|
 |
A- G | H - O | P - Z
| |
Acceleration |
| |
The right of the mortgagee (lender) to demand the immediate repayment of the mortgage loan balance upon the default of the mortgager (borrower), or by using the right vested in the Due-on-Sale Clause. |
| |
Adequate Protection Order |
| |
Forces trustees to release post petition payments being held prior to the chapter 13 confirmation hearing. |
| |
Adjustment Interval |
| |
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index. |
| |
Adverse Possession |
| |
A claim made against land titled in another person based on open, notorious and hostile possession and use of the land to the exclusion of the titled owner. |
| |
Amortization |
| |
Means loan payment by equal periodic payment calculated to pay off the debt at the end of a fixed period, including accrued interest on the outstanding balance. |
| |
Amortized Loan |
| |
The amount applied for less the prepaid finance charges. Prepaid finance charges can be found on the Good Faith Settlement Statement (HUD1 or HUD1A). For example, if the borrower's Note is for $100,000 and the prepaid finance charge total is $5,000, the Amount Financed would be $95,000. The Amount Financed is the amount on which the Annual Percentage Rate (APR) is calculated. |
| |
Annual Cap |
| |
The limit on the amount of an adjustable rate mortgage's interest rate can change over a 12-month period. An annual cap prevents your payments from changing too dramatically, even if the factors that determine changes in an adjustable mortgage's rate rise or fall sharply during that period. |
| |
Annual Percentage Rate (A.P.R.) |
| |
This is not the Note rate for which the borrower applied. It is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account points and other credit costs, such as private mortgage insurance, loan discount, origination fees, and other credit costs. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan. |
| |
Appurtenance |
| |
Anything attached to the land or used with it passing to the new owner. |
| |
Assumption of A Mortgage |
| |
Assumption by a purchaser of the primary liability for a payment of an existing mortgage or deed of trust. The seller remains secondarily liable unless specially released by the lender. |
| |
Attorney In Fact |
| |
A type of agency relationship where one person holds a POWER OF ATTORNEY allowing him to execute legal documents on behalf of another. Decisions made by the attorney in fact are binding on the principal. |
| |
Balloon (Payment) Mortage |
| |
Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract. |
| |
Bankruptcy |
| |
A provision of Federal Law whereby a debtor surrenders his assets to the Bankruptcy Court and is relieved of the future obligation to repay his unsecured debts. A Trustee in Bankruptcy administers the assets, selling them to pay as much of the debt as possible. If your seller is in bankruptcy, the Trustee in Bankruptcy owns the property and is the party to sign the contract and make decisions. After bankruptcy, the debtor is discharged and his unsecured creditors may not pursue further collection efforts against him. Secured creditors, those holding deeds of trust or judgment liens, continue to be secured by the property but they may not take other action to collect from the debtor. |
| |
Basis Point |
| |
1/100th of 1% of yield. Used to describe the amount of change in yield in many debt instruments, including mortgages. |
| |
Beneficiary |
| |
A person named to receive a benefit from a TRUST. A contingent beneficiary has conditions attached to his rights, usually someone else must die first. |
| |
Bi-Weekly Mortgage |
| |
A mortgage with payments due every two weeks totaling 26 payments a year. |
| |
Blanket Mortgage |
| |
A mortgage covering at least two pieces of real estate as security for the same mortgage. This sort of loan is more common for commercial property or special case loans. |
| |
Bond |
| |
An amount of money, often posted with the Court, to guarantee against loss as a result of a possible claim. For example, if there is a LIEN against the property, the owner may post a bond and the lien is removed from the property and the parties argue over the money rather than the property. |
| |
Borrower (Mortgagor) |
| |
One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full. |
| |
Breach Of Contract |
| |
Failure to perform provisions of a contract. |
| |
Broker |
| |
An individual in the business of assisting in arranging funding or negotiating contracts for a client buy who does not loan the money himself. Brokers usually charge a fee or receive a commission for their services. |
| |
Building Restriction Line |
| |
A required set-back a certain distance from the road within which no building may take place. This restriction may appear in the original plat of subdivision, restrictive covenants or by building codes and zoning ordinances. |
| |
Buy-Down |
| |
When the lender and/or the home builder subsidizes the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. These are sometimes used to qualify borrowers for a loan amount that they would not otherwise qualify for but will be able to pay in subsequent years as their income increases. |
| |
|
|
Call Provision |
|
