-
Vendor-
Vendee-
- Vendor- seller
- Vendee- buyer
-
Subordination means
to take a lower position
-
A senior loan that has been subordinated becomes
a Junior loan
-
In a mortgage, the lender is called
mortgagee
-
The order of recording
establishes lien positions
-
Takes priority over all recorded liens
real estate property taxes and special assessments
-
IRS tax liens fall into the
order of recording
-
A lien that is not paid at the closing
remains on record
-
A mechanic's lien
is filled for non payment of work materials
-
Mechanics liens become effective
when materials is delivered or work begins
-
Excess money at a foreclosure goes
to the mortgagor/trustor/borrower
-
an alienation clause in a mortgage requires
the full payment of the debt if the title is transferred
-
A non disturbance clause in a mortgage benefits
the lessee
-
In a land contract the buyer/vendee
does not have legal title to the property
-
An acceleration clause in a note or mortgage
requires full payment of the debt upon default
-
A novation
is a substitution of one obligation for another and it will release liability. A novation is given by a lender
-
A mortgage
pledges property as security for a debts
-
Under a land contract (contract for deed) title passes (by deed) to the buyer when
property is paid for or other conditions are met
-
Selling property under a loan assumption would activate an
alienation clause or a due sale clause
-
if funds are insufficient at a foreclosure sale
the lender may seek a deficiency judgement
-
A buyer under a land contract has an
Equitable interest in the property
-
special assessments are normally based
on the front footage of lots
-
A foreclosure will have no affect on lien holders who are
not notified of the foreclosure
-
An estoppel certification
is given by a mortgagor to a mortgagee to verify a loan balance
-
Title theory states
the law interprets that a mortgage, when given to a mortgagee,givens the mortgagee legal title to the property. Upon default, the mortgagee has possession rights
-
Lien Theory States
the law interprets a mortgage as an instrument that creates a lien on the mortgages property. A mortgagee must foreclose through judicial procedure upon default by a mortgagor.
-
Hypothecation
in lien theory states, a mortgagor pledges property without giving possession rights to the mortgagee
-
the primary financial instrument is the ____. the _____ is secondary
-
Promissory note
is the written promise to repay a debt
-
the mortgage
is the document that pledges property as collateral or security for the payment of the debt.
-
A trust deed or deed of trust
acts like a mortgage bec it secures property for the payment of a debt, these financial security instruments are used in title theory states.
-
parties to a trust deed
- trustor (borrower)
- trustee (3rd party)
- beneficiary (lender)
-
Deed of reconveyance
When a borrower under a trust deed makes the final payment, the trustee is required to convey the title of the trustor
-
acceleration clause
allows the lender to demand full payment of the unpaid debt and any interest owed if the borrower defaults. A note also contains a acceleration clause.
-
default clause
in a note specifies the conditions of default. In order for a lender to foreclose on a mortgage, the note must contain a default and acceleration clause.
-
-
A mortgage must be written and identify
the mortgagor and mortgagee. A mortgage must also contain a legal property description, a statement defining the interest being pledged and a mortgaging clause.
-
assignment
is a transfer of contract rights. A lender may assign a mortgage to a third party (bank selling to other bank)
-
An escalation clause
allow the lender to increase the interest rate (ARM)
|
|
