Section 5 - Chapter 15 Flashcards Preview

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Flashcards in Section 5 - Chapter 15 Deck (27):
1

a mortgage is:

a voluntarily lein on real estate

2

the borrower is:

the mortgagor

3

the lender is:

the mortgagee

4

In title-theory states:

mortgagor gives legal title to mortgagee but retains equitable title

5

in lein-theory states:

mortgagor/borrower holds both legal and equitable title

6

defeasance clause:

stipulates that the title must be released back to the borrower when debit is repaid in full

7

acceleration means:

asking for debit to be repaid in full upon borrower defaulting

8

mortgages have how many parts?

2 parts; the debt itself and the security for the debt

9

hypothecation is:

process of giving debtor possession and control while creditor receives underlying equitable right in the property

10

promissory note is:

borrower's personal promise to repay the debt

11

interest is:

the charge for use of money

12

usury is:

charging interest in excess of the maximum rate allowed by law

13

discount points are:

1% of the loan amount

14

deed of trust:

3-party instrument for a mortgage; conveys naked title (title without right of possession). deed given to trustee, the third party.

15

beneficiary

the lender in a deed of trust situation

16

trustor:

borrower in a deed of trust situation

17

satisfaction of mortgage is:

release of the title to the buyer

18

PITI stands for:

principal, interest, taxes, and insurance; recurring components of a borrower's monthly loan

19

novation is:

seller becomes free of original loan when house is sold

20

alienation clause is:

when property is sold, lender may declare entire debt due immediately or buyer assume loan at current market interest rates

21

subordination agreements does:

changes priority of mortgage or deed of trust liens

22

under a land contract:

buyer (vendee) agrees to make a down payment and monthly loan payments directly to seller

23

foreclosure:

when property pledges as security is sold to satisfy the debt

24

type of foreclosure:

non-judicial (no court action), judicial (sold by court order), strict (property goes directly to lender)

25

deed in lieu of foreclosure

alternative to foreclosure

26

short sale is:

lender accepts less than the amount owed on the property

27

equitable right of redemption

after default but before foreclosure, payment is made and so get the property back