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Essay, 2 pages (450 words)

Homework5

Finance and Accounting al Affiliation 1. There 21 s having Deeds of Trust rather than mortgages 2. If a part of the property or property’s is transferred or sold, without the consent of the lender, lender may ask for the full payment of sums secured by security instruments. The lender shall not exercise the option if the applicable law prohibits the exercise. In case, the lender exercises, he shall issue the borrower acceleration notice. The notice provides the duration of more than 30 days from the notice date in reference to section 15 within which needs to pay the security instrument sum. Failure to which, the lender might invoke remedies permitted by the security instrument without the borrowers demand.
3. The borrower might be required by the lender to pay the reinstatement expenses and sums in the form of money order, cash, certified check, bank check, cashier’s check, and treasurer’s check. Provided any of the checks is drawn from a firm having deposits that are insured by entity, federal agency, and instrumentality. The expenses can also be paid via Electronic Funds Transfer. When the borrower is reinstated the security obligations and instruments will remain effective as if no acceleration had taken place.
4. Borrower is not allowed to store, use, dispose, or release any substance that is hazardous on the property. Borrowers shall not permit any activity that will violate the environment’s law, condition, or creates a condition that will affect the property’s value.
5. The lender must cover the default, the remedies for curing the default; date from the time the borrower was issued with the notice. Also, the notice covers the failure for curing the default on or before the specification date in the notice. Failure may result to acceleration of secured sums secured by the security instruments and the property’s sales. The notice also informs the borrower’s right to reinstate in case of acceleration
2.
An interest-rate cap dictates the maximum amount an interest rate can raise. The interest caps can either be periodic or overall caps. Periodic caps limit the increase in interest rate from an adjustment period to the other. Overall caps limit the increase in interest rate over the life of a loan. All adjustable rate mortgages must have periodic and overall caps. Supposing the Adjustment-Rate mortgages has a periodic cap of 2%. During the first adjustment the index rate increases by 3%. Computations will be as
When the interest rate drops, the monthly payment does not always drop. Adjustment rates having the periodic caps, their amount of payment might increase although their index rate has declined or remain stagnant. The loan’s rate rises any date of adjustment when the standard rate of ARM is higher than the paid amount before adjustment.
Reference
Single-Family Uniform Instruments – Security Instruments – Freddie Mac. (n. d.). Freddie Mac Home. Retrieved June 27, 2013, from http://www. freddiemac. com/uniform/unifsecurity. html
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