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FINANCE, FORECLOSURE, AND INSURANCE► CHAPTER 12
© 2009 South-Western, Cengage Learning
© 2009 South-Western, Cengage Learning
Massachusetts is title theory state (NOT lien theory – NOT intermediate theory)
mortgages in writing to be enforceable(statute of frauds)
© 2009 South-Western, Cengage Learning
attorney disclosure of mortgagee representation
appraisal available to mortgagor for 30 days
© 2009 South-Western, Cengage Learning
due on sale clause (a/k/a alienation/non-alienation clause)
direct reduction loan
reverse mortgage loan
installment land contract (a/k/a contract for a deed)
payoff letter
satisfaction of mortgage
© 2009 South-Western, Cengage Learning
power-of-sale clause
non-judicial or entry by possession (both often provided)
entry by possession (rarely employed)
non-judicial foreclosure (Order of Notice and Notice of Sale)
excess proceeds
equitable right of redemption
no statutory right of redemption
deficiency judgment
© 2009 South-Western, Cengage Learning
notice of default – new 90 day MA grace period as of 5/01/08
tenant at sufferance (former mortgagor)
tenant in a foreclosed property
notice of accounting – following sale
© 2009 South-Western, Cengage Learning
For owner-occupied 1 to 4 dwelling units: must be licensed
mortgage broker Loan Origination & Compensation Agreement
thorough background check and license requirements
mortgage document (must identify mortgage broker or reference “no mortgage broker”)
© 2009 South-Western, Cengage Learning
☞ Attorney General regulations (generally does not include reverse mortgages or HELOCs)
☞ advertising practices
☞ mortgage disclosures
☞ prohibited practices
☞ public evaluation by Division of Banks
© 2009 South-Western, Cengage Learning
© 2009 South-Western, Cengage Learning
For owner-occupied 1 to 4 dwelling units:
Predatory Home Loan Practices Act
prepayment penalties: no prepayment penalty after 36 months 1st year – lesser of 3 month’s interest or remaining due to refinance in 3 years - up to 3 month’s interest FHA mortgage - reimbursement of fees/premiums
late charges or penalties
subprime mortgage loans
© 2009 South-Western, Cengage Learning
☂ insurance-cancelation notification – mortgagee 20-day notice
☂ nondiscrimination in homeowners insurance
☂ coverage – not in excess of replacement cost
☂ FAIR plan
☂ flood insurance
KEY TERMS
© 2009 South-Western, Cengage Learning
direct-reduction loan
due-on-sale clause
entry by possession
FAIR Plan
foreclosure rescue
mortgage broker
mortgage discharge
mortgage originator
National Flood Insurance Program
non-judicial foreclosure
Notice of Sale
payoff statement
power-of-sale clause
predatory lending
prepayment penalty
title theory