In a mortgage or deed of trust, it refers to the mortgagee's or beneficiary's ability to speed up payment of the obligation under certain conditions. In bonds, it refers to the right to redeem the bond before maturity. |
|
Capital Gains |
|
Profit earned from a sale of real estate. |
|
Capitalization |
|
A method used to estimate value of a property based on the rate of return on investment. |
|
Caps (Interest) |
|
Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage may change per year and/or the life of the loan. |
|
Caps (Payment) |
|
Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage may change. |
|
Cashflow |
|
The amount of cash derived over a certain period of time from an income-producing property. The cash flow should be large enough to pay the expenses of the income producing property (mortgage payment, maintenance, utilities, etc.) |
|
Caveat Emptor |
|
Buyer beware. The buyer must inspect the property and satisfy himself it is adequate for his needs. The seller is under no obligation to disclose defects but may not actively conceal a known defect or lie if asked. |
|
Certificate Of Eligibility |
|
The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business, and mobile homes. certificates of eligibility may be obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility). |
|
Certificate Of Occupancy |
|
A certificate issued by a local governmental body stating that the building is in a condition to be occupied. |
|
Certificate Of Reasonable Value (CRV) |
|
An appraisal issued by the Veterans Administration showing the property's current market value. |
|
Coinsurance |
|
When more than one insurance company shares the risk of a particular transaction or series of transactions. Lenders may require co-insurance on large commercial projects. |
|
Comparables |
|
Properties used as comparisons to determine the value of a specified property. |
|
Condemnation |
|
Taking of private property for a public use through exercise of the power of EMINENT DOMAIN. The Constitution protects against taking without fair compensation. |
|
Conditional Commitment |
|
During HUD/FHA mortgage insurance processing, it indicates the satisfactory completion of technical processing involving the estimated costs of the project, the as-is value of the site, the detailed estimate of the operating expenses and taxes, the supportable costs, the financial and credit capacity of the sponsors, financial requirements, and mortgage amounts. |
|
Contested Foreclosure |
|
When a mortgagor responds (answers) a Foreclosure Complaint disagreeing with some of the facts contained in the complaint. If the disagreement is not considered to be factual, the court may issue a Summary Judgement in favor of the mortgagee. If the answer disputes facts stated within the complaint, the court may order a hearing to determine the facts. If the mortgagor asserts new matters in the answer, this may be a Counter Complaint and may also result in Summary Judgement or a hearing. |
|
Contract For Deed |
|
Also known as a Land Contract or Land Installment Contract. A method of financing where title remains in the Seller's name until the Buyer has paid the full purchase price. A Contract for Deed will normally trigger the DUE ON SALE CLAUSE in a DEED OF TRUST or MORTGAGE but Veterans Administration regulations specifically allow Contracts for Deed without invoking the DUE ON SALE CLAUSE. |
|
Convertible Standby Commitment |
|
FNMA mortgage purchase that may be converted to the same yield as offered in the most recent Free Market Auction. |
|
Covenants, Conditions, And Restrictions |
|
The basic rules establishing the rights and obligations of owners of real property within a subdivision or other tract of land in relation to other owners within the same subdivision or tract and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners. |
| |
|
| |
Debt Coverage Ratio |
| |
The ration of effective annual net income to annual debt service. |
| |
Debt Service |
| |
A borrower's periodic payment comprising repayment of principal plus payment of interest on the unpaid balance. |
| |
Debt-To-Income Ratio |
| |
The ratio, expressed as a percentage, which results when a borrower's monthly payment obligation on long-term debts is divided by his or her gross monthly income. See housing expenses-to-income ratio. |
| |
Deed Of Trust |
| |
A type of security instrument conveying title in trust to a third party covering a particular piece of property. It is used to secure the payment of a note. Compare, MORTGAGE. In some states, this document is used in place of a mortgage to secure the payment of a note. |
| |
Deed |
| |
The written document conveying real property. The Deed must be executed (signed), ACKNOWLEDGED, and DELIVERED to the Grantee. Once recorded at the Courthouse, the original piece of paper is not needed to convey title in the future. |
| |
Deferred Interest |
| |
When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance. See negative amortization. |
| |
Deficiency Judgment |
| |
If the foreclosure sale does not bring sufficient proceeds to pay the costs of sale and the note in full, the holder of the note may obtain a judgment against the maker for the difference. |
| |
Department Of Veterans Affairs (VA) |
| |
- An independent agency of the federal government that guarantees long-term, low-or no-down payment mortgages to eligible veterans.
