Finance Exam Prep

    A certificate of title, also known as an opinion letter, gives an opinion stating that the title is vested in a particular individual. A certificate of sale is issued to a buyer at a judicial sale and entitles a buyer to the deed upon confirmation of sale by court. An estoppel certificate, sometimes called a certificate of no defense, is a legal instrument used by the bank to stop the mortgage and to indicate what the mortgage balance is on a certain date, after which the mortgagor has no defense unless he/she contests in a timely manner.
    A person with an adjustable-rate mortgage would expect the interest rate to change yearly according to terms specified by the lender. With a fixed-rate mortgage, the interest rate does not fluctuate. A straight line mortgage is a loan in which only interest is paid and then one balloon payment of principal is made at the end of the loan.
    Hypothecation refers to the pledge of the property as security for collateral for a loan. The term accretion refers to the addition of soil to property by the gradual operation of natural causes (i.e. the opposite of erosion).
    Often times called the "due on the sale clause", the alienation clause says that the entire mortgage balance will be "due on the sale" of the property. The hypothecation clause is the transfer of property as a pledge of security for repayment of the debt.