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37 Cards in this Set
- Front
- Back
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Note |
The borrowers personal promise to repay |
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Mortgage |
The document that offers the real property as security for a loan. (Dead Pledge) Between the borrower/mortgagor and lender/morgagee. Borrower agrees to pay back over time with interest. |
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Loan to Value Ratio |
difference between the sale price and down payment L / V = LTV |
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In Arrears |
Interest in usually calculated at the end of a period. |
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Usury |
Excessively high rate beyond legal limit |
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Loan Estimate (LE) |
standard form required by law providing borrowers with information about the prospective loan. At time of application or within 3 days |
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Appraisal Fee + Credit Report Fee = |
Application Fee
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Discount Points |
A fee charged by a lender to inrease the yield on a loan allowing the lender to give borrower a lower interest rate. 1 point is 1 percent of the loan. |
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Definition of a Mortgage Loan |
A loan, debt, lien, contract, pledge. |
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Hypothecaution |
Pledge of real property as collateral security while borrower still retains possession and use. |
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foreclosure |
legal procedure by the lender when there is a failure to make loan payments. In PA this is through a court ordered auction. |
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Amortized Mortgage |
where regular periodic payments (monthly and with level payments) have a portion first toward interest then to reduce the principle. |
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term loan |
regular payments consist of interest only. the principle is paid at the end of the term in a lump sum. (one balloon payment) |
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purchase money mortgage |
when a seller provides a loan to help a buyer purchase the sellers property. IE: Seller Financed |
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partially amortized mortgage |
has an initial period of time during which the loan is amortized with payments including principle and interest calculated and spread out over a 30 year basis. At the end of the term (3,5,7, etc) the final lump sum balloon payment is due. |
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2 Documents of Financing |
Promissory Note and Mortgage |
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Promissory Note |
A borrower agrees in writing to pay back the money over time with interest. It is a Negotiable Instrument and can be transferred or sold to another party. |
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Mortgage |
Security Instrument where the borrower pledges the real property as collateral security for the repayment of the loan. |
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Defeasanse Provision
--Defease - undo |
in a mortgage, states the lender is required to remove the mortgage lien from the court house records. |
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satisfaction piece |
A lender filing to show in the records that the loan obligation is satisfied. |
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Acceleration Provision |
if borrower fails to meat the T&C and the mortgage is in default the lender has the option to declare the full amount due and payable after typically 30 days notice. |
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Alienation Provision |
Refered to as the due on sale clause because debt is due upon the sale of the property. |
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"subject to the seller's existing mortgage" |
seller is still personally liable for the debt. |
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"assumes the seller's existing mortgage" |
buyer and seller together take responsibility for the debt. |
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Primary Mortgage Market (Direct Lenders) |
Where borrowers get the money - morgagor (borrower) gets a mortgage through a mortgagee (lender). All of the direct lenders are refereed to as primary mortgage market. |
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Sources of lenders in the primary mortgage market. |
Mortgage Bankers S&L Assoc. Credit Unions Commercial Banks Life Ins. Companies (work in the secondary market) Individuals Mortgage brokers |
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Mortgage Bankers |
major source of residential mortgages. |
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Mortgage Brokers |
bring together borrowers and lenders |
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When a lender gives a loan money is removed from their pool of available funds |
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Assignment of Mortgage |
lenders assign (sell) their loan packages to investors. |
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Secondary Market |
All investors who buy loans from the primary mortgage market. This sends money back to the lender of the primary mortgage market. |
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Fannie Mae |
Federal National Mortgage Assoc. (FNMA) A private corp. that is the most dominant buyer of mortgages from the primary market. |
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Ginnie Mae |
Government National Mortgage Assoc. )GNMA Federal agency operating under HUD (Department of Housing and Urban Development). |
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Freddie Mac |
Federal Home Loan Mortgage Corp. (FHLMC) Freddie buys FHA, VA, and conventional mortgages from the primary market. |
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Warehouse Agency |
purchaser in the secondary market that buys mortgages from the primary market then assembles the loans into packages for resale to investors. |
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Subprime Mortgage |
a high risk mortgage for the borrow and lender based on safe lending standards. |
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Secure and Fair Enforcement for Mortgage Licensing Act. |
Provides that all residential Mortgage Loan Originators (MLOs) be state-licensed or federally registered. |
