Section 9: Deeds, Mortgages, and Taxes

Question 1

Deeds, Mortgage, and Taxes:
Financing Real Estate:
* There are many types of financing from both public sources and private sources.
* Most common types of financing are mortgages and ________ but seller financing/land contracts are still very popular.

Answer 1

Deeds of Trust

Question 2

Deeds, Mortgage, and Taxes:
Financing Real Estate:
* When discussing Financing property, we need to understand what each ________ does and when it would be used.

Answer 2

Instrument

Question 3

Deeds, Mortgage, and Taxes:
Financing Real Estate:
IMPORTANT : Arizona is a ‘deed of trust’ state and so ________ are preferred by institutional lenders over mortgages for loans secured by a buyer’s home.

Answer 3

Trust Deeds

Question 4

Deeds, Mortgage, and Taxes:
Instruments:
* When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property:
1. The ________
2. The Financing Instrument (Mortgage, Deed of Trust, Land Contract (aka –Seller Financing, Owner Financing/Carry, Vendor/Vendee))

Answer 4

Note / Promissory Note

Question 5

Deeds, Mortgage, and Taxes:
Instruments:
* When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property:
1. The Note (Promissory Note)
2. The ________ (Mortgage, Deed of Trust, Land Contract (aka –Seller Financing, Owner Financing/Carry, Vendor/Vendee))

Answer 5

Financing Instrument

Question 6

Deeds, Mortgage, and Taxes:
Promissory Note:
- ________ Amount
- ________ Rate
- Loan ________Term
- Default ________
- ________ Of Payment
- ________

Answer 6

Loan

Interest

Triggers

Method

Signature

Question 7

Deeds, Mortgage, and Taxes:
Promissory Note:
What is required on the Promissory Note?
1.
2.
3.
4.
5.
6.

Answer 7

• Loan Amount
• Interest Rate
• Loan Term
• Default Triggers
• Method Of Payment
• Signature

Question 8

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
The Note:
* The Note or Promissory Note gives evidence of a ________.

Answer 8

Debt

Question 9

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
The Note:
IMPORTANT: A Promissory Note is a ________ signed by a Borrower.

Answer 9

Financing Instrument

Question 10

When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
The Note:
* Primary document that evidences the borrower’s legally enforceable promise to repay and it is typically ________ along with the deed.

Answer 10

Recorded

Question 11

When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
The Note:
*The ________ is the primary document that evidences the borrower’s legally enforceable promise to repay the loan (IOU).

Answer 11

Promissory Note

Question 12

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
The Note:
* Can be used as evidence of a ________ on both personal and real property.

Answer 12

Lien

Question 13

When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
The Note:
* A Promissory Note is a financing instrument signed by a borrower.
* Contains the payment terms and ________:
o Loan amount
o Interest rate
o Loan term
o Default trigger
o Method of payment etc.

Answer 13

Conditions

Question 14

When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
The Note:
IMPORTANT:
Promissory Note:
The primary loan document that proves a promise to ________ the debt.

Answer 14

Repay

Question 15

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
* The financing ‘instrument’ is document that provides the ________ for the note.

Answer 15

Security

Question 16

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
o Used for borrowers who NEED to ________ money for a home or other type of real estate purchase.
 Mortgage
 Trust Deed
 Land Contract (aka –Seller Financing, Owner Financing/Carry, Vendor/Vendee).

Answer 16

Borrow

Question 17

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
IMPORTANT: The financing instrument is recorded with the ________ where the property is located to give evidence to the public that a financing instrument exists.

Answer 17

County

Question 18

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
* A borrower in need of financing would hypothecate their ________ to the lender.

Answer 18

Collateral

Question 19

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
Hypothecation:
* Hypothecation:
The ________ of property as security for an obligation or a loan without losing possession of it (You stay in the house you hypothecated to the lender).

Answer 19

Pledging

Question 20

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
Hypothecation:
* The BORROWER will offer to the lender the property as collateral to ________ the loan and will secure it or ‘hypothecate it’ with a mortgage or deed of trust.

Answer 20

Obtain

Question 21

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
Hypothecation:
* The Borrower gets to stay in the property and use/enjoy it while the lender uses that property as collateral against the loan.
*It is the mortgage, deed of trust or land contract document that provides the rights to a lender to ________ if you fail to make the monthly payments.

Answer 21

Foreclosure

Question 22

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
Hypothecation:
*By hypothecating to the lender the rights to the property, the borrower is giving ________ or the rights to sell in case of default to the lender.

Answer 22

Legal Title

Question 23

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
Hypothecation:
When the borrower gives up or hypothecates their property to the lender, they are allowing the lender to show ________ to the property being financed. The lender needs to show proof that in case the borrower doesn’t repay the loan, the lender can foreclose or take back the property, so the lender has legal title.

Answer 23

Legal Rights

Question 24

Deeds, Mortgage, and Taxes:
When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two:
Financing Instruments:
Hypothecation:
________: “the rights to dispose of the property”.

Answer 24

Legal Title

Question 25

Deeds, Mortgage, and Taxes: When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two: Financing Instruments: Hypothecation: Legal Title: "The rights to ________ of the property" *This is the "D" in the DEEP-C, this is the rights to DISPOSE, in cases of DEFAULT.

Answer 25

Dispose

Question 26

Deeds, Mortgage, and Taxes: When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two: Financing Instruments: Hypothecation: When the borrower gives the LEGAL TITLE to the lender or trustee, the borrower has ________, or the rights to enjoy the property while another party has the legal title to it. In this case, it's known that the borrower has 'equity' in the property, and they won't have full legal title until the property is paid back in full, at which time the lender/trustee will give back the legal title (once the promise to repay was satisfied).

Answer 26

Equitable Title

Question 27

Deeds, Mortgage, and Taxes: When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two: Financing Instruments: Hypothecation: ________: "the rights to enjoy the property when the lender has legal title".

Answer 27

Equitable Title

Question 28

Deeds, Mortgage, and Taxes: When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property this is one of these two: Financing Instruments: Mortgage: Mortgage is Latin for “________”

Answer 28

Death Pledge [Mort = Death] [Gage = Pledge]

Question 29

Deeds, Mortgage, and Taxes: Mortgages: * Mortgages are used frequently in many states as a form of financing. IMPORTANT: Mortgages are available in AZ but they are not commonly used. REMEMBER: Mortgage has ________ Parties: Death Pledge is 2 words SO there are 2 parties.

Answer 29

Two

Question 30

Deeds, Mortgage, and Taxes: Mortgages: * When a mortgage is used as the “financing document” there are two parties: *________= BorrowOR (Giv-or of the Monthly Payments). *________= Lender (Receiv-EE of the Monthly payments).

Answer 30

MortgagOR MortgagEE

Question 31

Deeds, Mortgage, and Taxes: Mortgages: * The mortgage is a document that you give to the lender that creates a lien on the property. It is given as security for the debt borrowed. IMPORTANT: It hypothecates the property and gives the rights to sell to the mortgagee in case of ________.

Answer 31

Default

Question 32

Deeds, Mortgage, and Taxes: Mortgages: Understanding Equitable Title in a Mortgage: Remember, ________ in real estate refers to the INTEREST or RIGHTS a party has in a property, even though they may not have legal title to it. This means that while they don't hold the LEGAL title (the bank does), they still have certain rights and benefits associated with the property.

