...Transaction Real Estate Law, Spring 2016 Chapter 21 Financing is a key to most real estate transactions. Although many changes keep occurring in real estate financing, the mortgage remains the primary method of financing a real estate purchase. This chapter introduces you to the nature and purpose of the mortgage. One purpose of this chapter is to acquaint you with the basic vocabulary of mortgage financing. It also discusses: 1. The legal repercussions of a mortgagor's default and the many different types of mortgage loans. 2. The application of the mortgage in financing the purchase of real estate. 3. The rights and duties of the parties 4. The relationship between mortgages and other liens. 5. The options often available to buyers and sellers when mortgaged real property is sold. Mortgage--a written instrument that uses real property to secure payment of a debt. Deed of Trust--a 3-party written instrument created by statute as follows: 1. Borrower- known in a deed of trust as the grantor 2. Trustee – neutral third party who holds title in trust as long as the debt is unpaid 3. Lender – known in the deed of trust as the beneficiary There are significant differences between a mortgage and a deed of trust. Primarily in how they are foreclosed once the loan is in default.. Mortgages, for the most part, are a thing of the past and have been replaced by modern deed of trust. Following are a few terms with which you should be acquainted: 1....
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...Foreclosure Crisis in Florida and Beyond: Suggested Conflict Resolution Framework For Resolving this Crisis American Dream (or) American Nightmare [pic] [pic] David W. Puckett Email: dpuckett@dvergence.com Skype: david.w.puckett Twitter: davepuckett@twitter.com Phone: 813.727.3583 Introduction Each day there are stories reported in the news about mortgage foreclosures, detailing the single biggest financial crisis to hit the nation that is creating a strangle-hold on our economy and preventing economic recovery. While the entire nation has been stunned, the crisis has disproportionately affected the states of Florida, Nevada, Arizona, California and Georgia; these states were hit with an unprecedented loss of value in residential real estate. According to the leading provider of real estate industry statistics, Realtytrac.com (2011), one in every 611 United States housing units had a foreclosure filing during the month of July 2011 and it appears that the foreclosure processing delays, combined with the smorgasbord of national and state-level foreclosure prevention efforts such as loan modifications, lender-borrower mediations and mortgage payment assistance for the unemployed may be allowing more distressed homeowners to stave off foreclosure.. A CNBC report said that the falloff in foreclosures is not based on a “robust recovery in the housing market but on short-term interventions and delays that will extend the current housing market...
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...Product Purchases and the Economy Jose Velasco ECO/372 November 9, 2015 Matthew Mulyanto Product Purchases and the Economy Macroeconomics is a helpful resource for enabling understanding of factors that affect shifts in supply and demand and pricing of products. Macroeconomics can provide an understanding, for example, of how indicators such as inflation and interest rates can reflect the state of the economy, revealing its relative strengths or weaknesses. Information such as this can be extremely useful in determining whether one should buy a product such as a home, which would necessitate a mortgage and monthly payments. Economic Indicators and the State of the Economy Two economic indicators that reflect the strength of the economy are the inflation rate and interest rates. A stable and low inflation rate, for instance, is viewed worldwide as a necessary means to keeping the economy strong. Banks worldwide, including the U.S. Federal Reserve, the Bank of Japan, and the European Central Bank have published directives stating their primary objective for monetary policy as being “to maintain price stability” (Federal Reserve Bank of San Francisco, 2006). Others, such as the Bank of England, the Bank of Canada, and the Central Bank of Chile, have a similar goal to “keep inflation low and stable” (Federal Reserve Bank of San Francisco, 2006). Maintaining a stable inflation rate allows governments to strengthen their economies by ensuring...
