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Real Estate Exam 2.24 > Finance > Flashcards

Finance Flashcards

1
Q

Discount Points

A

The percentage of a loan which determines the amount paid to the lender to increase the return(Interest)

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2
Q

Acceleration Clause

A

Mortgage loans provision which permits the lender to demand the entire loan upfront

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3
Q

Adjustable rate mortgage

A

mortgage loan which allows the lender to periodically adjust the interest rate up or down

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4
Q

Alienation Clause/Due on Sale

A

Mortgage loans provisions which allows the lender to demand the entire loan balance due if the property s sold

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5
Q

Balloon pay off

A

a lump sum pay off of the unpaid balance or loan

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6
Q

Blanket Mortgage

A

arrangement where several parcels of land are pledged as secuirty

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7
Q

Budget Mortgage

A

mortgage loan in which loan with monthly include not only principal and interest but also 1/12th of the annual cost

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8
Q

Certificate of Eligibility

A

The VA’s official statement regarding the Certfied amount of entitlement available to a particular veteran

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9
Q

Certificate of Sale

A

issued to successful bidder at foreclosure sale (statutory period)

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10
Q

Closed mortgage

A

does not allow the borrower to pay off the loan before maturity

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11
Q

Closing cost

A

prorated charge by the lender including costs of making the loan and service charge

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12
Q

Collateral

A

property pledged to a lender as security loan

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13
Q

Conventional Loan

A

loan that is neither insured nor guaranteed by the goverement

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14
Q

Credit report

A

written report detailing the credit history

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15
Q

Deed in lei of foreclosing

A

deed given to a lender by a defaulting burrower who wishes to avoid forclosing

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16
Q

Defeasance clause

A

mortgage provision which allows the borrower to defeat the mortgage by repaying the terms of the note

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17
Q

Deficiency Judgment

A

judgement ordered by the court against the borrower when proceeds from foreclosure sale are not enough to satisfy the debt

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18
Q

Demand Deposits

A

banks deposits which are available to the depositor with no advance with =drawl notice required

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19
Q

Discount Rate

A

rate of the Federal Reserve System charges member banks to borrow money

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20
Q

Disinter mediation

A

occurs when withdrawals exceeds deposits from saving and loans association

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21
Q

Entitlement

A

The amount of the loan guarantee that a veteran is elgible

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22
Q

Equity

A

difference between the value of a property and outstanding loan

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23
Q

Equity of Redemption

A

borrower’s right to redeem property at any time after default but before a foreclosure sale

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24
Q

Estoppel Certificate

A

borrowers written acknowledgement of the loan balance

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25
Q

Exculpatory Clause

A

mortgage loan provision in which the lender waives the right to seek a deficiency judgement against the borrower

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26
Q

Fannie Mae

A

agency which buys loans from lenders to assure them of a continuing flow of funds

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27
Q

Farmers Home Administration (FMHA)

A

Federal agency under the US Department of agriculture that makes credit available to farmers

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28
Q

Federal Reserve System

A

Agency responsible for regulating and monitoring the lending practices of commercial banks

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29
Q

FHA loan

A

loan fully insured by FHA

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30
Q

FHA Mortgage Insurance(MIP)

A

mortgage insurance that protects the lender against loss in case of defaul

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31
Q

Firm Commitment

A

commitment to insure that a loan will be avaialable for a given buyer

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32
Q

First Mortgage/Subordination Clause

A

one that has the earliest recording date in most instances

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33
Q

Foreclosure by Power of Sale/Non judicial foreclosure

A

legal procedure whereby the lender is authorize by the loan agreement to sell the mortgage property upon default and apply the proceeds to the debt

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34
Q

Fully Amortized Mortgage

A

Long term repayment plan which provides for equal payments of principle and interest

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35
Q

Good Faith Estimate

A

estimate of all charges against the borrower at closing

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36
Q

Holder in Due Course

A

One,who a good faith and without notice or defect

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37
Q

Impounds

A

Monthly payments of taxes and insurance collected by the lender to assure payment of these items when they become due

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38
Q

Interest

A

amount paid or accrued in return for the use of money

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39
Q

Kickback

A

practice of accepting fees for referral without providing actual service

40
Q

Land Contract

A

also known as a installment contract buyer makes small down payment and takes possession

41
Q

Lien Theory

A

mortgage only creates a lien rather than conveying title to the lendor

42
Q

Loan Discount

A

Prepaid interest paid by the borrower in seeking a loan designed to increase the lenders return

43
Q

Loan servicing

A

lenders admin duties after a loan is placed

44
Q

Lock in Clause

A

provision which prevents the loan from being paid off early

45
Q

Loan transfer fee

A

charge for changing the lenders records when a buyer takes over the sellers existing loan

46
Q

Mortgage Correspondent

A

one who places a mortgage loans by using funds belonging to an investor

47
Q

Mortgage Clause

A

in lien theory provision gives the lender a lien in the property pledged as securty

48
Q

Mortgagor

A

Borrower

49
Q

National Banks

A

Commercial banks which are charted by Federal system

50
Q

Naked Title

A

Rights granted to a trustee by a trust deed

51
Q

Negative Amortization

A

a increase in the principle loan balance due to an insufficient amount of monthly payment to cover the accrued interest

52
Q

Negotiable insrument

A

written promise to pay certain sum of money which may be transferred by endorsement or delivery

