Real Estate 306 Exam 2; Questions and Answers 100% Correct
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Course
Real Estate 306
Institution
Real Estate 306
Real Estate 306 Exam 2; Questions and
Answers 100% Correct
The action of taking possession of a mortgaged property when the mortgagor fails to keep up
their payments Correct answer-Foreclosure
A claim or legal right against assets that are typically used as collateral to satisfy a debt
Cor...
Real Estate 306 Exam 2; Questions and
Answers 100% Correct
The action of taking possession of a mortgaged property when the mortgagor fails to keep up
their payments Correct answer-Foreclosure
A claim or legal right against assets that are typically used as collateral to satisfy a debt
Correct answer-Lien
a non-binding financing commitment Correct answer-Term Sheet
A loan committee that consists of upper management of a lending institution with the authority
to approve loans that the initial loan officer does not have the authority to approve
Correct answer-Credit Committee
An entity created for a specific purpose such as a LLC or LP Correct answer-Special
Purpose Entity (SPE)
Part of the organizational documents that identifies the relationship between
investors/owners/developer is a deal and spells out their percentage ownership interests and
any rights responsibilities and profit splits Correct answer-Operating Agreement
A type of loan used to purchase real estate, where the borrower agrees to pay the lender over
time, typically in a series of regular payments that are divided into principal and interest. The
property serves as collateral Correct answer-Mortgage
, Real Estate 306 Exam 2; Questions and
Answers 100% Correct
Also known as a mortage _____, or promissory ______, is a legal document that binds the
borrower to repay the mortgage within an agreed period and outlines the terms of the loan
Correct answer-Note
Promise by a third-party entity, or individual, to pay or perform the obligations of the borrower
Correct answer-Guaranty
The process of reducing or paying off the principal of the loan, typically in regular installments
Correct answer-Amortization
The amount of time during which a borrower repays a loan if fully amortizing, or until the
outstanding loan balance, or balloon payment, is due if non-amortizing (i.e. interest only) or
partially amortizing Correct answer-Term
The amount of capital borrowed (the return OF capital for the bank) Correct answer-
Principal
The cost of debt, i.e., what the borrower pays the lender for using its funds (the return ON
capital for the bank) Typically made up of the index rate plus a margin Correct answer-
Interest Rate
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