Podcast
Questions and Answers
A homeowner has a blanket mortgage on a large plot of land. They want to sell off a portion of the land. Which clause would allow them to pay off a proportional amount of the mortgage to free that specific portion of land from the mortgage?
A homeowner has a blanket mortgage on a large plot of land. They want to sell off a portion of the land. Which clause would allow them to pay off a proportional amount of the mortgage to free that specific portion of land from the mortgage?
- Satisfaction of Mortgage Clause
- Usury Clause
- Release Clause (correct)
- Wrap-around Mortgage Clause
Which action is a primary goal of the Real Estate Settlement Procedures Act (RESPA)?
Which action is a primary goal of the Real Estate Settlement Procedures Act (RESPA)?
- Providing low-interest loans to first-time homebuyers.
- Guaranteeing all veterans receive housing assistance.
- Standardizing appraisal processes across state lines.
- Ensuring consumers are well-informed about settlement services and eliminating hidden fees. (correct)
Which mortgage type involves the lender making regular payments to the borrower, using the borrower's home equity as collateral?
Which mortgage type involves the lender making regular payments to the borrower, using the borrower's home equity as collateral?
- Wrap-around Mortgage
- Straight Mortgage
- Shared Equity Mortgage
- Reverse Annuity Mortgage (correct)
A business owner sells their office building but immediately leases it back from the new owner. What type of transaction is this?
A business owner sells their office building but immediately leases it back from the new owner. What type of transaction is this?
After fully paying off a mortgage, what document should the borrower receive to confirm the debt is satisfied?
After fully paying off a mortgage, what document should the borrower receive to confirm the debt is satisfied?
In a shared equity mortgage, what benefit do the property occupants receive in addition to shared ownership?
In a shared equity mortgage, what benefit do the property occupants receive in addition to shared ownership?
A lender charges an interest rate on a loan that exceeds the legally allowed maximum. This practice is known as:
A lender charges an interest rate on a loan that exceeds the legally allowed maximum. This practice is known as:
Which type of mortgage is specifically designed to assist eligible veterans in purchasing a home, often with no down payment?
Which type of mortgage is specifically designed to assist eligible veterans in purchasing a home, often with no down payment?
Flashcards
Release Clause
Release Clause
Allows paying off part of a mortgage to free a portion of property.
RESPA
RESPA
A law ensuring consumers are informed about settlement services and protects against unfair costs.
Reverse Annuity Mortgage
Reverse Annuity Mortgage
Lender pays the borrower, using home equity as mortgage satisfaction.
Sale-and-Leaseback
Sale-and-Leaseback
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Satisfaction of Mortgage
Satisfaction of Mortgage
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Straight/Term Mortgage
Straight/Term Mortgage
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Usury
Usury
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VA Mortgage
VA Mortgage
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Study Notes
- Release Clause: This clause in a blanket mortgage allows the property owner to pay off a portion of the mortgage to free part of the property from the mortgage.
- Real Estate Settlement Procedures Act (RESPA): Enacted in 1974, this consumer protection statute aims to help consumers shop for settlement services and eliminate kickbacks/referral fees that raise settlement service costs.
- Reverse Annuity Mortgage: The lender makes periodic payments to the borrower, using the borrower’s home equity to satisfy the mortgage.
- Sale-and-Leaseback: A transaction where an asset is sold and then leased back long-term, allowing continued use without ownership.
- Satisfaction of Mortgage: A document confirming that a mortgage debt has been paid.
- Shared Equity Mortgage: Joint ownership of real estate by lenders and property dwellers, where proceeds are shared upon sale, and occupants benefit from interest and property tax write-offs.
- State of New York Mortgage Association (SONYMA): This mortgage program assists first-time homebuyers in New York State.
- Straight Mortgage/Term Mortgage: A type of non-amortizing mortgage where the principal is paid in full at the maturity date.
- Usury: Charging a rate of interest on a loan that exceeds the legal limit.
- VA Mortgage: A mortgage loan offering long-term financing to eligible American veterans or their surviving, unmarried spouses. It aims to supply home financing where private options are limited and help veterans purchase property without a down payment.
- Wrap-around Mortgage: A form of secondary financing where the seller extends a junior mortgage to the buyer, wrapping around existing superior mortgages.
- FmHA loan: Backed by the U.S. Department of Agriculture, this loan program, formerly Farmers Home Administration, supports rural housing.
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Description
Overview of various mortgage types including release clause, reverse annuity mortgage, and shared equity mortgage. Also covers the Real Estate Settlement Procedures Act (RESPA) and sale-and-leaseback transactions. Key terms related to mortgage debt and property ownership are defined.
