RELE Finance 1319.XP one 2013 April 8

Five ways to breach a deed of trust

1. No mortgage payment, 2. Nonpayment of ad valorem taxes, 3. No insurance on property, 4. No maintenance on property, 5. Nonpayment of owners Association dues.

Bond

A certificate of indebtedness issued by government body for a corporation; it will generate a return for the bondholder in the form of periodic payments of interest until the principle is repaid in lump some

Lien

A nonpossessory interest in real Property, gives the lien holder the right to foreclose if the owner does not pay a debt owed to the lien holder.

Dividend

A share companie's profits paid to a stockholder as a return on the investment.

Stock

A share of corporation's stock represents a fractional ownership interest in the corporation; a shareholder may receive a return on the investment in the form of dividends and/or appreciation of the shares value.

Investment capital

Accumulated wealth - saviings- made available To find business enterprises or other ventures, projects, or transactions.

5. Stevison borrowed money from Acme savings to buy a rental house. He paid 15% down. Which of the following is true;

Acme's loan to Stevenson's was a debt investment, and the Stevenson real estate purchase was an ownership investment

Acceleration

All principal and interest immediately due -

1. In connection with the loan, the term principal refers to the

Amount Borrowed.

Appreciation

An increase in the value of an asset over time; the Opposite of depreciation.

Debt investment

An investment in which temporary use of the investor's funds is exchange for interest payments, pursuant to an agreement that requires repayment of the funds or allows withdrawal of funds.

Liquid investment

An investment that can be quickly and easily converted into cash

7. The phrase - return on investment - refers to;

An investor's profit over and above the amount originally invested.

Ownership investment

An jinvestment in which the investor's funds are used to purchase an asset or a property interest in an asset.

Deed of trust

Becomes effective on date of closing or when it is recorded in the proper county.

Release of lien

Clears encumbrances -, A lien on a property that is now free from a mortgage. 15:239‎

Deed of Trust

Collateral instrument - secures the debt.

Grantor

Conveyor, ---The person transferring title to or an interest in real property to a grantee

Spread

Cost of funds - difference between the cost of money and profit

Real estate note

Creates the debt-- and promised to pay - real estate notes are never recorded.--, note for which real property is given as the collateral to satisfy the amount of the note if not paid.

Will

Decent document- -, leave or give by will after one's death

Deed

Encumbrance---, the official document transferring ownership from seller to buyer

Appraisal

Estimate of value

Three sources in the primary real estate market For loans in real estate

FHA, VA, Conventional

Title

Form of ownership -, , a legal document signed and sealed and delivered to effect a transfer of property and to show the legal right to possess it.

Mortgagee

Give the money - funding the loan--, A lender in a mortgage loan transaction

6. The return that a mortgage lender receives on it's typical investment takes the form;

Interest payment - mortgage lenders typical investment - mortgage loans provide a return in the form of interest payments

9. When market interest rates are rising, a lender making a 30 year loan at a fixed interest rate will probably be most concerned about;

Interest rate risk, the lenders most concerned that market rates will significantly rise while the lender funds are tied up in long-term loans at a lower rate.

Securities

Investment instruments that confer an interest or a right to payment, without allowing any direct manager of control over the enterprise invested in.

Lessor

Landlord----, A party that has agreed contractually to let another party use its asset for a period at an agreed price

Investor

Last monkery on the bottom of the Grapevine--, a person who gives money to a company with the hope of making money later

Caveat Emptor

Latin phrase meaning "Let the buyer beware"

10. An investor who might need to cash in investments to cover unexpected expenses is likely to be especially concerned about;

Liquidity--If an investor might need to cash an investment on short notice, it's better if the investment is a liquid one,, one that is easily converted into cash.

Portfolio loans

Loans the lender keeps on the books - in-house.

Depreciation

Loss of value to an improvement

Escrow

Many types, -----a written agreement (or property or money) delivered to a third party or put in trust by one party to a contract to be returned after fulfillment of some condition.55

Mortgage broker

No money - marries borrowers and lenders-- , A person who brings together the user of capital (borrower) and the supplier of capital (lender). For this service, a finder's fee is usually paid by the borrower.

Grantor

Not always selling--Could have been given for love and affection.

