Unit 12: Residential Mortgages

You have a loan with monthly principal and interest payments of $846,21. If the lender requires an impound account for taxes and insurance, what would the total payment amount be if your annual property taxes were $2,840 and your annual insurance cost was $1,570?

$1,213.71.

In a _____ theory state, the borrower or _____ retains title to the property.

Lien, mortgagor.

The loan-to-value ratio is 80%. A buyer wants to acquire a property with a purchase price of $136,000. Calculate the required down payment.

The loan amount represents 80% of the purchase price. Therefore, the down payment is 20% of the purchase price. $136,000 purchase price x .20 = $27,200 down payment.

A mortgagor defaulted on a mortgage encumbering an apartment complex. Once the foreclosure proceedings were filed, the lender appealed to the courts to appoint.

a receiver.

A ______ _____ is constructive notice of pending legal action that involves a parcel of real estate.

lis pendens.

The person who borrows money to help pay for the purchase of real property is called at various times the

mortgage.

The mortgagor gives a mortgage as security to do the _____.

mortgagee.

Any surplus funds remaining after all liens have been paid after a foreclosure sale belong to the _____.

mortgagor.

A couple purchased their home for $125,000. They financed the purchase with an 80% conventional loan. The mortgagee charged 2.5 points. Calculate the actual cost of the points in dollars.

$2,500.

A borrower is getting a loan for $225,000 at 5% interest, and the lender is charging 2 points. What will the borrower pay for the points?

$225,000 x 0.2 (2%) = $4,500 cost of points.

The loan-to-value ration is 80%. A buyer wants to acquire a property with a purchase price of $116,000. Calculate the required down payment.

$23,200.

What is the loan-to value ration (LTV) for a home purchased for $315,000 with a loan of $283,500?

$283,500 ($315,000) = .9 or 90% LTV.

The market value of an apartment building is $350,000. The investor has mortgaged $300,000. What is the investor's equity in the property?

$50,000.

The rule of thumb used to convert discount points to an annual percentage rate is that each discount point increases the yield by approximately (sh).

1/8 of 1%.

A lender charged 7% plus 3 points. What is the approximate yield on this loan? (sh).

7.375%.

A home was purchased with a down a payment $50,000 and a loan of $200,000 at 6% interest for 20 years. Monthly payments are $1,432.86. What is the loan-to-value ratio?

80%.

List the two parties to a mortgage, along with their common names.

Mortgagor (borrower), mortgagee (lender).

If a mortgagee does NOT want the mortgage to be paid ahead of schedule, the mortgage will normally contain.

a repayment penalty clause.

A lender declares all the unpaid balance due and payable as a result of default. The lender is exercising the.

acceleration clause.

If a borrower is in default, the _____ clause allows the lender to call the entire loan balance due at payable.

acceleration.

The parties to an assignment of mortgage are the seller/lender called the _____ and the purchaser of the mortgage loan and promissory note called the _____.

assignor, assignee.

When a lis pendens is filed property with the county clerk, it becomes a type of

constructive notice.

A type of seller financing in which the seller retains legal title until the buyer has repaid the debt is a

contract for deed.

In title theory states, the mortgage clause that proves that the conveyance of the title to the lender is defeated when all the terms of the agreement have been fulfilled is the.

defeasance caluse

the _____ clause in a mortgage in Florida releases the mortgage lien once debt is paid in full.

defeasance.

The right of a mortgagor in default to prevent foreclosure by paying all money owed, including principal, interest, and the expenses occurred in initiating a foreclosure proceeding, is called the _____ of _____.

equity, redemption.

Prepaid property taxes and hazard insurance costs are held by the lender in an _____ _____.

escrow account.

An _____ _____ verifies the unpaid loan balance, interest rate, and the date to which interest has been paid before the assignment of a mortgage instrument.

estoppel certificate.

Discount points are charged by the lender to _____ the _____ on a mortgage loan.

increase, yield.

A deed in lieu of foreclosure is a _____ procedure became the defaulting mortgagor transfers the deed to the lender in lieu of a foreclosure process.

nonjudicial.

In a mortgage transaction in Florida, the legal evidence of the personal debt is the

note.

The legal instrument that contains the amount of the loan, interest rate, and payment provisions is called a _____.

note.

A buyer agrees to purchase a property with an existing mortgage lien. In which situation is the new buyer the only party responsible for the debt?

novation.

A seller who allows a purchaser to assume the existing mortgage should have the lender and purchaser agree to execute a _____ agreement.

novation.

The clause in a blanket mortgage that allows a parcel of property to be sold free and clear of the blanket mortgage upon payment of a specified amount is the _____ _____ clause.

partial release.

A couple has just made the final mortgage payment on their home. What document must the mortgagee file on their behalf?

satisfaction of mortgage

A mortgage is the instrument that pledges the property as _____ for the debt.

security.

A _____ _____ involves a real estate transaction where the net proceeds at closing will not satisfy the payoff amount of mortgages and other liens on the property.

short sale.

When mortgaged property is sold _____ to the mortgage, the buyer takes over the balance of the existing mortgage and the seller remains solely responsible over the balance of the existing mortgage and the seller remains solely responsible for a deficiency judgment.

subject.

A borrower who is in default on a mortgage is allowed to prevent the lender from foreclosing on the property by paying the mortgagee the delinquent principal and interest, plus any expenses the mortgagee has incurred in attempting to collect the payments. This right is called.

the equity of redemption.

When a vendee buys "subject to the mortgage," the

vendee is not responsible for the note.

The primary purpose of an estoppel certificate is to

verify the loan balance.