Answer 32

Equitable Title

Question 33

Deeds, Mortgage, and Taxes: Mortgages: Understanding Equitable Title in a Mortgage: In the context of a mortgage, equitable title typically refers to the interest the borrower (or mortgagor) has in the property. When a person takes out a mortgage to buy a property, the legal title to the property is held by the ________ as security for the loan until the debt is fully paid off.

Answer 33

Lender / Mortgagee

Question 34

Deeds, Mortgage, and Taxes: Mortgages: Understanding Equitable Title in a Mortgage: However, the borrower retains EQUITABLE title to the property, which grants them the right to use, possess, and benefit from the property as long as they meet their mortgage obligations. Once the mortgage is ________, the borrower will typically receive the legal title to the property, and their equitable title will be MERGED with the LEGAL title, giving them FULL ________.

Answer 34

Paid Off Ownership Rights

Question 35

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: * This is a ‘financing instrument’ and it is recorded with the county where the property is: * ARIZONA is a Trust Deed or Deed of Trust State. * The Deed of Trust is the document that creates a lien on Arizona real property to secure payment of a debt or satisfaction of an ________.

Answer 35

Obligation

Question 36

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: * ________ is used frequently to create a lien on real property to secure the obligations contained in the Note or Promissory Note.

Answer 36

Deed of Trust

Question 37

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: o Certain Items need to be identified in a deed of trust and include:  A legal description of the property that will be used as security. IMPORTANT: All parties involved in the process: 1. 2. 3.

Answer 37

Trustor Trustee Beneficiary

Question 38

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties In a Deed of Trust there are three parties involved: o ________=Borrower “Giv-or of the bare legal title to the trustee”. Trustor has equitable title (right to use and possess). Trustor gives power of sale to Trustee if they fail to pay. o ________=The person or entity that “benefits” from payments (Banks/Lenders). o ________=Neutral Third Party. “Receiv-ee who receives or holds legal title”.

Answer 38

Trustor Beneficiary Trustee

Question 39

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust:  In Arizona, six entities can serve as trustees; Attorneys, ________, title or escrow companies, insurance agents, public fiduciaries, & real estate brokers.

Answer 39

Banking Institutions

Question 40

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: ________: "Borrower in a deed of trust who gives legal title to the trustee and payments to the beneficiary". - This person is the Giv-or of legal title to the trustee. - This person has equitable title (right to enjoy). - This person gives power of sale to Trustee if they fail to pay.

Answer 40

Trustor

Question 41

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: ________: "Neutral Third Party in a deed of trust who holds legal title". * “Receiv-ee who receives or holds legal title.

Answer 41

Trustee

Question 42

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: * In Arizona, six entities can serve as trustees: Attorneys, banking institutions, title or escrow companies, insurance agents, ________, & real estate brokers.

Answer 42

Public Fiduciaries

Question 43

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: * In Arizona, six entities can serve as trustees: Attorneys, banking institutions, title or escrow companies, insurance agents, public fiduciaries, & ________.

Answer 43

Real Estate Brokers

Question 44

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: * In Arizona, six entities can serve as trustees: ________, banking institutions, title or escrow companies, insurance agents, public fiduciaries, & real estate brokers.

Answer 44

Attorneys

Question 45

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: * In Arizona, six entities can serve as trustees: attorneys, banking institutions, ________, insurance agents, public fiduciaries, & real estate brokers.

Answer 45

Title or Escrow Companies

Question 46

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: * In Arizona, six entities can serve as trustees: Attorneys, banking institutions, title or escrow companies, ________, public fiduciaries, & real estate brokers.

Answer 46

Insurance Agents

Question 47

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: ________: “The person or entity that benefits from payments (Banks/Lenders)”.

Answer 47

Beneficiary

Question 48

Deeds, Mortgage, and Taxes: Financing Instrument: o ________ = the document that contains the PROMISE to repay the loan. REMEMBER: I Owe U [IOU]

Answer 48

The Promissory Note

Question 49

Deeds, Mortgage, and Taxes: Deed of Trust as a Financing Instrument: HINT: 3 Words - 3 Parties Deed of Trust: o ________: The document that pledges or HYPOTHECATES the property as security for the loan.

Answer 49

Deed Of Trust

Question 50

Deeds, Mortgage, and Taxes: Mortgage: Quiz: Which of these statements are incorrect? The Promissory Note is the primary document that evidences the borrower’s legally enforceable promise to repay the loan. The mortgage is a document that you give to the lender that creates a lien on the property, given as security for the debt borrowed. In a deed of trust, the three parties involved are; Trust-or, Beneficiary, Trustee Mortgage is latin for 'Life Pledge'

Answer 50

Mortgage is latin for 'Life Pledge'

Question 51

Deeds, Mortgage, and Taxes: Mortgage: Case Study: Q: What two instruments does a borrower need to use as evidence that a loan was obtained for a property?

Answer 51

When financing a purchase, a borrower will have two written instruments that are used as evidence that a loan was used to obtain the property: 1. The Note (Promissory Note) 2. The Financing Instrument (Mortgage, Deed of Trust, Land Contract)

Question 52

Deeds, Mortgage, and Taxes: Mortgage: Case Study: Name three terms and conditions that are on a Promissory Note.

Answer 52

Promissory Note Contains the payment terms and conditions: 1. Loan amount 2. Interest rate 3. Loan term 4. Default trigger 5. Method of payment REMEMBER: M.I.L.L.D. Sauce

Question 53

Deeds, Mortgage, and Taxes: Mortgage: Case Study: Does Arizona primarily use Mortgages or Deed of Trusts? What is the difference between the two?

Answer 53

It is a Deed of Trust primarily used by Arizona. A deed of Trust is a ‘financing instrument’ recorded with the county where the property is located. However, Mortgages are used frequently in many states as financing (Not in AZ). The mortgage is a document you give the lender that creates a lien on the property. It is given as security for the debt borrowed.

Question 54

Deeds, Mortgage, and Taxes: Mortgage: Case Study: Q: What parties are involved in the process of a Deed of Trust?

Answer 54

In a Deed of Trust, there are three parties involved 1. Trustor 2. Beneficiary 3. Trustee

Question 55

Deeds, Mortgage, and Taxes: Mortgage: Quiz: In the State of Arizona, the two written instruments that are commonly used as evidence of a loan are? Promissory Note and Deed of Trust Promissory Note and Deed in Lieu The borrower or trustor would sign the promissory note and the Deed of Trust Recorded Note and Deed for Sale

Answer 55

Promissory Note and Deed of Trust

Question 56

Deeds, Mortgage, and Taxes: Mortgage: Quiz: Amanda goes to the credit union in her home town in hopes of borrowing money that can be used to purchase a property. She is told that she can qualify for a 10% down mortgage and she agrees. Which of the following parties would be required to sign and date the mortgage? Lender Only Borrower Only Lender and Borrower Lender, Borrower and Witnesses

Answer 56

Borrower Only

Question 57

Deeds, Mortgage, and Taxes: Mortgage: Quiz: A borrower wishes to obtain a purchase money loan for their purchase of a home located in Arizona. The bank offers them a loan, as long as the borrower will allow the lender to create a lien on the house that was being used as collateral. In this case, the lender and the borrower are known as? Beneficiary and Trustee Trustee and Trustor Beneficiary and Trustor Trustor and Mortgagor

Answer 57

Beneficiary and Trustor

Question 58

Deeds, Mortgage, and Taxes: Mortgage: Quiz: Which of the following may not serve as a trustee in the State of Arizona? Escrow Company Insurance Agent Real Estate Broker Trustor

Answer 58

Trustor

Question 59

Deeds, Mortgage, and Taxes: Mortgage: Quiz: In Arizona, the trustor gave what to the Trustee? Recognized Title Legal Title Clear Title Marketable Title

Answer 59

Legal Title

Question 60

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: REMEMBER: The -OR is the ________ and the -EE is the ________.