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...Duties of Parties Prior to Foreclosure Theories of Mortgages 1) Title Theory of Mortgages: a. Mortgagee holds legal title to land until the debt is satisfied. Equitable title remains in borrower. When mortgage is paid off, lender loses legal title. b. Significance: With legal title, lender has superior claim to the rents over anybody else’s interest that arises later. The lender has the right to take possession upon foreclosure, and doesn’t need ancillary remedies. 2) Lien Theory of Mortgages (restatement) a. Mortgagee retains legal and equitable title to the land when a mortgage is executed. Lender has a lien. The lender has no claim on possession or rents (unless the borrower mortgaged the rents). 3) Intermediate Theory a. Lien theory until default and title theory thereafter. As a practical matter, these states are really title theory states because nothing happens until default anyways in a title theory state. Ancillary Remedies (available to lender before foreclosure) 1) Mortgagee taking possession a. Takes possession & manages property; includes collecting rents & profits b. Lender must use legal process & cannot use self-help, even if so stated in mortgage or contract. c. Not available in lien theory states, unless: i. MR abandons property (public policy) ii. Consent of MR iii. Result of Good faith invalid foreclosure d. Duties of...
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...threaten the company’s financial health through sub-prime related losses. “We believe that these lawsuits further increase the company’s litigation risk and also represent a threat to scathe the company’s financial health to some extent. However, if proved or settled, the investors can breathe some relief” Market Analysis The markets have been in decline for 3 years and there is a very significant challenge that the housing market is presenting to us. We may be on the verge of a double dip recession, the economy is weakening both here and abroad, and the housing market is a significant part of that. Because prices have gone so low, willingness to purchase homes has gotten so low, there are very few starts, very few permits, very low construction activity, resulting in putting people out of jobs and it looks like it may continue for the foreseeable future. “The drop in pending home sales is clearly disappointing,” said Pierre Ellis, an...
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...actual damages sustained by a person as a result of the failure, and * Statutory damages up to $4,000. 15 U.S.C. §1640[a][1],[2].Material violations that are grounds for damages include, but are not limited to, improper disclosure of amount financed, finance charge, payment schedule, total of payments, annual percentage rate, and security interest disclosures. Under TILA, a creditor is considered strictly liable for any violations. This means money damages are imposed for the violations, regardless of the creditor’s intent.TILA Violations Allowing RescissionThe more significant TILA violation for borrowers, especially those facing foreclosure, is the right of rescission. “Rescinding” the loan means the borrower can void the loan as if it was never made. A borrower’s right to rescind applies to consumer credit transactions in which a non-purchase money lien or...
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...Why Renting in Today’s Economy is better than Buying a House Matt Harrell COM/156 November 7, 2010 Karen Campbell Why Renting in Today’s Economy is better than Buying a House Foreclosure crisis is at an all time high across most large metropolitan areas in the United States. Seattle- Tacoma- Bellevue metro area registered the sharpest annual increase, 71% or one in every 129 households received a foreclosure notice. California, Nevada, Florida, and Arizona remain the hotspots for foreclosure across the nation according to RealtyTrack Incorporated Rick Sharga a senior vice president at RealtyTrack quoted “The epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that had not been previously affected.” One of the latest signs that the foreclosure crisis is worsening across the nation is, high unemployment, slow job growth, and homeowners are uncertain about falling home prices. Concerning housing, he or she has options. He or she has an option to rent and an option to buy. Renting an apartment is a better option than buying a house both renting and buying has many advantages and disadvantages. By explaining these advantages and disadvantages, I will persuade him or her into renting over buying. While renting he or she can save money, instead of spending money. “A survey conducted by Harris Interactive for the National Apartment Association in May 2010 found that 76% of those surveyed now believe that renting is a better...
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...Macroeconomics - The Financial Crisis of 2008 Mason S. Clark In 2008, a sequence of bank and insurance company failures resulted in a financial crisis that effectively brought global credit markets to a halt and required unprecedented government intervention. For example, Fannie Mae (FNM) and Freddie Mac (FRE) were both taken under the control of the government. In addition Lehman Brothers declared bankruptcy after it was unable to find a buyer. Furthermore, Merrill Lynch was purchased by Bank of America, and American International Group was bailed out by the federal government with an $85 billion dollar capital injection. Shortly after, Washington Mutual (WM) went under; however, J P Morgan Chase (JPM) agreed to purchase the assets of WM resulting in the largest bank failure in the history of the United States. Due to the failures stated above it brings me to realize why banks are so hesitant to lend money between themselves or to anyone. The crisis began in the real estate market and the subprime lending crisis. As long as we can remember, the values in commercial and residential properties have been exponentially increasing and were not interrupted for nearly a decade. With housing prices increasing it lead to banks lowering lending standards allowing unqualified buyers to take out mortgages while at the same time deregulation blended lines between traditional investment banks and mortgage lenders. However, when housing prices failed to rise and homeowners...
