Shared Flashcard Set

Details

test 3
real estate
220
Finance
Undergraduate 3
11/02/2016
Click here to study/print these flashcards.

Create your own flash cards! Sign up here.

Additional Finance Flashcards

 

 

Cards

Term
statement of the buyer’s costs.
 Definition
A real estate purchase agreement contract used by a multiple listing member may be all of the following EXCEPT
Term
binding on the seller.
 Definition
An earnest money agreement signed by all parties is
Term
the broker.
 Definition
The amount of earnest money necessary for a given transaction is NOT determined by
Term
by agreement between the buyer and seller.
 Definition
In a brokered real estate transaction, the amount of earnest money is determined by the
Term
be written and delivered.
 Definition
A valid enforceable sales agreement must
Term
prorating.
 Definition
The process of dividing ongoing expenses and income items as of the closing date is called
Term
warranty as to physical condition.
 Definition
The phrase “as is” when used in real estate contracts means the buyer is accepting the property without
Term
contract would be voidable by the buyer.
 Definition
If a contract of sale is subject to the buyer’s ability to secure a loan, and after diligent effort the buyer is unable to do so by the stated deadline, the
Term
be sued by the buyer for specific performance and damages.
 Definition
The seller decided that he didn’t want to sell his house a few days before closing. He can
Term
that punctual performance of the time limits set by the contract is essential.
 Definition
The phrase “time is of the essence” means
Term
enforceable when the seller signs it and the buyer is notified of the seller’s acceptance.
 Definition
A purchase agreement for the purchase of real property is
Term
Submit the second offer immediately
 Definition
What should a salesperson do if he receives a second bona fide offer after one offer has already been submitted to the seller but not yet accepted or rejected?
Term
discount rates.
 Definition
The printed portions of a standard residential sales contract refer to all the following EXCEPT
Term
Choices of financing for the transaction
 Definition
A real estate licensee may advise sellers or buyers regarding which of the following?
Term
can advise seller to obtain the services of a lawyer.
 Definition
When a seller wishes to convey title by means of a statutory deed form, the salesperson
Term
No one
 Definition
A broker is preparing an original real estate sales contract for a buyer and seller. Whom may he lawfully charge for this service?
Term
non-existent since legal title is not transferred until the contract is paid off.
 Definition
When property is purchased using a land sales contract, the instrument used to convey legal title would be
Term
a contract for deed.
 Definition
If title to real property remains in the seller’s name after it is sold on an installment payment plan, the buyer would have purchased it under
Term
Possession
 Definition
When buying property under a land sales contract, which of the following does the buyer receive immediately?
Term
Vendor-Vendee
 Definition
From the following, select the parties to a land sales contract.
Term
is in title.
 Definition
If the vendee is in default, the vendor
Term
Purchaser holds equitable title
 Definition
Which of the following is true of a land sales contract?
Term
equitable title is held by the vendee.
 Definition
Under a conditional land sales contract,
Term
equitable title.
 Definition
A land sales contract passes
Term
valid
 Definition
An option is given wherein consideration is stated as $10.00. The option is
Term
cancelable by the optionor.
 Definition
An option to purchase real property is NOT
Term
forfeits his option money if he doesn’t buy the property.
 Definition
At the time the expiration of an option to purchase, the optionee
Term
There is no grace period
 Definition
The legal grace period in an option to purchase real estate is how long?
Term
owner
 Definition
When a property is optioned, the optionor is the
Term
do nothing
 Definition
Howard signed an option with Paula giving Paula the “right to purchase” in 90 days. Paula decided she did not want the property and did not exercise her option. Howard can
Term
T
 Definition
Money paid upon signing of a contract of sale by the offeror is called earnest money.
Term
T
 Definition
In most residential purchase agreements, the purchaser has the right to withdraw from the purchase without forfeiture of the earnest money if he cannot obtain necessary financing.
Term
F

buyer first
 Definition
After the seller has accepted an offer, the sales agent should deliver a copy of the agreement first of all to the lender.
Term
F

