Financing
Foreclosure
lender notifies borrower and trustee Notice of Default
3 month Trustee Sale
Ad once a week for 21 days Notice of Sale
Trustee hold Sale
Notice of Default warns owner's of junior liens
Land contracts
seller retains legal title
vendee = vendor; has equitable title
vendor
must use income to make payments against his mortgage
cannot use impound accounts
Cal-vet
California Veterans Farm and Home Purchase Plan
financed by Department of Veterans Affairs
Financing sources
Institutional Lenders
Insurance companies
Use loan correspondents
do not make construction loans
prefer long-term loans on existing commercial property
Savings bank
Savings of individual depositories
Main source of 1- 4 units
greatest percent of assets in residential property
commercial banks
short term loans
construction loans = interim loan
Maturity Date is the date of the note
interest computed when proceed are placed in escrow
Mortgage Companies
Private lenders main source of junior loans
originate conventional and sub-prime
often lend their own money
warehousing
collection of loans prior to sale
Secondary Mortgage Market
FNMA
buys conventional, VA and FHA loans
HUD
GNMA
guarantees interest payment on pass-through securities
Mortgage Company would by pass-through in a volatile market
Freddie Mac works with
Federal Reserve Board
discount rate
money supply
Federal Open Market Committee
Impound account; benefits
lender
tustor
miscellaneous
down payment = buyer's equity
more then one buyer
lender will include 'jointly and severally'
FHA
created National Housing Act
enables buyers to by with low-down payment
seller usually pays 1% loan fee
point
close the gap between market rates and fixed rates
no alienation clause or prepayment penalty is allowed
alienation = due on sale when transferring ownership
'Or more' clause = no prpr-prepayment
MIP or PMI
will loan on a rental property when owner occupied
junior loans are not permitted
lender deciding to originate FHA loans are least concerned with mortgage insurance costs
VA
CRV
appraisal
sells home to a non-vet, subject to; seller is still liable
will not loan on a rental property
owner occupied
Cal Vet
No discount points
will not loan on a rental property
owner occupied
Blanket Loan
when builder pays to have several lot released his equity in the remain lots increase
property tax cannot be a blanket encumbrance
AITD
wraparound
used with land contracts
Trust-or in the AITD does not assume existing liens
Financing Credit Laws
Truth in Lending; Regulation Z
all real estate loans not for business
APR
used for comparison shopping
Disclosure Statement
Name of lender
APR
Finance charge
does not include CR or appraisal
Ad must disclose APR if interest rate is mentioned
rescission
3 business days at midnight
RESPA
passed in 1974; federal loan disclosure law which helps protect buyers or borrowers who obtain federally related loans
reliable way to view costs
allows client to comparison shop
lender requirements
HUD 'settlement costs' booklet
Good Faith Estimate
within 3 days of taking the application
kick-backs are illegal
limits the amount of impounds
seller cannot specify title insurer
Hard Money loan
1st TD
under 30k are regulated
2nd TD
under 20k are regulated
$8000 due 2years
max commission is 5%
$3,000 due in 3 years
max. commission is 15%
exclusive loan listing
not more the 45
Mortgage loan disclosure Statement
must be give within 3 days of broker originated application
Federal; Equal Credit Opportunity
everyone is measured against the same stick
Penalty
damages including attorney and court cost
$5000 in punitive damages Max
CPI
housing is one of the largest expenses
Rent adjustment
commercial leases
pricing index
measures the purchasing power of the US dollar
GDP
when GDP increase then personal income, home sales rise
Miscellaneous
'non disturbance-clause = lender will not terminate tenant leases
compensating balances
require borrower to maintain a minimum balance
HUD
does not need two rails for stairways
Bankruptcy
discharges debts at date of filing
Gambling debts are dis-chargeable