CITE THIS READING MATERIAL AS: Realty Publications, Inc. Real Estate Finance Eighth Edition
Table of Contents i Table of Forms...v Glossary...601 Quizzes...619 Table of Contents Chapter 1 Chapter 2 Wellenkamp to Garn and beyond Lenders vs. owners in the recent past... 1 Consumer mortgage re-regulation Two sets of laws control consumer financing... 19 The Borrower- Lender Relationship Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 The promissory note Evidence of the debt... 35 Basic provisions in trust deed notes Minimum elements for a note to be enforceable... 47 Special provisions for a note Beyond fundamental debt obligations...61 Adjustable rate mortgages The birth of the ARM... 75 Modifying the mortgage note Modifying provisions in a note... 93 Prepayment penalties The privilege of becoming debt-free when able...103 Mortgage lock-in clauses Restraints on rights of alienation...117 Late charges and grace periods Elements for a delinquency...125 Balloon payments risks and notices Notes containing a balloon payment...137 Notes and Their Provisions Chapter 12 Chapter 13 Chapter 14 Trust deed characteristics A security device, a lien and a mortgage...145 The trust deed as a contact The limits on mortgage holder enforcement...153 Impound accounts: funds for taxes and insurance Tax and insurance reserves...167 The Trust Deed
ii Real Estate Finance, Eighth Edition Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Assignment of rents provisions The mortgage holder s collection of rent on a default...181 Beneficiary statements and payoff demands The amount and terms of the mortgage debt...195 Grant deed as a mortgage Risks in alternative security devices...205 Equity purchase: sale-leaseback, no option The home-in-foreclosure sales scheme...213 Due-on-sale regulations Rising rates bring lender interference...223 Assumptions: formal and subject-to The buyer takes over the seller s mortgage...239 FHA and VA mortgage assumptions Avoiding fees and investor prohibitions...251 Personal property as security Additional collateral and financing statements...259 Carryback Financing Chapter 23 Chapter 24 Chapter 25 Chapter 26 Chapter 27 Chapter 28 Chapter 29 Chapter 30 Chapter 31 Carryback financing overview Carryback financing supports the price...271 The carryback purchase agreement Negotiating the terms for seller financing...281 No down payment carryback sales Minimizing the risks of default...291 Due-on waiver and junior financing Prior planning prevents a mortgage holder s interference...301 Disclosure on seller carrybacks Advice by agents for risk assessment...311 Carryback foreclosure and resale costs Protecting the seller begins with advice...323 Buyer s creditworthiness: seller s further approval A seller carries back based on documentation...335 Working the AITD Flexible financing via the seller...349 Alternative security devices for sellers Creative financing vs. creative chaos...363
Table of Contents iii Chapter 32 Chapter 33 Chapter 34 Chapter 35 Chapter 36 Chapter 37 Chapter 38 Chapter 39 Conventional financing The conventional mortgage...375 The Uniform Residential Loan Application Fundamentals of the Uniform Residential Loan Application...383 A lender s oral promises as commitments No responsibility for oral or conditional promises...393 Mortgage fees regulated, disclosed RESPA origins and general purpose...399 The FHA-insured consumer mortgage Enabling tenants to become homeowners...417 Private mortgage insurance Risk reduction for the mortgage lender...427 Usury and the non-exempt lender Broker-made or -arranged mortgages avoids usury...433 Usury and the carryback note Modified, assigned and unconscionable rates...445 Lenders Chapter 40 Chapter 41 Anti-deficiency: past, present and future The trade-off: real estate as security...453 Converting nonrecourse debt to recourse debt Eliminating or substituting the security...465 Recourse and Nonrecourse Loans Chapter 42 Chapter 43 Chapter 44 Chapter 45 Chapter 46 Chapter 47 Reinstatement and redemption periods during foreclosure Nullifying the call...475 Judicial foreclosure Deficient property value and recourse debt...487 The nonjudicial foreclosure process Power-of-sale provision...499 Requests for notices of delinquency and default Risk mitigation by prior planning...515 Accepting partial payments after a default The mortgage holder may continue to foreclose...525 A deed-in-lieu of foreclosure Reducing the risk of loss...531 Default and Foreclosure
iv Real Estate Finance, Eighth Edition Chapter 48 Trustee s or attorney fees, not both The three-stage foreclosure period...539 Tax Aspects of Financing Chapter 49 Chapter 50 Chapter 51 Chapter 52 Chapter 53 Deduction of mortgage points Homeowner s prepaid interest accrual exception...547 Home mortgage interest deductions Two residences, two deductions...557 Seller financing diminishes tax impact Installment sale defers profit reporting...565 Interest reporting on a carryback note Charge or impute at the note s own AFR...581 Checklist for packaging a consumer- or businesspurpose mortgage Documentation, disclosures and mortgage packaging activities...595
Table of Forms v No. Form Name Page 103 Buyer s Listing Agreement Exclusive Right to Buy, Lease or Option................................................ 284 281 Agreement to Subordinate..................................... 471 300 Financial Disclosure Statement............................... 312 302 Credit Application............................................. 342 303 Foreclosure Cost Sheet......................................... 328 351 Individual Tax Analysis (INTAX).............................. 559 406 Deed-in-Lieu of Foreclosure................................... 533 410 Further Encumbrance Consent................................ 304 412 Request for Notice of Default and Notice of Delinquency..... 517 415 Beneficiary Statement......................................... 199 418-1 Late Payment Provisions Addendum to Promissory Note............................... 128 418-2 Prepayment of Principal Provisions Penalties and Discounts....................................... 107 418-3 Final/Balloon Due Date Provisions............................. 66 418-4 Right of First Refusal to Buy Note.............................. 68 418-5 Note Enforcement Provisions................................. 461 419 Notice of Balloon Payment Due............................... 142 420 Note Secured by Deed of Trust Interest Included........ 38, 52 422 Note Secured by Deed of Trust Interest Extra............. 39, 57 424 Promissory Note Unsecured................................. 297 425 Modification of the Promissory Note........................... 96 430 Shared Appreciation Note Contingent Interest Extra....................................... 42 431 Assumption Agreement Unsecured and Subrogated....... 247 436 Security Agreement For Note Secured by Personal Property.............................................. 265 436-1 UCC-1 Financing Statement................................... 262 450 Trust Deed and Assignment of Rents.......................... 155 455 Impound Addendum Taxes and Insurance................ 171 456 Demand on Owner to Pay Rent to Lender..................... 186 457 Demand on Tenant to Pay Rent to Party Other than Landlord........................................... 188 Table of Forms Full Forms
vi Real Estate Finance, Eighth Edition Partial Forms 150 Purchase Agreement (One-to-Four Residential Units Conventional and Carryback Financing)................. 287, 337 163 Lease-Option Contract for Deed.............................. 372 168 Land Sales Contract All-Inclusive with Power of Sale....... 371 202 Uniform Residential Loan Application (FNMA 1003)......... 385 204-5 Loan Estimate.................................................. 412 300-1 Financial Disclosure Statement For Entering into a Land Sales Contract....................... 317 300-2 Financial Disclosure Statement For Entering into a Lease-Option Sale......................... 315 339 Tracking the Loan Origination Process Addendum......... 405 418-1 Late Payment Provisions Addendum to Promissory Note................................. 67 418-2 Prepayment of Principal Provisions Penalties and Discounts..................................... 65, 70 418-5 Note Enforcement Provisions.................................. 70 450 Trust Deed and Assignment of Rents.................147, 183, 501 471 Notice of Default With Substitution of Trustee.............. 502 474 Notice of Trustee s Sale......................................... 508