Answer 60

Giv-or Receiv-ee

Question 61

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: * ________, contract for deed, installment contracts & Land Contracts are all terms used to describe the same CONCEPT of SELLER FINANCING.

Answer 61

Agreement for Sale

Question 62

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: * Agreement for sale, ________, installment contracts & Land Contracts are all terms used to describe the same CONCEPT of SELLER FINANCING.

Answer 62

Contract for Deed

Question 63

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: * Agreement for Sale, contract for deed, ________ & Land Contracts are all terms used to describe the same CONCEPT of SELLER FINANCING.

Answer 63

Installment Contracts

Question 64

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: * Agreement for Sale, contract for deed, installment contracts & ________ are all terms used to describe the same CONCEPT of SELLER FINANCING.

Answer 64

Land Contracts

Question 65

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: *The ________ is acting as the bank or lender but they don’t surrender LEGAL title until the loan has been paid in full, but allow the borrower/buyer EQUITABLE title.

Answer 65

Seller

Question 66

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: REMEMBER: There are only the two parties in this case, the Seller/________ and the Buyer/________.

Answer 66

Vendor Vendee

Question 67

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: o ________: "The seller who is financing the buyer and will eventually give up LEGAL title once paid in full".

Answer 67

Vendor

Question 68

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: o ________: "The buyer, who is being financed, and will receive LEGAL title once the vendor is paid back in full".

Answer 68

Vendee

Question 69

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: * The seller/VENDOR allows the vendee the use and possession of the property, They hold ________ until the loan is paid back in full at which point the LEGAL title or DEED is then given to the buyer/VENDEE.

Answer 69

Equitable Title

Question 70

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: * Easy for the seller/VENDOR to repossess or foreclose or take back–based on TIMELINES. * This is known as “________”. The buyer gives up their equity due to non-payment.

Answer 70

Vendee Forfeit

Question 71

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: In Arizona, specifically, if a seller is offering this type of Vendor/Vendee financing, the vendor already has the legal title and the deed, so there isn't a need to foreclosure if the buyer defaults on payments. IMPORTANT: In this case, there is a '________' which is based on how much EQUITY the vendee has in the property.

Answer 71

Forfeiture of Equity

Question 72

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ less than 20% Equity: ________ Day Redemption Period

Answer 72

30 Day

Question 73

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ 21% to 30% Equity: ________ Day Redemption Period

Answer 73

60 Day

Question 74

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ 31% to 50% Equity: ________Day Redemption Period

Answer 74

120 Day

Question 75

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ 51% or more Equity: ________ Day Redemption Period

Answer 75

270

Question 76

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity. If the Vendee fails to perform, the Vendor can file a notice in the county and serve notice to the Vendee by Process Server or ________.

Answer 76

Certified Mail

Question 77

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ less than ________% Equity: 30 day redemption period

Answer 77

20%

Question 78

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ _______% to ________% Equity: 60 day redemption period

Answer 78

21% to 30%

Question 79

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ _______% to ________% Equity: 120 day redemption period

Answer 79

31% to 50%

Question 80

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: *Forfeiture timelines in case of default is based upon the amount of equity: ▪Vendee @ ________% or more Equity: 270 day redemption period

Answer 80

51%

Question 81

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: * If the Vendee fails to perform, the Vendor can file a notice in the county and serve notice to the Vendee by person or certified mail. The notice shall be delivered at least ________ Days prior to actual forfeiture of property and equity. The publication is to give notice to other creditors or the general public and needs to be recorded to be valid.

Answer 81

20 Days

Question 82

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: * The Vendee (or anyone else) becomes current to the Vendor again, the seller or Vendor will need to file a ________, publicly acknowledging that the vendee is current again and will not forfeit their equity.

Answer 82

Notice of Reinstatement

Question 83

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Foreclosure: * The publication and recording of the “________” gives notice again to all parties that the vendor has taken back the property and all the equity with it.

Answer 83

Completion of Forfeiture

Question 84

Deeds, Mortgage, and Taxes: Seller Financing in Arizona: Quiz: A vendee in Arizona put 10% down and has made payments equal to an additional 25% equity. If the vendee defaults how much time would the vendor need to give to redeem the property? 30 days 120 days 240 days 270 days

Answer 84

120 days REMEMBER: ADD THE DOWN PAYMENT + ADDED EQUITY FOR COMPLETE AMOUNT OF EQUITY.

Question 85

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: * There are two types of States * ________ Theory * ________ Theory

Answer 85

Lien Title

Question 86

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: ________ Theory States: *These states use Deeds of Trust (Like Arizona) *Borrower gives LEGAL TITLE to a 3rd party, the trustee, who holds onto it until the debt is repaid.

Answer 86

Lien

Question 87

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Lien Theory States: IMPORTANT: The BANK or LENDER DOES NOT have the legal title which gives them the ________. *Lender has a “Recorded Lien” against the property to prove their financial interest.

Answer 87

Rights to Sell

Question 88

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: LIEN Theory States: *Lender records their lien to show evidence that they are owed money. o This is a “________” and is designed to show evidence of the lien. The borrower does not have clear title. Remember a this directly affects the marketability of the title.

Answer 88

Cloud on the Title

Question 89

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: LIEN Theory States: o Lender of mortgaged property holds ________ rather than legal title. o Borrower holds ________ and the deed.

Answer 89

Equitable Title Legal Title

Question 90

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: LIEN Theory States: *Arizona is a LIEN THEORY STATE. *Arizona being a lien theory state means that Title will ________ at Close of Escrow (COE) and a deed of trust is recorded as EVIDENCE of the transfer. (NOT a Mortgage!!).

Answer 90

Transfer

Question 91

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: LIEN Theory States: * The borrower or trustor in Arizona is allowing the lender or Beneficiary to place a lien on the property–this is a voluntary & ________ lien.

Answer 91

Specific

Question 92

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: LIEN Theory States: o The TRUSTOR (borrower) is now referred to as the ________ (Receiv-EE of the Lien).

Answer 92

Lienee

Question 93

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: LIEN Theory States: o The BENEFICIARY (lender) is now referred to as the ________ (Giv-OR of the Lien).

Answer 93

Lienor

Question 94

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: TITLE Theory States: *Title Theory States use ________.

Answer 94

Mortgages

Question 95

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: TITLE Theory States: *IMPORTANT: Borrower has EQUITABLE TITLE *This is the rights to enjoy the property. - REMEMBER: DEEP-C *These Rights ONLY include: 1. 2. 3. 4.

