Terms and Questions from Ch. 8 of Michigan RE Test Book
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
|
|
||||
|---|---|---|---|---|---|
| Promissory Note | Provides evidence that valid debt exists. Must be in writing.
🗑
|
||||
| Interest | Money/Fee paid to use someone else's money.
🗑
|
||||
| Mortgage Principal | Amount of money on which interest is paid/received.
🗑
|
||||
| Amortizing Loan | Periodic Payments paid first toward interest and then principal.
🗑
|
||||
| Hypothecating | Pledging property as security for a loan. (deed of trust)
🗑
|
||||
| Mortgage | Bilateral agreement: borrower give mortgage to lender for borrowed funds.
🗑
|
||||
| Mortgagor | Borrower
🗑
|
||||
| Mortgagee | Lender
🗑
|
||||
| Trustee | Type of Third party referee in deed of trust relationship
🗑
|
||||
| Trustor | Borrower in deed of trust relationship
🗑
|
||||
| Beneficiary | Lender in deed of trust relationship
🗑
|
||||
| What are the 9 requirements to make a Mortgage or Deed of Trust valid? | 1. In Writing 2. Competent parties 3. Valid Debt 4. Valid Interest 5. Property Description 6. Mortgaging Clause 7. Defeasance Clause 8. Execution by Borrower 9. Delivery and Acceptance by lender.
🗑
|
||||
| Acceleration Clause | Enables lender to declare immediately the entire balance if borrower in default.
🗑
|
||||
| Open Mortgage | No Prepayment penalty if loan payed off early.
🗑
|
||||
| Defeasance Clause | Borrower has right to remove lien by paying of debt in full.
🗑
|
||||
| Alienation or Due on Sale Clause | Lender can declare Principal balance due immediately if borrower sells property during mortgage term making it unassumable.
🗑
|
||||
| Michigan Due on Sale Clause | If lender amends loan contract and blends rate for buyer assuming loan, seller still retains liability of note and mortgage.
🗑
|
||||
| Formal Assumption | Permission to assume mortgage at prevailing interest rate at time of assumption.
🗑
|
||||
| Equitable Redemption | Borrower can redeem title after default but before foreclosure sale by paying off debt, interest, and costs.
🗑
|
||||
| Right of Assignment | Lender can sell mortgage at anytime to obtain invested money.
🗑
|
||||
| What are the 3 rights a Borrower has? | 1. RIght to possession during mortgage term as long as not in default. 2. Right of Defeasance Clause 3. Equitable Redemption
🗑
|
||||
| What are the 3 right a Lender has? | 1. Right to foreclose(take possession) if borrower defaults 2. Can sell property at foreclosure sale to satisfy debt. 3. Right of assignment.
🗑
|
||||
| Foreclosure | Liquidation of title to real property in order to satisfy mortgage debt.
🗑
|
||||
| Judicial Foreclosure | Lender must bring a lawsuit against borrower to obtain debt owed.
🗑
|
||||
| Nonjudicial Foreclosure | Foreclosure under power of sale: mortgagee/trustee must advertise property for sale at courthouse.
🗑
|
||||
| Statutory Redemption | Borrower can redeem title after foreclosure sale if all debt, interest, and costs paid off.
🗑
|
||||
| Waste | Borrower fails to do preventative/corrective maintenance, lender has right to protect collateral interest by treating borrower as tenant and evicting.
🗑
|
||||
| Receiver | Appointed to manage property through foreclosure process if borrower is guilty of waste and must evict.
🗑
|
||||
| Strict Foreclosure | Lender files petition with court if borrower is in default. Court orders borrower to satisfy debt by a certain time.
🗑
|
||||
| Deed in Lieu of Foreclosure | To avoid a record of foreclosure, borrower in default can convey title to lender.
🗑
|
||||
| What is the Distribution order of proceeds from a Foreclosure sale? | 1. All Legal Expenses/costs of sale 2. Property Tax liens 3. Mortgage lien 3. All other liens against the property 4. Borrower if anything left.
🗑
|
||||
| Deficiency Judgment | If after Foreclosure sale, money is still owed to the lender, they can sue for the remaining amount. Court then orders borrower to pay.
🗑
|
||||
| Recordation of Mortgage or Deed of Trust | Provides constructive notice to public of ownership and protects the present/future interest in property.
🗑
|
||||
| Priority and Subordination of liens | Usually whichever one is recorded first takes priority except property tax liens.
🗑
|
||||
| Release of Mortgage, Note, Claim, or Deed of Trust | Recording of satisfaction of the debt. Failure to do so can cloud title.
🗑
|
||||
| Mortgage Assumption | A third party assumes the original mortgagor's mortgage payment. However mortgagor is still liable if in default.
🗑
|
||||
| What are the major sources of residential financing in primary mortgage market? | Savings banks, mutual savings banks, commercial banks, mortgage bankers.
🗑
|
||||
| Mortgage Broker | Brings a lender and borrower together for a fee paid by lender.
🗑
|
||||
| What are some lesser known sources of Real Estate financing? | Life Insurance companies, Credit Unions, REITs(Real Estate Investment Trusts) MSDHA(Michigan State Housing Development Authority, individual(Private) Investors.
🗑
|
||||
| Predatory Lending | Intended to injure or exploit for personal gain.
🗑
|
||||
| Secondary Mortgage Market | Buys and sells mortgages created in Primary Mortgage market in order to provide liquidity to primary mortgage lenders so they can create more mortgages.
🗑
|
||||
| Disintermediation | "Drying up" of funds available to lenders due to withdrawal of funds for high-yielding investment.
🗑
|
||||
| What are the 3 Secondary Mortgage organizations that Lenders sell to? | 1. Fannie Mae(FNMA)-residential 2. Ginnie Mae(GNMA)-VA and FHA mortgages only 3. Freddie Mac (FHLMC)-Conventional mortgages
🗑
|
||||
| Conforming Loan | Loans processed using FNMA/FHLMC uniform loan forms.
🗑
|
||||
| Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act | 1987-regulates licensing of people who are involved in making loans in Michigan residential property.
🗑
|
Review the information in the table. When you are ready to quiz yourself you can hide individual columns or the entire table. Then you can click on the empty cells to reveal the answer. Try to recall what will be displayed before clicking the empty cell.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Created by:
jenkij
Popular Real Estate sets