Chapter 14
Real Estate Financing: Principles
This financing chapter focuses on the
documents and concepts involved in real
estate lending.
Security and Debt
 Hypothecation
 Promissory
Note
Interest
Usury
Loan Origination Fee
Discount Points
Prepayment Penalty
Modern Real Estate Practice
17th Edition
Mortgage Law
 Mortgagor
 Mortgagee
 Title
Theory
Conveys ownership
 Lien
Theory
Creates lien only
 Intermediate
Theory
Owner has title lender can take
Modern Real Estate Practice
17th Edition
Mortgages or Deeds of Trust

Duties of the Mortgagor or Trustor
Promise to pay
Real estate taxes
Insurance
Good repair
Removal
Default
Assignment
Release
Assignment of Rents
Prepayment
Acceleration
Defeasance
Alienation
Late Fees
Escalator
Assumption
Alienation
Modern Real Estate Practice
17th Edition
Modern Real Estate Practice
17th Edition
Modern Real Estate Practice
17th Edition
Land Contracts
 Contract
Contract
for Deed or Installment
Other financing may not be available
Buyer = vendee
Seller = vendor
Owner Financing
Modern Real Estate Practice
17th Edition
Foreclosure
 Judicial
Redemption
Equitable
Statutory
 Non-judicial
 Strict
 Deed in Lieu
of Foreclosure
Deed to Purchaser at Sale
Deficiency Judgment
Modern Real Estate Practice
17th Edition
Modern Real Estate Practice
17th Edition