Answer 95

Enjoyment Exclusion Possession Control

Question 96

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: TITLE Theory States: *IMPORTANT: Lender has LEGAL TITLE they have some of the Bundle of Rights - ________. - REMEMBER: DEEP-C

Answer 96

Disposition

Question 97

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: TITLE Theory States: *IMPORTANT: Lender holds legal title to the mortgaged property until the mortgagor satisfies the terms and obligations of the loan. *IMPORTANT: Lender gives the ________ to the borrower once all payments have been made. **Helpful Hint: This is the same thing as driving a new car off the lot that was paid for using a loan from a bank. You Drive the Car, you Use the car and you Enjoy the Car. The Bank holds title (rights to repossess or sell) to the car until it is paid off then the title is released to you. You have equitable title until it is paid off. Distressed Properties

Answer 97

Legal Title

Question 98

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: TITLE Theory States: IMPORTANT: Whoever has the "D" in the bundle of rights, the "DISPOSITION" - holds ________.

Answer 98

Legal Title

Question 99

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: TITLE Theory States: If the lender holds the LEGAL title, it is a ________Theory State.

Answer 99

Title

Question 100

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: TITLE Theory States: If the lender does NOT hold the title, they MUST have a LIEN to show evidence they are owed money - thus, they are in a ________ Theory State!

Answer 100

Lien

Question 101

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Distressed Property Types: * ________: o A seller and a lender who agree to sell the property for less than the full amount owed is a short sale

Answer 101

Short Sale

Question 102

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Distressed Property Types: ________: o This is any listing where the owner/seller is the bank or lending institution.

Answer 102

Bank Owned Property / Real Estate Owned [R.E.O.]

Question 103

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Distressed Property Types: *________: o A seller who is under this agreement, they have a time of REPRIEVE where the bank is allowing a set time for the borrower to NOT make payments while AVOIDING foreclosure.

Answer 103

Forbearance

Question 104

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Distressed Property Types: *________: o The loan modification is where lender will allow the borrower the opportunity to adjust the terms, in an effort to keep them in the property.

Answer 104

Loan Modification

Question 105

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: True or False: Arizona is not a lien theory state. True False

Answer 105

True

Question 106

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Case Study: Regarding seller financing, when will the legal title be transferred to the buyer? What type of title will the seller give the buyer in the meantime?

Answer 106

The seller is acting as the bank or lender, but they don’t surrender legal title until the loan has been paid in full, but allow the borrower/buyer equitable title

Question 107

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Case Study: What does Vendee Forfeit refer to?

Answer 107

“Vendee Forfeit” means the buyer gives up their equity due to nonpayment. The vendor allows the vendee to use and possess the property until the loan is paid back in full, at which point the legal title or deed is given to the buyer/vendee. It is easy for the seller to repossess, foreclose, or take back – based on timelines.

Question 108

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Case Study: Is Arizona a Lien Theory or Title Theory state? What is the difference between a Lien Theory and a Title Theory state?

Answer 108

Arizona is a LIEN THEORY STATE. LIEN Theory States use DEEDS of TRUST while TITLE Theory States use MORTGAGES.

Question 109

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Case Study: What option may be available to a homeowner instead of a foreclosure? What are the benefits of this?

Answer 109

The homeowner can ‘give up’ rights and possession to the bank instead of foreclosure. This makes it possible to negotiate a deal in which the lender agrees not to pursue a deficiency judgment. Moreover, deeds given IN LIEU prevent FORECLOSURE and negatively impact credit.

Question 110

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Quiz: Arizona is typically referred to as a? Deed of Trust State Mortgage State Beneficiary State Community Deed State

Answer 110

Deed of Trust State

Question 111

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Quiz: In a state where Trust Deeds are used, who has the right to sell the property in case of foreclosure action taken? Original Lender Trustee Beneficiary Grantor

Answer 111

Trustee

Question 112

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Quiz: In which type of state does a borrower have equitable title? Lien theory Title theory Community property Service Theory

Answer 112

Title Theory

Question 113

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Quiz: At what point does the legal title transfer to the buyer in a Land Contract? At time of sale Once the loan is paid back in full At the recordation of the contract At the recordation of the Notice of Reinstatement

Answer 113

Once the loan is paid back in full

Question 114

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Quiz: If a Vendee has $144,000 in equity on a house that is valued at $190,000 where the seller is financing the buyer under a contract for deed, how many days does he/she have for redemption before the seller can foreclose? 270 Days 180 Days 120 Days 90 Days

Answer 114

They have 75% Equity in the property so they have 270 Days

Question 115

Deeds, Mortgage, and Taxes: Lien Theory and Title Theory States: Quiz: Central Bank has legal title to an owner’s property. The owner of the property borrowed money in the form of a mortgage. In this case, Legal Title stays with which party? Lender Trustee Beneficiary Owner

Answer 115

Lender

Question 116

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: REMEMBER: In a Mortgage Foreclosure the ________ is the Borrower and ________ is the Lender.

Answer 116

Mortgagor Mortgagee

Question 117

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: * Requires the Mortgagee to go through “________” procedures which are usually more costly to the lender and take longer as the courts must now be involved.

Answer 117

Judicial Foreclosure

Question 118

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: *IMPORTANT: Require a period of ________ which varies by States Statutes *The courts act as NEUTRAL third party and determine if mortgagee can LEGALLY foreclose. *There is still the REQUIRED time period however per each state.

Answer 118

Redemption

Question 119

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: Redemption Period: “A timeframe where the Mortgagor who lost the property in the judicial sale can ________ the property by paying back all fees”.

Answer 119

Redeem

Question 120

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: *Mortgages contains an ________ which gives lenders the rights to foreclose o If however this clause were missing, it would be difficult to proceed with the foreclosure.

Answer 120

Acceleration Clause

Question 121

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: o IMPORTANT: By denying the mortgagor the right to redeem the property after the foreclosure sale, then the lender could be deemed a ________ and have LIABILITY to the borrower.

Answer 121

Wrongdoer

Question 122

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: ________: If upon defaulting on a mortgage, the lender can call the whole loan payable upon default and thus accelerates the forced sale.

Answer 122

Acceleration Clause

Question 123

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: *________: Timeframe where the Mortgagor who lost the property in the judicial sale can redeem the property by paying back all fees.

Answer 123

Redemption Period

Question 124

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure: *________: If upon defaulting on a mortgage, the lender can call the whole loan payable upon default and thus accelerates the forced sale.

Answer 124

Acceleration Clause

Question 125

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure In AZ: *IMPORTANT: ________ Foreclosures also known as ________Foreclosures in Arizona are RARE as we are a deed of trust state but CAN exist if that was what the borrower and lender agreed upon.

Answer 125

Judicial Mortgage

Question 126

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure In AZ: o A borrower who agreed to use a mortgage and is foreclosed on in Arizona, must have a ________ Month Period of Redemption per the Arizona Revised Statutes.

Answer 126

6 Month

Question 127

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure In AZ: Sheriffs Sale and Sheriff’s Certificate of Sale: The deed granted by the courts in a Judicial foreclosure is a Sheriffs Deed, but before the borrower can obtain the deed, they MUST wait the redemption period. They will have a Sheriff's Certificate to show "________" or, that they were the buyers at the mortgage sale.