|
| |
Discount Point |
| |
The amount of money you can choose to pay when you first get a loan to reduce its overall interest rate. Discount points are usually a small fraction of the total amount of your loan—i.e., 1, 2, or 3%—and can lower the interest rate for the entire life of the loan, or just part of it. |
| |
Discount |
| |
In loan origination, a discount refers to an amount withheld from loan proceeds by a lender. In a secondary marketing sale, a discount is the amount by which the sale price of a note is less than its face value. In both instances, the purpose of a discount is to adjust the yield upward, either in lieu of interest or in addition to interest. The rate of the amount of the discount depends on money market conditions, the credit of the borrower, and the rate or terms of the note. |
| |
Dual Agency |
| |
Representation of opposing parties (buyer and seller) at the same time in the same transaction. This situation most often refers to cases where the Realtor is the agent for both parties. |
| |
Due On Sale Clause |
| |
A clause in the MORTGAGE that makes the loan non-assumable by providing the noteholder may call the loan immediately due and payable upon a sale or conveyance of an interest in the property. The FNMA/FHLMC form provides that a lease of more than three years or a lease with an option to buy also triggers this provision. |
| |
Earnest Money |
| |
Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment. A good faith deposit. |
| |
Easement |
| |
The right to use the land of another for a specific limited purpose. Examples include utility lines, driveways, and INGRESS AND EGRESS. Easements can be temporary or permanent. |
| |
ECOA |
| |
Equal Credit Opportunity Act. ECOA is a federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt from public assistance programs. |
| |
Eminent Domain |
| |
The power of the state to take private property for public use upon payment of just compensation. |
| |
Encroachment |
| |
The physical intrusion of a structure or improvement on the land of another. Examples include a fence or driveway over the property line. |
| |
Endorsement |
| |
A writing on a negotiable instrument by which title to a property mentioned therein is assigned and transferred. A notation added to an instrument after execution to change or clarify its contents. In insurance, coverage may be restricted or enlarged by endorsing a policy. In FHA loans, a notation placed on the note by the FHS indicating that the loan is insured under the National Housing Act. |
| |
Equity Sharing |
| |
- A form of joint ownership between an owner/occupant and an owner/investor. The investor takes depreciation deductions for his share of the ownership. The occupant receives a portion of the tax write-offs for interest and taxes and a part of his monthly payment is treated as rent. The co-owners divide the profit upon sale of the property. Compare, JOINT OWNERSHIP AGREEMENT.
|
| |
Escrow |
| |
A bank account where you deposit money that will be used to pay charges that come with your purchase of a house. An escrow account is sort of a neutral area between you and your mortgage lender that stores money you've deposited until you need it to pay for certain aspects of your loan, like closing costs, taxes or insurance fees. |
| |
Eviction |
| |
Also know as Ejectment in some jurisdictions, the legal removal of former property owners, tenants or squatters from a foreclosed property. |
| |
Executed Sales Contract |
| |
A contract where all the terms have been successfully completed by the buyer and the seller. |
| |
Executor |
| |
A person named in a will to carry out its terms and administer the estate. The feminine form is Executrix. Compare, ADMINISTRATOR. |
| |
Farmers Home Admistration (FMHA) |
| |
Provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere. |
| |
FDIC |
| |
Federal Deposit Insurance Corporation. Originally established by the Banking At of 1933 to insure the deposits of all banks entitled to federal deposit insurance. |
| |
Federal Home Loan Bank Board (FHLBB) |
| |
The former name for the regulatory and supervisory agency for federally chartered savings institutions. Agency is now called the Office of Thrift Supervision |
| |
Federal Home Loan Mortgage Corporation (FHLMC) Also Called Freddie MAC |
| |
Is a quasi-governmental agency that specializes in purchasing mortgage loans, primarily from savings and loans associations. Freddie Mac is run by the United States government, with assistance from private sector professionals. |
| |
Federal Home Loan Mortgage Corporation (FHLMC) |
| |
- A affiliate of the Federal Home loan Bank which creates a secondary money market in conventional residential loans and in FHA and VA loans by purchasing mortgage loans from members of the Federal Reserve System and the Federal Home Loan Bank Systems. Also known as Freddie Mac.
