Mortgage Basics
This document outlines the financial rights and obligations of both the borrower and lender in a mortgage agreement.
What is a mortgage (Deed of Trust)?
Most home loans have a term to maturity between these years.
What is 15-30 years?
This type of bankruptcy involves a court-supervised workout for a troubled business.
What is Chapter 11 bankruptcy?
The most common type of home loan that is not insured or guaranteed by a U.S. government agency.
What is a conventional home loan?
This clause allows a lender to speed up loan repayment if the borrower defaults.
What is an acceleration clause?
This clause requires a borrower to maintain property casualty insurance and gives the lender joint control over insurance proceeds.
What is an insurance clause?
The number of days a missed payment must be overdue before a lender considers it a serious default.
What is 90 days?
This form of bankruptcy liquidates assets to pay creditors.
What is Chapter 7 bankruptcy?
This act created an independent oversight agency for consumer financial protection after the 2007 mortgage crisis.
What is the Dodd-Frank Act?
A mortgage loan type where the borrower does not make payments but instead builds debt against home equity.
What is a reverse mortgage?
When a borrower transfers a security interest in the mortgaged property to the lender, the lender is called this.
Who is the mortgagee?
When a borrower owes more than the property’s current value, their mortgage is considered this.
What is underwater?
A court-supervised workout for a financially troubled household is known as this.
What is Chapter 13 bankruptcy?
The government agency that insures mortgage loans for low-income housing, nursing homes, and condominiums.
What is the Federal Housing Administration?
A mortgage type where a second loan is taken to avoid private mortgage insurance (PMI).
What is a piggyback mortgage?
This term refers to a borrower pledging a property as security for a loan.
What is a mortgage?
Private mortgage insurance (PMI) protects lenders against this risk.
What is loss due to default on the loan?
A mortgage clause that allows the lender to require full loan repayment when the property is sold.
What is the due-on-sale clause?
A contract where the title is transferred to the buyer only after all payments are made.
What is a contract for deed?
A mortgage type where the government helps insure or guarantee the loan.
What is an FHA or VA loan?
This clause allows a lender to demand full repayment if the borrower defaults.
What is a demand clause?
A second mortgage loan that allows homeowners to borrow against their accumulated equity.
What is a home equity loan?
The number of years a default remains on a borrower’s credit report. (DAILY Double)
What is 7 years?
This government-backed loan program assists veterans in purchasing homes.
What is a Veterans Affairs (VA) loan?
The term for a loan where the buyer takes possession of the property but does not receive the title until payments are complete.
What is a contract for deed?