Answer 127

Proof of Purchase

Question 128

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure In AZ: o ________: The deed granted by the courts in a judicial foreclosure is a Sheriffs Deed. This deed offers little protection to the buyer and is an act of law.

Answer 128

Sheriffs Sale / Sheriff’s Certificate

Question 129

Deeds, Mortgage, and Taxes: Mortgage Foreclosure Process: Mortgage Foreclosure In AZ: o ________: A deed that offers little protection to the buyer and is used to convey ownership as an act of law and is used in mortgage foreclosures.

Answer 129

Sheriff’s Deed

Question 130

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: REMEMBER: Arizona is a Lien Theory state and we use the Trust Deed and as such, we use ________ who hold legal title–which allows them the “RIGHT to SELL” the property.

Answer 130

Trustees

Question 131

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: o ________ holds the LEGAL title, while the ________ holds EQUITABLE title.

Answer 131

Trust-ee Trust-or

Question 132

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: IMPORTANT: Deed of Trust Foreclosure : NON-JUDICIAL foreclosure process: o Since the trustor gave their legal title to the trustee to hold for the Beneficiary voluntarily, ________ do NOT need to intervene on behalf of the borrower or lender.

Answer 132

Courts

Question 133

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: IMPORTANT: Deed of Trust Foreclosure : NON-JUDICIAL foreclosure process: o Lender can foreclose the Deed of Trust and cause the property that is SECURED by the Deed of Trust to be sold via public auction at a ________. They have the Power.

Answer 133

Trustee Sale

Question 134

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: IMPORTANT: Deed of Trust Foreclosure : NON-JUDICIAL foreclosure process: o Deeds of trust have a ________ Day Reinstatement Period in which loans can be made good by repaying back payments and any fees and penalties.

Answer 134

90 Day

Question 135

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: IMPORTANT: Deed of Trust Foreclosure: NON-JUDICIAL foreclosure process: o Arizona the MINIMUM time to foreclose is ________ Days due to the Statutory Redemption.

Answer 135

90 Days

Question 136

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: ________: A sale of real property held by the trustee on behalf of the beneficiary where upon sale a deed is granted by the trustee to the auction winner.

Answer 136

Trustee’s Sale

Question 137

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Trustee’s Sale: There is NOT an ACCELERATION clause as the trustee has the legal title already. There is NOT a ________ in a Deed of Trust Foreclosure in Arizona.

Answer 137

Redemption Period

Question 138

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Trustee’s Sale: * A Trustees deed is granted by the trustee to the ________ winner. * There is NOT an acceleration clause as the trustee has the legal title already. * There is NOT a redemption period in a Deed of Trust Foreclosure in Arizona.

Answer 138

Public Auction

Question 139

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 1. The Trustor or borrower ________ on the terms and conditions of the loan.

Answer 139

Defaults

Question 140

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 2. The ________ records a notice of default and pending notice of trustee’s sale. This is considered giving Constructive Notice.

Answer 140

Beneficiary

Question 141

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 3. The Beneficiary ________ the trustor of default in writing and instructs trustee to conduct a sale on behalf of the Beneficiary.

Answer 141

Notifies

Question 142

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: TRUSTEE has the LEGAL title = RIGHT to ________.

Answer 142

Sell

Question 143

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 4. Constructive Notice is given to the general public by ________ an election to sell real property and trustor (borrower) is given Actual Notice being sent certified mail.

Answer 143

Recording

Question 144

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 5. The minimum time from date of default to actual trustee’s sale is ________ Days in Arizona.

Answer 144

90 Days

Question 145

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 6. To give legal notice to the general public, the pending sale must be published in a general circulation newspaper or other periodical for a period of ________ Weeks.

Answer 145

3 Weeks

Question 146

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 7. Auction and sale can be held on county courthouse steps, in an office of the ________ or in some cases at the actual site of the property.

Answer 146

Trustee

Question 147

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 8. The beneficiary enters a ________ which must be met in order for a sale to take place. This amount is published before the time of the sale and it maybe the entire amount owed plus fees or another amount that is much lower if the lender does not want the property back.

Answer 147

Reserve Bid

Question 148

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 9. A Trustees deed goes to the ________ bidder on the property.

Answer 148

Highest

Question 149

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: 10. If there is leftover money after the loan and fees are paid to the beneficiary”. IMPORTANT: - Subordinate or junior ________ will get paid with what is left over from the sale.

Answer 149

Lienholders

Question 150

Deeds, Mortgage, and Taxes: Steps Taken in an Arizona Foreclosure: IMPORTANT: - Remaining money, if any after all costs are paid, goes back to the ________.

Answer 150

Trustor / Borrower

Question 151

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: The lienholders will be paid back from the sale proceeds in the manner in which they were recorded in time. First in time, is first in line to get paid back. If, after all money has been paid back to the lenders, the excess money from the foreclosure sale will go back to the previous owner.

Answer 151

Excess Money Bid

Question 152

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: The lender bids the debt that the borrower owes. Basically, the lender gets a credit in this amount. The lender can bid the full amount of the debt, including foreclosure fees and costs, or it might bid less.

Answer 152

Lender’s Credit Bid

Question 153

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: A bid that occurs when the foreclosing lender submits a written bid less than the amount owed. The foreclosing lender may elect to sue the homeowner who signed the original promissory note, for the amount of the deficiency.

Answer 153

Deficient Bid

Question 154

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: An act of yielding a position. Lenders usually want to be in first place, but if a lender were to agree to ‘subordinate’ their position, it would mean taking a back seat to the new lender, not likely.

Answer 154

Subordination

Question 155

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: This clause ensures that a tenant will not be evicted in the event that the landlord goes bankrupt.

Answer 155

Non-Disturbance Clause

Question 156

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: Owner of the home has the option to ‘give up’ rights and possession to the bank in lieu of a foreclosure. o Possible to negotiate a deal in which the lender agrees not to pursue a deficiency judgment. o These deeds are given to prevent the foreclosure and are less impactful on credit.

Answer 156

Deed in Lieu

Question 157

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: The lender is required to report the amount of the removed debt to the borrower and to the IRS on FORM 1099-C. o Used when the forgiven debt is $________ or GREATER, which can result in taxable “INCOME” to the borrower.

Answer 157

Cancellation of Debt $600

Question 158

Deeds, Mortgage, and Taxes: Foreclosure Terms: * ________: A lender cannot take further action against a debtor if the foreclosure sale did not cover the entire balance of the loan due to the lender.

Answer 158

Anti-Deficiency Laws

Question 159

Deeds, Mortgage, and Taxes: Arizona Deficiency Laws: o In the Arizona Revised Statutes ________, Anti-Deficiency Laws are found and mean that a lender cannot take further action against a debtor if the foreclosure sale did not cover the entire balance of the loan due to the lender.

