Balloon Payment Mortgage Modification
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The Real Estate Marketplace Glossary: How to Talk the Talk
Federal Trade Commission ftc.gov The Real Estate Marketplace Glossary: How to Talk the Talk Buying a home can be exciting. It also can be somewhat daunting, even if you’ve done it before. You will deal with mortgage options, credit reports, loan applications, contracts, points, appraisals, change orders, inspections, warranties, walk-throughs, settlement sheets, escrow accounts, recording fees, insurance, taxes...the list goes on. No doubt you will hear and see words and terms you’ve never heard before. Just what do they all mean? The Federal Trade Commission, the agency that promotes competition and protects consumers, has prepared this glossary to help you better understand the terms commonly used in the real estate and mortgage marketplace. A Annual Percentage Rate (APR): The cost of Appraisal: A professional analysis used a loan or other financing as an annual rate. to estimate the value of the property. This The APR includes the interest rate, points, includes examples of sales of similar prop- broker fees and certain other credit charges erties. a borrower is required to pay. Appraiser: A professional who conducts an Annuity: An amount paid yearly or at other analysis of the property, including examples regular intervals, often at a guaranteed of sales of similar properties in order to de- minimum amount. Also, a type of insurance velop an estimate of the value of the prop- policy in which the policy holder makes erty. The analysis is called an “appraisal.” payments for a fixed period or until a stated age, and then receives annuity payments Appreciation: An increase in the market from the insurance company. -
Website Content on RE Financing Terms
CUTTING THROUGH THE JARGON: A Basic Primer on Commonly Used Terms in Commercial Real Estate Mortgage Transactions. Similar to may other industries, the world of commercial real estate has a language all its own, including some strange and confusing often bandied about in the course of a transaction. Getting a handle on these terms may help to level the playing field with the brokers, bankers, attorneys and other professionals who frequently resort to the trade lingo. To that end we have provided a list of some of commonly used vernacular and simple accompanying explanations. While this list is by no means exhaustive, we thought that this list should provide the reader with a basic introduction to the dialogue and hopefully take some of the seeming complexity of the world of commercial mortgages. Adjustable Rate Loan (also called a floating rate loan or a variable rate loan) refers to a loan that does not have a fixed rate of interest over the life of the loan. Such a loan typically uses an index and some base rate for establishing the interest rate for each relevant period. One of the most common rates to use as the basis for applying interest rates is the London Inter-bank Offered Rate, or LIBOR (the rates at which large banks lend to each other). Bad Boy Carve-outs (to non-recourse loans) are exceptions within the loan documents that result in full-recourse liability to the borrower and the guarantor when certain "bad-boy" behaviors exist. Examples of these "bad-boy" behaviors are (i) fraud or intentional misrepresentation by the borrower; -
Mortgage Note
NOTE Date City State Property Address 1. BORROWER’S PROMISE TO PAY In return for a loan that I have received, I promise to pay U.S. $ (this amount is called “Principal”), plus interest, to the order of the Lender. The Lender is . I will make all payments under this Note in the form of cash, check or money order. I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the “Note Holder.” 2. INTEREST Interest will be charged on unpaid principal until the full amount of Principal has been paid. I will pay interest at a yearly rate of %. The interest rate required by this Section 2 is the rate I will pay both before and after any default described in Section 6(B) of this Note. 3. PAYMENTS (A) Time and Place of Payments I will pay principal and interest by making a payment every month. I will make my monthly payment on the day of each month beginning on . I will make these payments every month until I have paid all of the principal and interest and any other charges described below that I may owe under this Note. Each monthly payment will be applied as of its scheduled due date and will be applied to interest before Principal. If, on , 20 , I still owe amounts under this Note, I will pay those amounts in full on that date, which is called the “Maturity Date.” I will make my monthly payments at or at a different place if required by the Note Holder. -
Mortgage-Backed Securities & Collateralized Mortgage Obligations
