Business law chapter 26 midterm 2

  1. Accommodation party (surety or co-debtor)
    third person in surety arrangement
  2. antifiduciary statute
    • a statute that prohibits deficiency judgments regarding certain types of mortgages, such as those on residential properties.
    • Second mortgages usually are not protected by anti-deficiency statutes
  3. beneficiary (creditor)
    the lender in a deed of trust
  4. collateral
    any property put up as a security interest in case of default
  5. Construction/Mechanics' lien
    A contractor’s, laborer’s, supplier’s, or design professional’s statutory lien that makes the real property to which services or materials have been provided security for the pay-ment of the services and materials
  6. Consumer Financial protection
    laws that protect borrowers from abusive lending practices
  7. consumer financial protection act of 2010
    federal statute requires disclosure of credit terms on credit card and charge card solicitations and applications. the APR, annual membership fee, minimum or fixed finance charge, transaction charge for use of the card for purchases, and a statement that charges are due when the periodic statement is received by the debtor
  8. Consumer Financial Protection Bureau
    agency that is responsible for enforcing federal consumer financial protection statutes
  9. County recorder's office
    where one records a mortgage or deed of trust.
  10. credit
    when one party makes a loan to another party
  11. Credit CARD act
    adds additional disclosures
  12. Credit Report
    Information about a person's credit history that can be secured from a credit reporting agency
  13. Creditor
    person lending the credit
  14. Debt Collectors
    people collecting debt and prohibited from certain practices thanks to the Fair Debt Collection Practice Act
  15. Debtor
  16. Deed of trust
    an instrument that gives a creditor a security interest in debtor's real property that is pledged as collateral for a loan. it is a three party instrument
  17. default
    when you are unable to pay a credit or loan
  18. Deficiency judgment
    when acquiring the mortgaged property is under the value of the loan, the lender may go to a court to seize the borrowers other property
  19. Equal Credit Opportunity Act
    statute that prohibits discrimination in the extension of credit based on sex, marital status, race, color, national origin, religion, age, or receipt of income from public assistance programs
  20. Fair Credit Reporting Act
    statute that protects a consumer who is the subject of a credit report by setting rules for credit bureaus to follow and permitting consumers to obtain information from credit reporting businesses
  21. fair debt collection practices act
    qLimits debt collector from abusive, deceptive and unfair practices

    qDebt collectors can’t:

    qHarass, abuse or intimidate,

    qMake false or misleading misrepresentations, and

    qUse unfair or unconscionable practices
  22. first purchase money mortgage
    first mortgages that are taken out to purchase houses
  23. foreclosure sale
    a legal procedure by which a secured creditor causes the judicial sale fo the secured real estate to pay a defaulted loan
  24. Guarantor
    third person in guaranty arrangement
  25. guaranty arrangement
    third party promises to be secondarily liable for the payment of another's debt, when the borrower is unable to pay and creditor has exhausted all other options.
  26. judgment proof
    it would be pointless to sue because they have no property to take
  27. land sale contract
    an arrangement in which the owner of real property sells property to a purchaser and extends credit to the purchaser
  28. lien release
    written document signed by a contractor waiving his statutory lien against real property
  29. mortgage
    arrangement where an owner of property borrows money from a lender and pledges the real property as collateral to secure the repayment of the loan
  30. mortgagor
    debtor of the mortgage
  31. mortgagee
    creditor in mortgage
  32. nonrecordation of a mortgage
    the mortgage is still legal, but failure to record properly is not effective against either A. subsequent purchasers of the real property or B. other mortgagees who have no notice of the prior mortgages

    EX: Eileen purchases a house for $500,000. She borrows $400,000 from Boulevard Bank and gives the bank a mortgage on the house for this amount. Boulevard Bank fails to record the mortgage. Eileen then applies to borrow $400,000 from Advance Bank. Advance Bank reviews the real estate recordings and finds no mortgage recorded against the property, so it lends Eileen $400,000. Advance Bank records its mortgage. Later, Eileen defaults on both loans. In this case, Advance Bank can foreclose on the house because it recorded its mortgage. Boulevard Bank, even though it made the first loan to Eileen, does not get the house and can only sue Eileen to recover the unpaid loan.
  33. note
    an instrument that is evidence of a borrower's debt to the lender
  34. notice of lien
    recorders office for proper lien
  35. Power of Sale
    a power stated in a mortgage or deed that permits foreclosure without court proceedings and sale of the property through an auction
  36. preliminary liability
    in a surety agreement, the creditor can ask the borrower or the surer for a defaulted payment
  37. reconveyance
    satisfaction of a mortgage that must be noted in the recorder's office
  38. recording statute
    mortgages and deeds of trust must be recorded in the county's office
  39. right of redemption
    ability to pay in full (principal, interest, and other costs) after default, usually after 6-12 months of the foreclosure
  40. secondarily liable
    liability for a guarantor
  41. secured credit
    credit given after receiving security interest as collateral
  42. security interests in real property
    owner borrows money from a lender and pledges real estate as security for repayment of the loan
  43. surety
    qThird person (aka surety) promises to be primarily liable for another person’s debts

    qBoth parties are primarily liable for debts
  44. trustee
    legal title to the real property is placed with him until the amount borrowed has been paid full
  45. trustor
    owner debtor/ borrower
  46. Unsecured credit
    credit is given without security interest as collateral and the creditor can go to court to receive payment
Card Set
Business law chapter 26 midterm 2
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