Answer 159

Section 33

Question 160

Deeds, Mortgage, and Taxes: Arizona Deficiency Laws: o These statutes prevent a lender from seeking a deficiency judgment after foreclosure only if:  The loan was made to ________ purchase the home  The property is less than ________ Acres in size  Single family or duplexes only There can be no more than ________ Units.  Must be ________  Investments, commercial, rentals and second homes are ________. o MAY NOT apply to ________ Insured Loan or ________ Money used

Answer 160

Help 2.5 Acres 2 Units Primary Residence Excluded Federally HELOC

Question 161

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: Click which steps are NOT part of the Arizona Deed of Trust Foreclosure process: Borrower is in default Mortgagee files a suit with the courts Trustee holds legal title and legally can sell Trustee holds sale and awards highest bidder trustee deed Beneficiary must give 6 month redemption period

Answer 161

Mortgagee files a suit with the courts Beneficiary must give 6 month redemption period

Question 162

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: Choose the following statements about foreclosure that are correct: The minimum time for foreclosure is 60 days There is NOT a redemption period in a Deed of Trust Foreclosure in Arizona. A Trustees deed goes to the highest bidder on there property Deed in Lieu solidifies the foreclosure and affects credit greatly

Answer 162

There is NOT a redemption period in a Deed of Trust Foreclosure in Arizona. A Trustee's deed goes to the highest bidder on the property.

Question 163

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: In the Arizona Revised Statutes SECTION 33, ANTI-DEFICIENCY laws are found and mean that a lender can NOT take further action against a DEBTOR if the foreclosure sale did NOT cover the entire ________ of the loan due to the lender.

Answer 163

Balance

Question 164

These statutes prevent a lender from seeking a deficiency judgment ________ foreclosure only if: 1. The loan was made to help purchase the home 2. The property is less than 2 1/2 acres in size 3. Single family or duplexes only (no more than 2 units) 4. Must be Primary Residence 5. Investments, commercial, rentals and second homes are excluded * MAY NOT apply to Federally Insured Loan or HELOC Money used

Answer 164

After

Question 165

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Case Study: Who/what entity is legally selling the home during the foreclosure process in Arizona?

Answer 165

Arizona is a Lien Theory state, and we use the Trust Deed. As such, we use Trustees who hold legal title, which allows them the “Right to Sell” the property.

Question 166

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Case Study: If the lender (beneficiary) did not receive the entire balance of the loan due from the sale of a foreclosed property, can they (the beneficiary) pursue further funds from the borrower (trustor)? What is this type of law called?

Answer 166

A lender cannot take further action against a debtor if the foreclosure sale did not cover the entire balance of the loan due to the lender. It is Anti-Deficiency laws.

Question 167

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Case Study: What certificate is issued to the winning bidder of a mortgage foreclosure?

Answer 167

At the time of sale, the winning bidder is issued a "Sheriff's certificate" or a "Certificate of Sale."

Question 168

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Case Study: What is a non-recorded, specific, involuntary, 1st priority lien?

Answer 168

In Arizona, all property taxes are a “lien against the property,” which isn’t recorded. Property Tax Liens are always 1st in Lien Priority (They get paid 1st, no matter what) and are specific, involuntary Lien.

Question 169

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: In a state where Trust Deeds are used, who has the right to sell the property in case of a foreclosure? Original Lender Trustee Beneficiary Grantor

Answer 169

Trustee

Question 170

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: In Arizona what is the reinstatement period for property owners when a foreclosure has been filed? 120 Days 100 Days 90 Days 60 Days

Answer 170

90 Days

Question 171

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: A buyer at an auction of a foreclosed property in Arizona would obtain what type of deed if the beneficiary was the lender? Auction and Sale Deed Deed in Lieu Trustee Deed Beneficiary Deed

Answer 171

Trustee Deed

Question 172

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: A borrower falls behind on his payments to the lender. The beneficiary would record a Notice of Default and Pending Notice of Foreclosure. This would serve what purpose? Giving Eviction Notice to the owners Giving Constructive Notice to the Public Giving Elective Notice to the Trustee Giving Substantial Notice to the Lienor

Answer 172

Giving Constructive Notice to the Public

Question 173

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: Money that was used for the purchase of a home that was declared to be a primary residence is not fully recovered after a trustee sale. The lender is unable to take further action against the former owners in Arizona due to what Law? Homestead Law Homeowner Protection Law Declared Protection Law Anti-Deficiency Law

Answer 173

Anti-Deficiency Law

Question 174

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: The lender, upon a borrower missing payments would call the loan balance due, this is due to what clause? Action Clause Call to Auction Clause Deed in Lieu Clause Acceleration Clause

Answer 174

Acceleration Clause

Question 175

Deeds, Mortgage, and Taxes: Deed Of Trust Foreclosure Process In Arizona: Quiz: Husband and wife had a mortgage in Arizona and defaulted after making 112 monthly payments on a 15 year loan. This was their primary home and the money borrowed was used as purchase money. The statutory redemption period is how long for the husband and wife? 90 days 120 days 270 days 180 days

Answer 175

180 days

Question 176

Deeds, Mortgage, and Taxes: Property Taxes in Arizona: o The power to collect taxes in Arizona falls under the “________” which we will discuss later but REMEMBER: Taxation = Government Power. (PETE) o States, Counties and Cities collect taxes to fund their operations and schools.

Answer 176

Government Powers

Question 177

Deeds, Mortgage, and Taxes: Property Taxes in Arizona: o Taxes are always paid in “________” or in the PAST  You previously enjoyed the use of the property,  Taxes come due after you enjoyed the use  Relate to it as you stay in a hotel, pay your bill on check out (after use)

Answer 177

Arrears

Question 178

Deeds, Mortgage, and Taxes: Property Taxes in Arizona:  Property Taxes are Levied ________  Property Taxes CAN be paid ________

Answer 178

Annually Semi-Annually

Question 179

Deeds, Mortgage, and Taxes: Property Taxes in Arizona: o IMPORTANT: In Arizona, all property taxes are a “________” which isn’t recorded.

Answer 179

Lien Against the Property

Question 180

Deeds, Mortgage, and Taxes: Property Taxes in Arizona: o IMPORTANT: Property Tax Liens are always ________ in Lien Priority (They get paid 1st, no matter what)

Answer 180

1st

Question 181

Deeds, Mortgage, and Taxes: Property Taxes in Arizona: o IMPORTANT: Property taxes are a Specific, ________ Lien

Answer 181

Involuntary

Question 182

Deeds, Mortgage, and Taxes: Property Taxes in Arizona: o Most often, property taxes are paid by the LENDER who impounds the monthly account and collects the taxes over 12 MONTHS and PAYS the bill when it becomes available.  Lien is ________ placed on all real property every January 1.

Answer 182

Silently

Question 183

Deeds, Mortgage, and Taxes: Property Taxes in Arizona:  IMPORTANT: Real Property owners who more than $100 can pay taxes in two installments. * The First payment is due ________ of the current year * The second is due ________ of the following year.  If you owe less than $________, your payments are due October 1 of current year.

Answer 183

October 1 March 1 $100

Question 184

Deeds, Mortgage, and Taxes: Property Taxes in Arizona:  If you owe less than $100, your payments are due October 1 of current year. o However, failure to pay the tax bill will result in a possible recorded lien and eventual foreclosure due to ________ of taxes owed.

Answer 184

Non-Payment

Question 185

Deeds, Mortgage, and Taxes: Property Taxes in Arizona:  If a real property owner falls behind on their taxes, they can make ________ to the Assessor where the taxes are due.

