Real Estate Finance and Lending
Instruments
Separate the promise to pay from the security. The note carries the debt; the mortgage or deed of trust gives the lien. Oregon is a deed-of-trust state with three parties: trustor (borrower), beneficiary (lender), and trustee. Default is enforced by nonjudicial foreclosure under a power of sale, with notice of default served well in advance of the trustee's sale and no post-sale statutory right of redemption.
Regulation
Truth in Lending and RESPA produce the integrated disclosures: the Loan Estimate within three business days of application and the Closing Disclosure at least three business days before consummation. Know ability-to-repay and qualified mortgage standards, escrow and impound accounts, private mortgage insurance termination rules, flood insurance, adverse action notices under Regulation B, and RESPA Section 8, which bars kickbacks and unearned fees for settlement services.
Terms and math
Loan-to-value equals loan divided by price or value. Down payment percentage plus LTV equals 100. A point is one percent of the loan amount. Know APR versus note rate, amortization, mortgage insurance cancellation around 80 percent LTV on request and automatic termination lower down, due-on-sale clauses, and prepayment penalty limits.
Traps
Confusing the note with the security instrument; treating the trustee as the lender's agent; measuring TRID timing in calendar days rather than business days; forgetting that a foreclosure may wipe out junior liens but not always senior ones.
Worked example: a $320,000 purchase with 20 percent down gives a $256,000 loan and an 80 percent LTV, so no PMI is required.