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Abstract (Of Title)
A summary of the public records relating to the title to a particular piece
of land. An attorney or title insurance company reviews an abstract of title
to determine whether there are any title defects which must be cleared before
a buyer can purchase clear, marketable, and insurable title.
Acceleration Clause
Condition in a mortgage that may require the balance of the loan to become
due immediately, if regular mortgage payments are not made or for breach
of other conditions of the mortgage.
Acceptance
An offeree’s consent to enter into a contract and be bound by the
terms of the offer.
Additional principal payment
A payment by a borrower of more than the scheduled principal amount due
in order to reduce the remaining balance on the loan.
Adjustable Mortgage Loan
Any mortgage that does not have a fixed interest rate and a fixed payment
for the term of the loan, or does not amortize to zero at the end of the
set term, when required payments are made on time.
Adjustable Rate Mortgage
A mortgage in which the interest rate is adjusted periodically according
to the movement in a pre-selected index.
Adjusted basis
The original cost of a property plus the value of any capital expenditures
for improvements to the property minus any depreciation taken.
Adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage
(ARM).
Adjustment Interval
For an adjustable rate mortgage, the time between changes in the interest
rate charged. The most common adjustment intervals are one, three or five
years.
Adjustment period
The period that elapses between the adjustment dates for an adjustable-rate
mortgage (ARM). Administrator
A person appointed by a probate court to administer the estate of a person
who died intestate.
Agreement of Sale
Known by various names, such as contract of purchase, purchase agreement,
or sales agreement according to location or jurisdiction. A contract in
which a seller agrees to sell and a buyer agrees to buy, under certain
specific terms and conditions spelled out in writing and signed by both
parties.
Amenity
A feature of real property that enhances its attractiveness and increases
the occupant’s or user’s satisfaction although the feature
is not essential to the property’s use. Natural amenities include
a pleasant or desirable location near water, scenic views of the surrounding
area, etc. Human-made amenities include swimming pools, tennis courts,
community buildings, and other recreational facilities.
Amortization
A payment plan, which enables the borrower to reduce his debt gradually
through monthly payments of principal.
Amortization schedule
A timetable for payment of a mortgage loan. An amortization schedule shows
the amount of each payment applied to interest and principal and shows
the remaining balance after each payment is made.
Amortization term
The amount of time required to amortize the mortgage loan. The amortization
term is expressed as a number of months.
Amortize
Reduce a debt by regular payments of both principal and interest.
Amortization Schedule
A timetable for payment of a mortgage showing the amount of each payment
applied to interest and principal and the remaining balance.
Annual Percentage Rate (APR)
(APR) is the cost of credit expressed as a yearly rate. The APR includes
the interest rate, points, broker fees, and certain other credit charges
that the borrower is required to pay.
Annuity
An amount paid yearly or at other regular intervals, often on a guaranteed
dollar basis.
Application
A form used to apply for a mortgage loan and to record pertinent information
concerning a prospective mortgagor and the proposed security.
Application Fee
The fee charged by the lender to the borrower for applying for a loan.
Appraised value
An opinion of a property's fair market value, based on an appraiser's
knowledge, experience, and analysis of the property.
Appraiser
A person qualified by education, training, and experience to estimate
the value of real property and personal property.
Appraisal
A professional opinion of the market value of a property.
Appreciation
An increase in the value of a house due to changes in market conditions
or other causes.
Assessed Value
The valuation placed upon property by a public tax assessor for purposes
of taxation.
Assessment
The process of placing a value on property for the strict purpose of taxation.
May also refer to a levy against property for a special purpose, such
as a sewer assessment.
Assessor
A public official who establishes the value of a property for taxation
purposes.
Asset
Anything of monetary value that is owned by a person. Assets include real
property, personal property, and enforceable claims against others (including
bank accounts, stocks, mutual funds, and so on).
Assignment
The transfer of a mortgage from one person to another.
Assumable Loan
These loans may be passed on from a seller of a home to the buyer. The
buyer "assumes" all outstanding payments.
Assumption clause
A provision in an assumable mortgage that allows a buyer to assume responsibility
for the mortgage from the seller. The loan does not need to be paid in
full by the original borrower upon sale or transfer of the property.
Assumption fee
The fee paid to a lender (usually by the purchaser of real property) resulting
from the assumption of an existing mortgage.
Assumption of Mortgage
An obligation undertaken by the purchaser of property to be personally
liable for payment of an existing mortgage. In an assumption, the purchaser
is substituted for the original mortgagor in the mortgage instrument and
the original mortgagor is to be released from further liability in the
assumption, the mortgagee's consent is usually required.
Attorney-in-fact
One who holds a power of attorney from another to execute documents on
behalf of the grantor of the power. The original mortgagor should always
obtain a written release from further liability if he desires to be fully
released under the assumption. Failure to obtain such a release renders
the original mortgagor liable if the person assuming the mortgage fails
to make the monthly payments. An "Assumption of Mortgage" is
often confused with "purchasing subject to a mortgage." When
one purchases subject to a mortgage, the purchaser agrees to make the
monthly mortgage payments on an existing mortgage, but the original mortgagor
remains personally liable if the purchaser fails to make the monthly payments.
Since the original mortgagor remains liable in the event of default, the
mortgagee's consent is not required to a sale subject to a mortgage. Both
"Assumption of Mortgage" and "Purchasing Subject to a Mortgage"
are used to finance the sale of property. They may also be used when a
mortgagor is in financial difficulty and desires to sell the property
to avoid foreclosure.
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Balance sheet
A financial statement that shows assets, liabilities, and net worth as of
a specific date.
Balloon Mortgage
Behaves like a fixed-rate mortgage for a set number of years (usually five
or seven) and then must be paid off in full in a single "balloon"
payment. Balloon loans are popular with those expecting to sell or refinance
their property within a definite period of time.
Bankrupt
A person, firm, or corporation that, through a court proceeding, is relieved
from the payment of all debts after the surrender of all assets to a court-appointed
trustee.
Bankruptcy
A proceeding in a federal court in which a debtor who
owes more than his or her assets can relieve the debts by transferring
his or her assets to a trustee.
Before-tax income
Income before taxes are deducted.
Beneficiary
The person designated to receive the income from a trust, estate, or a
deed of trust.