Answer 185

Installment Arrangements

Question 186

Deeds, Mortgage, and Taxes: Property Taxes in Arizona:  Interest on the back taxes will accrue and it is at a rate of ________%  This is known as the “________”.  This rate is the HIGHEST interest rate allowed for borrowers who do not agree to an otherwise negotiated rate.

Answer 186

16% Legal Rate

Question 187

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________ = Property taxes become an unrecorded lien on real property.

Answer 187

January 1

Question 188

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________ = County assessor mails a notice of valuation to all owners.

Answer 188

Month of January

Question 189

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________ = Real Property owners receive their tax bill.

Answer 189

Late August/Early September

Question 190

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________: First half of the current year’s tax bill due. October 1= Due/November 1 = Late

Answer 190

October 1

Question 191

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________: First half current year’s taxes are now considered delinquent.

Answer 191

November 1

Question 192

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________: Second half of the current year’s taxes due. March 1 = Due/May 1 = Late

Answer 192

March 1

Question 193

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________: Second half current year’s taxes are now considered delinquent.

Answer 193

May 1

Question 194

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: * ________: Delinquent notices are sent to unpaid owners.

Answer 194

September

Question 195

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona: o ________: Tax lien sold at auction for payment of taxes.

Answer 195

February of Next Year

Question 196

Deeds, Mortgage, and Taxes: Tax Dates and Calendar of Events in Arizona:  IMPORTANT: October, November, March, May, September, February! Acronym: O.N.M.M.S.F:________

Answer 196

Oh No, More Money, Send Funds

Question 197

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: o Arizona uses ________ of a property and is determined by Legislation and enacted in the Arizona Revised Statutes.

Answer 197

Assessed Values

Question 198

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: o In order to find the assessed value, we use a simple equation that uses the ________ and we multiply that by the prescribed ________. o Also known as “________”, market value is what the counties feel your property is worth.  There is a formal process one must go through if the feel that their property is ________ too high.

Answer 198

Current Market Value Assessed Ratio Full Cash Value Valued / Taxed

Question 199

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o ________: Is also unique to Arizona. This is a value calculated according to a statutory formula, designed to reduce the effect of inflation on property taxes.

Answer 199

Limited Property Value

Question 200

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o Market Value (MV) x Assessed Ratio (AR) = ________

Answer 200

Assessed Value (AV)

Question 201

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o The assessed ratios are divided into 4 different categories: 1. ________ = 18% 2. ________ = 16% 3. ________ = 10% 4. ________ = 10%

Answer 201

Commercial Property Vacant Land Rented Residential Property Residential Property

Question 202

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o The assessed ratios are divided into 4 different categories: 1. Commercial property = ________% 2. Vacant Land = ________% 3. Rented Residential Property = ________% 4. Residential Property = ________%

Answer 202

18% 16% 10% 10%

Question 203

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o The assessed ratios are divided into 4 different categories: 1. ________ = 18%

Answer 203

Commercial property

Question 204

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o The assessed ratios are divided into 4 different categories: 2. ________ = 16%

Answer 204

Vacant Land

Question 205

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o The assessed ratios are divided into 4 different categories: 3. ________ = 10%

Answer 205

Rented Residential Property

Question 206

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o The assessed ratios are divided into 4 different categories: 4. ________ = 10%

Answer 206

Residential Property

Question 207

Deeds, Mortgage, and Taxes: Tax Rates in Arizona: Limited Property Value: o The assessed ratios are divided into 4 different categories: IMPORTANT: Rentals MUST be reported as an income producing property to the State. It is still taxed at ________% rate, but there is an additional rental tax collected on the rent every month.

Answer 207

10%

Question 208

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: o IMPORTANT: When a real property owner's taxes are not paid, they become delinquent and under the power of the government, they can legally ________ at a tax sale in order to collect on the taxes that are owed.

Answer 208

Sell the Property

Question 209

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: o If delinquent taxes are not paid by ________, the county assessor will send notice to the owner that they are delinquent and facing a tax sale in ________ of next year.

Answer 209

September February

Question 210

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: o IMPORTANT: The “Actual Notice” sent to the owner will include the amount owed, interest and will clearly state a delinquent tax rate of ________%.

Answer 210

16%

Question 211

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: o County Assessor will obtain a ________ from the county courts which will legally allow the assessor to hold the delinquent tax sale.

Answer 211

Judgement Order

Question 212

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure:  ________: Many counties have an in person live auction where the taxes are sold.

Answer 212

Live Auction

Question 213

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure:  ________: More progressive counties are opting to do online tax sales, which draws a larger crowd from around the country and usually increases the bidding.

Answer 213

On-Line Auction

Question 214

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: o Assessor will advertise in a publication of general circulation of pending tax sale for a period of ________ weeks to inform the public. This is deemed as constructive notice.

Answer 214

3 Weeks

Question 215

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure:  At time of auction of real property taxes, opening bid starts at 16%.  Bidders “________” from the 16% Legal Tax Rate.  The winning bidder is the one who accepts the ________ tax interest rate.  The Assessor charges the property owner 16% and keeps the ________ between what the winning bidder accepted at lowest rate.

Answer 215

Bid Down Lowest Difference

Question 216

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: IMPORTANT: At time of sale, the winning bidder is issued a “________” and pays the back taxes, interest and penalties for that real property.

Answer 216

Certificate of Purchase

Question 217

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: The delinquent tax rate in Arizona is: 12% 10% 14% 16%

Answer 217

16%

Question 218

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: o The “________” now starts.  3 Years is the redemption period.  Starts AFTER the sale, not from the time taxes were originally due.

Answer 218

Tax Sale Redemption Period

Question 219

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: o At the end of the ________ Year redemption period, if the property owner has not paid back the investor in full, the investor has the right to go to court to exchange the certificate of purchase for ________.

Answer 219

3 Year Treasurer's Deed

Question 220

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure:  The investor will now take ownership of the ________.  Any and all liens are now wiped out.  Investor will own that property free and clear.

Answer 220

Real Property

Question 221

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: - Assessor will advertise in a publication of general circulation of pending tax sale for a period of ________ Weeks to inform the public. This is deemed constructive notice.

Answer 221

3 Weeks

Question 222

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: - At time of auction of real property taxes, "________" starts at 16%. - Bidders “________” from the 16% Legal Tax Rate. - The winning bidder is the one who accepts the LOWEST tax interest rate.

Answer 222

Opening Bid Bid Down

Question 223

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: - The Assessor continues to charge the property owner 16% but the county keeps the ________ between what the winning bidder accepted at lowest rate.

Answer 223

Difference

Question 224

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: IMPORTANT: At time of sale, the winning bidder is issued a “________” and pays the back taxes, interest and penalties for that real property.

Answer 224

Certificate of Purchase

Question 225

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: - The Assessor continues to charge the property owner 16% but the county keeps the ________Difference between what the winning bidder accepted at lowest rate.

Answer 225

Difference

Question 226

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: IMPORTANT: At time of sale, the winning bidder is issued a “________” and pays the back taxes, interest and penalties for that real property.

