When a borrower obtains a real estate loan what do they sign?
What is a promissory note?
It is a written commitment of a borrower to a loan obligation
What is a security instrument?
It is a written legal document that secures payment or satisfaction of any debt or obligation
What is a trust deed?
It is a
that makes the real property collateral for the loan
What are three examples of negotiable instruments?
Does a straight note pay on principal?
No principal payments are made during the term of the loan, but are due payable on a certain date
A holder in due course is a party who has taken a negotiable instrument for value and good faith without what?
knowledge of any defects
How long does a borrower have for a right of redemption under a judicial foreclosure?
What is a deficiency judgement?
It is a personal judgement against a debtor for the difference between the unpaid balance of the secured debt and the amount of the actual proceeds of the sale.
When is a deficiency judgment permitted in CA?
The property must be foreclosed through a
and the loan can
purchase money loan
What party is the trustee in a trust deed loan?
The trustee has two jobs, what are they?
to reconvey or to foreclose
How long must the trustee wait after recording the notice of default?
How long does the trustor have to reinstate the loan before a foreclosure sale?
How does the trustee authorize the trustee's sale?
Power of Sale Clause
How long does the trustor have if the beneficiary elects a judicial foreclosure for
equity rights of redemption
When a trustor signs a deed of trust what has he
And what has he
He has conveyed the
essence of legal title
to the trustee but retains
What is a junior loan?
It is a 2nd
What is a blanket trust deed?
It is a loan that secures more than one property as collateral, and contains a
that releases specific parcels from the encumbrance upon the repayment of part of the loan.
When a property is transferred, the buyer obtains either a new purchase money loan or what two other loans?
the existing loan or
the existing property
What is the difference to the seller between a
loan or a
The seller has
subject to loan
How are different liens on the same property prioritized?
time of their recording
What clause allows the lender the right to declare the full amount of the debt?
An acceleration clause
What is another name for a
due on sale clause
What is often not enforced in a tight money market?
The alienation clause isn't enforced when houses are not selling well
How is the basic simple interest formual calculated?
What is the nominal interest rate?
It is the rate stated in the loan document
What is the
effective interest rate
It is the rate that the borrower is
. It is commonly called the
(annual percentage rate)
In a conflict between the terms of a
deed of trust,
which will control?
PMI is sometimes required by a lender for conventional loans.