Wyatt Institute for Real Estate – Flashcards
Unlock all answers in this set
Unlock answersquestion
Agent
answer
aka a proxy. one engaged to represent and be under the control of a principal
question
Principal
answer
One who contracts with another for representation, advice and counsel in legal or business dealings with third parties; also known in SC law as a Client
question
Client
answer
SC law term synonymous with "Principal"
question
Special Agent
answer
one hired for a specific service (i.e. to sell or help purchase a house). Limited authority - does not have continuous service
question
General Agent
answer
hired for continuous service - broad authority
question
Subagent
answer
a subagent is an agent of an agent. There are two types of subagency: 1: in-house and 2: cooperative
question
Dual Agency
answer
(Created by SC Law) A real estate firm represents both a seller and a buyer in the same real estate transaction. Neither client gets full representation.
question
Designated Agency
answer
(Created by SC statute) a designated agent is one of the individual Associated licensees/Subagents in a brokerage who are designated by the BIC to represent only one client in a specific "in house" transaction that would otherwise be a dual agency. One of the agents CANNOT be the BIC, if so then it is a dual agency
question
Express Agency
answer
Written (in writing) Mandatory in SC
question
Implied Agency
answer
created by the acts of the parties.
question
Exclusive Right to Sell
answer
Listing Brokerage gets paid if property is sold by anyone
question
Exclusive Agency - Seller
answer
Listing Broker does not get paid if the owner sells property
question
Open Listing
answer
(Rarely Used) Could be many listing brokerages; only the company that sells it gets paid
question
Net Listing
answer
Unethical. Not a type of listing.
question
Exclusive Right to Buy
answer
Listing Broker gets paid if property is bought
question
Exclusive Agency - Buyer
answer
(Rarely Used) Buyer's brokerage does not get paid if buyer buys a propertry not listed and not other licensee is involved.
question
Open Agency - Buyer
answer
Buyer's brokerage only gets paid if directly involved in the purchase.
question
OLDCAR
answer
Agent's fiduciary duties to Principal; Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care and diligence
question
Dual Agency - Fiduciary duties
answer
Lose the OLD, keep the CAR for both clients
question
Sherman and Clayton Acts
answer
Antitrust Laws - their primary purpose is to promote competition.
question
Price Fixing, Group boycotts, allocation of markets or non-compete agreements, tie-in contracts
answer
Examples of antitrust activities
question
SC License Law 40-57-135 (D)
answer
Listing and Buyer Representation agreements
question
SC License Law 40-57-137 (A)
answer
SC fiduciary duties - OLDCAR
question
Agency Disclosure
answer
Agency Disclosure Brochure - given AND discussed with everyone at the FIRST PRACTICAL opportunity, at which there is SUBSTANTIVE contact.
question
Real Estate Comission (REC) - Powers and duties
answer
Set general policy with regard to enforcing the License Law; Determine standards for qualifications & eligibility of applicants for licensing; Recommend changes in legislation and promulgate regulations; conduct disciplinary hearings & decide disciplinary actions; Establish fees through regulation; Make periodic inspections of offices of licensees to ensure compliance with the law; DOES NOT resolve comission disputes
question
SC Department of Labor, Licensing and Regulation (LLR)
answer
Oversees all licensing Commissions (such as the REC)
question
LLR investigations can be initiated two ways:
answer
Director of LLR may initiate an investigation based on the belief the law has been broken; A person may file a written complaint to the LLR.