53
Q

Notice of Lis Pendens

A

recorded notice which indicates that a lawsuit is

54
Q

Open Mortgage

A

mortgage loan which allows the borrower pay off all or part without penalty

55
Q

Open-end Mortgage

A

Entitles the borrower to receive future advances up to a certain limit

56
Q

Owner’s Rent Clause

A

mortgage provision which obligates a defaulting borrowers to pay rent while remaining in possesion

57
Q

Package Mortgage

A

a financing arrangement where the borrower pledges both real and personal property as security

58
Q

Partial Release Clause

A

provision in a blank age mortgage which obligates the lender to release release each parcel held as security upon payment

59
Q

Participation Loan

A

Financing arrangement in which the lender is made a partner as a condition of obtaining a loan

60
Q

Pledge

A

transfer of property to be held by the lender as secuirty

61
Q

Pledged account Mortage(PAM)

A

mortgage loan that requires the borrower to make gradual payments and at the same same time provide the lender with full monthly payments

62
Q

Power of Sale Clause

A

mortgage provision which enables the lender to foreclose without filing a lawsuit

63
Q

Prepayment Clause

A

allows the borrower to pay off part or all of the loan without penalty at anytime before it becomes due

64
Q

Prepayment Penalty

A

charge for paying off part or all of a loan before it becomes due

65
Q

Primary Mortgage Market

A

where individual home buyers go to obtain mortgage loan finacing

66
Q

Promissory Note

A

borrowers written promise to repay a loan

67
Q

Property Manager

A

one who is giving the responsibility of maintaining preserving and enhancing an owner’s property and a the same time generating the highest possible net

68
Q

Purchase Money Mortgage

A

financing arrangement where the purchaser gives the seller a note secured by a mortgage as part payment of the purchases price

69
Q

Real Estate Settlement Procedures Act(RESPA)

A

Federal Law which requires lenders to inform potential home buyers about various costs involved in arranging mortgage financing

70
Q

Reciever

A

a court appointed official responsible for managing a property during the period beginning after default

71
Q

Receiver Clause

A

permits a court to appoint a receiver to manage income producing property during a period of default

72
Q

Redlining

A

unlawful practice of a lender refusing to make a loan solely on the basis of the particular neighborhood involved

73
Q

Regulation Z

A

truth lending act-regulations provided lenders and those who help arrange credit for borrowers specific guidelines to follow in disclosing to borrowers their exact cost of credits

74
Q

Release of Liability

A

lender’s written statement releasing the originals borrower from further personal liability on the note

75
Q

Request for Conveyance

A

lender’s official request of the trustee to execute and deliver a re conveyance deed to the trust or as a result of paying off the loan

76
Q

Sale Lease back

A

Financing arrangement which enables a business property owner to sell property with an agreement to lease it back on a long term

77
Q

Satisfaction of Mortgage

A

written statement which cancels the debt and terminates all rights in the property held for collateral

78
Q

Secondary Mortgage Market

A

market where loans are bought from local lenders in order to provide them with a constant supply cash to originate more loans to homebuyer

79
Q

Security Agreement

A

instrument which gives a lender a security interest in personal property pledged as collateral for a loan

80
Q

Security deed

A

conveys title to lender until the debt is satisfied

81
Q

Shared Appreciation Mortgage (SAM)

A

financing arrangement in which the borrower receives a below market interest rate by allowing the lender to share in the property’s future appreciative in value

82
Q

Statutory rights of Redemption

A

delinquent borrowers rights to redeem property by paying off debt within a specified time frame

83
Q

Straight term mortgage

A

borrower makes periodic payment of interest only for a term for the loan plus a balloon payment

84
Q

Strict Foreclosure

A

enables the lender to take title from a defaulting borrower without a foreclosure sale

85
Q

Subject to

A

method of taking over a sellers existing loan without assuming any personal liability for the payment

86
Q

Swing Loan

A

short term loan allowing the purchaser to purchase a new property based on the strength of the equity from the property purchaser is sellng

87
Q

Take out Commitment

A

lender’s commitment to a contractor that permanent financing will be available to pay of a construction loan

88
Q

Thrift Institution

A

Saving and loan Association and Saving Banks

89
Q

Title theory

A

legal position adopted by some states holding that the mortgage conveys tittle to the lender.

90
Q

Trust Deed/Deed of trust

A

deed used in some states in lieu of mortgage. Title is held by a trustee on the behalf of lender

91
Q

Trustee

A

a neutral third party who holds title on the behalf of a lender until debt is paid

92
Q

Trustor

A

Borrower who executes a trust deed

93
Q

Truth in lending law

A

Federal Law which requires a lender to disclose the exact cot of credit o certain loans so the borrower can compare costs from other credit sources before committing to take the loan

94
Q

Uniform Settlement Statemment

A

reprinted form on which RESPA requires the lender of certain loans to itemize all settlement charges

95
Q

Usury

A

legal limit of interest imposed by state laws, does not apple to VA and FHA loans

96
Q

Warehousing

A

loan correspondents practice holding mortgage in his or name until they can be assembled into a package of loans and sold to an investor

97
Q

Wraparound Mortgage

A

a junior mortgage which includes the amount of any existing loans plus the balance of the sellers equity after deducting the buyers down payment

Real Estate Exam 2.24 (6 decks)

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