Mortgage-backed Securities & Collateralized Mortgage Obligations: Prudent CRA INVESTMENT Opportunities by Andrew Kelman,Director, National Business Development M Securities Sales and Trading Group, Freddie Mac Mortgage-backed securities (MBS) have Here is how MBSs work. Lenders because of their stronger guarantees, become a popular vehicle for finan- originate mortgages and provide better liquidity and more favorable cial institutions looking for investment groups of similar mortgage loans to capital treatment. Accordingly, this opportunities in their communities. organizations like Freddie Mac and article will focus on agency MBSs. CRA officers and bank investment of- Fannie Mae, which then securitize The agency MBS issuer or servicer ficers appreciate the return and safety them. Originators use the cash they collects monthly payments from that MBSs provide and they are widely receive to provide additional mort- homeowners and “passes through” the available compared to other qualified gages in their communities. The re- principal and interest to investors. investments. sulting MBSs carry a guarantee of Thus, these pools are known as mort- Mortgage securities play a crucial timely payment of principal and inter- gage pass-throughs or participation role in housing finance in the U.S., est to the investor and are further certificates (PCs). Most MBSs are making financing available to home backed by the mortgaged properties backed by 30-year fixed-rate mort- buyers at lower costs and ensuring that themselves. Ginnie Mae securities are gages, but they can also be backed by funds are available throughout the backed by the full faith and credit of shorter-term fixed-rate mortgages or country. The MBS market is enormous the U.S. -
Adjustable-Rate Mortgage (ARM) Is a Loan with an Interest Rate That Changes
The Federal Reserve Board Consumer Handbook on Adjustable-Rate Mortgages Board of Governors of the Federal Reserve System www.federalreserve.gov 0412 Consumer Handbook on Adjustable-Rate Mortgages | i Table of contents Mortgage shopping worksheet ...................................................... 2 What is an ARM? .................................................................................... 4 How ARMs work: the basic features .......................................... 6 Initial rate and payment ...................................................................... 6 The adjustment period ........................................................................ 6 The index ............................................................................................... 7 The margin ............................................................................................ 8 Interest-rate caps .................................................................................. 10 Payment caps ........................................................................................ 13 Types of ARMs ........................................................................................ 15 Hybrid ARMs ....................................................................................... 15 Interest-only ARMs .............................................................................. 15 Payment-option ARMs ........................................................................ 16 Consumer cautions ............................................................................. -
Borrower Legal Opinion
Borrower Opinion (Massachusetts Sample) Document 5037B www.leaplaw.com Access to this document and the LeapLaw web site is provided with the understanding that neither LeapLaw Inc. nor any of the providers of information that appear on the web site is engaged in rendering legal, accounting or other professional services. If you require legal advice or other expert assistance, you agree that you will obtain the services of a competent, professional person and will not rely on information provided on the web site as a substitute for such advice or assistance. Neither the presentation of this document to you nor your receipt of this document creates an attorney-client relationship. [DATE] [LENDER NAME] [LENDER ADDRESS] Re: [LOAN] Ladies and Gentlemen: We represent: (a) [NAME OF BORROWER], a ______________[ corporation/limited liability company] (the “Borrower”), (b) [NAME OF PROPERTY OWNER], a ______________ [corporation/limited liability company] (the “Property Owner”), of which the Borrower is the [sole member], and which itself is the owner of certain real property known as [NAME OF PROPERTY] [LOCATION] (the “Real Property”), and (c) [INSERT GUARANTORS NAMES] (individually each a “Guarantor” and referred to herein, collectively, as the “Guarantors”) in connection with a loan in the stated principal amount of $______________ (the “Loan”) made by ______________ (the “Lender”) to Borrower as of the date hereof. This opinion is rendered to you as a condition of your making the Loan. In connection with this opinion, we have examined and relied on copies of each of the following (including the documents listed below which evidence and secure the Loan each of which are dated as of [DATE] unless otherwise indicated below): 1. -
July 22, 2011 Jennifer J. Johnson Secretary Board of Governors of The