fully executed
 Definition
On a land sales contract, the seller must have marketable title for the property when the contract is recorded.
Term
T
 Definition
The vendor holds legal title to real property when a land sales contract has been entered into between the seller of the property and a buyer.
Term
T
 Definition
If a person has the right to rent a house and the guaranteed opportunity to buy it at a fixed price at a later date, he would have what is known as a lease with option to buy.
Term
T
 Definition
Walter has reserved the right, for a specific period of time, to buy Helen’s house. Walter gave Helen a $500 deposit for this right. This transaction most likely involves an option.
Term
F

not required
 Definition
Earnest money is required to make a sales contract enforceable.
Term
F

finding of a lender and arranging financing.
 Definition
The most time consuming item in carrying out the terms of the purchase contract is the termite inspection.
Term
T
 Definition
If the buyer needs possession prior to closing a separate rental agreement should be used.
Term
T
 Definition
If the buyer is unable to obtain financing on the terms outlined in the sales agreement, the seller will have to return the buyer’s deposit.
Term
F
 Definition
Any item of personal property to be sold with the real estate must be handled with a bill of sale.
Term
F

and or not but
 Definition
In the event of default by the buyer the seller may sue for specific performance but not for money damages.
Term
F

non defaulting
 Definition
“Time is of the essence” means that the time limits set by the contract must be faithfully observed or the contract is voidable by the defaulting party.
Term
T
 Definition
After the buyer signs the sales contract, he retains one copy and the rest are delivered to the seller for his decision.
Term
T
 Definition
The federal government has authorized electronic signatures and documents.
Term
T
 Definition
The rejection of even the smallest portion of an offer is a rejection of the entire offer.
Term
T
 Definition
A rider is any addition annexed to a document and made part of the document by reference.
Term
T
 Definition
During the period beginning with the buyer and seller signing the contract and the seller delivering the deed, the buyer is said to hold “equitable title” to the property.
Term
T
 Definition
A lease-option allows a tenant to buy a property at a preset price and terms during the option period.
Term
Time, essence
 Definition
____________________ is of the ____________________ is a phrase that means that the time limits of a contract must be faithfully observed or the contract is voidable.
Term
equitable
 Definition
The right to demand that title be conveyed upon payment of the purchase price is known as ____________________ title.
Term
prorating
 Definition
The process of dividing ongoing expenses and income items at closing is known as
Term
addendum, attachment
 Definition
A rider is any addition annexed to a document and made a part of the document by reference is also known as a(n) ____________________ or a(n) ____________________.
Term
letter of intent
 Definition
If two or more parties want to express their mutual intention to buy, sell, lease, develop, or invest, and wish to do so without creating any firm, legal obligation, they may use a ______________________________.
Term
installment
 Definition
The most important feature of a(n) ____________________ contract is that the seller does not deliver a deed to the buyer at closing.
Term
vendor, vendee
 Definition
Under an installment sale, the seller is known as the ____________________ and the buyer is known as the ____________________.
Term
option
 Definition
Under a(n) ____________________ contract, the buyer has a right to purchase the property but with no obligation to do so.
Term
tax deferred
 Definition
When two properties are exchange rather than each being sold independently, it is likely structured as a(n) _________________________ exchange.
Term
lease option
 Definition
A _________________________ allows the tenant to buy the property at a preset price for a given period of time.
Term
purchase contract
 Definition
a written and signed agreement specifying the terms at which a buyer will purchase and an owner will sell
Term
binder
 Definition
a short-form purchase contract to hold a real estate transaction together until a more formal contract can be prepared an designed
Term
earnest money deposit
 Definition
money that accompanies an offer to purchase as evidence of good faith
Term
“as is”
 Definition
property offered for sale in its present condition with no guarantee or warrant of quality provided by the seller
Term
dry rot
 Definition
rotted wood; usually the result of alternate soaking and drying over a long period of time
Term
closing date
 Definition
the day on which the buyer pays his money and the seller delivers title