question
Activities requiring a Real Estate License
answer
Acting as a broker, salesman or property manager for compensation; negotiations involving real estate; auctioning real estate; soliciting to do any activity on this list; advisory services as a real estate consultant or counselor; offering to act as an agent representing a principal in a real estate estate transaction; advertising to the public that the person does anything listed above
question
Real estate transactions exempt from licensing
answer
Property owner handling his own real estate transactions where the interest in the real estate is equal to the owner's legal interest; attorney at law acting as legal representation of his client; Federal or state empolyees acting in their scope of official duties; registered foresters; court appointed receivers and trustees acting within the scope of their duties (Personal Representatives appointed by Probate Court)
question
3 types of Licenses issued by the SC REC
answer
Broker, Salesman Property Manager
question
Continuing Education Requirements
answer
8 hours of CE (continuing education) every 2 years. 2 hours must be in core courses on state and federal changes to the law
question
Expiration/lapsed license
answer
The permanent salesman license expires every two years on 30 June and lapses 6 months later if not renewed
question
A BIC must inform the LLR in writing when a licensee...
answer
the licensee's forwarding address when leaves the brokerage firm
question
A licensee must disclose their interest in real estate transactions...
answer
1: Must reveal real estate license status in personal transactions in UNDERLINED CAPITAL LETTERS on the first page of the contract; 2: May not buy property listed with him or his/her company OR property for which he has been approached by the seller or prospective buyer to act as agent for himself/ business in which the agent has an interest or a close relative
question
Co-mingling
answer
When a fiduciary (BIC or PMIC) mixes trust funds with his own funds.
question
Conversion
answer
The unauthorized appropriation of trust funds by a BIC or PMIC
question
Trust Funds (deposits) received by a PMIC
answer
must be deposited within 48 hours in the trust fund (excluding days the bank is closed).
question
Substantional misrepresentations involving real estate transactions
answer
License Law Violation - SC 40-57-145
question
False promises likely to persuade or influence
answer
License Law Violation - SC 40-57-145
question
Continuation of the misrepresentation and/or making false promises through associated licensees or advertising
answer
License Law Violation - SC 40-57-145
question
Practice of real estate that demonstrates bad faith, dishonesty or incompetence, etc
answer
License Law Violation - SC 40-57-145
question
Licensee representing another borker other than his BIC
answer
License Law Violation - SC 40-57-145
question
Guaranteeing future profits
answer
License Law Violation - SC 40-57-145
question
Dual contracting (giving a lender a fake contract to get a buyer a higher loan or lower down payment)
answer
License Law Violation - SC 40-57-145
question
Criminal convictions
answer
License Law Violation - SC 40-57-145
question
Failure to report criminal convictions in writing by certified mail within 10 days of notification
answer
License Law Violation - SC 40-57-145
question
Not timely accounting for money in possession belonging to others
answer
License Law Violation - SC 40-57-145
question
Paying a commission or compensation to an unlicensed individual for activities requiring al icense under this chapter
answer
License Law Violation - SC 40-57-145
question
Interfering with a buyer's choice of attorney, insurance agent, title insurance aganet or any other service provider
answer
License Law Violation - SC 40-57-145
question
Failing to make timely agency disclosure
answer
License Law Violation - SC 40-57-145
question
Receiving compensation from more than one party without written consent from all parties
answer
License Law Violation - SC 40-57-145
question
Representing more than one party in a real estate transaction without written consent.
answer
License Law Violation - SC 40-57-145
question
Being an agent and an undisclosed principal in the same tranasaction
answer
License Law Violation - SC 40-57-145
question
Accepting deposit money without informing payor and having payor acknowledge in writing who will hold the money received by the licensee
answer
License Law Violation - SC 40-57-145
question
Issuing a check in connection with real estate business which is returned and marked NSF or account closed
answer
License Law Violation - SC 40-57-145
question
Failing to disclose material facts concerning a real estate transaction
answer
License Law Violation - SC 40-57-145
question
Violating any provision of the license law or regulation
answer
License Law Violation - SC 40-57-145
question
Inducing a party to break a contract of sale, lease, listing agreement or buyer agency agreement
answer
License Law Violation - SC 40-57-145
question
Engaging in practice or takig action inconsistant with agency relationship of other agents
answer
License Law Violation - SC 40-57-145
question
Failing to make records available to the commission
answer
License Law Violation - SC 40-57-145
question
43,560
answer
Number of square feet in an acre
question
Number of square feet in an acre
answer
43,560
question
Perimeter measurement
answer
Width + width + depth + depth OR (W+D)2
question
Area measurement
answer
WxD; also gives sqft
question
ATM T square
answer
Assessed Value, Tax, Millage Rate
question
FRESH CORN
answer
Familial, Race, (Equal), Sex (Gender), Handicap, Color, (Opportunity), Religion or Nationality
question
Civil Rights Act of 1968
answer
Prohibits discrimination in the sale, rental, financing, or providing brokerage services of housing based upon the protected classes FReSHCoRN
question
Steering
answer
Guiding a person to or away from a particular area based upon a protected class. Violation of the CRA of '68
question
Blockbusting
answer
Scaring property owners into selling by insinuating or suggesting a protected class person is purchasing or wants to purchase property in an area. Violation of the CRA of '68
question
Redlining
answer
A decision not to make loans in a certain are based upon a protected class. Violation of the CRA of '68.