Bill of sale
A written document that transfers title to personal property.
Binder or "Offer to Purchase"
A preliminary agreement, secured by the payment of earnest money, between
a buyer and seller as an offer to purchase real estate. A binder secures
the right to purchase real estate upon agreed terms for a limited period
of time. If the buyer changes his mind or is unable to purchase, the earnest
money is forfeited unless the binder expressly provides that it is to
be refunded. Broker (See Real Estate Broker)
Blanket insurance policy
A single policy that covers more than one piece of property (or more than
one person).
Bond
An interest-bearing certificate of debt with a maturity date. An obligation
of a government or business corporation. A real estate bond is a written
obligation usually secured by a mortgage or a deed of trust.
Borrower
One who receives funds with the expressed or implied intention of repaying
the loan in full.
Bridge loan
A form of second trust that is collateralized by the borrower's present
home (which is usually for sale) in a manner that allows the proceeds
to be used for closing on a new house before the present home is sold.
Broker
An individual in the business of assisting in arranging funding or negotiating
contracts for a client but who does not loan the money himself. Brokers
usually charge a fee or receive a commission for their services.
Building code
Local regulations that control design, construction, and materials used
in construction. Building codes are based on safety and health standards.
Building Line or Setback
Distances from the ends and/or sides of the lot beyond which construction
may not extend. The building line may be established by a filed plat of
subdivision, by restrictive covenants in deeds or leases, by building
codes, or by zoning ordinances.
Buy down
Money advanced by an individual (seller, builder, etc.) to reduce monthly
payments for a home mortgage either during the entire term or for an initial
period of years.
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Call option
A provision in the mortgage that gives the mortgagee the right to call the
mortgage due and payable at the end of a specified period for whatever reason.
Capital expenditure
The cost of an improvement made to extend the useful life of a property
or to add to its value.
Capital improvement
Any structure or component erected as a permanent improvement to real property
that adds to its value and useful life.
Caps
A set percentage amount by which an adjustable rate mortgage may adjust
each adjustment period. For adjustable loans, caps are usually quoted as
two numbers as in 2/5. The first number indicates how much a loan may adjust
at each adjustment period while the second number indicates how much a loan
may adjust over its lifetime.
Cash Out
A loan transaction in which the borrower receives funds at the time of
closing.
Cash-out refinance
A refinance transaction in which the amount of money received from the
new loan exceeds the total of the money needed to repay the existing first
mortgage, closing costs, points, and the amount required to satisfy any
outstanding subordinate mortgage liens.
Certificate of deposit
A document written by a bank or other financial institution that is evidence
of a deposit, with the issuer’s promise to return the deposit plus
earnings at a specified interest rate within a specified time period.
Certificate of Eligibility A document issued by the federal government
certifying a veteran’s eligibility for a Department of Veterans
Affairs (VA) mortgage. Certificate of Reasonable Value (CRV) A document
issued by the Department of Veterans Affairs (VA) that establishes the
maximum value and loan amount for a VA mortgage.
Certificate of Title
A certificate issued by a title company or a written opinion rendered
by an attorney that the seller has good marketable and insurable title
to the property, which he is offering for sale. A certificate of title
offers no protection against any hidden defects in the title, which an
examination of the records could not reveal. The issuer of a certificate
of title is liable only for damages due to negligence. The protection
offered a homeowner under a certificate of title is not as great as that
offered in a title insurance policy.
Chain of title
The history of all of the documents that transfer title to a parcel of
real property, starting with the earliest existing document and ending
with the most recent.
Change frequency
The frequency (in months) of payment and/or interest rate changes in an
adjustable-rate mortgage (ARM).
Chattel
Another name for personal property.
Claim
An amount requested of an insurer, by a policyholder or a claimant, for
an insured loss.
Clear title
A title that is free of liens or legal questions as to ownership of the
property.
Closing
The occasion where a sale is finalized; the buyer signs the mortgage,
and closing costs are paid. Also called "settlement."
Closing Costs
Expenses (over and above the price of the property) incurred by buyers
and sellers in transferring ownership of a property. Also called "settlement
costs."
Closing cost item
A fee or amount that a homebuyer must pay at closing for a single service,
tax, or product.
Closing Costs
closing costs may include application fees; title examination, abstract
of title, title insurance, and property survey fees; fees for preparing
deeds, mortgages, and settlement documents; attorneys’ fees; recording
fees; and notary, appraisal, and credit report fees. Under the Real Estate
Settlement Procedures Act, the borrower receives a good faith estimate
of closing costs at the time of application or within three days of application.
The good faith estimate lists each expected cost either as an amount or
a range.
Closing Day
The day on which the formalities of a real estate sale are concluded.
The certificate of title, abstract, and deed are generally prepared for
the closing by an attorney and this cost charged to the buyer. The buyer
signs the mortgage, and closing costs are paid. The final closing merely
confirms the original agreement reached in the agreement of sale.
Cloud (On Title)
An outstanding claim or encumbrance, which adversely affects the marketability
of title.
Co-Borrower
An additional borrower on a loan. A co-borrower's obligation on a loan
are the same as all other borrowers.
Coinsurance
A sharing of insurance risk between the insurer and the insured. Coinsurance
depends on the relationship between the amount of the policy and a specified
percentage of the actual value of the property insured at the time of
the loss.
Coinsurance clause
A provision in a hazard insurance policy that states the amount of coverage
that must be maintained -- as a percentage of the total value of the property
-- for the insured to collect the full amount of a loss.
Collateral
An asset (such as a car or a home) that guarantees the repayment of a
loan. The borrower risks losing the asset if the loan is not repaid according
to the terms of the loan contract.
Collection
The efforts used to bring a delinquent mortgage current and to file the
necessary notices to proceed with foreclosure when necessary.
Co-maker
A person who signs a promissory note along with the borrower. A co-maker's
signature guarantees that the loan will be repaid, because the borrower
and the co-maker are equally responsible for the repayment.
Commission
Money paid to a real estate agent or broker by the seller as compensation
for finding a buyer and completing the sale.
Commitment Letter
A formal offer by a lender stating the terms under which it agrees to
loan money to a homebuyer.
