Exam Cram Vocabulary - Finance Flashcards Preview

2018 California Real Estate Broker Exam > Exam Cram Vocabulary - Finance > Flashcards

Flashcards in Exam Cram Vocabulary - Finance Deck (84):
1

A promissory with repayment

that is not sufficient to

amortize the loan over its

term; usually contains a

balloon payment at the end

PARTIALLY - AMORTIZED

INSTALLMENT NOTE

2

A document in which title to

a property is transferred to a

third party trustee as security

for a debt owed by the

trustor (borrower) to the

beneficiary (lender)

TRUST DEED

3

Holds bare legal title to

property as a neutral third

party where there is a deed

of trust used as secruity for a

loan

TRUSTEE

4

The interest held by the trustor (borrower) 

or vendee

EQUITABLE

TITLE

5

A promissory note in which 

payments of interest only are made

perdiodically during the term of the

note, with the principal payment

due in one lump sum upon maturity;

May also be a note with no

payments on either principle or

interest until the entire sum is due

STRAIGHT

NOTE

6

A note whose interest rate is

tied to a flexible index

ADJUSTABLE - RATE

MORTGAGE

7

The lender under a deed of

trust

BENEFICIARY

8

An agreement between a

property owner and the holder

of a trust deed or mortgage by

which the holder receives, as

 security, the right to collect rents

from tenants of the property in the

event of default by the borrower

 HINT: AOR

ASSIGNMENT

OF RENTS

9

A person who has obtained a 

negotiable instrument (promissory note, check)

in the ordinary course of business

1.  before it is due,

2. in good faith and for value, and

3. without knowledge that it has been previously dishonored

and without notice of any defect or set off at the

time it is negotiated

HOLDER IN

DUE COURSE

 

10

A note that is fully repaid at

maturity by peridodic 

reduction of the principal;

usually paid in equal

monthly installments

FULLY AMORTIZED

NOTE

11

The borrower under a deed of trust

 

HINT: T

TRUSTOR

12

A clause in a trust deed or

mortgage that gives the 

holder the right to sell the

property in the event of

default by the borrower

POWER OF

SALE

13

Failure to pay a debt or

honor a contract

DEFAULT

14

Evidence of obligations to

pay money

SECURITY

15

Something of value given

as security for a debt

COLLATERAL

16

To give real proeprty as

security for a debt without

giving up possession

HYPOTHECATION

17

The transfer of property to a

lender as a security for repayment

of a debt.

The lender takes possession

of the property.

PLEDGE

18

Value remaining in a

property after payment of

all liens; the difference

between the amount that is

owed and the fair market

value

EQUITY

19

A mortgage on which the

interest rate varies according

to an agreed-upon index, varying upwards and downwards

thus resulting in a change

in the borrower's monthly 

payments

(VlRs or VMRs, Variable Mortgage Rates.) An interest rate in a real estate loan which by the terms of the note varies upward and downward over the term of the loan depending on money market conditions. 

VARIABLE RATE

MORTGAGE

(VIR-VARIABLE INTEREST RATE)

(VMR-VARIABLE MORTGAGE RATE)

20

The right of the debtor,

before a foreclosure sale, to

reclaim property that had

been given up due to

mortgage default;

also known as right of redemption

EQUITY OF

REDEMPTION

21

Any written instrument that

may be transferred by

endorsement or delivery

NEGOTIABLE

INSTRUMENT

22

A written promise or order 

to pay money; evidence of

a debt

PROMISSORY

NOTE

23

The use of borrowed money

to purchase proeprty

LEVERAGE

24

The party to whom a 

promissory note is made

payable; the person

holding the note

HOLDER

25

A loan that allows the

rewriting of a new loan at

 the termination of the prior

loan

 

HINT: 

ROLLOVER

MORTGAGE

26

A loan that enables elderly homeowners

to borrow against the equity

 in their homes by receiving monthly

payment, from a lender, that are

needed to help meet living costs;

due upon a specific date or upon the occurence of a specific event, such as the sale of the property or the 

death of the borrower.