Term
bill of sale
 Definition
written evidence of the sale of personal property
Term
“time is of the essence”
 Definition
a phrase meaning that all parties to a contract are expected to perform on time as a condition of the contract
Term
installment contract
 Definition
also known as a conditional sales contract, land contract, contract for deed, or agreement of sale
Term
vendee
 Definition
the buyer under a contract for deed
Term
equitable title
 Definition
the right to demand that the title be conveyed upon payment of the purchase price
Term
lease-option
 Definition
allows the tenant to buy the property at a preset price for a given period of time
Term
right of first refusal
 Definition
the right to match or better an offer before the property is sold to someone else
Term
letter of intent
 Definition
expresses a mutual intention to buy, sell, lease, develop, or invest without creating any firm obligation
Term
optionee
 Definition
the party receiving an option
Term
loan commitment
 Definition
an agreement by a lender to make a loan
Term
option fee
 Definition
money paid for the privilege of having an option
Term
delayed exchange
 Definition
a non-simultaneous real estate trade
Term
qualified intermediary
 Definition
a third-party escrow agent used in tax-deferred exchanges
Term
prorating
 Definition
the process of dividing ongoing expenses and income items
Term
is the primary evidence of a loan.
 Definition
A promissory note
Term
a promissory note.
 Definition
In the United States, the instrument most commonly used to evidence a debt on real property is
Term
prepayment privilege.
 Definition
A borrower who wanted to make a monthly payment larger than that called for by the note, could do so if the note contains a
Term
makers.
 Definition
The phrase “jointly and severally liable” in a note or bond applies when there are two or more
Term
The mortgagee
 Definition
Of the following parties to a mortgage, whose interest is benefited by an acceleration clause?
Term
acceleration clause.
 Definition
When a borrower gets behind on his loan payments, the lender could call for the entire balance due immediately based on the
Term
debt security.
 Definition
A mortgage or trust deed is considered to be
Term
lender
 Definition
When a loan evidenced by a note is secured by a mortgage, the funds are furnished by the
Term
Real estate given as security
 Definition
Which is an example of pledged property?
Term
mortgagor and mortgagee.
 Definition
The parties to a mortgage are called
Term
a transfer of title.
 Definition
In some states, a mortgage is considered to be a lien on real property. In other states a mortgage is interpreted as
Term
a note.
 Definition
A mortgagee in a lien theory state holds
Term
gives the lender the right to call the entire loan balance upon alienation.
 Definition
A “due on sale” clause
Term
lender.
 Definition
An alienation clause in a mortgage loan is to the advantage of the
Term
subject to the loan.
 Definition
Barry purchased Bob’s home without accepting obligation for the existing loan. Barry is said to be buying the house
Term
assuming the loan.
 Definition
A property is sold and the buyer promises the seller in writing that he, the buyer, will repay the existing loan. This is called
Term
Property tax lien
 Definition
Which lien would have highest priority?
Term
mortgage first recorded.
 Definition
Unless there is a specific agreement to the contrary, the mortgage having first priority will be the
Term
junior to a superior mortgage lien.
 Definition
A second mortgage is
Term
Property taxes
 Definition
Which of the following claims against a real property interest would be the first to be satisfied?
Term
Borrower
 Definition
Who benefits the most by the inclusion of a subordination clause in a mortgage?
Term
a subordination clause.
 Definition
A beneficiary allows a clause in his contract stating that another lender’s interest will be allowed to take precedence over his at some later date. This clause is known as
Term
be foreclosed on.
 Definition
If an owner of a single-family residence defaults on his mortgage, it can
Term
Power of sale
 Definition
Which of the following requires a public sale?
Term
loan balance, accrued interest and the accumulated cost of the foreclosure action and sale.
 Definition
Betty is six months behind on her mortgage payments. Foreclosure by public auction has been ordered. The sale has not been completed. Betty may redeem her property by paying the
Term
redemption.
 Definition
The right of the mortgagor to reclaim his property upon payment in full of the obligation is
Term
deficiency judgment.
 Definition
When a clause in a mortgage allows the lender to proceed against a borrower’s other assets if the foreclosure sale does not satisfy the debt, the result is called a
Term
deficiency.
 Definition