Common area assessments
Levies against individual unit owners in a condominium or planned unit
development (PUD) project for additional capital to defray homeowners'
association costs and expenses and to repair, replace, maintain, improve,
or operate the common areas of the project.
Common areas
Those portions of a building, land, and amenities owned (or managed) by
a planned unit development (PUD) or condominium project's homeowners'
association (or a cooperative project's cooperative corporation) that
are used by all of the unit owners, who share in the common expenses of
their operation and maintenance. Common areas include swimming pools,
tennis courts, and other recreational facilities, as well as common corridors
of buildings, parking areas, means of ingress and egress, etc.
Common law
An unwritten body of law based on general custom in England and used to
an extent in the United States.
Community property
In some western and southwestern states, a form of ownership under which
property acquired during a marriage is presumed to be owned jointly unless
acquired as separate property of either spouse.
Comparables
A abbreviation for comparable properties used for comparative purposes
in the appraisal process; facilities of reasonably the same size and location
with similar amenities; properties which have been recently sold, which
have characteristics similar to property under consideration, thereby
indicating the approximate fair market value of the subject property.
Compound interest
Interest paid on the original principal balance and on the accrued and
unpaid interest.
Condemnation
The taking of private property for public use by a government unit, against
the will of the owner, but with payment of just compensation under the
government's power of eminent domain. Condemnation may also be a determination
by a governmental agency that a particular building is unsafe or unfit
for use.
Condominium
Individual ownership of a dwelling unit and an individual interest in
the common areas and facilities, which serve the multi-unit project.
Condominium conversion
Changing the ownership of an existing building (usually a rental project)
to the condominium form of ownership.
Condominium hotel
A condominium project that has rental or registration desks, short-term
occupancy, food and telephone services, and daily cleaning services and
that is operated as a commercial hotel even though the units are individually
owned.
Conforming Loan
A mortgage loan for up to $300,700 in the continental United States (Alaska
and Hawaii limits are higher).
Construction Loan
A short-term loan for funding the cost of construction. The lender advances
funds to the builder as the work progresses.
Consumer reporting agency
An organization that prepares reports that are used by lenders to determine
a potential borrower's credit history. The agency obtains data for these
reports from a credit repository as well as from other sources.
Contingency
A condition that must be met before a contract is legally binding.
Contract
An oral or written agreement to do or not to do a certain thing.
Contractor
In the construction industry, a contractor is one who contracts to erect
buildings or portions of them. There are also contractors for each phase
of construction: heating, electrical, plumbing, air conditioning, road
building, bridge and dam erection, and others.
Conventional Mortgage
mortgage loans other than those insured or guaranteed by a government
agency such as the FHA (Federal Housing Administration), the VA (Veterans
Administration), or the Rural Development Services (formerly know as Farmers
Home Administration, or FmHA).
Conversion
The right of a borrower to convert an adjustable or balloon loan into
a fixed loan.
Convertibility clause
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower
to change the ARM to a fixed-rate mortgage at specified time.
Convertible Arm
An adjustable-rate mortgage that can be converted to a fixed-rate mortgage
under specified conditions.
Coverage
The amount of protection, usually expressed in a percentage of the total
claim amount, an insured receives under a certificate.
Cooperative (co-op)
A type of multiple ownership in which the residents of a multiunit housing
complex own shares in the cooperative corporation that owns the property,
giving each resident the right to occupy a specific apartment or unit.
Cooperative Corporation
A business trust entity that holds title to a cooperative project and
grants occupancy rights to particular apartments or units to shareholders
through proprietary leases or similar arrangements.
Cooperative Housing
An apartment building or a group of dwellings owned by a corporation,
the stockholders of which are the residents of the dwellings. It is operated
for their benefit by their elected board of directors. In a cooperative,
the corporation or association owns title to the real estate. A resident
purchases stock in the corporation, which entitles him to occupy a unit
in the building or property owned by the cooperative. While the resident
does not own his unit, he has an absolute right to occupy his unit for
as long as he owns the stock.
Cooperative mortgages
Mortgages related to a cooperative project.
Cooperative project
A residential or mixed-use building wherein a corporation or trust holds
title to the property and sells shares of stock representing the value
of a single apartment unit to individuals who, in turn, receive a proprietary
lease as evidence of title.
Corporate relocation
Arrangements under which an employer moves an employee to another area
as part of the employer's normal course of business or under which it
transfers a substantial part or all of its operations and employees to
another area because it is relocating its headquarters or expanding its
office capacity.
Cost of funds index (COFI)
An index that is used to determine interest rate changes for certain adjustable-rate
mortgage (ARM) plans. It represents the weighted-average cost of savings,
borrowings, and advances of the 11th District members of the Federal Home
Loan Bank of San Francisco.
Covenant
A clause in a mortgage that obligates or restricts the borrower and that,
if violated, can result in foreclosure.
Commitment
A written letter of agreement detailing the terms and conditions by which
the lender will lend and the borrower will borrow funds to finance a home.
Credit history
A record of an individual's open and fully repaid debts. A credit history
helps a lender to determine whether a potential borrower has a history
of repaying debts in a timely manner.
Credit life insurance
A type of insurance often bought by mortgagors because it will pay off
the mortgage debt if the mortgagor dies while the policy is in force.
Credit Rating
Borrowers are rated by lenders according to the borrower's credit-worthiness
or risk profile. Credit ratings are expressed as letter grades such as
A-, B, or C+. These ratings are based on various factors such as a borrower's
payment history, foreclosures, bankruptcies and charge-offs. There is
no exact science to rating a borrower's credit, and different lenders
may assign different grades to the same borrower.
Credit Report
A report of an individual's credit history prepared by a credit bureau
and used by a lender in determining a loan applicant's creditworthiness.
Credit repository
An organization that gathers, records, updates, and stores financial and
public records information about the payment records of individuals who
are being considered for credit.
Creditor
A person to whom money is owed.
Cure
A loan that is removed from a delinquency status with no loss to the insurer.
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Deed-in-lieu
A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid
foreclosure. Also called a "voluntary conveyance."
Deed of Trust
Like a mortgage, a security instrument whereby real property is given as
security for a debt. However, in a deed of trust there are three parties
to the instrument: the borrower, the trustee, and the lender, (or beneficiary).