HINT: RAL

REVERSE

ANNUITY LOAN

27

A loan in which the borrower

is given a limit up to which

may be borrowed, with each

advance secured by the

same trust deed

HINT: 

A mortgage containing a clause which permits the mortgagor to borrow additional money after the loan has been reduced without rewriting the mortgage. 

OPEN END

LOAN

28

A method of financing in which a

new loan is placed in a secondary position; 

the new loan includes both

the unpaid principal balance of the first loan and whatever

sums are loaned by the lender;

sometimes call an All Inclusive Trust Deed (AITD)

WRAP-AROUND

LOAN

29

A loan that is secured by

several properties

BLANKET

LOAN

30

 A cash loan made against

the equity in the borrower's 

home

HOMEOWNER 

EQUITY LOAN

31

A purchase money deed of 

trust subordinate to, but

still including, the original 

loan

ALL INCLUSIVE

TRUST DEED (AITD)

32

A buyer takes over the 

exiting loan and agrees to 

be liable for the repayment

of the loan

ASSUMPTION

CLAUSE

33

 A buyer takes over the

exisitng loan payments

but assumes no personal

liability for the loan

SUBJECT TO

CLAUSE

34

The buyer under a contract 

of sale (land contract)

 

HINT: Picture buyer at vending machine on empty land

VENDEE

35

The seller under a contract 

of sale (land contract)

 

HINT: picture seller as a vending machine on empty land

VENDOR

36

A contract for the sale of

real property in which the 

seller gives up possession of 

the property but retains title

until the total of the purchase 

price is paid off

CONTRACT FOR

DEED

37

A legal procedure by which

mortgaged property, in which

there has been default on 

the part of the borrower, is 

sold to satisfy the debt

FORECLOSURE

38

Conveys title to property from 

a trustee back to the

borrower (trustor) upon 

payment in full of the debt 

secured by the trust deed

RECONVEYANCE

DEED

39

Title that is complete and

perfect in regard to the right

of ownership; can be held by

a trustee

LEGAL

TITLE

40

Notice given, and published,

that a trustee's sale will be

held to sell a property

to satisfy a debt

NOTICE OF

TRUSTEE'S SALE

41

Bring current and restore

REINSTATE

42

A notice to a defaulting 

party that there has been a 

nonpayment of debt

NOTICE OF

DEFAULT

43

A judgment against a

borrower for the balance of

a debt owed when the

security for the loan is not

sufficient enough to pay a

debt

DEFICIENCY

JUDGMENT

44

A deed given to a buyer of

real property at a trustee's 

sale

TRUSTEE'S 

DEED

45

The forced sale of real

property, by a lender, to

satisfy a debt

TRUSTEE'S 

SALE

46

Foreclosure by court action

JUDICIAL

FORECLOSURE

47

The borrower under a 

mortgage

MORTGAGOR

48

A legal document used as

security for a debt

MORTGAGE

49

A sale during which 

property is sold to satisy a debt

FORECLOSURE

SALE

50

The lender under a mortgage

MORTGAGEE

51

A notice that is sent, upon

request, to any parties 

interest in a trust deed 

informing them of a 

default

REQUEST FOR 

NOTICE

52

The evidence of a debt that

is recorded after a first

trust deed; a junior trust

deed

SECOND TRUST

DEED

53

Any trust deed that is

recorded after a first trust 

deed, and whose priority

is less than the first trust

deed

JUNIOR TRUST

DEED

54

A loan in which the monthly

payment that is graduated by

 a certain percentage each

year for a specific number

of years and then levels off

for the remaining term of

the loan

GRADUATED

PAYMENT ADJUSTABLE

MORTGAGE (GPAM)

55

The charge for the use of

money

INTEREST

56

The evidence of a debt 

given in exchange for cash

HARD MONEY 

LOAN

57

A trust deed created as

 evidence of a debt at the 

time of the sale of real 

property

PURCHASE

MONEY LOAN

58

Related to an adjustable-rate

loan; the lender may

alter the interest rate of a

loan based on an agreed

index

VARIABLE 

INTEREST RATE

59

The act of charging a rate

of interest in excess of that

permitted by law

USURY

60

The relationship of the total

finance charge to the total

amount to be financed as

required under the Trust in

Lending Act

ANNUAL 

PERCENTAGE RATE

(APR)