question
Exemptions to the Fair Housing Law
answer
NO EXCEPTIONS FOR RACE! other protected classes have exemptions - FSBO (no more than 3 houses), resided in the residence; owners who rent a room in the residence they live in (including a 4-plex or smaller), religious organization (if membership is not restricted), private club (fraternal/sorority) if not commercial purpose. None of these can use a real estate licensee, or use illegal advertising
question
Fair Housing in Advertising Exemptions
answer
There are none
question
Taxpayer Relief Act of 1997
answer
Home owners may not pay a capital gains tax IF they have owned the residence at least 2 years prior to the date of sale AND used it as a primary residence for at least 2 of the 5 years prior to the date of sale.
question
Definition of LAND
answer
surface, subsurface, airspace, trees and water
question
Definition of REAL ESTATE
answer
land plus manmade improvement
question
Definition of IMPROVEMENTS
answer
Manmade additions/changes to land; either horizontal or vertical
question
Definition of APPURTENANCES
answer
Items that pass on with ownership including; articles, interests, benefits, improvements either tangible or intangible
question
Leasehold
answer
Personal property of a tenant. It has value
question
Emblements
answer
Growing crops with a right to harvest
question
Sold Real property is transferred with a
answer
Deed
question
Sold personal property is transferred with a
answer
Bill of Sale
question
Annexation
answer
causes personal property to become real property
question
Severance
answer
causes real property to become personal property once again
question
IRMA
answer
test for determining if something is a "fixture"; Intent of the parties, Relationship of the annexor to the property, Method of Attachment, Adaptation to property
question
Intent of the parties, Relationship of the anexor to the property, Method of Attachment and Adaptation to the property
answer
test to determine if something is a "fixture" IRMA
question
CUPiD
answer
Owners bundle of rights or "intersts in owning property - Control of the property, Use and enjoyment of the property, Possession of the property and Disposition of the property
question
Bundle of Rights - ownership
answer
CUPiD
question
Three PHYSICAL characteristics of property
answer
Immobility, Indestructabilty and Non-homogeneity (uniqueness)
question
Four ECONOMIC characteristics of property
answer
SLIP, Scarcity, Location, Improvements and Permanence
question
Metes and Bounds
answer
One Legal description of property using Point of Beginning (POB), monuments, compass directions and distance.
