Quick Answer: What Is A Lien Theory State Quizlet?

What is the function of a note in a mortgage or trust deed financing arrangement?

What is the function of a note in a mortgage or trust deed financing arrangement.

It is evidence of the lender’s interest in the collateral property.

trust deed or mortgage.

If a borrower obtains an interest only loan of $75,000 at an annual interest rate of 8%, what is the monthly interest payment?.

What is a lien quizlet?

Only $2.99/month. Lien. A charge or claim against a person’s property made to force the payment of money. Security ( collateral) something of value that the borrower promises to give the lender if the borrower fails to repay the debt.

Which of the following is true of an amortizing loan?

Which of the following is true of an amortizing loan? The amount of annual interest paid is the same for every year of the loan term. Part of each periodic payment is applied to repayment of the loan balance in advance and part is applied to payment of interest in arrears.

What type of loan is a GPM?

graduated payment mortgageA graduated payment mortgage (GPM) is a type of fixed-rate mortgage in which the payments increase gradually from an initial low base level to a higher final level. Typically, the payments will grow between 7-12 percent annually from their initial base payment amount until the full monthly payment amount is reached.

What types of loans are exempt from respa?

Commercial or Business Loans Normally, loans secured by real estate for a business or agricultural purpose are not covered by RESPA. However, if the loan is made to an individual entity to purchase or improve a rental property of 1 to 4 residential units, then it is regulated by RESPA.

Which transaction is at risk of violating respa?

A RESPA violation occurs when a title company has a financial interest (or ownership) in a real estate transaction where a buyer’s loan is “federally insured.” RESPA is a consumer protection law created to make sure that buyers of residential properties of one to four family units are informed in detailed writing …

What type of foreclosure does a lien theory state provide?

In a lien theory state, the buyer holds the deed to the property during the mortgage term The buyer promises to make all payments to the lender and the mortgage becomes a lien on the property, but title remains with the buyer. The lender’s lien is removed once the payment of all loan payments have been completed.

Which of the following transactions is covered by respa?

RESPA applies to the majority of purchase loans, refinances, property improvement loans, and equity lines of credit. RESPA requires lenders, mortgage brokers, or servicers of home loans to provide disclosures to borrowers concerning real estate transactions, settlement services, and consumer protection laws.

What is a loan discount point?

Points, also known as discount points, lower your interest rate in exchange paying for an upfront fee. Lender credits lower your closing costs in exchange for accepting a higher interest rate. These terms can sometimes be used to mean other things. “Points” is a term that mortgage lenders have used for many years.

What does fully amortized loan mean?

A fully amortized payment is one where if you make every payment according to the original schedule on your term loan, your loan will be fully paid off by the end of the term. … Amortization simply refers to the amount of principal and interest paid each month over the course of your loan term.

What does lien theory mean for the mortgage?

The mortgage agreement serves as the lender’s lien on the property until the loan is paid back completely, but the buyer holds the title to the property instead of the lender. … The lien is extinguished when the loan is paid off in full.

What type of lien is a specific lien?

Specific liens are typically voluntary liens. Voluntary liens are placed on the subject property with the consent of the owner. This is usually done through the loan documents (mortgage and promissory note). The property owner voluntarily creates a debt, which results in a voluntary lien.

Is a judgment lien a specific lien?

Mechanic’s lien: A mechanic’s lien is a lien placed on your property for nonpayment for work you had done on the property. A mechanic’s lien is involuntary and specific. … Judgment lien: Judgment liens, sometimes just called judgments or money judgments, usually are created as a result of a court action.

What is a GPM rate?

GPM means Gallons Per Minute. Also known as “flow rate”, GPM is a measure of how many gallons of water flow out of your shower head each minute. Since 1992, a maximum of 2.5 GPM is the federally mandated flow rate for new shower heads. … The GPM flow rate for shower heads has decreased over time.

What does an interest only loan mean?

An interest-only mortgage is a type of mortgage in which the mortgagor (the borrower) is required to pay only the interest on the loan for a certain period. The principal is repaid either in a lump sum at a specified date, or in subsequent payments.

Which of the following transactions are exempt from respa?

The following transactions are not covered by RESPA: an all cash sale, a sale where the individual home seller takes back the mortgage, a rental property transaction or other business purpose transaction.

Who holds title in a lien theory state?

In title theory or mortgage states title is held in the lender’s name until the final payment is made, when title is passed or re-conveyed to the borrower. In lien theory states, title to the property is held in the name of the borrower with a security interest or lien to the property being granted to the lender.

Is Florida a lien theory or title theory state?

Florida is considered a lien theory state, and that impacts the mortgage process for residential home buyers. … This is because Florida is a state that practices lien theory, as opposed to title theory, that is used in other states. In other states, the lender holds the actual legal title.

What are specific liens examples?

Examples of specific liens include: -Property tax lien when taxes are not paid. -Mortgage lien when a mortgage is used in financing. -Mechanic’s lien when work done is not paid for.

What is the difference between a balloon loan and a fully amortizing loan?

A balloon loan is a type of loan that does not fully amortize over its term. Since it is not fully amortized, a balloon payment is required at the end of the term to repay the remaining principal balance of the loan.

Why is respa important?

RESPA has two main purposes: (1) to mandate certain disclosures in connection with the real estate settlement process so home purchasers can make informed decisions regarding their real estate transactions; and (2) to prohibit certain unlawful practices by real estate settlement providers, such as kickbacks and …