|
| |
Federal Housing Administration (FHA) |
| |
A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders. FHA also sets standards for underwriting mortgages.
|
| |
Federal National Mortgage Association (FNMA) Also Know As Fannie Mae |
| |
- A tax-paying corporation created by Congress that purchases and sells conventional residential mortgages as well as those insured by FHA or guaranteed by VA to add cash to the mortgage market. This institution, which provides funds for one in seven mortgages, makes mortgage money more available and more affordable.
|
| |
Financing Statement |
| |
Lenders record financing statements to evidence personal property, such as a new furnace, siding or windows, is subject to a lien. |
| |
Floating Rate Of Interest |
| |
An interest rate that instead of being a fixed percent is stated as an amount above or below another rate, usually the prime rate, so that as the prime rate moves up and down the interest rate moves with it. |
| |
Flodd Insurance |
| |
An insurance policy that covers damage your home may receive due to flooding. If the home you're buying is in an area prone to flooding, then you may be required by your home loan provider to get flood insurance. To establish whether or not your home is in such an area, a land survey must be done—at the expense of the person selling the home—at least fifteen days before the date you close on the home purchase. |
| |
FNMA |
| |
The Federal National Mortgage Association is a secondary mortgage institution, which is the largest single holder of home mortgages in the United States. FNMA buys VA, FHA, and conventional mortgages from primary lenders. Also known as Fannie Mae. |
| |
Forward Commitment |
| |
A commitment made by the lender to make or purchase a loan in the future. |
| |
Free-Market System Auction |
| |
A periodic auction conducted by the Federal National Mortgage Association, at which commitments to purchase mortgages are issued. Approved lenders specify a dollar amount and yield to FNMA. |
| |
Full Disclosure |
| |
A legal requirement that says a person selling a home must inform a potential buyer of everything they know about the home's physical and economic condition. |
| |
Fully Indexed Note Rate |
| |
As related to adjustable rate mortgages, the index value at the time of application plus the gross margin stated in the note. |
| |
General Warranty Deed |
| |
The Grantor warrants title against all claims. |
| |
Gestation Repo |
| |
A repurchase agreement covering the time between the date an issuer submits documents to the Government National Mortgage Association for final pool approval and the date the new security is actually issued (usually 20 calendar days) |
| |
Government National Mortgage Association |
| |
On September 1, 1968, Congress enacted legislation to partition FNMA into two continuing corporation entities. GNMA has assumed responsibility for the special assistance loan programs. Also, GNMA administers the mortgage-backed securities programs that channel new sources of funds into residential financing through the sale of privately issued securities carrying the GNMAS guaranty. |
| |
Graduated Payment Mortgage (GPM) |
| |
A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off. This type of mortgage has negative amortization built into it. |
| |
Gross Margin |
| |
With regard to an adjustable rate mortgage, an amount expressed as percentage points, stated in the note which is added to the current index value on the rate adjustment date to establish a new note rate |
| |
Ground Lease |
| |
The owner grants a long term lease of the land (usually 99 years) and allows the lessee to build and use the land as agreed. At the end of the term, the land and all improvements revert to the owner. |
| |
Guaranteed Coupon |
| |
- A term in a contract for the purchase or sale of mortgage-backed securities that states the securities to be delivered will bear an agreed upon interest rate.
|
| |
Guaranteed Mortgage Certificate (GMC) |
| |
A bond-like instrument issued by the Federal Home Loan Mortgage Corporation that represents ownership in a large pool of residential mortgages. Principal is returned annually and interest is paid semiannually. |
| |
Guaranty |
| |
- A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract
|
| |
Guardian |
| |
One appointed by the Court to administer the affairs of a minor. A guardian ad litem is appointed to protect one's interest in a particular legal action. |
|
