Exam (elaborations)
Idaho Real Estate Guide Questions with Accurate Answers
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Idaho Real Estate Guide
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Idaho Real Estate Guideaddendum - answeran addendum is a document attached to and made part of the
original contract
it is important to do what when adding an addendum? - answeralways be accurate and
specific about what is being added or modified, including which contract will be affected.
licensed real estate agents should? - answerbe able to identify when they are able to
provide assistance to their clients as well as when they should recommend the use of a
professional
every loan for real estate is made up of two elements. they are: - answera promissory
note & a security instrument
a promissory note - answerA borrower's personal promise to repay a debt according to
the agreed terms.
a security instrument - answerattaches the real estate to the promissory note & gives
lenders (bank) the authority to seize defaulted property
usury - answerthe illegal action or practice of lending money at unreasonably high rates
of interest.
discount points - answerA fee charged by the lender at settlement that results in
increasing the lender's effective yield on the money borrowed. One discount point
equals one percent of the loan amount.
hypothecation - answerTo pledge property as collateral (security) for an obligation or
loan without giving up possession of it.
title theory - answerThe mortgagor gives the mortgage legal title and retains equitable
title, upon full payment legal title is returned
lien theory - answerThe mortgagor retains both legal and equitable title, while the
mortgagee has a lien to the property as security for a debt.
deed of trust - answersimilar, but not identical to, a mortgage; the main differences
appear when a foreclosure action starts
, contracts for deed (land sale contracts) - answera buyer and seller execute a payment
plan and the buyer gets to move onto the property and treat it as their own. When the
last payment has been made, the seller deeds the property to the buyer. If the buyer
misses a payment, the seller can reenter the property and Immediately seize because
the are rightful owners.
vendor - answer(n.) a person who sells something
vendee - answerbuyer
Deed of Reconveyance - answera recorded document that gives notice that the loan
has been paid in full - a trustee uses deed to transfer the title back to the trustor
(borrower)
acceleration clause - answera statement in a credit contract that requires you to repay
the entire loan immediately if you miss a payment
Foreclosure - answerA legal procedure whereby property pledged as collateral is sold to
satisfy the debt in the event of default in payment of the mortgage note or default of
other terms in the note.
judicial foreclosure - answerallows the property to be sold by court order after the
mortgagee has given sufficient public notice
redemption period - answerThe right of a mortgagor to make good (repurchase) on the
default within a specified time and receive the property back.
redemption period timeframe - answerproperties <20 acres: 6 months
properties >20 acres: 12 months
short sale - answersale of property that produces less money than what is owed to the
lender (remaining indebtedness)
amortized loan - answerA loan in which the principal as well as the interest is payable in
monthly or other periodic installments over the term of the loan.
fannie mae - answerThe government-sponsored enterprise responsible for
guaranteeing and funding home mortgages (fha, va, conventional)
freddie mac - answerA government supervised enterprise established to purchase
primarily conventional mortgage loans in the secondary mortgage market.
ginnie mae - answerA government agency that is a division of HUD - plays an important
role in the secondary mortgage market it guarantees mortgage backed securities using
FHA insured and VA guaranteed loans as collateral.
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