Holder in Due Course One who acquires a negotiable instrument in good faith

Real Estate Mortgage: Unit 1 Flashcards

The type of mortgage theory where the lender or mortgagee does not hold legal title is Lien theory Negotiable InstrumentDocuments which may be legally transferred from one party to another by assignments; such as stocks, bonds, checks, or freely transferable promissory notes HypothecateTo hypothecate property means that a debtor can pledge property as a security without giving up possession of it Holder in Due CourseOne who acquires a negotiable instrument in good faith and for consideration and has certain rights beyond those of the original payee Title, EquitableAn interest created in property upon the execution of a valid sales contract, whereby actual title will be transferred by deed at the future date (closing). Also, the vendee's (buyers) interest in property user a land contract. Also called an Equitable Interest PrincipalThis is the base amount of a loan InterestThis is a charge for the use of the money Under a land contract, the vendor (seller) holds legal title as security In a mortgage transaction, the lender is the obligator?False, the borrower is the obligator Promissory NoteThis is the basic evidence of debt, showing in writing who owes how much to whom The document that creates a lien against real property as security for promise to repay a loan is called a mortgage Mortgagorthe borrower Adjustable Rate MortgageA type of mortgage structure that permits the lender to periodically change or vary the interest rate charged, based on a standard index Trust DeedAn instrument held by a third party (known as the trustee) as security for the payment of note The borrower who gets the mortgage from the mortgage company os the mortgagee False, the borrower is the mortgagor and the lender is the mortgageeRemember, the borrower is actually getting the money from the mortgage company and giving the company the mortgage, which places property as collateral principalbase amount of the loan TrustorIn a trust deed, the borrower Promissory Notefinancing instrument Liena hold or claim that one person has on the property of another to secure payment of a debt or other obligation Title, LegalThe interest in property held by the rightful owner. Also, the vendors (sellers) interest in property under a land contract

Land ContractReal estate installment agreement where the vendor (seller) and the vendee (buyer) sign a contract in which the vendee promises to pay the vendor a down payment and then a certain amount of principal and interest over a number of years ForeclosureWhen a lien holder causes property to be sold, so that the unpaid debt secured by the lien can be satisfied from the sale proceeds Under a trust deed, the borrower is referred to astrustor Term LoanA type of reverse mortgage loan provides monthly advances to homeowners that are 62 years of age or older against the equity in their home, for a fixed period of time (usually 3-12 years). At the end of the period, all principal advances plus interest are due. (Plan has limited success because borrowers fear having to sell their home at the end of the term) The promissory note and the mortgage are actually the same thing False, they are two separate documentsPromissory not is the provost to repay a debt while the mortgage places property up as collateral for the note that was creates. The mortgage document is recorded in a public record With a promissory note, the lender may seek a deficiency judgement against a borrower who defaults on a loan True, this document enables the lender to seek a judgment against a borrower who defaults CollateralProperty pledged as security for a debt MakerThe person promising to pay money Mortgageelender Fixed-Rate LoanLoan where the interest rate remains constant for the duration of the loan Straight NoteA note that calls for payment of interest only during the term of the note, with a balloon payment at the end to pay off the principal balance Interestpercentage of the principal charged to the borrower by the lender for the use of the money A holder in due course is one who acquires a negotiable instrument in good faith and for consideration and has certain rights beyond those of the original payee True, the holder in due course may acquire a negotiable instrument by purchasing a note from a lender as an investment at a fair price Balloon Paymenta final payment at the end of a loan term to pay off the entire remaining balance of principal and interest not covered by payment during the loan term A straight note requires regular payments of principal and interest to pay off the entire balance by the end of the loan term False, its a fully amortized notestraight note requires interest only payments with balloon payment due at the end of the loan term A straight note requires periodic payments of the principal amount only, with a balloon payment at the end of the loan tern to pay off the balance due False

"ee" always receives"or" always gives After real estate taxes and other associated costs of the foreclosure sale are paid, a first mortgage holder is paid true Fully Amortized MortgageA type of mortgage structure that requires regular payment of principal and interest calculated to pay off the entire balance by the end of the loan term MortgageAn instrument that creates a voluntary lien on real property to secure repayment of a debt. The parties to a mortgage are the mortgagor (borrower) and the mortgagee (lender) With a trust deed, who is considered the beneficiary?the lender PayeeThe person who is promised payment Mortgagesecurity instrument The type of lawn that has an interest rate that varies up or down depending on the cost on money as determinate by an index called adjustable rate The type of not that has an interest rate that varies up or down depending on the cost of money as determined by an index is called adjustable rate note