1. Instruments of Real Estate Finance
Chapter 7
Instruments of Real Estate Finance

2. 7-1
Learning Objectives
Explain the basic characteristics of real estate financial instruments
List and define the basic provisions of a promissory note
List and define the basic provisions of a trust deed

3. Promissory Notes Outlines the borrowers promise to pay
7-2
Promissory Notes
Outlines the borrowers promise to pay
Accompanies the mortgage or deed of trust
Recourse or nonrecourse notes
Deficiency judgement

4. Provisions of Promissory Notes
7-3
Provisions of Promissory Notes
Amount, Consideration, and Payer
Interest and Payment
Assignment Provision
Prepayment
Default and Acceleration
Escrow Accounts
Due-on-Sale Clause

5. Provisions of Deed of Trust or Trust Deeds
7-4
Provisions of Deed of Trust or Trust Deeds
Assignment of Rents
Waste
Successors and Assigns
Reconveyance
Release Clause
Owner Occupancy
Award from Eminent Domain
Covenants and Restrictions