitable redemption is the right of a defaulting mortgagor to reclaim property by paying all past due mortgage payments anytime PRIOR to foreclosure.

Question 77

Open End Mortgage

Answer 77

Permits the borrower to go back to the lender and borrow more money. There is usually a set dollar limit on the additional amount that can be borrowed - An open-end mortgage is a type of mortgage that allows the borrower to increase the amount of the mortgage principal outstanding at a later time. - An open-end mortgage allows a borrower to take a portion of the loan value for which they have been approved to cover the costs of their home; by taking only a portion, the borrower can pay a lower interest rate since they are only obligated to make interest payments on the outstanding balance. - An open-end mortgage is advantageous for a borrower who qualifies for a higher loan principal amount than may be needed to buy the home.

Question 78

Bargain and sale deed

Answer 78

Implies the grantor owns the property and has right to convey it. But no warranties go with it Bargain and sale deeds are typically used when transferring property in foreclosure or tax sales, because the seller is likely to have little knowledge of the history and status of the property, "indicates that only the seller of a property holds the title and has the right to transfer ownership. This type of deed offers no guarantees for the buyer against liens or other claims to the property, so the buyer could be responsible for these issues if they turn up."

Question 79

Special Warranty Deed

Answer 79

grantor only warrants against defects arising during the time he owned the property not against defects arising before he owned property