question
PETE
answer
Government's rights in land, Police Power, Eminent Domain, Taxation and Escheat
question
Police Power
answer
a restrictive power to protect citizens
question
Eminent Domain
answer
the right to take property for the public good
question
Condemnation
answer
the act of taking property under eminent domain
question
Taxation of Real Estate
answer
Government right in land
question
Ad valorem tax
answer
a property tax based upon value
question
Special Assessment
answer
a property tax on property directly benefiting from the betterment
question
Zoning/Master Plans
answer
A Public Control based on Police Power
question
Ordinances
answer
a set of rules or regulations concerning property
question
Non-conforming use
answer
an improvement (use) exception to current zoning ordinance (grandfathered)
question
Variance
answer
A request to deviate from the zoning ordinance
question
Spot zoning
answer
A small are of land singled out and placed in a different zone than the surrounding property
question
Building Codes
answer
A Public Control based on Police Power
question
Covenants, Conditions and Restrictions
answer
CC&R or private controls enforced by a Homeowners' Association (HOA)
question
Encumbrances
answer
Liens, Easements, Licenses, & encroachments - CC&R is an encumbrance also; may decrease value but not prevent the passing of the title
question
Liens - 2 types
answer
Specific (against a particular piece of property) and General (against all assets)
question
Lis Pendens
answer
Pending lawsuit or legal action
question
Lien
answer
a charge against property to provide security; the right to have a claim satisfied by the forced sale of the property
question
Easement
answer
is the right to cross property that belongs to another
question
Easement appurtement
answer
at least one dominant and one servient tenement
question
Dominant tenement
answer
the property benefitting from the easement
question
Servient tenement
answer
the property burdened by the easement
question
Creation by Prescription
answer
Easement created over time when there is open continual trepass
question
Creation by Implication
answer
Easement imposed by law
question
Creation by Condemnation
answer
Easement created through the right of eminent domain
question
License (versus easement)
answer
a privilege of use
question
Fee Simple
answer
Type of Freehold Estate - (absolute) (inheritable)
question
Defeasible Fee
answer
Type of Freehold Estate with Limits on use - Reversion - reverts back to owner or heirs; Remainder - transfers to third party
question
Life Estate
answer
Type of Freehold Estate (not inheitable) - 2 types
question
Ordinary Life Estate
answer
Life Estate - For the life of the tenant
question
Estate pur autre vie
answer
Life Estate - For the life of another (other than tenant)
question
Tenancy in Severalty
answer
Sole Ownership (one person or legal entity)
question
Tenancy in Common
answer
Concurrent ownership with two or more owners
question
Joint Tenancy
answer
concurrent ownership with two or more owners; not affected by the will of any owner; requires special wording; each owner owns all; right of survivorship (last owner gets all)
question
PITT
answer
Four unities of joint ownership - Same right of possession, the same interest, take title at the same time, must be on the same title
question
Possession, Interest, Time and Title
answer
Four unities of Joint Tenancy
question
Condominium
answer
A form of collective ownership of real property; owner owns the "airspace" inside the walls, everything else is "tenancy in common"
question
Condominiums sold and put into a rental pool
answer
are classified as securities and a securities license is required
question
Title Insurance
answer
protection against defects in the title of record, defects not disclosed by the record and cost of defending the title
question
2 Types of title insurance
answer
Owners policy - protects the owner and heirs (optional) - mortgagee's policy - protects the lender up to the amount of the loan
question
Marketable title
answer
Title to real estate that is free and clear of liens or other title defects; a title that enables the owner to sell the property freely to others and which others will accept without objection
question
Insurable Title
answer
Title to real estate that has cloud(s) (exceptions) over it which may make it unmarketable.
question
Legal Title passes when
answer
the signed deed is delivered by a competent grantor (while still living) and accepted by the grantee
question
Equitable title is
answer
the right to get legal title usually received by a binding purchase and sale contract
question
Land Contract
answer
aka Installment contract - buyer gets possession but the owner keeps title.
