MA Real Estate Chapter 8
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28 terms
Terms | Definitions |
|---|---|
| OTHER TYPES OF SECURITY DOCUMENTS (other means of re payment of loans) | 1. DEED O TRUST 2. INSTALLMENT LAND CONTRACT |
| PACKAGE MORTGAGE | MORTGAGE WHICH COVERS REAL ESTATE AND CERTAIN EQUIPMENT AND APPLIANCES LOCATED ON PREMISE EXAMPLE WOULD BE RESTARAUNT |
| is the mortgage the money lended | NO IT IS JOINT OWNERSHIP OF THE PROPERTY BETWEEN THE MONEY LENDERER AND BUYER |
| MORTGAGE | CONDITIONAL CONVEYANCE O TITLE/OWNERSHIP OF REAL ESTATE TO SECURE A PAYMENT OF LOAN BORROWER RETAINS POSSESION WHILE -RE PAYING DEBT |
| Is the defaulter entitled to money if there is a surplus when the bank forecloses the house | Yes |
| Special clauses in mortgages | 1. ACCELERATION (if buyer is in default and not paying loan and interest on time the bank will want ALL money within the next 30 days 2. DUE-ON SALE /ALIENATION CLAUSE (I you sell the property you need to pay off your loan) 3. TAX AND INSURANCE ESCROW 4. PRE PAYMENT PENALTY (if one pays there mortgage in full unless open mortgage) 5. POWER OF SALE AND FORECLOSURE |
| Once the bank auctions off the property do I have any rights to the home? | NO |
| RIGHTS OF MORTGAGOR | 1. POSSESION and enjoyment of property unless in default 2. RELEASE of mortgage (discharge upon repayment of loan) 3. RIGHT OF REDEMPTION after default |
| MORTGAGEE | LENDER/BANK |
| REVERSE ANNUITY MORTGAGE | Allows a property to be mortgaged in order to get a flow of periodic payments from the lender Example would be senior who lives off his equity and when he passes the bank takes the property and sells it |
| SECOND MORTGAGE | Taking out more then one mortgage on a property |
| MORTGAGOR | BORROWER/OWNER |
| TWO TYPES OF FORECLOSURES | 1. JUDICIAL 2. STATUTORY |
| PURCHASE MONEY MORTGAGE | A DEFERRED PURCHASE MONEY MORTGAGE IS TAKEN BACK BY THE SELLER TO DEFER THE PAYMENT OF PAT OF THE PURCHASE PRICE |
| TYPES OF MORTGAGES | 1. SECOND MORTGAGE AND SUBORDINATION 2. PURCHASE MONEY MORTGAGE 3. EQUITY/ OPEN END MORTGAGE 4. ASSUMABLE AND TAKE OVER MORTGAGES |
| FORECLOSURE | PROCESS OF TERMINATING A DEFAULTED MORTGAGORS EQUITABLE RIGHT OF REDEMPTION |
| BLANKET MORTGAGE | COVERS MORE THEN ONE PARCEL OF REAL ESTATE PROVIDING FOR PARTIAL RELEASE UPON REPAYMENT OF PORTIONS OF DEBT USUALLY HAS A PARTIAL RELEASE CLAUSE |
| CONSTRUCTION MORTGAGE | SHORT TERM LOAN TO COVER THE CONSTRUCTION COSTS OF BUILDING OR DEVELOPMENT. MONEY IS ADVANCED O BUILDER AND USUALLY LOAN IS AT HIGHER THEN MARKET INTEREST RATE BECAUSE IT'S HIGH RISK |
| EQUITY | difference between market value I property and the money owed to lender |
| DEED OF TRUST | NOT PRACTICED IN MA TRUSTOR BECOMES BORROWER AND GIVES TRUST DEED TO TRUSTEE OR TRUST COMANY. THE BANK BECOMES THE BENEFICIARY AND IF THE TRUSTOR DOES NOT MAKE PAYMENTS THE TRUSTEE GIVES DEED TO BANK. THE TRUSTOR CAN LIVE ON PROPERTY BUT HAS NO OWNERSHIP UNTOL LOAN ISPAID |
| ASSUMPTION CLAUSE IN MORTGAGE | FHA AND VAloans The buyer buys a home where there is money owed. The by FHA OR VA and comes up with the money to pay the equity to the seller and takes on the sellers monthly payments |
| PROMISSORY NOTE | LOAN DOCUMENT THAT IS THE WRITTEN EVIDENCE OF THE DEBT |
| PARTIAL RELEASE CLAUSE | ALLOWS BORROWER TO PAY A CERTAIN AMOUNT TO RELEASE SOME LOTS WITH MORTGAGE CONTINUING TO COVER REMAINING LOTSB |
| RIGHTS OF THE MORTGAGEE | 1. If borrower is in default the bank has the right to sue borrower for amount due on note 2. Sell property in public auction 3. Sell mortgage and note (assignment) to third party |
| DEFAULT | OCCURS WHEN BORROWER FAILS TO COMPLY WITH TERMS OF MORTGAGE BORROWER FAILS TO MAKE MONTHLY PAYMENTS AS AGREED ON LOAN |
| Why is it called a SECOND MORTGAGE | all mortgages are written alike. The determining factor is the RECORDING DATE and this leads to RACE TO THE REGISTRY (in the case of default) |
| Why would a buyer take on an ASSUMPTION CLAUSE | Because they will have lower interest rates |
| Obligations of MORTGAGOR | 1. REPAY LOANS AS AGREED 2. KEEP PROPERTY INSURED (at least in amount of loan) 3. PREVENT WASTE (don't want property value to decrease) 4. DON'T REMOVE IMPROVEMENTS WITHOUT CONSENT OF LENDER 5. PAY ALL TAXES AND ASSEMENTS |
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