Champions Real Estate Exam Prep National Ch 7 Questions with correct Answers

Mortgage Loans -ANSWER-Most common choice for financing real property. Can be conventional or non-conventional Conventional Loan -ANSWER-Neither federally insured nor guaranteed Non-conventional Loan -ANSWER-Federally insured/guaranteed mortgage loans to encourage ownership (FHA, VA, USDA) Contract for Deed -ANSWER-A means by which the seller passes possession but retains title to the property until the total or a substantial portion of the purchase price is paid. Installment contract. The two parties here are the vendor (owner) and the vendee (buyer). Hypothecation -ANSWER-The action of pledging real property as security for a debt Promissory Note -ANSWER-A written promise to pay a specified amount of money on demand or at a definite time Lien Theory -ANSWER-When mortgage loan is used for purchase of real property, at closing the buyer receives the title and the lender has a lien Title Theory -ANSWER-At closing the lender receives the title and will hold it until the lien is satisfied or paid off Deed of Trust -ANSWER-Used instead of a traditional mortgage in Texas. Parties are borrows (trustor), lender (beneficiary), and trustee Power of Sale Clause -ANSWER-Allows for non-judicial foreclosure Trustee (Deed of Trust) -ANSWER-Acts in fiduciary relationship with beneficiary, released lien when not is paid or forecloses in the event of default