If a foreclosed property has sold for less than the loan amount, the difference between the indebtedness and the sale price of the real estate at the foreclosure sale is called the
Term
right of redemption.
 Definition
The right, which allows the mortgagor to regain his property following a mortgage foreclosure, is known as
Term
deed in lieu of foreclosure.
 Definition
A mortgagor signs a deed conveying title to the mortgagee, leaving the mortgagee without recourse. This is an example of
Term
F
 Definition
A legal description of the property typically appears in a promissory note.
Term
F
 Definition
In a promissory note, the term “principal” refers to the borrower.
Term
T
 Definition
An acceleration clause most nearly means to speed up the payments.
Term
T
 Definition
To use property as security for a debt without giving up possession is called hypothecation.
Term
T
 Definition
Provisions for the defeat of a mortgage are found in the defeasance clause.
Term
T
 Definition
That portion of a mortgage that requires the borrower to preserve and maintain the pledged property is called the covenant of good repair.
Term
F
 Definition
A borrower wants provisions written into his mortgage whereby the lender will remove a portion of the property from the mortgage upon partial repayment of the loan. The borrower would ask for an alienation clause.
Term
F
 Definition
Mogan and David buy a furnished house. They assume and agree to the existing mortgage. They will need a note and mortgage.
Term
T
 Definition
The mortgage holding the highest priority would be the one that is recorded first.
Term
T
 Definition
A mortgagee allows a clause in his contract stating that another lender’s interest will be allowed to take precedence over his own. This clause is a subordination clause.
Term
F
 Definition
A lawsuit, filed by the lender, requesting that a borrower’s interest in his property be cut off is called a defeasance suit.
Term
T
 Definition
In a foreclosure, a surplus money action would be filed by the junior mortgage holder.
Term
T
 Definition
A nonjudicial foreclosure does not go to court and is not heard by a judge.
Term
F
 Definition
At the same time that a lawsuit is filled with the court, a notice of lis pendens is also filed with the court.
Term
F
 Definition
Strict foreclosure is a nonjudicial foreclosure without a judicial sale and usually without a statutory redemption period.
Term
F
 Definition
A power of sale in a mortgage gives the lender the power to take ownership and sell the mortgaged property without taking the issue to court.
Term
T
 Definition
A deed in lieu of foreclosure relieves the lender of foreclosing and waiting out any required redemption period.
Term
F
 Definition
In the covenant of good repair the borrower promises not to remove or demolish any buildings or improvements.
Term
T
 Definition
A deed of trust differs from a traditional mortgage in that it is a three-party agreement
Term
T
 Definition
A partial release would allow a developer to release some of the mortgaged property from the mortgage collateral.
Term
obligee, payee
 Definition
In a promissory note the entity to which the debt is owed is known as the ____________________ or ____________________.
Term
acceleration
 Definition
A clause that allows the lender to demand immediate payment of the entire balance on a note if the borrower misses the obligatory payments is known as a(n) ____________________ clause.
Term
Hypothecation
 Definition
____________________ means the borrower retains the right to possess and use the property while it serves as collateral.
Term
lien
 Definition
In ____________________ theory states, the mortgage gives only a lien right to the lender and the borrower retains title.
Term
good repair
 Definition
The covenant of _________________________ requires the borrower to keep the mortgaged property in good condition.
Term
alienation
 Definition
A(n) ____________________ clause allows the lender to call the entire balance due if the borrower sells or conveys the mortgaged property.
Term
junior
 Definition
Any mortgage with a lower priority than the first mortgage is known as a ____________________ mortgage.
Term
subordination
 Definition
When a lender voluntarily takes a lower position than he would normally be entitled to the process is known as ____________________.
Term
nonjudicial
 Definition
A(n) ____________________ foreclosure does not go to court and is not heard by a judge.
Term
deficiency judgment
 Definition
When a property sells at a foreclosure sale for less than the debt, a(n) ______________________________ may allow the lender to proceed against the borrower’s other unsecured assets.
Term
mortgage
 Definition
a document by which property secures the repayment of the debt
Term
defeasance clause
 Definition