question
General Warranty Deed (GWD)
answer
Used in most property transfers - gives every possible future guarantee to grantee; Seisin (possession), Right to convey, against encumbrances, further assistance, quiet enjoyment and warranty forever
question
Seisen or Seizen
answer
Possession (present covenant of a General Warranty Deed)
question
5 ways of Transferring or Alienating of Real Property
answer
Involuntary transfer, Nature at Work, Voluntary transfer, Will, 1031 Exchange
question
Adverse possession
answer
Squatter's rights - an open, continuous, visible, hostile occupation for a period of time
question
Statute of Frauds
answer
its purpose is to prevent perjury
question
Real Estate agreements MUST be written to
answer
be enforcable in court
question
Bilateral contract
answer
A promise exchanged for a promise
question
Unilateral contract
answer
promise exchanged for an act (option to buy)
question
Valid contract
answer
meets all requirements
question
Void contract
answer
does not meet requirement(s)
question
Voidable contract
answer
Valid on its face, but may be voided (by a minor, under duress, mutual mistake)
question
Unenforceable contract
answer
Oral, expired by "Time is of the Essence", expired by the "Statute of Limitations"
question
Four requirements (Essential Elements) of a vaild contract (MLCL)
answer
Mutual Assent, Legal Consideration, Competent Parties, Legal Purpose
question
Final step to create a binding contract is
answer
communication
question
Rejection, Counteroffer, Lapse of Time, Revocation, Death
answer
Termination of Offers
question
Offers are terminated by
answer
Rejection, Counteroffer, Lapse of time, Revocation or Death
question
Discharge of Contract - Recission
answer
A discharge of a contract - Gives restitution; usually requires a lawsuit
question
Discharge of Contract - Novation
answer
Substitution of parties or terms; original party is TOTALLY released from liability
question
Discharge of contract - Assignment
answer
Substitution of parties; original party is STILL responsible
question
Discharge of Contracts - Release
answer
One agrees to let another out of the deal
question
4 elements of Misrepresentation or Fraud
answer
Misstatement, Material Fact, Reliance and Resulting Damage
question
Fraud
answer
A willful misstatement
question
Missrepresentation
answer
An innocent missatement
question
Puffing
answer
Opinion or belief that does not rise to the level of misrepresentation
question
Liquidated damages
answer
A remedy for breach of contract; usually retention by the seller of earnest money
question
Appraisal
answer
An opinion of value, numerically expressed as a number or range of numbers
question
Market Value
answer
An opinion of value, that presumes the transfer of property as of a certain date, under specific conditions set forth in the defintion of terms identified by the appraiser as applicable ina an appraisal.
question
USPAP
answer
Uniform Standards of Professional Appraisal Practice; its purpose is to set quality control standards
question
BPO or BOV
answer
Broker's Price Opinion or Broker's Opinion of Value - NOT an appraisal
question
DUSTe
answer
Elements or Characteristics of Value - Demand, Utility, Scarcity and Transferability
question
Demand, Utility, Scarcity, and Transferability
answer
Elements or Characteristics of Value
question
Physical, Economic, Political and Social
answer
Factors that influence value PEPSi
question
PEPSi will "fizz"
answer
Physical, Economic, Political Social Influences on value
question
3 Approaches/methods to estimating value
answer
Sales comparison, replacement cost and income approach
question
CMA
answer
Competitive Market Approach - sales of comparable properties - NOT an appraisal
question
3 Income approaches to estimating value
answer
GRM (Gross Rent Multiplier), GIM (Gross Income Multiplier) and Capitalization
question
GRM approach
answer
Gross Rent Multiplier approach based on monthly rental and sale prices - doesn't account for expenses
question
GIM approach
answer
Gross Income Multiplier approach based upon annual rental and sale price - doesn't account for expenses
question
Capitalization approach
answer
Based upon NOI or Net Operating Income - gross operating income minus operating expenses
question
Sale Price divided by monthly rent
answer
Gross Rent Multiplier
question
Sale Price divided by annual rent
answer
Gross Income Multiplier
question
Economic Life
answer
time over which property can be profitably used
question
Cost Approach
answer
Used for special purpose property that rarely sells (churches, schools, etc)
question
Effective Age
answer
the age of a property based upon its appearance of condition and design
question
3 causes of accrued depreciation
answer
Physical Deterioration, Functional Obsolescence and External Obsolescence
question
Physical Deterioration
answer
A cause of accrued depreciation, either curable or uncurable
question
Functional Obsolescence
answer
Bad floor plan, outdated fixtures, swimming pool - either curable or uncurable
question
External Obsolenscence
answer
Highway next door, downsizing by employers, uncollected junk nearby, loss of value outside of the property lines
question
SC Fair Housing Act
answer
Same as the Federal Fair Housing Act - 6 months to file a written complaint, 1 year to file suit in court
question
Homestead Exemption Program
answer
$50,000 reduction in appraised value for homeowners - 65 or older, totally blind or 100% disabled. Only need to meet one criteria
question
Usury
answer
Charging more than legal allowable interest rate - no such cap in SC
question
Assumption Fee
answer
Fee for assuming another's loan - in SC either 1% of loan balance or $400.00, whichever is lesser.