In such a transaction, the borrower transfers the legal title for the property
to the trustee who holds the property in trust as security for the payment
of the debt to the lender or beneficiary. If the borrower pays the debt
as agreed, the deed of trust becomes void. If, however, he defaults in the
payment of the debt, the trustee may sell the property at a public sale,
under the terms of the deed of trust. In most jurisdictions where the deed
of trust is in force, the borrower is subject to having his property sold
without benefit of legal proceedings. A few States have begun in recent
years to treat the deed of trust like a mortgage.
Default
Failure to make mortgage payments on a timely basis or to comply with other
conditions of a mortgage.
Deficiency Judgment
A court order to pay the balance owed on a loan if the proceeds from the
sale of the security are insufficient to pay off the loan. Deficiency judgments
are not allowed in all states.
Delinquency
A loan in which a payment is overdue but not yet in default. Department
of Veterans Affairs (VA)
An agency of the federal government that guarantees residential mortgages
made to eligible veterans of the military services. The guarantee protects
the lender against loss and thus encourages lenders to make mortgages
to veterans.
Deposit
A sum of money given to bind the sale of real estate, or a sum of money
given to ensure payment or an advance of funds in the processing of a
loan.
Depreciation
A decline in the value of property; the opposite of "appreciation."
Discount Points
See Points.
Documentary Stamps
A State tax, in the forms of stamps, required on deeds and mortgages when
real estate title passes from one owner to another. The amount of stamps
required varies with each State.
Dower
The rights of a widow in the property of her husband at his death.
Down Payment
The part of the purchase price, which the buyer pays in cash and does
not finance with a mortgage
Due-on-sale provision
A provision in a mortgage that allows the lender to demand repayment in
full if the borrower sells the property that serves as security for the
mortgage.
Due-on-transfer provision
This terminology is usually used for second mortgages.
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Earnest Money
The deposit money given to the seller or his agent by the potential buyer
upon the signing of the agreement of sale to show that he is serious about
buying the house. If the sale goes through, the earnest money is applied
against the down payment. If the sale does not go through, the earnest money
will be forfeited or lost unless the binder or offer to purchase expressly
provides that it is refundable.
Easement Rights
A right-of-way granted to a person or company authorizing access to or over
the owner's land. An electric company obtaining a right-of-way across private
property is a common example.
Effective age
An appraiser’s estimate of the physical condition of a building. The
actual age of a building may be shorter or longer than its effective age.
Effective gross income
Normal annual income including overtime that is regular or guaranteed. The
income may be from more than one source. Salary is generally the principal
source, but other income may qualify if it is significant and stable.
Eminent domain
The right of a government to take private property for public use upon payment
of its fair market value. Eminent domain is the basis for condemnation proceedings.
Employer-assisted housing
A special Fannie Mae housing initiative that offers several different ways
for employers to work with local lenders to develop plans to assist their
employees in purchasing homes.
Encroachment
An obstruction, building, or part of a building that intrudes beyond a legal
boundary onto neighboring private or public land, or a building extending
beyond the building line.
Encumbrance
A legal right or interest in land that affects a good or clear title, and
diminishes the land's value. It can take numerous forms, such as zoning
ordinances, easement rights, claims, mortgages, liens, charges, a pending
legal action, unpaid taxes, or restrictive covenants. An encumbrance does
not legally prevent transfer of the property to another. A title search
is all that is usually done to reveal the existence of such encumbrances,
and it is up to the buyer to determine whether he wants to purchase with
the encumbrance, or what can be done to remove it.
Endorser
A person who signs ownership interest over to another party. Contrast with
co-maker.
Equal Credit Opportunity Act (ECOA)
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 of income from public assistance
programs.
Equity
The difference between the market value of a property and the homeowner's
outstanding mortgage balance. Equity Loan
A loan based on the borrower's equity in his or her home. Prior to closing;
also, an account held by the lender into which a homeowner pays money
for taxes and insurance.
Escrow account
The account in which a mortgage servicer holds the borrower’s escrow
payments prior to paying property expenses.
Escrow analysis
The periodic examination of escrow accounts to determine if current monthly
deposits will provide sufficient funds to pay taxes, insurance, and other
bills when due.
Escrow collections
Funds collected by the servicer and set aside in an escrow account to
pay the borrower’s property taxes, mortgage insurance, and hazard
insurance. Escrow disbursements. The use of escrow funds to pay real estate
taxes, hazard insurance, mortgage insurance, and other property expenses
as they become due.
Escrow payment
The portion of a mortgagor’s monthly payment that is held by the
servicer to pay for taxes, hazard insurance, mortgage insurance, lease
payments, and other items as they become due. Estate. The ownership interest
of an individual in real property. The sum total of all the real property
and personal property owned by an individual at time of death.
Eviction
The lawful expulsion of an occupant from real property.
Examination of title
The report on the title of a property from the public records or an abstract
of the title.
Exclusive listing
A written contract that gives a licensed real estate agent the exclusive
right to sell a property for a specified time, but reserving the owner’s
right to sell the property alone without the payment of a commission.
Executor
A person named in a will to administer an estate.
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Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit
reports by consumer/credit reporting agencies and establishes procedures
for correcting mistakes on one's credit record.
Fair-market-value
The highest price that a buyer, willing but not compelled to buy would pay,
and the lowest a seller, willing but not compelled to sell, would accept.
FDIC
(Federal Deposit Insurance Corporation). Provides insurance of accounts
for institutions whose deposits were formerly covered by the Federal Savings
& Loan Insurance Corporation. (FSLIC).
Fee simple
The greatest possible interest a person can have in real estate.
Fee simple estate
An unconditional, unlimited estate of inheritance that represents the greatest
estate and most extensive interest in land that can be enjoyed. It is of
perpetual duration. When the real estate is in a condominium project, the
unit owner is the exclusive owner only of the air space within his or her
portion of the building (the unit) and is an owner in common with respect
to the land and other common portions of the property.
FHA
(Federal Housing Administration). A division of the Department of Housing
and Urban Development. The FHA's main activity is the insuring of residential
mortgage loans made by private lenders. It sets standards for construction
and underwriting. FHA neither lends money, nor plans, nor constructs housing.