a clause in a mortgage stating that the mortgage is defeated if the borrower repays the accompanying note on time
Term
foreclosure
 Definition
a lawsuit filed by a lender that asks a court to set a time limit on how long a borrower has to redeem her property
Term
equitable mortgage
 Definition
an agreement that is considered to be a mortgage in its intent even though it may not follow the usual mortgage wording
Term
chattel mortgage
 Definition
a document wherein personal property is used as security for a promissory note
Term
promissory note
 Definition
the evidence of debt; contains amount owed, interest rate, repayment schedule, and a promise to pay
Term
mortgagor
 Definition
one who gives a mortgage; the borrower
Term
alienation clause
 Definition
a clause in a mortgage that allows a lender to call the loan due if the property changes ownership; also known as a due-on-sale clause
Term
partial release
 Definition
release of a portion of a property from a mortgage
Term
assumption
 Definition
the buyer personally obligates himself to repay an existing mortgage loan as a condition of the sale
Term
subject to
 Definition
the buyer of an already mortgaged property makes the payment but does not take personal responsibility for the loan
Term
junior mortgage
 Definition
any mortgage lower than a first mortgage in priority
Term
power of sale
 Definition
a clause in a mortgage that gives the mortgagee the right to conduct a foreclosure sale without first going to court
Term
deficiency judgment
 Definition
a judgment against a borrower if the sale of a mortgaged property at foreclosure does not bring enough to pay the balance owing
Term
equity of redemption
 Definition
the right of a borrower, after a foreclosure sale, to reclaim the property by repaying the defaulted loan
Term
subordination
 Definition
voluntary acceptance of a lower mortgage priority position than one would otherwise be entitled to
Term
deed of trust
 Definition
a deed given to a trustee as security for a loan
Term
first mortgage
 Definition
the mortgage loan with highest priority for repayment in the event of foreclosure
Term
public auction
 Definition
the usual procedure by which foreclosed properties are sold
Term
acceleration clause
 Definition
allows the lender to declare the loan due if the borrower defaults
Term
lends to borrowers, services the loans and perhaps sells the instruments to another.
 Definition
A primary mortgage lender is one who
Term
Approved mortgage lender
 Definition
From whom would a borrower obtain a VA or FHA loan?
Term
Mortgage companies
 Definition
Which of the following sources provides the most home mortgage money in the United States?
Term
Certificates of deposit
 Definition
Which of the following are designed to prevent disintermediation?
Term
Savings and loan institutions
 Definition
To whom can a borrower turn for a direct loan for the financing of a single-family dwelling?
Term
Savings and loans
 Definition
Which of the following supplies money to finance home loans?
Term
construction loans.
 Definition
Commercial banks are most likely to deal heavily in
Term
interim loans.
 Definition
Commercial banks are most likely to deal heavily in
Term
deregulation of the lending industry.
 Definition
One of the primary reasons for the decline in loan demand at savings and loan institutions appears to be
Term
large commercial buildings.
 Definition
With regard to real estate loans, life insurance companies tend to favor
Term
insurance companies.
 Definition
One may find financing for a single family dwelling at all of the following EXCEPT
Term
Life insurance companies
 Definition
Which of the following is most likely to specialize in large, commercial participation loans?
Term
life insurance companies.
 Definition
Lenders who could be described as investing a major portion of their assets in long-term real estate loans, preferring not to service their own loans, and favoring large commercial properties would be
Term
Mortgage bankers
 Definition
Which of the following specializes in making loans and reselling them?
Term
Mortgage brokers
 Definition
Which of the following specializes in bringing lenders and borrowers together without lending their own money?
Term
use money provided by other investors.
 Definition
Most mortgage brokers generally
Term
municipal bonds
 Definition
An investor can invest in mortgages by purchasing all EXCEPT
Term
servicing the loan.
 Definition
A lender who continues to collect mortgage payments even after selling the loan is said to be
Term
FDIC.
 Definition
All of the following offer secondary mortgage market programs EXCEPT
Term
existing mortgages are bought, sold and discounted.
 Definition
The secondary mortgage market is an area of activity in which
Term
chattel mortgages.
 Definition
Fannie Mae buys and sells all mortgages EXCEPT
Term
FNMA.
 Definition
The entity that purchases the most loans in the secondary market is