question
Prepayment penalty
answer
Not legal for fixed rate loans under $240,000 or any adjustable rate loans
question
SC Consumer Protection Code Revision Act of 1982
answer
No usury in SC, rate as agreed upon by parties, borrower may select attorney, insurance agent and title insurance agent (not dictated by lender)
question
Unit Week
answer
a period of time that can be sold under the SC Vacation Time Sharing Plan Act; NOT a time share week
question
SC Vacation Time Sharing Plan Act - Recission
answer
Purchaser may cancel within 5 days in writing by certified mail to the seller's address
question
SC Residential Property Disclosure Law
answer
Owner's responsibility to fill out AND give to the buyer before entering into a contract of sale; exemptions are; builder (unoccupied dwelling), bank foreclosure, or both parties agree to it
question
SC Residential Landlord and Tenant Act
answer
its purpose is to encourage landlords and tenants to maintain and improve the quality of housing; exceptions include: frat houses, transient occupancy, co-op, timeshare, emergency or protective shelters
question
Security deposits must be returned within
answer
30 days after termination of lease or demand by tenant, whichever is later or a written itemized explanation of why part or all of the deposit is being withheld.
question
Distraint
answer
the legal seizure of tenant's personal property to satisfy rental debt
question
Loan to Value Ratio
answer
Divide loan amount by property value
question
Point (Discount Point)
answer
1% of the loan value, their purpose is to increase the yield on a loan
question
Origination Fee
answer
fee charged to cover the cost of miscellaneous expenses associated with making the loan.
question
Mortgage Insurance
answer
PMI (Private Mortgage Insurance) or MIP (Mortgage Insurance Premium) - FHA insured loans
question
Equity
answer
The difference in current value of the property and the amount owed by the owner
question
Pre-qualification
answer
How much you can afford (unverified)
question
Pre-approved
answer
How much you can afford (verified by the lender) - usually good for 30 days
question
RESPA
answer
Real Estate Settlement Procedures Act
question
HUD-1
answer
settlement statement required by RESPA regulations
question
2 Types of Loans
answer
Straight (Term) and Amortized (or Partially Amortized)
question
Term or Straight Loan
answer
Only interest is paid and at the end the entire original loan amount is due
question
Amortized Loan
answer
Level or equal payments including both interest and principal which fully pays off the loan
question
2 types of finance problems do NOT use the T bar approach
answer
Equity (value-loan) and Rate Factor Chart problems
question
Desired monthly payment * rate factor*1,000 equals
answer
the loan amount
question
Loan amount divided by 1,000 * rate factor equals
answer
the monthly loan payment
question
ARM
answer
Adjustable Rate Mortgage (most are assumable)
question
ARM prepayment penalty
answer
NO in SC, YES in US
question
3 classes of conventional loans
answer
standard conforming, alternative conforming and non-conforming
question
Federal National Mortgage Association
answer
Fannie Mae (FNMA) - buys loans on the secondary market
question
Standard conforming loan
answer
Qualifying ratios of 28% and 36%
question
Income ratio (qualifying ratio under FMNA)
answer
Total House Payment (THP) divided by Gross Monthly Income equals income ratio (cannot exceed 28%)
question
Debt Ratio (qualifying ratio under FNMA)
answer
(THP + Debt) divided by Gross Monthly Income equals debt ratio (cannot exceed 36%)
question
PITI
answer
Principal, Interest, Taxes and Insurance equals Total House Payment (THP)
question
