Extra Terminology

Money is an example of Consideration

1) payment or money. 2) a vital element in the law of contracts, consideration is a benefit which must be bargained for between the parties, and is the essential reason for a party entering into a contract. ... In a contract, one consideration (thing given) is exchanged for another consideration

The statute of limitations for breach of an ORAL contract in California is...?

2 Years

Condition

A condition is a term in a contract that has an expiration attached to it. Without the condition being removed before the expiration, the contract falls apart.

This type of title insurance covers unrecorded liens, unrecorded easements, encroachments, and items covered by a survey.

ATLA = American Land Title Association

The transferring of property to another is also referred to as

Alienation

Assignment of Contract

An assignment of contract occurs when one party to an existing contract (the "assignor") hands off the contract's obligations and benefits to another party (the "assignee"). Ideally, the assignor wants the assignee to step into his shoes and assume all of his contractual obligations and rights.

What occurs when a party demonstrates its intention to break a contract.

Anticipatory Breach

Anticipatory Repudiation/Breach

Anticipatory Repudiation: is an action/ breach that shows a party's intention to fail to perform or fulfill its contractual obligations to another party

Those whom property or interests therein shall have been transferred are referred to as...?

Assignees

One who assigns or transfers property is referred to as a/an...

Assignor

An oversupply plus lessened or decreased demand creates a...?

Buyer's Market

This type of title insurance covers matters of record, forgery and fraud, ownership of the property, accessibility to the property, and marketable interest.

CLTA = California Land Title Association

A mortgage agreement that DOES NOT have government backing and that is offered through a commercial bank or mortgage broker A loan that requires no insurance or guarantee.

Conventional Loan

This is one of the three methods in the appraisal process in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land...?

Cost Approach

Legal remedies are also called...?

Damages

The overall desire for a product or service is known as...?

Demand

The supply of willing and able buyers in the marketplace or lack thereof is referred to as...?

Demand

The ability to deduct expenses on improvements made to income producing property is referred to as...?

Depreciation

The minimum interest rate set by the Federal Reserve for lending to other banks is known as the...?

Discount rate

An acceleration clause granting the lender the right to demand full payment of the mortgage upon a sale of the property is referred to as a...?

Due on Sale Clause

Remedies for the purpose of 'Fairness And Justice' are referred to as...?

Equitable remedies

The value of an asset minus the debt is known as...?

Equity

The rate at which member banks charge each other for borrowing short-term money is known as the...?

Federal Funds Rate

Involuntary Alienation Examples

Foreclosure,

What type of lien has priority over any lien

Government Lien

....... are the total amount of cash received, while net proceeds are the amount of cash received from the sale after paying for expenses, fees, and taxes

Gross Proceeds

Fee Simple / Fee Simple Absolute

Highest Power of Ownership.

This is one of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process - (1) find net annual income, (2) set an appropriate capitalization rate or "present worth" factor, and (3) capitalize the income dividing the net income by the capitalization rate...?

Income Approach

The cost of borrowing capital, usually expressed as a percentage is known as...?

Interest Rate

When a property is "over improved" relative to other surrounding properties in the area that are of lesser value, it is referred as the...?

Law of Regression

Examples of debt instruments

Lease , Note, Mortgage

A right to keep possession of property belonging to another person until a debt owed by that person is discharged.

Lien

subsequent

Means "after"

precedent

Means "before"

A person whose principal BUSINESS is the originating, financing, closing, selling and servicing of loans secured by real property for institutional lenders on a contractual basis is referred to as a...?

Mortgage Banker

A broker who arranges a mortgage loan between a lender and a borrower for a fee is referred to as a...?

Mortgage Broker

This is the amount the seller receives following the sale of an asset after all costs and expenses are deducted from the gross proceeds

Net Proceeds

fee simple condition precedent

Ownership subject to condition that must be satisfied before title is actually conveyed.

This affirms that value is created by anticipated benefits to be derived in the future...?

Principal of Anticipation

A term used to indicate that the real estate has been foreclosed upon is referred to as...?

REO: Real Estate Owned REO: stands for Real Estate Owned properties, which get reclaimed by the bank or government agency which financed their mortgage after failing to sell at a real estate auction.

Defined as a decline in gross domestic product (GDP) for two or more consecutive quarters. GDP is the market value of all goods and services produced within a country in a given period of time.

Recession

The return or recapture OF the original investment amount is known as...?

Return OF Investment

Any additional amount after the return OF investment is referred to as...?

Return ON Investment

This is one of the three major valuation methods, which compares a subject property's characteristics with those of comparable properties which have recently sold in similar transactions...?

Sales Comparison Approach

The marketplace whereby the loans that were originated in the primary mortgage market are bought and sold is referred to as the...?

Secondary Mortgage Market

An action to compel performance of an agreement is known as...?

Specific Performance Example: The sale of land as an alternative to damages or rescission is an example of Specific Performance

A state law requiring certain contracts to be in writing and signed before they will be enforceable at law is known as...?