Term
FNMA.
 Definition
A quasi-governmental agency, which was originally established to create a secondary mortgage market for FHA loans, is
Term
resupply capital to primary lenders by guaranteeing repayment of pools of mortgage loans.
 Definition
The basic role of the GNMA is to
Term
Federal Home Loan Bank Board.
 Definition
Freddie Mac was originally formed to provide a secondary mortgage market facility for the
Term
the legal limit.
 Definition
The term “usury” in the field of real estate lending means charging an interest rate over and above
Term
all of the above.
 Definition
Computerized Loan Origination (CLO) programs are available to
Term
FHLMC.
 Definition
Participation Certificates (PCs) are instruments used by
Term
savings and loans.
 Definition
FHLMC was formed primarily to provide a secondary market for
Term
all of the above.
 Definition
Other lenders providing mortgage money might include
Term
primary
 Definition
The ____________________ market is where lenders originate loans by making funds available to borrowers.
Term
brokers
 Definition
Mortgage ____________________ do not lend their own money but simply put lender and borrower together.
Term
Disintermediation
 Definition
_________________________ results when depositors take money out of their savings accounts and invest directly in government securities, corporate bonds, and money market funds.
Term
Participation
 Definition
_________________________ loans provide a “piece of the action” for insurance companies as well as more inflation protection than a fixed rate of interest.
Term
Individuals
 Definition
____________________ are sometimes a source of cash loans for real estate, with the bulk of these loans between relatives or friends.
Term
alienation
 Definition
Most loans contain a due-on-sale clause which is also called a call clause or a(n) ____________________ clause.
Term
Participation
 Definition
____________________ certificates allow a mortgage originator to deliver to Freddie Mac either whole mortgages or part interest in a pool of whole mortgages.
Term
unconsumed
 Definition
Both fiat money and real savings represent ____________________ labor and materials.
Term
prepayment
 Definition
Loan contracts sometimes call for a ____________________ penalty in return for giving the borrower the right to repay the loan early.
Term
Prospector
 Definition
Freddie Mac’s Loan ____________________ program made available on the Internet overhauled the entire loan underwriting system.
Term
mortgage-backed securities
 Definition
securities issued, backed by the mortgages securing the loans and the full faith of the federal government
Term
due-on-sale clause
 Definition
requires immediate repayment of the loan if ownership transfers, also called an alienation clause
Term
secondary mortgage market
 Definition
a market where mortgage loans can be sold to investors
Term
mortgage company
 Definition
a firm that makes mortgage loans and then sells them to investors
Term
Fannie Mae
 Definition
a lending industry nickname for the Federal National Mortgage Association
Term
participation certificates
 Definition
a certificate that represents an undivided interest in a Freddie Mac pool
Term
usury
 Definition
charging a rate of interest higher than that permitted by law
Term
prepayment penalty
 Definition
penalty for paying a loan off prior to maturity
Term
automated underwriting systems
 Definition
computerized communication systems for loan approval between a loan originator and an investor
Term
computerized loan origination
 Definition
originating loans through the use of a networked computer system
Term
alienation clause
 Definition
requires immediate repayment of a loan if ownership transfers; also called a due-on-sale clause
Term
disintermediation
 Definition
the result created when lenders are required to pay high rates of interest for deposits while receiving long-term income from low-interest rate mortgage loans
Term
Freddie Mac
 Definition
a real estate industry nickname for the Federal Home Loan Mortgage Corporation
Term
mortgage broker
 Definition
one who brings together borrowers and lenders
Term
primary market
 Definition
the market in which lenders originate loans and make funds available to borrowers
Term
Ginnie Mae
 Definition
a real estate industry nickname for the Government National Mortgage Association
Term
FIRREA
 Definition
a law signed in 1989 which provided a sweeping revision of the regulatory authorities governing savings and loans
Term
municipal bonds
 Definition
instruments that pay interest that is tax-free from federal income taxes
Term
Farmer Mac
 Definition
a real estate industry nickname for the Federal Agricultural Mortgage Corporation
Term
Fiat money
 Definition
government created money; also called “printing press money”
Supporting users have an ad free experience!