FHA Loan
Government loans are loans that are guaranteed or purchased by government
organizations. Two of the most popular Government Loans are the Federal
Housing Administration (FHA) and the Department of Veterans Affairs (VA).
FHFB
(Federal Housing Finance Board). It oversees the credit functions of the
twelve regional Federal Home Loan Banks.
FHLBB
(Federal Home Loan Bank Board). A regulatory and supervisory agency for
federally charted savings institutions, which oversees the operations of
the FSLIC and FHLMC. This agency was abolished by the Financial Institutions
Reform, Recovery and Enforcement Act of 1989. (See FIRREA.)
FHLMC
(Federal Home Loan Mortgage Corporation, Freddie Mac). A private corporation
authorized by Congress, which became an independent, stockholder-owned government
corporation with the passage of FIRREA. FHLMC promotes the flow of funds
into the housing markets by purchasing conventional mortgages in the secondary
market and selling securities backed by those mortgages in the capital market.
Finance Charge
The total dollar amount your loan will cost you. It includes all interest
payments for the life of the loan, any interest paid at closing, your
origination fee and any other charges paid to the lender and/or broker.
Appraisal, credit report and title search fees are not included in the
finance charge calculation.
Finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage loan
for a prospective borrower.
FIRE
(Financial Institutions Reform, Recovery and Enforcement Act of 1989).
An act signed into law in August 1989, by President Bush that restructured
the thrift regulatory an insurance system.
Firm commitment
A lender’s agreement to make a loan to a specific borrower on a
specific property.
First Mortgage
The mortgage that has first claim in the event of default.
Fixed installment
The monthly payment due on a mortgage loan.
Fixed-Rate Mortgage
Fixed-Rate loans generally have repayment terms of 15, 20, or 30 years.
Both the interest rate and the monthly payments (for principal and interest)
stay the same during the life of the loan.
FNMA
(Federal National Mortgage Association, Fannie Mae). A government-sponsored
corporation, owned solely by private investors, created to provide support
to the secondary market for FHA and VA mortgages and conventional mortgages.
Fixture
Personal property that becomes real property when attached in a permanent
manner to real estate.
Flood insurance
Insurance that compensates for physical property damage resulting from
flooding. It is required for properties located in federally designated
flood areas.
Forfeiture
The loss of money, property, rights, or privileges due to a breach of
legal obligation.
Foreclosure
The process by which a mortgage property may be sold when a mortgage is
in default.
Fully amortized ARM
An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient
to amortize the remaining balance, at the interest accrual rate, over
the amortization term.
Full Recasting
Setting the P&I payments to the level that will fully amortize the
loan's outstanding balance over the remaining term using the fully indexed
accrual rate at the recasting point.
Fully Indexed Accrual Rate
The interest (accrual) rate resulting from the index at closing (or at
another point in the loan) plus the lender's full spread, rounded as prescribed
in the loan documents (often to the nearest 1/8th of 1%).
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General Warranty Deed
A deed which conveys not only all the grantor's interests in and title to
the property to the grantee, but also warrants that if the title is defective
or has a "cloud" on it (such as mortgage claims, tax liens, title
claims, judgments, or mechanic's liens against it) the grantee may hold
the grantor liable.
Good Faith Estimate
An estimate of charges, which a borrower is likely to incur in connection
with a loan closing.
Government Loans FHA / VA
Government loans are loans that are guaranteed or purchased by government
organizations. Two of the most popular Government Loans are the Federal
Housing Administration (FHA) and the Department of Veterans Affairs (VA).
Graduated Payment Mortgage
(GPM) A mortgage where the payments are scheduled to increase, usually
annually, for a set number of years, and then level off. GPM can be used
with either a fixed or adjustable interest rate, and usually has a 30-year
term.
Grantee
That party in the deed who is the buyer or recipient.
Grantor
That party in the deed who is the seller or giver.
Gross Monthly Income
The total amount the borrower earns per month, not counting any taxes
or expenses. Often used in calculations to determine whether a borrower
qualifies for a particular loan.
Growing Equity Mortgage
(GEM) A fixed rate, graduated payment mortgage with small initial payments
that increase each year so that the loan pays off in a shortened term,
usually 15 years.
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Hazard Insurance
Insurance to protect the homeowner and the lender against physical damage
to a property from fire, wind, vandalism, or other hazards.
Homeowner's Insurance
An insurance policy that combines liability coverage and hazard insurance.
Homeowner's Warranty
A type of insurance that covers repairs to specified parts of a house
for a specific period of time.
Housing Ratio
The ratio of the monthly housing payment to total gross monthly income.
Also called Payment-to-Income Ratio or Front-End Ratio.
HUD
(Department of Housing and Urban Development). A cabinet department responsible
for the implementation and administration of government housing and urban
development programs.
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Income property
Real estate developed or improved to produce income.
Index
(Also called "Rate Index"). A regularly published rate, independent
of the lending institution, that measures the prevailing cost of funds,
and is used periodically with the margin to set AML accrual rates. Initial
Borrower Interest Rate
The rate on which the borrower's first payment is calculated.
Initial Borrower Payment Rate
The annual interest rate used to calculate the borrower's initial cash
payment.
Inflation
An increase in the amount of money or credit available in relation to
the amount of goods or services available, which causes an increase in
the general price level of goods and services. Over time, inflation reduces
the purchasing power of a dollar, making it worth less.
Initial interest rate
The original interest rate of the mortgage at the time of closing.
Installment
The regular periodic payment that a borrower agrees to make to a lender.
Installment loan
Borrowed money that is repaid in equal payments, known as installments.
A furniture loan is often paid for as an installment loan.
Insurable title
A property title that a title insurance company agrees to insure against
defects and disputes.
Insurance
A contract that provides compensation for specific losses in exchange
for a periodic payment. An individual contract is known as an insurance
policy, and the periodic payment is known as an insurance premium.
Insurance binder
A document that states that insurance is temporarily in effect. Because
the coverage will expire by a specified date, a permanent policy must
be obtained before the expiration date.
Insured mortgage
A mortgage that is protected by the Federal Housing Administration (FHA)
or by private mortgage insurance (MI). If the borrower defaults on the
loan, the insurer must pay the lender the lesser of the loss incurred
or the insured amount
Interest
The fee charged for borrowing money.
