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57 Cards in this Set
- Front
- Back
Florida is a _theory state |
Lien theory |
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Allows the Borrower to retain the ownership of the property during the loan period, the lender records the mortgage creating a lien against the property |
Lien theory |
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__ note is a legal instrument that includes the borrower's promise to repay the loan with interest |
Promissory note |
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A promissory note that is secured by a mortgage is referred to as a |
Secured note |
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Hypothecation is |
The pledge of property as security for a loan |
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The mortgagor is the |
property owner |
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The mortgagee is |
The lender/ the party receiving the mortgage from the property owner |
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A mortgage lien gives the lender the ability to __ on the property |
Foreclose |
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When a loan has been paid in full the mortgagor should receive a letter from the mortgagee/ lender in _ days |
60 days |
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The clause that allows the lender to declare the entire outstanding balance due and payable immediately is |
The Acceleration Clause |
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The only legally necessary clause in a mortgage is the |
Defeasance Clause |
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The clause that stipulates if the property is sold the entire loan balance is due immediately |
Due on Sale Clause |
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Clause that keeps the lender in check as long as the borrower performs as agreed in the note and mortgage |
Defeasance Clause |
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Clause that allows lender to increase the interest rate based on the occurrence of an event such as consistant late payments |
Escalation clause |
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Clause that limits the lenders rights in a foreclosure to the amount received from the sale of the foreclosed property |
Exculpatory Clause |
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Clause that allows the borrower to borrow additional funds as the balance is paid down similar to a revolving line of credit |
Open end clause |
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Clause that allows the borrower to pay off the loan early |
Prepayment clause |
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A __ clause is used in mortgages on income producing real estate |
Receivership |
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Clause that is found in mortgages covering more than one parcel of land usually for builders and developers. |
Release clause- allows release of individual lot for payment to the construction lender of a specified amount of money. |
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The clause that asks the court to appoint a trustee/ receiver to manage property in cause the investor defaults |
Receivership Clause |
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Loan clause that gives a borrower the right to cure a defaulted loan by paing loan payment in arrears |
Right to Reinstate Clause |
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Clause that allows a lien reocrded earlier to be palced in a secondary position to a new lien |
Subordination Clause |
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The difference between the current market value of a property and the amount the owner still owes on the mortgage |
Equity |
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The degree to which a property is financed, as equity increases the __ percentage decreases |
Loan to Value |
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Money collected by the lender from the borrower to pay hazard insurance and property taxes when they become due is held in a |
Escrow/ Impound Account |
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Administrative and overhead fees charged by the lender |
Mortgage Loan Fees |
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For Loan origination fees 1 point is equal to __% of the amount borrowd |
1% |
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The loan process of risk evaluation is called |
Mortgage Underwirting |
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The loan application is generally taked by a _ |
Loan Processor |
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The mortgage ___ reviews and verifies loan application information and determines if the applicant is qualified and is low risk |
Underwriter |
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The ___ ____ Opportunity Act requires lenders to judge every loan applicant on the basis of the applicants own credit rating and income |
Equal Credit |
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IF a spouse is required for a loan application both parties become ____ and ___ liable for the debt |
Jointly and Severally |
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To determine if a property is of sufficient value the underwriter is concerned withe the appraiser's _ |
Estimate |
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A loan applicant is evaluated on 3 criteria |
Credit History, Income and Other Assests |
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Upfront payment to the lender in exchange for a lower mortgage rate, which decreases the monthly mortgage payment for the life of the loan |
Discount Points |
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The rate actually received by the lender after any points are applied is the |
Effective Yield |
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Principal Interest Taxes and Insurance / Monthly Gross Income = |
Housing Expense Ratio |
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PITI + Other monthly obligations/ Monthly Gross Income= |
Total Obligations Ratio |
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Conventional housing ratio expense ratio is |
28% |
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Conventional total obligations ratio is |
36% |
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FHA housing expense ratio is |
31% |
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FHA total obligations ratio is |
43% |
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The percentage of the property's value that is represented by the loan |
Loan to Value Ratio |
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Loan Amount/ Purchase Price or Appraised Value = |
Loan to Value Ratio |
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Mortgages that do not contain a due on sale clause can be assumed by a buyer without permission of the lender this is called |
Assumption of the motgage |
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Subsituting the sellers name with the borrower's name on the loan is called |
Novation |
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When the property is sold and the original borrower (the seller) remains liable for the balance of the original loan |
Subject to the mortgage |
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A lender can sell a loan through assignment. The lendor becomes the |
Assignor |
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The investor who obtaines the right to receive the income of the loan assigned is the |
Assignee |
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The right of the borrower to cure the default before foreclosure is called |
Equity of Redemption |
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Lis Pendens means |
Pending Litigation |
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When the lender brings suit in court agains the borrower in default requesting a judgment |
Foreclosure Process |
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Lien holders not paid from the proceeds of the foreclosure may obtain a |
Deficiency judgment |
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When the lender brings suit in court to prove default it is called a ___ foreclosure |
Judicial |
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An alternative to a foreclosure sale the borrower in default can voluntarily deed a property to the lien holder in lieu of payment of a debt |
Deed in Lieu of Foreclosure |
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A sale transaction in which a seller confronted with foreclosure enters a settlement to a sales price that is below the outstanding loan balance |
Short Sale |
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A _ letter can verify the outstanding balance of a mortgage |
Estoppel |