REAL 1010 Lecture Notes - Lecture 1: Real Estate Settlement Procedures Act, Fannie Mae, Hypothecation
25 Aug 2016
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Balance sheet: assets- left side; what do i own, liabilities=debt, net worth= equity. States can be: title theory- you don"t own your house until you pay for it. Deed typically in possession of third party; typically, an attorney. State don"t have mortgages, they have deeds of trust : lien theory- own your house while you"re paying for it. Lender has a lien on the house. If you don"t pay it back, the lender can foreclose on you. Hypothecation- gives you the right to live in the house while you pay for it. Without this, you could not live in your house until you pay for it. Bank subordinates themselves, and give you the right to live in the house. **a bank cannot make you pay your loan off early, unless you break a promise (default) Default- failure to comply with the terms and conditions of the loan.