Answer 226

Certificate of Purchase

Question 227

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: Tax Sale Example: GO OVER THIS A FEW TIMES Homeowner owes $1000 in taxes to the county but is delinquent and hasn't paid. The county auctions off the taxes owed and offers a ________ to the bidders.

Answer 227

Return on Investment (ROI)

Question 228

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: Tax Sale Example: GO OVER THIS A FEW TIMES The bidders start at 16% and bid ________. The lowest bidder bids 5% and the county awards certificate of purchase. The bidders pays the county the $1000 on behalf of the homeowner.

Answer 228

Downward

Question 229

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: Tax Sale Example: GO OVER THIS A FEW TIMES The certificate holder will collect 5% from the county, while the county is collecting 16% from the homeowner. This is a ________ of 11% to the county, plus they received the money they needed to pay for services.

Answer 229

Net Gain

Question 230

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: Tax Sale Example: - The “________” now starts. - In Arizona, 3 Years is the redemption period. - Starts AFTER the sale, not from the time taxes were originally due.

Answer 230

Tax Sale Redemption Period

Question 231

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: Public Tax Auction: Tax Sale Example: - At the end of the 3 year redemption period, if the property owner has not paid back the investor in full, the investor has the right to go to court to exchange the certificate of purchase for a ________. - The investor will now take ownership of the Real Property - Any and all liens are now wiped out. - Investor will own that property free and clear.

Answer 231

Treasurer's Deed

Question 232

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: ________ = A deed that the certificate of purchase holder is granted by the treasurer after the statutory redemption period has passed.

Answer 232

Treasure's Deed

Question 233

Deeds, Mortgage, and Taxes: Delinquent Taxes and Foreclosure: How long does the Tax Sale Redemption Period last? 5 years 3 years 2 years No Limit

Answer 233

3 Years

Question 234

Deeds, Mortgage, and Taxes: Taxes: Case Study: If a real property owner falls behind on their taxes, they can make installments to the assessor where the taxes are due. Interest on the back taxes will accrue, and it is at a rate of 16%. This is known as the “________”. This is the highest interest rate allowed for borrowers who disagree with an otherwise negotiated rate.

Answer 234

Legal Rate

Question 235

Deeds, Mortgage, and Taxes: Taxes: Case Study: How are property taxes calculated?

Answer 235

Property taxes are calculated using the assessed value of the property. This includes both the land and the buildings on it.

Question 236

Deeds, Mortgage, and Taxes: Taxes: Case Study: How is assessed value calculated?

Answer 236

To find the assessed value, we use a simple equation that uses the Current Market Value, and we multiply that by the prescribed Assessed Ratio. Market Value (MV) x Assessed Ratio (AR) = Assessed Value (AV)

Question 237

Deeds, Mortgage, and Taxes: Taxes: Case Study: When property owners fail to pay their property taxes, what information is included in the “actual notice” sent to them?

Answer 237

The “actual notice” sent to the owner will include the amount owed interest and clearly state a delinquent tax rate of 16%.

Question 238

Deeds, Mortgage, and Taxes: Taxes: Quiz: Property taxes in Arizona are due October 1st and March 1st, when do taxes in Arizona become an unrecorded lean against all property? January 1st March 1st May 1st November 15th

Answer 238

January 1st

Question 239

Deeds, Mortgage, and Taxes: Taxes: Quiz: Property Taxes are what type of lien? Voluntary Specific General Both A and B

Answer 239

Specific and Involuntary

Question 240

Deeds, Mortgage, and Taxes: Taxes: Quiz: Property Taxes in Arizona are paid? Once every two years Monthly In arrears Up front

Answer 240

In Arrears

Question 241

Deeds, Mortgage, and Taxes: Taxes: Quiz: What Month are delinquent tax notices sent out to homeowners in Arizona? September May November Augus

Answer 241

September

Question 242

Deeds, Mortgage, and Taxes: Taxes: Quiz: When the sheriff acts as the grantor, which financing instrument is used? Land Contract Mortgage Deed of Trust Promissory Note

Answer 242

Mortgage

Question 243

Deeds, Mortgage, and Taxes: Taxes: Quiz: Of the following parties listed below, which one does not receive monthly payments? Trustee Beneficiary Vendor Mortgagee

Answer 243

Trustee

Question 244

Property Tax Math: When working on tax problems, don’t forget that the assessed value of a property is the valuation percentage used for the purposes of ad valorem taxes. The tax rate can be shown in terms of a dollar amount per one hundred dollars of assessed value of assessed value shown as $100 or it can be shown in mills. Mills are 1/10 of a cent or 1/1000 of a dollar and is written as .0001. Formulas Used: _______ = Tax Rate x Assessed Value

Answer 244

Annual Taxes

Question 245

Property Tax Math: When working on tax problems, don’t forget that the assessed value of a property is the valuation percentage used for the purposes of ad valorem taxes. The tax rate can be shown in terms of a dollar amount per one hundred dollars of assessed value of assessed value shown as $100 or it can be shown in mills. Mills are 1/10 of a cent or 1/1000 of a dollar and is written as .0001. Formulas Used: _______ = Annual Taxes ÷ Assessed Value

Answer 245

Tax Rate

Question 246

Property Tax Math: When working on tax problems, don’t forget that the assessed value of a property is the valuation percentage used for the purposes of ad valorem taxes. The tax rate can be shown in terms of a dollar amount per one hundred dollars of assessed value of assessed value shown as $100 or it can be shown in mills. Mills are 1/10 of a cent or 1/1000 of a dollar and is written as .0001. Formulas Used: _______ = Annual Taxes ÷ Tax Rate

Answer 246

Assessed Value

Question 247

Property Tax Math: Cotton City determines their annual operating budget is $1,000,000 and total assessed value of property is $50,000,000. What is the tax rate expressed in both mills and dollars?

Answer 247

* $1,000,000 ÷ $50,000,000 = .02 -OR- $2.00 per $100 of assessed value. ANSWER: $2.00 per $100 of assessed value.

Question 248

Property Tax Math: Jim Jones property has an assessed value of $70,000. The tax rate is $1.25 per $100 of assessed value. What are his annual taxes?

Answer 248

$70,000 divided by 100 = 700 x $1.25 = $875 ANSWER: $875 in annual taxes

Question 249

Property Tax Math: You recently paid $1,485 in annual taxes, based on a tax rate of $1.742 per $100 of assessed value. What is the assessed value of your property as determined by the assessor?

Answer 249

* $1.742 ÷ 100 = .01742 = Mills Rate * $1,485 ÷ .01742 = $85,247 ANSWER: $85,247 Assessed Value

Question 250

Property Tax Math: You recently received your tax bill of $1,120, which showed the assessed value of your property to be $59,230. What is the tax rate for the county where this house is located?

Answer 250

* $1,120 ÷ $59,230 = .0189 * .0189 x 100 = $1.89 ANSWER: $1.89 per $100 of assessed value

Question 251

Property Tax Math: The assessed value of a home is $42,100 and the tax rate is $3.61 per $100 of assessed value. How much will the annual tax be?

Answer 251

* $42,100 ÷ 100 = 421 * 421 x $3.61 = $1,519.81 ANSWER: Annual tax of $1,519.81 OR * 3.61 ÷ 100 = .0361 * .0361 x $42,100 = $1,519.81 ANSWER: Annual tax of $1,519.81