Financing Mortgages, Notes and Foreclosure

Concept Mortgagor- borrower/debtor Mortgagee- secured creditor Writing required Debt Mortgage Note Filing

Regulation Z - Disclosure Identity of creditor Cash price Annual percentage rate (APR) Finance charge including any prepaid finance charges Amount financed and itemization (Continued on the next slide)

Regulation Z - Disclosure Total payment amount Number of payments Amount per payment Due date for payments Late payment charges

Federal Laws Affecting Real Property Financing Federal Consumer Credit Transaction Act Truth-in-Lending Act Home Mortgage Disclosure Act Fair Housing Act Community Reinvestment Act Equal Credit Opportunity Act

Important Clauses Due on Sale Late payment Acceleration Prepayment penalty Balloon payment Default and remedies Integration-complete agreement

Types of Mortgages Purchase money mortgages FHA mortgage VA mortgage Conventional mortgage Second mortgage Home-equity mortgage Straight-term mortgage (Continued on the next slide)

Types of Mortgages Subordinate mortgage Wrap-around mortgage Piggyback mortgage Anaconda or dragnet mortgage Adjustable rate mortgage (ARM) Variable rate mortgage Reverse mortgage Shared appreciation mortgage

Types of Charges Actual costs Commissions by loan brokers Late charges Government loan charges Construction loan charges Life insurance premiums Prepayment penalties Legal Other

Mortgage Transferability Prohibition on assignment? Assumption - original mortgagor, and transferee personally liable, property subject to foreclosure Subject to - original mortgagor personally liable, transferee not personally liable, property subject to foreclosure

Discharge of indebtedness Original mortgage and note marked “cancelled” and returned to mortgagor Release of mortgage filed

Foreclosure Default and remedies Filing the petition Notifying the required parties Filing a notice of action (lis pendens) Foreclosure trial or hearing Order of foreclosure Sale and right of redemption Deficiency Deed in lieu