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RE Study 2 Flashcards

(79 cards)

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1
Q

PITI

A

Principal; interest; taxes; insurance

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2
Q

Loan to Value

A

Amount of loan as percent of purchase price

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3
Q

Promissory Note

A

Borrower’s promise to repay

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4
Q

In Arrears

A

Payments made at end of a period

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5
Q

In Advance

A

Payments made at the beginning

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6
Q

Usury

A

Interest in excess of max allowed loan

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7
Q

Discount Points

A

Increases lender’s yield; 1% of borrowed amount NOT purchase price

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8
Q

2 Parts of Mortgage Loans

A

Debt itself; security for the debt

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9
Q

Hypothecation

A

Debtor retains right of possession and control while creditor receives equitable right

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10
Q

Satisfaction of Mortgage

A

Document issued when mortgage is paid in full

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11
Q

Lien Theory

A

States that mortgagor retains legal and equitable title that serves as a security

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12
Q

Deed of Trust

A

Conveys naked title (title w/o right of possession)

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13
Q

Acceleration Clause

A

Assists lender in foreclosure; entire balance due immediately

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14
Q

Assumption of Mortgage

A

Buyer assumes the mortgage and agrees to take over the debt

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15
Q

Alienation Clause

A

Prevents future purchaser from assuming the loan

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16
Q

Straight Loan

A

Interest only payments then paid in full

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17
Q

Amortized Loan

A

10-30yrs interest and principal; each payment first goes to interest and then principal

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18
Q

Adjustable Rate (ARM)

A

Interest fluctuates throughout loan life

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19
Q

Negative Amortization

A

Loan under water

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20
Q

Growing Equity Mortgage

A

Mortgage payments increase based on income

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21
Q

Judicial Foreclosure

A

Sold by courts

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22
Q

Non-Judicial Foreclosure

A

Power of sale clause; no court; used when borrower fails to cure

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23
Q

Strict Foreclosure

A

No sale; court gives property to lender

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24
Q

Deed In Lieu of Foreclosure

A

Mutual agreement between parties; hand property back over; no court

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25
Deficiency Judgement
Sale of the property doesn't cover the debt
26
Short Sale
Sale of property for less than what is owed
27
FHA
Neither builds nor lends loans but insures them
28
Package Loans
Covers furnished properties (ie new builds)
29
Blanket Loan
Covers more than one lot
30
Regulation Z
Truth in Lending Act (TILA); requires creditors to inform borrowers the true cost of obtaining financing
31
Community Reinvestment Act (CRA)
Lenders must invest in the communities in which they're located
32
Real Estate Settlement Procedures Act (RESPA)
Ensures the seller and buyer are fully informed of all costs related to closing
33
Closing
Title is transferred in exchange for payment
34
TILA-RESPA
Know before you owe
35
Loan Estimate Form
This form must be provided 3 days after loan application is submitted
36
Closing Disclosure
Itemizes charges for buyer and seller; borrower must receive 3 days before closing
37
Home Loan Toolkit
This form must be provided as part of the loan application
38
Mortgage Disclosure Improvement Act
Prevents consumer from receiving a low interest loan at initial application and then at settlement the lender charges more
39
Closing Statement
Accounting of the parties' debits and credits
40
Prorations
How allowances are allocated between the parties
41
Accrued Items
Buyer credits
42
Prepaid Items
Seller credits
43
Lien
Charge or claim against property
44
Types of Liens
"VISE"; voluntary, involuntary, statutory, equitable
45
General Lien
Affects all property; judgements and taxes
46
Specific Lien
Secured by specific property; vendor and mechanic's liens
47
Priority of Liens
First to record, first in right
48
Ad Valorem Tax
According to value; specific; involuntary and statutory
49
Assessment
Based on sales prices of comparable properties
50
Tax Rate
Expressed in mills; a mill is $0.001; 10 mills in a penny
51
Special Assessment
Charge to fund public improvements
52
Mechanic's Lien
Construction loan
53
Judgement
Decree issued by a court
54
Appraisal
Opinion of value based on supportable evidence and approved methods
55
Title 9 FIRREA
Requires a licensed appraiser for homes of 250k or more
56
Broker's Price Opinion
Less expensive than appraisals and used by lenders working w/ home equity lines
57
Value
Determined by "DUST"; demand, utility, scarcity, transferability
58
Market Value
Most probable price that property should bring in a market sale
59
Market Price
Asking offer, sales price
60
Cost does not equal...
Market value
61
Principles of Value
Anticipation, conformity, change, contribution, competition, highest and best use
62
Plottage
Value of 2 adjacent lots may be greater if combined
63
Assemblage
Act of combining 2 lots under one owner
64
Regression
Lavish home in modest neighborhood
65
Progression
Modest house in lavish area
66
Net Operating Income
Gross income minus operating expenses
67
Capitalization Rate
NOI divided by sell price
68
Leasehold Estate
Tenant's rights are for a term
69
Estate for Years
Estate for a definite period; no notice required for termination
70
Estate from Period to Period
Lasts an indefinite time; month to month
71
Estate at Will
Indefinite; continued until either party terminates
72
Estate at Sufferance
Tenant stays past allowed time
73
Nondisturbance Clause
Tenants are not affected if landlord defaults
74
Gross Lease
Tenant pays fixed rent and some or all of utilities
75
Net Lease
Tenant pays rent plus most or all of expenses
76
Percent Lease
Used for businesses; minimum fixed rent plus a percentage of income
77
Graduated Lease
Rent increases at set future dates
78
Index Lease
Increased or decreased rent based on changes in consumer price index
79
Constructive Eviction
Landlord is negligent and tenant can vacate/breach the contract

RE Study (3 decks)

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