Chapter Fourteen

Ace your homework & exams now with Quizwiz!

A building was sold for $115,000. Earnest money in the amount of $15,000 was deposited in escrow, and the buyer obtained a new loan for the balance of the purchase price. The lender charged two discount points on the loan. What was the total amount of cash used by the buyer for this purchase?

$17,000. $115,000 sales price - $15,000 earnest money = $100,000 loan balance; $100,000 × 2% (0.02) discount points = $2,000; $15,000 earnest money + $2,000 discount points = $17,000 cash used by buyer.

Which clause would give a lender the right to have all future installments become due upon default?

Acceleration

In one state, a mortgagee holds a lien on real property offered as collateral for a loan. The mortgagor retains both legal and equitable title to real property. If the borrower defaults on the loan, the lender must go through formal foreclosure proceedings to recover the debt. This state can be BEST characterized as what kind of state?

Lien theory

What document is available to the mortgagor when the mortgage debt is completely repaid?

Satisfaction of mortgage

The mortgagee foreclosed on a property after the borrower defaulted on the loan payments. At the foreclosure sale, however, the house sold for only $129,000. The unpaid balance of the loan at the time of the sale was $140,000. What must the lender do to recover the $11,000 the borrower still owes?

Seek a deficiency judgment

Under a typical land contract, when does the vendor give the deed to the vendee?

When the contract is fulfilled and all payments have been made

All the following clauses in a loan agreement enable the lender to demand that the entire remaining debt be paid immediately EXCEPT

a defeasance clause.

Real estate can be purchased under a land contract, also known as

an installment contract or contract for deed.

A promissory note used as a debt instrument without any related collateral is called

an unsecured note.

A buyer purchased a home under an agreement that made the buyer personally obligated to continue making payments under the seller's existing mortgage. If the buyer defaults and the court sale of the property does not satisfy the debt, the buyer will be liable for making up the difference. The buyer has

assumed the seller's mortgage.

Judicial foreclosure allows the property to be sold by

court order after the mortgagee has given sufficient public notice.

Under a land contract, the vendee receives

equitable title with the right of possession.

In title theory states, the mortgagor retains what is called

equitable title.

The seller agrees to sell the house to the buyer for $100,000. The buyer is unable to qualify for a mortgage loan for this amount, so the seller and the buyer enter into a contract for deed. The interest the buyer has in the property under a contract for deed is

equitable title.

A mortgagor is the one who

gives a mortgage.

In a land contract, the vendee

has possession during the term of the contract.

In mortgage lending, a borrower is required to pledge specific real property as security (collateral) for the loan, a practice called

hypothecation.

Discount points paid to a lender are used to

increase the lender's yield (rate of return) on its investment.

The general types of foreclosure proceedings are

judicial, nonjudicial, and strict foreclosure.

Discount points on a mortgage are computed as a percentage of the

loan amount.

The fee charged by a mortgage broker to arrange a loan is a(n)

loan origination fee.

A promissory note

makes the borrower personally liable for the debt.

A prospective buyer needs to borrow money to buy a house. The buyer applies for and obtains a real estate loan from a mortgage company. Then the buyer signs a note and a mortgage. In this example, the mortgage company is the

mortgagee.

A prospective buyer needs to borrow money to buy a house. The buyer applies for and obtains a real estate loan from a mortgage company. Then the buyer signs a note and a mortgage. In this example, the buyer is referred to as the

mortgagor.

Some states allow nonjudicial foreclosure procedures to be used when the security instrument contains a

power-of-sale clause.

The right a mortgagor has to regain the property by paying the debt after a foreclosure sale is called

redemption.

A woman has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records a(n)

satisfaction of mortgage.

A junior lien may become first in priority if the original lender agrees to execute a

subordination agreement.

An existing mortgage loan can have its lien priority lowered through the use of a

subordination agreement.

In those states that recognize deed of trust loans, the power of sale provision is generally given to the

trustee.

The borrower under a deed of trust is known as the

trustor.

Charging more interest than is legally allowed is known as

usury.

Under a land contract, the buyer is called the

vendee.

Under a land contract, the seller is called the

vendor.

Under an installment contract, the legal title to the property is held by the

vendor.


Related study sets

Anatomy Chapter 6: The Skeletal System: Osseous Tissue

View Set

Medical Terminology- Ch. 10 Vocab

View Set

trénink z obchodního práva - ZOK

View Set

Chapter 6 - Project Schedule Management

View Set

Scoring of Sleep & Associated Events (AASM Guidelines)

View Set