fil 260 trefzger exam 2| WIT COMPLETE solution 2023/24

fil 260 trefzger exam 2| WIT COMPLETE solution 2023/24 Contracts: Offer and Acceptance - Offer: a promise to act in specified way if the other party will act in some other specified way Acceptance: offeree agrees to abide by terms of contract, as stated in the offer Contracts: Specific Performance - the performance of a contractual duty, as ordered in cases where damages would not be adequate remedy. Contracts: Time is of essence clause - if contract does not state that "time is of the essence," either party can take additional time (a reasonable period) to complete his/her obligations. Contracts: Common conditions for voiding a contract to purchase RE - Fraud, Duress, Undue Influence, Innocent Misrepresentation Contracts: Difference between "Earnest Money" and "Down payment" - Earnest Money: a good faith deposit Down payment: typically must be returned Contracts: Handling accrued property taxes at closing in Illinois - In Illinois, however, property tax is paid in a later year, so property tax typically is an accrued item that must be prorated at closing. Lessor - - Landlord - Holds leased fee estate Lessee - - Tenant - Holds leasehold estate - Has value if rents negotiated at below-market level. Leased fee - interest is the owner or landlord's interest Leasehold - (has value if rents are negotiated at a below-market level, How do you compute a Leasehold - Leasehold= fee simple - leased fee How do you compute a Leased fee - Leased fee= fee simple-leasehold Lease terms - rules a tenant must agree to abide by before moving in Net Lease - a commercial property tenant pays a fixed rent plus operating/maintenance costs of the building, including sometimes a prorarted share of costs for maintaining common areas Constructive eviction - Tenant being forced to vacate due to home being unfit to live in Why can rent control not protect poor tenants? - The lessor is limited on the repairs they can apply to the property due to costs potentially exceeding generated revenue. In turn, this may lead to a less desirable living condition for the tenant, and ultimately lead to constructive eviction. Mortgage Lending concepts/terminology - Mortgage lenders rights and limitations 1. Default 2. Redemption a. Equitable right of redemption b. Statutory Right of redemption Clauses in a promisory note: Acceleration - - As soon as the borrower is found in default, entire loan balance becomes due. - Without this, lender would have to sue month after month for individual payments. Clauses in a promissory not: Alienation - "due-on-sale" clause, stating that the borrower must repay the loan in full if the property is sold; the borrower can not allow a new buyer to "assume" the loan without the lender's permission. What do primary mortgage markets do - money providers acquire financial claims that did not exist before (new securities are issued), and money users obtain access to money they did not have before What do secondary mortgage markets do - previously issued securities are sold among parties that "invest" in securities - no new financial claims are created, and no new money is made available to the ultimate money users. Role of FHA - provide long-term, amortizing (principal repaid along with interest during the loan's term) home mortgage loans with fixed interest rates. Its role today is providing payment insurance so lenders will make loans with low down-payments (as little as 3%) on moderately-priced homes Role of VA - providing payment guarantees (technically not insurance, since the veterans pay small up-front fees but no ongoing premiums) so that military veterans can obtain loans f