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12 Cards in this Set
- Front
- Back
- 3rd side (hint)
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A buyer purchasing real property using a conditional sales contract (also called a real property sales contract) would acquire? |
a possessory interest. |
The buyer (vendee), under the terms of a conditional sales contract, receives an (1) "equitable" title together with (2) possession of the property. In addition the vendee receives the (3) right to acquire the fee title after all of the conditions of the contract have been met. |
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Under which loan transaction would the lender have the best opportunity to secure a deficiency judgment in the event of a default and foreclosure? |
A first trust deed and note executed in favor of a private lender to secure a loan, the proceeds of which were used to purchase an automobile. |
The law will not permit a deficiency judgment on any type of loan in which the seller is the beneficiary, nor will it permit an outside lender to obtain a deficiency judgment on a loan used to purchase an owner-occupied residential property of four or fewer units. |
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Liquidation of a financial obligation on an installment basis is? |
amortization. |
Amortization is (1) the liquidation of a financial obligation on an installment basis or (2) recovery of cost or value over a period of time. |
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The document used when the seller extends credit to the buyer and the buyer receives equitable title is identified as? |
a conditional/installment contract. |
A conditional/installment sales contract transfers equitable title to the buyer but the seller keeps the legal title until the contract has been fulfilled. |
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A developer wants to purchase land and later secure financing for improvements. What clause is most beneficial to the developer in the original trust deed used to purchase the land? |
Subordination clause |
Since construction lenders require first priority, the previously recorded trust deed must have a clause that requires it to relinquish priority to a subsequent trust deed. |
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A lender, speaking of a loan in his portfolio, said it was "seasoned." The lender was referring to the? |
pattern of payments of the trustor. |
A seasoned loan is one that has been on the books for a time and the payment record of the borrower is a known quantity. |
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A builder is selling a house that he had built under a blanket encumbrance. Under normal procedure, the instrument that would be requested of the beneficiary would be a? |
partial reconveyance deed. |
A partial reconveyance deed would reconvey the legal title to a specified lot or lots to the trustor in return for a partial payment on the trust note balance, thus releasing a specified lot or lots from under the blanket encumbrance. |
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Regarding warehousing operations with respect to real estate finance, what would apply? |
The mortgage banker collecting loans prior to sale. |
Mortgage bankers who assemble loans and temporarily hold these portfolios until they can be sold to investors in the secondary mortgage market are said to be warehousing loans. |
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Under the provisions of the Real Estate Settlement Procedures Act, which would NOT be considered a violation? |
Buyer designating lender |
Kickbacks, unearned fees, and the seller designating (not the same as requesting) the title insurance company are all violations under RESPA. Buyers may, however, designate the lenders of their choice. |
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A deed of reconveyance would be signed by the? |
trustee. |
The trustee holds the legal title in trust. The one who conveys the title must sign the instrument. When the loan is paid in full, the trustee conveys legal title to the trustor using a deed of reconveyance, and therefore must sign. |
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If a person wanted to transfer equitable title and retain legal title, he or she would use a? |
land contract |
A conditional/installment sales contract, commonly called a land contract, transfers equitable title to the buyer, but the seller keeps the legal title until the contract has been fulfilled. |
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The maximum amount of commission and loan costs that may be charged for a second trust deed of $4,000 for a four-year term is? |
$990. |
Under Article 7, the maximum commission and fee is:$4,000 2nd T.D. × 0.15 15% of the principal of a loan of three years or more)600 Maximum commission × 390 (5% or $390—whichever is greater)$990 Maximum commission and fees |
