Financing - Chapter 6

Mortgage is viewed as a lien on real property

lender is viewed as the conditional owner of mortgaged land

Lender to take possession of the mortgaged real estate on default

Qualifies the borrower, orders the appraisal, FNMA application, origination fee

Mortgage required to execute  the release or satisfaction of Mtg when note is fully paid

If borrower sells, lender has choice of either declaring the entire debt due & payable or allowing the buyer to assume the loan

Grants or permits a subsequent mortgagor to take priority in lien structure

Mortgagor gives deed to mortgage when mortgagor is in default; allows foreclosure

A procedure to prevent foreclosure that a bank uses in an effort to minimize the financial loss

Process by which borrower regains interest in the property

Property sold & proceeds are insufficient to pay the difference

Given by the buyer to the seller as part of the purchase price

Covers more than one property or lot, generally includes partial-release clause

Includes real estate & all fixtures and appliances on the property

Lender receives interest & an equity position in a project, known as equity kicker or a percentage of the income of the property

To help buyer qualify for the loan by subsidizing the buyers PI payment

Originate loans for other lenders but do not service loan

Market in which loans are bought & sold after they have been originated and funded

Required to obtain mortgage, figured annually & often budgeted monthly

Charging a rate of interest in excess of the maximum rate allowed by state law

Lenders experience a rapid withdrawl of funds into alternative investments which weakens the lender's position in the money market

Profitable difference between interest rates in financing arrangements such as wraparound mortgages

Pledging property as security for the loan w/o losing possession of it

Trust account created to set aside funds for the future needs of the property

Smaller payments in the early years and increased payments in the later years

Payments of interest only w/ a lump sum payment of principal at maturity

Payment of debt based solely on the borrower's ability to pay, with security provided by the mortgage; (Not insured or guaranteed by gov't agency)

Financed by a deed of trust, _______ holds title until paid off.

Market in which loans are bought & sold after they have been originated & funded

FNMA purchase high risk , low-yield loans at full market rates while GNMA guarantees absorbs difference (Involves FNMA and GNMA)

Higher yield is relized from the difference in interest rates charged for the same money a second time

Second mortgage wrapped around a first mortgage

Allows for future advances of funds by the lender to the borrower

Insurance report that tells about previous insurance claims is

Due-on-Sale clause