15. Financing Documents NEW
Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What is this an example of
A land contract
Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it is going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in
A lien theory state
Which of the following is a true statement about the use of a promissory note
A promissory note is a legal instrument that's similar in nature to a contract.
Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan
A trustee will hold title until the loan is paid.
Craig's loan is secured by a mortgage. Who holds legal title when this security instrument is used
Craig
Which statement best describes an amortized loan
Debt that is paid off by making periodic payments consisting of interest and principal
A third party holds legal title to Jackie and Tom's house until their loan is paid off. What type of security instrument was used to secure the real estate transaction
Deed of trust
A trustee is holding title to Cassandra's house until the loan is paid in full. Which type of security instrument was used
Deed of trust
Theo is a buyer who's contemplating a land contract. Why might he choose this route over traditional financing
He doesn't qualify for traditional financing.
Which term represents how real property is used as collateral for a loan
Hypothecation
An amortized loan includes a regular payment that includes both principal and ______ to gradually pay off the loan over its entire term.
Interest
What purpose does the promissory note serve
It's a promise the buyer makes to the lender that the note will be repaid in full.
In a title theory state, which of the following is a true statement
It's generally much easier for a lender to foreclose on a property.
In title theory states, which of the following is a true statement
It's generally much easier for a lender to foreclose on a property.
A ______ is a contractual agreement in which the buyer pays the seller the purchase price over time in a series of installments until the contract has been paid in full.
Land contract
Who or what is the mortgagee
Lender
What information is listed on the promissory note
Loan amount and schedule of repayment
Which of these is NOT an option for a seller under an Arizona agreement for sale when a buyer defaults on the loan
Non-judicial foreclosure
Alyssa's mortgage loan is secured by the note and the mortgage. Which of the following is true if she lives in a lien theory state
She holds title to the property, and the mortgage becomes a lien on the property.
Who or what entity has legal title to a financed property in a lien theory state
The borrower
Who holds the promissory note when a deed of trust is used as a security instrument
The lender
When a mortgage is used as a security instrument, who holds the mortgage and the promissory note
The lender holds the mortgage and the note.
Olivia took out a 15-year loan secured with a deed of trust. She worked two jobs in order to pay the loan back and finally made her last payment this month. What happens now
The lender tells the trustee to release the title to Olivia.
Who holds the promissory note while it's being repaid
The payee
Which statement describes hypothecation
The process of pledging property as collateral for a loan
Which of the following is a reason a seller might consider selling property through a land contract rather than a traditional sale
The seller may pay less in capital gains taxes by receiving the proceeds from the sale over time rather than in a lump sum.
What is the trustee's role when a deed of trust is used to secure property for a loan
To hold legal title to the property on behalf of the beneficiary until the loan is repaid
How many parties does a mortgage involve
Two: borrower and lender
In which of these scenarios is an Arizona property seller allowed to initiate forfeiture after borrower default
When the transaction uses an agreement for sale.
What differentiates hypothecation property and pledging property
Who possesses the collateral while the loan is being paid