Statue of Frauds

The amount of a certain good or service that is available in the market is known as...?

Supply

Than annual percentage rate is always greater than the interest rate...?

TRUE

Dominant Tenement

The property (i.e. tenement) or piece of land that benefits from, or has the advantage of, an easement

These contracts must be in writing

The sale of personal property valued over $500, Agreement to answer for the debt of another, Transfer of an interest in real property

A mutual rescission usually occurs when which of the following happens...?

There is a mistake in the contract

This loan IS BACKED by the government or secured through a bank or private lender and ideal for individuals with a lower-income or less than perfect credit

Unconventional Loan

This refers to an improvement which, because of its DEFICIENCY in SIZE or COST, is not the highest and best use of the site...?

Under Improvement

The ability to give satisfaction and/or excite desire for possession is known as...?

Utility Appraisals analyze the features of the home and determine its functional utility, or its ability to adequately provide for its intended purpose.

The PRESENT WORTH of future benefits arising out of ownership to typical users/investors is referred to as...?

Value

An interest rate in a real estate loan which by the terms of the note varies upward and downward over the term of the loan depending on money market conditions is known as...?

Variable Interest Rate

A return ON an investment is known as...?

Yield

encumbrance

a mortgage or other charge on property or assets.

Easement

a right to cross or otherwise use someone else's land for a specified purpose

Interpleader

a suit pleaded between two parties to determine a matter of claim or right to property held by a third party.

Bankruptcy (Two Types)

also called a straight bankruptcy or liquidation bankruptcy because your unsecured debts are discharged at the end of your case. If you own nonexempt assets, the trustee may liquidate these possessions and give the proceeds to your creditors.

Consideration

careful thought

The use of warranty deed has been supplanted in California by the ........

grant deed

consent

permission to do something

Homogeneity

the quality or state of being all the same or all of the same kind

The statute of limitations for FRAUD in California is ......... years from the date the fraud was discovered?

3 Years

relinquish

to let go, give up

What 3 institutions are active in the secondary mortgage market...?

Fannie Mae, Ginnie Mae, Freddie Mac

A one-time premium paid at the closing pursuant to the purchase is known as...?

Mortgage Insurance Premium (MIP)

The economic life of a building minus its effective age is known as...?

Remaining Economic Life

An individual at a lending institution who determines creditworthiness in order to qualify an applicant for a loan is referred to as a...?

Underwriter

Recission

cancellation of a real estate contract between the buyer and seller.

conveyance

the legal process of transferring property from one owner to another

The statute of limitations for TRESPASSING in California is .......... years from the date the trespass is discovered?

3 Years

A written statement, independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date is known as a/an...?

Appraisal

One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes is known as a/an...?

Appraiser

An increase in money and credit relative to available goods that results in higher prices is known as...?

Inflation

A scarcity of supply combined with strong demand creates a...?

Seller's Market

This is an appraisal phrase meaning that use which, at the time of an appraisal, is most likely to produce the Greatest Net Return to the land and/or buildings over a given period of time...?

Highest and Best Use

Ingress/Egress

Ingress: Entering Egress: leaving

A penalty for paying off a loan before its maturity date is known as a...?

Prepayment Penalty

When a component part of a property is valued in proportion to its CONTRIBUTION to the value of the whole, it is referred to as this principle...?

Principle of Contribution

In appraising, this is a valuation principle stating that market value is affected by the intersection of Supply And Demand forces in the market as of the Appraisal date...?

Principle of Supply and Demand

Privity

Privity: is the legal term for a close, mutual, or successive relationship to the same right of property or the power to enforce a promise or warranty

Damages simply for the purpose of punishment are known as...?

Punitive Damages

What are the 3 means by which the Federal Reserve controls the money supply...?

Reserve requirement, Discount rate, Bond market

The statute of limitations for breach of a WRITTEN contract in California is...?

4 years

The statute of limitations for ADVERSE POSSESSION in California is...?

5 Years

The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties is known as...?

Novation

A sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.

Short Sale

This holds that it is the future, not the past, which is of prime importance in estimating value...?

Principal Of Change

This affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution....?

Principal of Substitution

This holds that the maximum of value is realized when a reasonable degree of homogeneity of improvements is present...?

Principle of Conformity

Fee Simple Determinable

Automatic reversion of the title without the necessary of court action Refers to an estate that automatically terminates and is reverted back to the grantor if a certain event specified in the grant occurs.

Fee Simple on Condition Subsequent

Ownership in which the grantor has the right to reclaim the property through court action if a condition isn't met after the title is conveyed.

The marketplace whereby loans are originated is referred to as the...?

Primary Mortgage Market (PMM)

The sale of property from a willing seller to a qualified buyer is an example of...?

Voluntary Alienation

Adverse Possession

A person takes possession & use of a property belonging to another. Possession must be open, notorious, hostile & uninterrupted for a certain period of time. Translation: Adverse possession is a legal concept that allows a trespasser—sometimes a stranger but more often a neighbor—to gain legal title over someone else's land