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...Abstract In history in 1929, there was a Great Depression where the stock market had crash. Wall Street has lost millions of investors it cause for unemployment, layoffs, and there were number foreclosure. Millions American were out of work. It nearly 10 years for America to regain from Depression after World War II brought jobs with industry regain recover. In 2007, there were loans were introduce it was part of economic factor. It had been 70 years since the last depression until the Second Depression (The Great Recession) hit for America in 2007 from a mortgage loan called subprime. The following will explain the background of the subprime loans. How the government had to intervene with subprime loan. Lastly, the policies taken place with primes and different programs. The Subprime loans beginnings started in 1992, where Congress wanted to affordable housing, work on plan with Fannie and Freddie. Congress wanted the Department of Housing and Urban Development to look at their regulations. The chairperson for Fannie had a trillion dollar commenting to finance affordable homes. Homeownership had become an economic factor over the years in the mortgage market. Majority of home have loan through financial institutes. Yet, these subprime mortgage loans were given to individuals who barley sustained income and had failed credit. The purpose of the loan was suppose have a better opportunity of have homeownership. It was unfortunate subprime loans were aim toward minorities...
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...essay, I will discuss each principal and the roles they play in the decision to buy a house. Furthermore, I will explain how these principals influence the marginal benefits and marginal costs associated with the decision to purchase a home (Mankiw, 2007). The role of principal number two the cost of something is what you give up to get it, puts in perspective what a person must give up to purchase a home. For example, most people have to give up frivolous spending to save money for a down-payment. This includes buying expensive groceries, going on vacations, and buying brand new vehicles. Generally speaking, people give up their normal spending habits and live below their means for a period to buy a home (Mankiw, 2007). Principle number three rational people think at the margin also plays a large role in the decision to buy a home. For instance, people do the best they can to achieve their goals given the opportunities they have. In the case of buying a home people will think at the margin and decide that buying a home is not only a place to live but an investment. Principal number two the cost is what you give up to get it and principal number three rational people think at the margin influences the marginal benefits and marginal costs associated with the decision to purchase a home. For example, some houses are in foreclosure and are examples of how banks think at the margin. For instance, instead of selling the house at the market price banks often sell the house at...
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...Negotiations Analysis Negotiation Analysis Paper Ivania Castaneda HR595- Keller School of Management March 2013 Introduction Buying a home is a complicated and time consuming process. The purchase of a home is just one of many examples of negotiations that happen in everyday life. It is one of the few places in life where some form of negotiation is the rule rather than the exception. Not all people are effective negotiators. It takes a keen understanding of the process in order to be good at it. This class has provided tools via the review of key concepts and methodology to allow even the not so adept negotiator to be better at negotiating. By informing yourself, preparing, and keeping an objective mind frame we can all use the tools taught in class to become more successful next time a negotiation situation arises. My paper will focus on integrative bargaining. Integrative bargaining (also called "interest-based bargaining," "win-win bargaining") is a negotiation strategy in which parties collaborate to find a "win-win" solution to their situation. This strategy focuses on developing mutually beneficial agreements based on the interests of both parties. This negotiation approach is important because it usually results in more of a positive outcome in contrast to distributive bargaining. The first step in integrative bargaining is identifying each side's interests. Although distributive bargaining is frequently seen as the opposite of integrative bargaining, the two...
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...industry, and how our service will be different from the competition. We will also discuss what kind of approach we will be using, the intrapreneurial approach, or the entrepreneurial approach. Flipping Houses Introduction Our new service is that of flipping houses. In order for one to better understand what this means, it is for someone to buy a house, fix it up, and then to resell it at a much higher price than what it was bought for (Flipping Houses, 2013). Market Flipping houses in today’s real estate market may look to be very risky; however, people that actually do this are finding lots of opportunities, but with a lot of risk. People feel that trying to flip homes with our economy would be a bad idea. On the contrary, this would prove to be the best time to do so (Moore, n.d.). Because so many homes are ending up in foreclosure, real estate investors are finding bargains all over the place, especially in Florida, Nevada, and California (Moore, n.d.). House flipping has made a huge comeback over the last four years, and because of this, more and more investors are going to public auctions of foreclosed homes. When the housing boom was popular, lots of people were aiming to make some money, so they bought and then resold homes. However, this type of house flipping dissolved several years back due to the stalling of home sales. Presently, a new type of home flipper has emerged, one that is looking for a bargain in foreclosure auctions...