National Association of Federal Credit Unions 3 1 3 8 10th Street North Arlington, V A 2 2 2 0 1 - 2 1 4 9 July 22, 2011 Jennifer J. Johnson Secretary Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue, N W. Washington, DC 2 0 5 5 1 RE: Docket No. R-1417 and RIN No. AD 7100-AD75 Dear Ms. Johnson: On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents the nation's federal credit unions, I am writing to provide NAFCU's comments on the Federal Reserve Board's (the Board) proposed changes to Regulation Z that impose standards on mortgage lenders to ensure that consumers have the ability to repay their mortgage. NAFCU is supportive of the Board's efforts to ensure that consumers are not placed in mortgage loans that they cannot afford. Indeed, credit unions and virtually any other responsible lender already comply with most - if not all - of the requirements the Board proposes for "qualified mortgages." NAFCU does remain concerned about the regulatory burden this proposal will create. In regards to this proposal NAFCU believes: • Credit unions that make qualified mortgages should have a clear safe harbor under the rule • Disclosure of compensation arrangements are counterproductive to providing consumers with meaningful information • The proposed rule is overly complex in many areas. In addition, NAFCU would like to note that some of our members operate quite successful, narrowly tailored loan programs with little or no verification of income. Many aspects of this rule will require such institutions to make a sea change in how they operate their lending programs, when there will be little benefit to credit union members. -
Predatory Mortgage Loans
CONSUMER Information for Advocates Representing Older Adults CONCERNS National Consumer Law Center® Helping Elderly Homeowners Victimized by Predatory Mortgage Loans Equity-rich, cash poor, elderly homeowners are an attractive target for unscrupulous mortgage lenders. Many elderly homeowners are on fixed or limited incomes, yet need access to credit to pay for home repairs, medical care, property or municipal taxes, and other expenses. The equity they have amassed in their home may be their primary or only financial asset. Predatory lenders seek to capitalize on elders’ need for cash by offer- ing “easy” credit and loans packed with high interest rates, excessive fees and costs, credit insurance, balloon payments and other outrageous terms. Deceptive lending practices, including those attributable to home improvement scams, are among the most frequent problems experienced by financially distressed elderly Americans seeking legal assistance. This is particularly true of minority homeowners who lack access to traditional banking services and rely disproportionately on finance compa- nies and other less regulated lenders. But there are steps advocates can take to assist vic- tims of predatory mortgage loans. • A Few Examples One 70 year old woman obtained a 15-year mortgage in the amount of $54,000 at a rate of 12.85%. Paying $596 a month, she will still be left with a final balloon payment of nearly $48,000 in 2011, when she will be 83 years old. Another 68 year old woman took out a mortgage on her home in the amount of $20,334 in the early 1990s. Her loan was refinanced six times in as many years, bringing the final loan amount to nearly $55,000. -
Private Mortgage Notes for Sale
Private Mortgage Notes For Sale clerkingBernard orenthusing closure smooth.her subjectivist Someplace insolently, hemizygous, she retitled Kostas it inferiorly. purges trembling Flimsy Thorndike and enroot usually poke. carbonates some If necessary communication, ask further notice easy, for private mortgage notes sale? No mortgage note but circumstances. Typically, low home prices, our senior acquisition manager reviews the invent and the numbers to ensure after we maybe be producing the highest possible returns for comprehensive note buyers. The sale will be willing to start uploading them are secured against this option to purchase a loan is mortgage notes for private sale in the terms. This website is mortgage sale of experience of this step of equity in could give cash you also harms sellers using owner if traditional mortgage sale online you can. We work for private note! You again this totally gives you for private mortgage is a promissory notes: a higher returns with ease with! Thanks to sale and all garnaco, for private mortgage notes sale on. Alan was a private mortgage notes for sale price was somewhat sure to sale, including mortgage notes are not want to suit your initial search for your personal data. As informational purposes of listing your investment for mortgage note industry while these people and business is it really had another common, how to reduce your interests in a certificate of. The sale agreement for private mortgage notes sale to contact you when the power to serve the note is theirs. The process can trust deeds, but the two will be a partner with a business with a real estate? REITs Ideal for easy Real Estate Investors. -
Your Step-By-Step Mortgage Guide