Interest accrual rate
The percentage rate at which interest accrues on the mortgage. In most
cases, it is also the rate used to calculate the monthly payments, although
it is not used for an adjustable-rate mortgage (ARM) with payment change
limitations.
Interest Rate
The percentage of an amount of money, which is paid for its use for a
specified time.
Interest Rate Cap
A provision of an ARM limiting how much interest rates may increase per
adjustment period.
Interest rate ceiling
For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified
in the mortgage note.
Interest rate floor
For an adjustable-rate mortgage (ARM), the minimum interest rate, as specified
in the mortgage note.
Investment property
A property that is not occupied by the owner.
IRA (Individual Retirement Account)
A retirement account that allows individuals to make tax-deferred contributions
to a personal retirement fund. Individuals can place IRA funds in bank
accounts or in other forms of investment such as stocks, bonds, or mutual
funds.
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Judgment
A decision made by a court of law. In judgments that require the repayment
of a debt, the court may place a lien against the debtor's real property
as collateral for the judgment's creditor.
Judgment lien
A lien on the property of a debtor resulting from the decree of a court.
Judicial foreclosure
A type of foreclosure proceeding used in some states that is handled as
a civil lawsuit and conducted entirely under the auspices of a court.
Jumbo Loans
Jumbo, or non-conforming, is a term used to describe a loan that does
not conform to Fannie Mae or Freddie Mac guidelines. The typical Jumbo
loan exceeds the maximum loan amounts described above.
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Late charge
The penalty a borrower must pay when a payment is made a stated number of
days (usually 15) after the due date.
Lease
A written agreement between the property owner and a tenant that stipulates
the conditions under which the tenant may possess the real estate for a
specified period of time and rent.
Leasehold estate
A way of holding title to a property wherein the mortgagor does not actually
own the property but rather has a recorded long-term lease on it.
Legal description
A property description, recognized by law that is sufficient to locate and
identify the property without oral testimony.
Lender
An institution that makes loans to borrowers on real estate.
Liabilities
A person's financial obligations. Liabilities include long-term and short-term
debt, as well as any other amounts that are owed to others. Liability
insurance
Insurance coverage that offers protection against claims alleging that
a property owner's negligence or inappropriate action resulted in bodily
injury or property damage to another party.
Lien
A legal claim against a property that must be paid when the property is
sold.
Lifetime Cap
A provision of an ARM that limits the total increase in interest rates
over the life of the loan.
Lifetime payment cap
For an adjustable-rate mortgage (ARM), a limit on the amount that payments
can increase or decrease over the life of the mortgage.
Line of credit
An agreement by a commercial bank or other financial institution to extend
credit up to a certain amount for a certain time to a specified borrower.
Liquid asset
A cash asset or an asset that is easily converted into cash.
Loan
A sum of borrowed money (principal) that is generally repaid with interest.
Loan Commitment
Formal offer by a lender stating the terms under which it agrees to loan
money to a homebuyer.
Loan origination
The process by which a mortgage lender brings into existence a mortgage
secured by real property.
Loan origination fees
fees charged by the lender for processing the loan and are often expressed
as a percentage of the loan amount.
Loan Servicing
The collection of mortgage payments from borrowers and related responsibilities
of a loan servicer.
Loan -To-Value
(LTV). The loan-to-value ratio (LTV) is the original loan amount divided
by the lower of the sales price or the appraised value.
Lock
The period, expressed in days, during which a lender will guarantee a
rate.
Lock-in period
The time period during which the lender has guaranteed an interest rate
to a borrower.
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Marketable Title
A title that is free and clear of objectionable liens, clouds, or other
title defects. A title which enables an owner to sell his property freely
to others and which others will accept without objection.
Master association
A homeowners' association in a large condominium or planned unit development
(PUD) project that is made up of representatives from associations covering
specific areas within the project. In effect, it is a "second-level"
association that handles matters affecting the entire development, while
the "first-level" associations handle matters affecting their
particular portions of the project.
Maturity
The date on which the principal balance of a loan, bond, or other financial
instrument becomes due and payable.
Merged credit report
A credit report that contains information from three credit repositories.
When the report is created, the information is compared for duplicate entries.
Any duplicates are combined to provide a summary of a your credit.
Modification Margin
(Also called "Spread"). The amount the lender adds to the index
to determine the Fully Indexed Accrual Rate.
Money market account
A savings account that provides bank depositors with many of the advantages
of a money market fund. Certain regulatory restrictions apply to the withdrawal
of funds from a money market account.
Money market fund
A mutual fund that allows individuals to participate in managed investments
in short-term debt securities, such as certificates of deposit and Treasury
bills. Monthly Housing Expense
Total principal, interest, taxes, and insurance paid by the borrower on
a monthly basis. Used with gross income to determine affordability.
Monthly payment mortgage
A mortgage that requires payments to reduce the debt once a month.
Mortgage
A legal document that pledges a property to the lender as security for
a payment of a debt.
Mortgage Banker
A company that originates mortgages exclusively for resale in the secondary
market.
Mortgage Broker
A company that for a fee matches borrowers with lenders.
Mortgage Insurance Premium
(MIP). The fee paid to FHA or a private insurer for mortgage insurance.
Mortgagee
The lender in a mortgage agreement.
Mortgage Commitment
A written notice from the bank or other lending institution saying it
will advance mortgage funds in a specified amount to enable a buyer to
purchase a house.
Mortgage Insurance Premium
The payment made by a borrower to the lender for transmittal to HUD to
help defray the cost of the FHA mortgage insurance program and to provide
a reserve fund to protect lenders against loss in insured mortgage transactions.
In FHA insured mortgages this represents an annual rate of one-half of
one percent paid by the mortgagor on a monthly basis.
Mortgage life insurance
A type of term life insurance often bought by mortgagors. The amount of
coverage decreases as the principal balance declines. In the event that
the borrower dies while the policy is in force, the debt is automatically
satisfied by insurance proceeds.
Mortgage Note
A written agreement to repay a loan. The agreement is secured by a mortgage,
serves as proof of indebtedness, and states the manner in which it shall
be paid. The note states the actual amount of the debt that the mortgage
secures and renders the mortgagor personally responsible for repayment.