Total House Payment (THP)
answer
Includes PITI - Principal, Interest, Taxes and Insurance
question
Long Term Debt (defined for FNMA)
answer
Any debt which cannot be repaid within 10 months (all revolving credit)
question
Non-conforming (conventional loans)
answer
"Jumbo Loans" will not be purchased by FNMA, exceed maximum conforming loan amount
question
Contract for Deed
answer
a.k.a. Bond for Title, Land Contract, Land Sale Contract, Installment Contract, Installment Land Contract ( in all cases the seller retains the title as security)
question
Primary Market (loans)
answer
Source of money for consumers
question
Secondary Market (loans)
answer
Source of money for lenders
question
Purchase Money Mortgage
answer
Seller/Owner financing - Borrower/Buyer gets the deed
question
Government National Mortgage Association
answer
GNMA - Ginnie Mae - Insures loans of qualified lenders
question
Federal Home Loan Mortgage Corporation
answer
FHLMC Freddie Mac - 2nd largerst purchaser of loans on the secondary market like FNMA; insures loans like GMNA
question
Veterans Administration
answer
Guarantees loans up to 100%; entitlement is $417,000 times 25% or $104,250
question
Federal Housing Adminstration
answer
FHA insures loans of lenders up to 100%
question
FHA qualifying ratios
answer
29 and 41 - THP or PITI/GMI cannot exceed 19%, THP + Debt/GMI cannot exceed 41%
question
Certificate of Reasonable Value
answer
CRV - Appraisal for VA guaranteed loan
question
CRV
answer
Certificate of Reasonable Value or an appraisal required for a VA guaranteed loan
question
Revere Annuity Loan
answer
not to be confused with reverse amortization (payment caps)
question
Open End Loan
answer
ex: home equity loan; revolving line of credit
question
Construction loan
answer
interim loan
question
Package loan
answer
loan combining real and personal property as collateral
question
Blanket loan (Brr)
answer
Where several properties act as collateral and the loan contains release or partial release clauses which do not negate or terminate the loan
question
Sale leaseback
answer
Grantor (seller) becomes the leasee (tenant), the Grantee (buyer) becomes the lessor (landlord)
question
Mortgage take-over
answer
Assumption of mortgage (qualified or non-qualified buyer) OR Subject to the Mortgage (buyer has NO Liability)
question
Lien Theory
answer
"Equitable Theory" - Security instrument is only a lien on the property pledged. SC is a Lien Theory state
question
Title Theory
answer
Security instrument conveys title to the property that has been pledged to the lender. A Deed of Trust or Trust Deed does convey title to the lender
question
Promissory Note
answer
A promissory note is evidence of the debt. It is the PRIMARY OBLIGATION of the Borrower
question
Trust Deed/ Deed of Trust - Parties
answer
Trustor = Borrower, Trustee = Third Party, Beneficiary = Lender
question
Promissory Note - Parties
answer
Maker = Borrower "makes a promise", Payee = Lender "gets paid"
question
Mortgage - Parties
answer
Mortgagor = Borrower, Mortgagee = lender
question
Hypothecation
answer
A type of pledge - (mortgage) where the borrower keeps possession of the property
question
2 types of Acceleration clauses
answer
Default (failure to keep covenants) and Due-on-sale or Alienation/Assumption clause (sold the property)
question
Acceleration Clause
answer
causes the entire note to be due at once
question
TILA or Regulation Z
answer
Truth in Lending Act - creditors must make disclosures about financing costs
question
National Consumer Protection Act
answer
its purpose is to protect consumers
question
GFE
answer
Good Faith Estimate - due witin 3 business days to borrowers, must wait 7 days after disclosure before closing loan