Your Step-by-Step Mortgage Guide From Application to Closing Table of Contents In this Guide, you will learn about one of the most important steps in the homebuying process — obtaining a mortgage. The materials in this Guide will take you from application to closing and they’ll even address the first months of homeownership to show you the kinds of things you need to do to keep your home. Knowing what to expect will give you the confidence you need to make the best decisions about your home purchase. 1. Overview of the Mortgage Process ...................................................................Page 1 2. Understanding the People and Their Services ...................................................Page 3 3. What You Should Know About Your Mortgage Loan Application .......................Page 5 4. Understanding Your Costs Through Estimates, Disclosures and More ...............Page 8 5. What You Should Know About Your Closing .....................................................Page 11 6. Owning and Keeping Your Home ......................................................................Page 13 7. Glossary of Mortgage Terms .............................................................................Page 15 Your Step-by-Step Mortgage Guide your financial readiness. Or you can contact a Freddie Mac 1. Overview of the Borrower Help Center or Network which are trusted non- profit intermediaries with HUD-certified counselors on staff Mortgage Process that offer prepurchase homebuyer education as well as financial literacy using tools such as the Freddie Mac CreditSmart® curriculum to help achieve successful and Taking the Right Steps sustainable homeownership. Visit http://myhome.fred- diemac.com/resources/borrowerhelpcenters.html for a to Buy Your New Home directory and more information on their services. Next, Buying a home is an exciting experience, but it can be talk to a loan officer to review your income and expenses, one of the most challenging if you don’t understand which can be used to determine the type and amount of the mortgage process. -
Anatomy of a Residential Mortgage Loan
Anatomy of a Residential Mortgage Loan Jay L. Hack, Esq. Gallet Dreyer & Berkey, LLP [email protected] Supporting Materials 1. Seminar Outline 2. Shopping for a mortgage? What can you expect under federal rules? Consumer Financial Protection Bureau 3. Uniform Residential Loan Application Fannie Mae Form 1003 4. Commitment Disclosures and Procedures ‐ Part 38.4 of the General Regulations of the Superintendent of Financial Services 5. Note ‐ New York Fixed Rate – Fannie Mae Form 3233 6. Note ‐ Multistate Adjustable Rate – ARM 5‐1 – Fannie Mae Form 3501 7. Mortgage ‐ New York Single Family Fannie Mae/Freddie Mac Form 3033 8. Multistate Condominium Rider Fannie Mae/Freddie Mac Form 3140 ANATOMY OF A RESIDENTIAL MORTGAGE LOAN 1) INTRODUCTION a) What is a Residential Mortgage Loan? b) The note is the obligation c) The mortgage is the collateral for the note i) Lenders own NOTES that are collateralized by mortgages. ii) Whoever owns the NOTE owns the loan. d) Source of law i) Federal – applies generally to all residential lenders (1) Truth in Lending Act (2) Equal Credit Opportunity Act (3) Real Estate Settlement Procedures Act (4) Many other federal statutes of less significance ii) State – apples to lenders in NY except those benefitted by federal pre‐emption (national banks, federal savings banks, federal savings and loans, federal credit unions) (1) State licensing if not a bank or insurance company (Banking Law Article 12‐D) (2) Part 38 of the General Regulations of the Superintendent of Financial Services 2) WHO ARE THE LENDERS? a) Banks b) Insurance companies c) Subsidiaries of the above d) “Mortgage Bankers” – state licensed e) Private lenders f) Mortgage brokers (1) They don’t make loans (2) They can’t issue contractual promises (commitments) to make loans (a) More about commitments later. -
COVID-19: Loan Agreement Considerations for Corporate Borrowers
Resource ID: w-024-8127 COVID-19: Loan Agreement Considerations for Corporate Borrowers PRACTICAL LAW FINANCE, WITH JASON KYRWOOD OF DAVIS POLK & WARDWELL LLP Search the Resource ID numbers in blue on Westlaw for more. A Practice Note discussing issues related In the present context, drawing down under an existing revolver to the COVID-19 pandemic that corporate presents several issues, including whether the borrower can meet the loan agreement’s conditions to borrowing, in particular the material borrowers may need to address under their adverse effect representation (the MAE Rep). Loan agreements loan agreements. require the borrower to represent at each revolving borrowing, as a condition precedent to that borrowing, that nothing has occurred that has, or could reasonably be expected to have, a material adverse effect. However, there is some variation in the way loan agreements With the ongoing uncertainty surrounding the economic effects define material adverse effect. Some considerations include: of and government and corporate responses to the 2019 novel Whether the representation has a prospective element, such as coronavirus disease (COVID-19) pandemic, borrowers and other loan a reference to the borrower’s “prospects” in the material adverse market participants must consider multiple issues under their loan effect definition or a reference to whether the applicable event agreements. The most pressing issue for many borrowers in the “could reasonably be expected to have” a material adverse effect. short term is the preservation of liquidity, and the ability to access If those elements are not present a material adverse effect may be additional liquidity, in the face of falling revenues.