Mortgagor
The borrower in a mortgage agreement.
Multidwelling units
Properties that provide separate housing units for more than one family,
although they secure only a single mortgage.
Multifamily mortgage
A residential mortgage on a dwelling that is designed to house more than
four families, such as a high-rise apartment complex.
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Negative Amortization
(Also called "Deferred Interest"). If the payments are too small
to cover the interest due on a loan, the remaining interest owed is added
to the outstanding loan balance, causing negative amortization.
Net cash flow
The income that remains for an investment property after the monthly operating
income is reduced by the monthly housing expense, which includes principal,
interest, taxes, and insurance (PITI) for the mortgage, homeowners' association
dues, leasehold payments, and subordinate financing payments.
Net Effective Income
Gross income less federal income tax.
Negative amortization
A gradual increase in mortgage debt that occurs when the monthly payment
is not large enough to cover the entire principal and interest due. The
amount of the shortfall is added to the remaining balance to create "negative"
amortization.
Net Worth
The value of all assets, including cash, less total liabilities.
No cash-out refinance
A refinance transaction in which the new mortgage amount is limited to
the sum of the remaining balance of the existing first mortgage, closing
costs (including prepaid items), points, the amount required to satisfy
any mortgage liens that are more than one year old (if the borrower chooses
to satisfy them), and other funds for the borrower's use (as long as the
amount does not exceed 1 percent of the principal amount of the new mortgage).
Non-liquid asset
An asset that cannot easily be converted into cash.
Note
A legal document that obligates a borrower to repay a mortgage loan at
a stated interest rate during a specified period of time.
Note rate
The interest rate stated on a mortgage note.
Notice of Default
A formal written notice to a borrower that a default has occurred and
that legal action may be taken.
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Original principal balance
The total amount of principal owed on a mortgage before any payments are
made.
Origination Fee
A fee paid to a lender for processing a loan Application.
OTC
(The Office of Thrift Supervision). Charters federal thrifts, serves as
the primary federal examiner and regulator of federal and state-chartered
savings associations, and administers laws governing savings and loan
holding companies.
Owner financing
A property purchase transaction in which the property seller provides
all or part of the financing.
Owner Occupied
"Owner Occupied" means the property is the owner's primary residence.
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Payment Adjustment Period
The length of time (typically a year) between changes to the AML borrower's
P&I payment.
Payment Buy down
Payment buy downs occur when a third party, typically a builder, pays
part of the initial P&I payments for a year or two, so that the borrower
has smaller payments and can qualify for the loan.
Payment Cap
A limit on the amount the payment can be changed at the end of each Payment
Adjustment Period.
Payment Discount
In a payment discount, the lender reduces the first year's interest rate
to make the mortgagor more attractive to borrowers.
Periodic payment cap
A limit on the amount that payments can increase or decrease during any
one-adjustment period.
Periodic rate cap
A limit on the amount that the interest rate can increase or decrease
during any one adjustment period, regardless of how high or low the index
might be.
Personal property
Any property that is not real property.
PITI
Principal, Interest, Taxes and Insurance are components of a mortgage
payment.
Plat
A map or chart of a lot, subdivision or community drawn by a surveyor
showing boundary lines, buildings, improvements on the land, and easements.
Points
Points are fees paid to the lender for the loan. One point equals 1 percent
of the loan amount. Points are usually paid in cash at closing. In some
cases, the money needed to pay points can be borrowed, but doing so will
increase the loan amount and the total costs.
Power of attorney
A legal document that authorizes another person to act on one’s
behalf. A power of attorney can grant complete authority or can be limited
to certain acts and/or certain periods of time.
Prepayment
Payment of mortgage loan, or part of it, before due date.
Pre-qualification
The process of determining how much money a prospective homebuyer will
be eligible to borrow before application.
Prime rate
The interest rates that banks charge to their preferred customers.
Principal
The amount borrowed or remaining unpaid, also, that part of the monthly
payment that reduces the outstanding balance of a mortgage.
Private Mortgage Insurance
Private mortgage insurance (PMI) protects the lender against a loss if
a borrower defaults on the loan. It is usually required for loans in which
the down payment is less than 20 percent of the sales price or, in a refinancing,
when the amount financed is greater than 80 percent of the appraised value.
Promissory note
A written promise to repay a specified amount over a specified period
of time.
Public auction
A meeting in an announced public location to sell property to repay a
mortgage that is in default.
Planned Unit Development (PUD)
A project or subdivision that includes common property that is owned and
maintained by a homeowners' association for the benefit and use of the
individual PUD unit owners.
Purchase Agreement
See Agreement of Sale.
Purchase money transaction
The acquisition of property through the payment of money or its equivalent.
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Qualifying Ratios
Guidelines applied by lenders to determine how large a loan to grant a
homebuyer.
Quitclaim Deed
A deed, which transfers whatever interest, the maker of the deed may have
in the particular parcel of land. A quitclaim deed is often given to clear
the title when the grantor's interest in a property is questionable. By
accepting such a deed the buyer assumes all the risks. Such a deed makes
no warranties as to the title, but simply transfers to the buyer whatever
interest the grantor has.
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Radon
A radioactive gas found in some homes that in sufficient concentrations
could cause health problems.
Rate Caps
(Also called "Interest Rate Caps"). A limit on the amount of
which the interest rate charged to the borrower can be changed.
Rate lock
A commitment issued by a lender to a borrower or other mortgage originator
guaranteeing a specified interest rate for a specified period of time.
Real Estate Broker
A middleman or agent who buys and sells real estate for a company, firm,
or individual on a commission basis. The broker does not have title to
the property, but generally represents the owner.
Real Estate Owned
(REO). A term frequently used by lending institution as applied to ownership
of real property acquired for investment or as a result of foreclosure.
RESPA
(Real Estate Settlement Procedures Act). A Federal law that requires lenders
to provide home mortgage borrowers with information about known or estimated
settlement costs.
Real property
Land and appurtenances, including anything of a permanent nature such
as structures, trees, minerals, and the interest, benefits, and inherent
rights thereof.
REALTOR
A real estate broker or an associate who holds active membership in a
local real estate board that is affiliated with the National Association
of Realtors.