Acknowledgment

Notary, ---A formal declaration made before an authorized person, e.g., a notary public, by a person who has executed an instrument stating that the execution was his or her free act. In this state an acknowledgment is the statement by an officer such as a notary that the signatory to the instrument is the person represented to be.

Mortgage

Note and deed of trust

Primary market

Origination- -, Market for selling financial assets that can only be redeemed by the original holder

Capitalization rate

Percent of return on invested capital., The rate of return considered to be a reasonable return on investment - given the risk.

Interest

Peroidic charge that a lender requires a borrower to pay in exchange for the temporary use of the borrowed funds, usually expressed in an annual percentage of the remaining principal balance. Sometimes referred to as the cost of borrowing money

Deed of trust

Pledge--, Legal document that conveys title to real property to a trustee who holds the title as security for a debt to a lender.

Cloud on title

Possible ownership issue, ______A claim, encumbrance or condition which impairs the title to real property until disproved or eliminated as for example through a quitclaim deed or a quiet title legal action.

A Paper

Preferred borrower - great credit scores

RE Note

Promise to pay - creates the debt.

Collateral

Property, personal or real, accepted by a lender as security for a loan. The lender has the right to keep or sell the collateral if the borrower fails to repay the loan as agreed.

Secondary market

Purchase and sale -, a market for reselling financial assets

3. All of the following our debt Investments accept:

Purchase of real estate - Purchase of real estate is an ownership investment not a debt investment.

Foreclosure

REO-Real estate Owned

Three instruments that affect real estate Transactions

Real estate note, deed of trust, the deed. -

Grantee

Recipient,--- one to whom real estate is conveyed; the buyer of real estate

2. Stocks and bonds are the primary example of

Securities - Investment instruments that are traded and establish financial markets, ----stocks, are ownership investment, but bonds are debt instruments.

Improvement

Something added by man.

B-C-D Paper

Sub prime paper- real estate, - not the greatest credit scores no substantial income, may just have change jobs

Amortization

Systematic production of debt through providing payments

Mortgagor

The buyer of the loan--, A borrower in a mortgage loan transaction

8. As a general rule, the same for the investment;

The lower the yield high-yield investments Higher- risk investments.

Principal

The original amount of loan, or the remainder of that amount after part of it has been repaid., the original amount of a debt on which interest is calculated.

Diversification

The practice of investing in a variety of different ways and/or in a variety of different sectors of the economy, to make a portfolio safer.

Yield

The rate of return that an investor receives on an investment, usually stated as annual percentage of the amount invested.

Market interest rates

The rates that under current economic conditions, are paid on particular types of investments or charge for particular types of loans.

Repayment risk

The risk that a loan will be repaid all sooner than expected - often because the market interest rates have dropped, reducing the lenders anticipated yield.

Interest rate risk

The risk that, after a loan is made for a specified term at a fixed interest rate, market interest rates will rise and the lender will miss the opportunity to invest the loaned funds at a higher rate.

Portfolio

Then next of investments and cash reserves held by an investor.

Texas lien Theory

Three parties instrument Limited, 1. Borrower, 2. Lender, 3. Trustee- (attorney)

Deed

Transfer of ownership rights.

Alienation

Transfer of title, ---------(law) the voluntary and absolute transfer of title and possession of real property from one person to another

Investment

When someone, an investor, makes a sum of money, investment capital, available for use by another person or entity in the expectation that this will generate a return - a profit - for the investor.

Mortgage banker

a banker the lends money for example via bank. May or may not keep alone in the house-- , 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.

Mutual fund

a company to invest its capital and diversified portfolio of securities on behalf of of its investor who owns share in the fund.

Mortgage loan

a loan secured by mortgage or deed of trust that creates a lien against real property; especially, a loan used to purchase real property when that same property serves as security for a loan.

4. a company that invests in a diversified portfolio of stocks and bonds on behalf of of its investors/owners is called a /an;

a mutual funds- invest the capital provided by shareholders in a diversified portfolio of securities, the fund managers who make the decisions our investment professionals.

Return on investment

a profit that an investment generates for an investor or, over and above the amount of money that he or originally invested in it.

Lessee

a tenant ------who holds a lease-----,, someone who pays rent to use or occupy property owned by someone else

Certificate of deposit

is a time deposit that requires you to leave your money in a financial institution for a set amount of time.... Or pay a penalty for early withdrawal.