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...How Business Ethics Relates to Subprime Mortgage Market By Wanda Thibodeaux, eHow Contributor Many people have lost their homes as a result of unethical suprime mortgage practices. The ability to have a home of your own in the United States typically depends on your ability to repay a mortgage, since most Americans don't purchase their homes outright. Because not everyone has perfect credit, a section of the mortgage industry involves subprime loans. In the wake of the mortgage and foreclosure crisis that began in 2007, the ethics of those in the industry is under scrutiny. Other People Are Reading How Do Subprime Loans Affect Business Growth? Code of Ethics for Business in the Philippines Print this article Subprime Mortgage Definition A definition of subprime mortgage is necessary to understand the relationship between the industry and ethics. Subprime mortgages are mortgage loans lenders provide only to those whose credit disqualifies them from receiving the best (prime) interest rates a lender can offer. A subprime mortgage by definition means that lenders work with those with a lesser ability to pay. Roughly 25 percent of all mortgages are subprime, according to Thomas Kostigen of the Wall Street Journal's MarketWatch website. Fiduciary Duties and Ethical Problems Businesses typically operate under fiduciary duties, or obligations. These fall into two broad categories of loyalty and care. These duties essentially stipulate that a businessperson should...
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...The Gold Mine Version 2.1 Your Step by Step System for Finding, Securing and Obtaining Surplus Funds From Mortgage Foreclosures, Tax Sales, Unclaimed Estate Monies, and Bankruptcy Courts. **Please NOTE – the Videos that will help you understand the written information that follows are now all on one page with titles describing what they address. Please be sure to check those videos out at http://www.surplusfundsriches.com/coursevids.htm YOUR BROWSER MUST BE OPEN IN THE BACKGROUND FOR THIS TO WORK! If you’re internet browser is open in the background while you are reading this, you can click the above link and go straight to the page. If not, cut and paste it into your browser. WATCH AT LEAST THE INTRODUCTORY – FIRST – VIDEO PLEASE! Also – if you are going to function as a researcher, using our funding, you are responsible for using this book to get the list of monies held, doing the research as outlined in the pages that follow, and sending that information in. The last part of this portion of the book has the Independent Contractor’s Agreement, the Referral Form and additional information. You do not do the negotiations or contact the individuals if you wish to function in this capacity. Please, before you ask for help on acquiring a list, follow directions to do so with the emails to the bookkeepers. GETTING THE LIST IS PRIORITY – USE THE VIDEO LINK ABOVE TO WATCH VIDEOS, IN ADDITION TO READING THIS BOOK! Finally, I get a lot of calls regarding new statutes/laws passed in each...
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...African-American household. Find the average income, wealth, and primary purchases of the African-American household. Compare and contrast the consumption pattern of the African-American with European, Asian, and Hispanic Americans. African-American household Average income- $37,150 Wealth- $6,000 White Household Average income- $55,463 Wealth- $88,000 Comparing African American households to European, Asian and Hispanic Americans, African Americans have the lowest income. Second of all, in response to a lower income theoretically one would think that African Americans would save more and spend less and begin to invest, yet in response to poor financially education, and decisions African Americans spend more than any other race on materialistic things. African Americans spend a large amount and above any other races median in clothing, video game hardware, pc software and shoes. African Americans have been found to be very brand loyal to body soap, sneakers, potato chips, soda, hair products, and cookies and nail polish. African-American/Black Market profile found that African Americans are very persuaded through marketing, such as commercials, music videos, radios, and locals ads to buying cars, car accessories, communication gadgets and cosmetic products, and theses products are not being differentiated or improved, but marketers have learned techniques to persuade the African American race to purchase. 2) Given your consumer profile of the average African-American...
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