Real Estate Loan Classifications

Question 1

Blanket Mortgage

Answer 1

Occurs when a mortgagor pledges more than one property to secure the note

Question 2

Construction Loan

Answer 2

An open-end mortgage loan that finances the cost of materials and labor for a building; short-term loan that must be replaced with permanent financing

Question 3

Hard Money Loan

Answer 3

A type of loan that is secured by real property. Hard money loans are considered loans of “last resort” or short-term bridge loans and carry a higher rate

Question 4

High-Cost Mortgage

Answer 4

A loan classified as high-cost based on criteria of the Home Ownership and Equity Protection Act

Question 5

Non-Disturbance Clause

Answer 5

A provision in a loan that ensures that a rental agreement will continue under any circumstances

Question 6

Nonrecourse

Answer 6

The lender would not be able to seek a judgement if the foreclosure did not pay off the full debt

Question 7

Open-End Mortgage

Answer 7

A mortgage containing a clause that permits the mortgagor or trustor to borrow additional money without rewriting the mortgage or deed of trust

Question 8

Package Mortgage

Answer 8

A security instrument that includes real property and the personal property on the premises

Question 9

Purchase Money Mortgage

Answer 9

Also known as a deed of trust, it refers to any loan, whatever the source, for all or part of the purchase price for the purchase of real property