61

An agreement upon time

 after the payment of a debt is

past due during which a party

can perform without being

considered in default; usually

10 to 15 days

GRACE PERIOD

62

The original amount

borrowed

PRINCIPAL

63

A clause in a promissory note 

that allows a borrower to pay

a loan off early without

penalty

OR MORE

CLAUSE

64

An organization that obtains

funds through deposits and

then lends those funds to earn

a return; savings and loan

associations, commercial 

banks, credit unions, and 

mutual savings banks

 

HINT: FI

FINANCIAL 

INTERMEDIARIES

65

A process by which financial 

institutions, that had formerly 

been restrained in their

lending activities by the law, 

are allowed to compete 

freely for the profits in the 

marketplace

DEREGULATION

66

Abbreviation for principal, 

interest, tax, and insurance 

as commonly found in an 

all-inclusive mortgage 

payment

PITI

67

A statement that informs the 

buyer of all charges and 

expenses related to a 

particular loan

MORTGAGE LOAN

DISCLOSURE

STATEMENT

68

The process of transferring 

capital from those who 

invest funds to those who 

wish to borrow

INTERMEDIATION

69

A written notice filed with the 

county recorder by a creditor who 

has extended credit for the 

purchase of personal property; 

establishes the creditor's interest 

in the personal property, which is

security for the debt

 

HINT:  FS

FINANCING

STATEMENT

70

The interest of a creditor (lender)

in the property of a debtor (borrower).

SECURITY INTEREST

71

The device commonly used to

 secure a loan on personal

property

SECURITY

AGREEMENT

72

A way investors with a small

amount of capital can pool

their resources to buy

real estate

REAL ESTATE

INVESTMENT

TRUST (REIT)

73

A contract for the sale of 

real property in which the seller 

gives up possession but

retains the title until the 

purchase price is paid in full; 

also known as a contract of sale or land contract

AGREEMENT OF

SALE

74

A contract for the sale of real 

property in which the seller 

gives up possession but retains 

the title until the purchase price 

is paid in full; also known as a

contract of sale or agreement of sale

LAND 

CONTRACT

75

A short-term loan used to 

enable the purchaser of a 

new property to buy that 

property on the strength of 

the equity from the property 

the purchaser is now selling

SWING LOAN

76

A clause in the loan document 

that allows the lender to call 

the entire loan due upon the 

sale of the proeprty; a type of 

acceleration clause

 

A clause in a contract giving the lender certain rights in the event of a sale or other transfer of mortgaged property. 

ALIENATION

CLAUSE

77

A clause in the loan document 

describing certain events that 

would cause the entire loan to 

be due

 

 

ACCELERATION

CLAUSE

78

Under an installment loan, 

a final payment that is 

substantially larger than the 

other payments and repays

the debt in full

BALLOON

PAYMENT

79

A provision found in many 

blanket loans enabling the 

borrower to obtain a partial 

release of specific parcels

from the loan

RELEASE

CLAUSE

80

A clause in a trust deed that 

allows a lender to collect a 

certain percentage of a loan

as penalty for an early

payoff

PREPAYMENT

CLAUSE

81

A clause in which the holder 

of a trust deed, permits a 

subsequent loan to take

priorty

SUBORDINATION

CLAUSE

82

A federal law designed to 

protect persons in military 

service from loss of property 

when their ability to make the 

payment has been affected by 

their entering military service

SOLDIERS' AND SAILORS'

RELIEF ACT

83

A federal law that requires 

lenders to assure that credit is 

available with fairness, 

impartiality, and without 

discrimination

EQUAL CREDIT

OPPORTUNITY ACT

84

A federal law that requires 

borrowers to be informed 

about the cost of borrowing 

money

TRUTH IN

LENDING ACT

(REGULATION Z)