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""1. When purchasing real estate property, what me...




""1. When purchasing real estate property, what methods can be used to provide a buyer with the assurance that a title is valid, marketable, and free of legal concerns? Discuss the advantages and disadvantages of each different method. 2. As Citadel, LLC, searches for future investing opportunities, there are questions regarding property rights and issues that may be encountered. What type of property right restrictions could potentially be found on a property? Explain how these restrictions could possibly be lifted. 3. Jim recently purchased a property at a foreclosure sale. It was originally owned by a person named Ms. Mary Smith, with American National holding the first mortgage and another lender, U.S. Bank, holding the second. Ms. Smith defaulted on her mortgage payments, but American National foreclosed without joining U.S. Bank in the foreclosure suit. What are the rights of U.S. Bank, if any? How does this situation affect Jim's ownership (and subsequently the ownership of the LLC)? 4. What options are available to property owners that are facing default? Is foreclosure the only and final option? In addition, what advice would you give to an individual who is considering bankruptcy? What about a company that is considering bankruptcy? How would mortgage debt be affected under the different forms of bankruptcy? 5. Joshua purchased a property 10 years ago that is now a part of the company's portfolio. It was a 30-year fully amortizing loan, and the original balance was $85,000 at an original rate of 9%. At this point in time, he would like to prepay the mortgage balance by $10,000. If the prepayment is approved, what would be the new balance? If the loan maturity is shortened, and using the original monthly payments, what is the new loan maturity? 6. Courtney Baxter indicates that she is excited about the current low interest rate levels and believes that Joshua and Jim should take advantage of this. She has found a property for $200,000 and believes they can be approved for an interest-only ARM for 30 years. The start rate is 3% and monthly interest-only payments will be made for 3 years. After the 3-year period, payments must be sufficient to fully amortize the loan at maturity. What will the interest-only payments be each month during the 3-year period? Assume that at the end of the 3-year period, the reset rate is 6% and again, payments must be made to fully amortize the loan. What will the new payments be for the remaining term of the loan? Are there any risks associated with this overall arrangement? Questions must be addressed in a complete manner with an average of 50 words per question. For problem-based questions, the solution must be provided, but it is also recommended that mathematical work is provided for support. This is how you are graded; Category Points Description Title Assurance 25 Demonstrate an understanding of title assurance options and methods. Property Rights 25 Demonstrate an understanding of property right restrictions and how they could be lifted. Foreclosure Rights 25 Demonstrate an understanding of foreclosure rights and the impact of foreclosure upon real estate ownership. Default Options/Bankruptcy 25 Discuss options in the case of default and the impact of bankruptcy options on mortgage debt. Prepayment Impact on Loan Balance/Loan Maturity 25 Calculate the new balance of a loan after prepayment (12.5 points); calculate a new loan maturity assuming original monthly payments after prepayment (12.5 points). Interest Only/Amortized Payments/Risk 25 Calculate the interest only payments (10 points); calculate payments to fully amortize loan (10 points); discuss risks associated with this loan arrangement (5 points). Total 150 A quality assignment will meet or exceed all of the above requirements.


Paper#13649 | Written in 18-Jul-2015

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