Recission
The cancellation or annulment of a transaction or contract by the operation
of a law or by mutual consent.
Recorder
The public official who keeps records of transactions that affects real
property in the area.
Recording
The noting in the registrar’s office of the details of a properly
executed legal document, such as a deed, a mortgage note, a satisfaction
of mortgage, or an extension of mortgage, thereby making it a part of
the public record. Refinancing
The process of the same mortgagor paying off one loan with the proceeds
from another loan.
Rehabilitation mortgage
A mortgage created to cover the costs of repairing, improving, and sometimes
acquiring an existing property.
Remaining balance
The amount of principal that has not yet been repaid.
Remaining term
The original amortization term minus the number of payments that have
been applied.
Repayment plan
An arrangement made to repay delinquent installments or advances. Lenders'
formal repayment plans are called "relief provisions."
Replacement reserve fund
A fund set aside for replacement of common property in a condominium,
PUD, or cooperative project -- particularly that which has a short life
expectancy, such as carpeting, furniture, etc.
Restrictive Covenants
Private restrictions limiting the use of real property. Restrictive covenants
are created by deed and may "run with the land," binding all
subsequent purchasers of the land, or may be "personal" and
binding only between the original seller and buyer. The determination
whether a covenant runs with the land or is personal is governed by the
language of the covenant, the intent of the parties, and the law in the
State where the land is situated. Restrictive covenants that run with
the land are encumbrances and may affect the value and marketability of
title.
Revolving liability
A credit arrangement, such as a credit card, that allows a customer to
borrow against a pre-approved line of credit when purchasing goods and
services. The borrower is billed for the amount that is actually borrowed
plus any interest due.
Right of first refusal
A provision in an agreement that requires the owner of a property to give
another party the first opportunity to purchase or lease the property
before he or she offers it for sale or lease to others.
Right of ingress or egress
The right to enter or leave designated premises.
Right of survivorship
In joint tenancy, the right of survivors to acquire the interest of a
deceased joint tenant.
RTC
(Resolution Trust Corporation). Formed to resolve thrift failures over
the next three years and dispose of their assets and liabilities.
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Sales Agreement
See Agreement of sale.
Second Mortgage
A mortgage that has rights that are subordinate to the rights of the first
mortgage holders.
Secondary Mortgage Market
The buying and selling of existing mortgages.
Seller-Provided Funds
(Also called "Seller Contributions"). Seller-provided funds
include all transaction cost paid by the seller except the real estate
agent's (or brokers) fee.
Servicer
The party who has entered into an agreement with the insured to service
a loan.
Settlement Costs
See Closing Costs.
Single Premium
A premium, which provides coverage for more than a year. empty)
Special Assessments
A special tax imposed on property, individual lots or all property in
the immediate area, for road construction, sidewalks, sewers, streetlights,
etc.
Special Lien
A lien that binds a specified piece of property, unlike a general lien,
which is levied against all one's assets. It creates a right to retain
something of value belonging to another person as compensation for labor,
material, or money expended in that person's behalf. In some localities
it is called "particular" lien or "specific" lien.
(See Lien.)
Special Warranty Deed
A deed in which the grantor conveys title to the grantee and agrees to
protect the grantee against title defects or claims asserted by the grantor
and those persons whose right to assert a claim against the title arose
during the period the grantor held title to the property. In a special
warranty deed the grantor guarantees to the grantee that he has done nothing
during the time he held title to the property which has, or which might
in the future, impair the grantee's title.
Survey
A map or plat made by a licensed surveyor showing the results of measuring
the land with its elevations, improvements, boundaries, and its relationship
to surrounding tracts of land. A survey is often required by the lender
to assure him that a building is actually sited on the land according
to its legal description.
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Tax
As applied to real estate, an enforced charge imposed on persons, property
or income, to be used to support the State. The governing body in turn
utilizes the funds in the best interest of the general public.
Tax Lien
A claim against real estate for the amount of its unpaid taxes.
Teaser Rate
Similar to a Payment Discount, but implies either an unusually large initial
rate discount or an attempt by the lender to lure an otherwise unqualified
borrower into the mortgage.
Tenancy by the entirety
A type of joint tenancy of property that provides right of survivorship
and is available only to a husband and wife. Contrast with tenancy in
common.
Tenancy in common
A type of joint tenancy in a property without right of survivorship. Contrast
with tenancy by the entirety and with joint tenancy.
Tenant-stockholder
The obligee for a cooperative share loan, who is both a stockholder in
a cooperative corporation and a tenant of the unit under a proprietary
lease or occupancy agreement.
Third-party origination
A process by which a lender uses another party to completely or partially
originate, process, underwrite, close, fund, or package the mortgages
it plans to deliver to the secondary mortgage market.
Title
As generally used, the rights of ownership and possession of particular
property. In real estate usage, title may refer to the instruments or
documents by which a right of ownership is established (title documents),
or it may refer to the ownership interest one has in the real estate.
Title Company
A company that specializes in examining and insuring titles to real estate.
Title Insurance
Protects lenders or homeowners against loss of their interest in property
due to legal defects in title. Title insurance may be issued to a "mortgagee's
title policy." Insurance benefits will be paid only to the "named
insured" in the title policy, so it is important that an owner purchase
an "owner's title policy", if he desires the protection of title
insurance.
Title Search or Examination
A check of the title records, generally at the local courthouse, to make
sure the buyer is purchasing a house from the legal owner and there are
no liens, overdue special assessments, or other claims or outstanding
restrictive covenants filed in the record, which would adversely affect
the marketability or value of title.
Total Debt Ratio
Monthly debt and housing payments divided by gross monthly income. Also
known as Back-End Ratio.
Total expense ratio
Total obligations as a percentage of gross monthly income. The total expense
ratio includes monthly housing expenses plus other monthly debts.
Trade equity
Equity that results from a property purchaser giving his or her existing
property (or an asset other than real estate) as trade as all or part
of the down payment for the property that is being purchased.
Transfer of ownership
Any means by which the ownership of a property changes hands. Lenders
consider all of the following situations to be a transfer of ownership:
the purchase of a property "subject to" the mortgage, the assumption
of the mortgage debt by the property purchaser, and any exchange of possession
of the property under a land sales contract or any other land trust device.
In cases in which an inter vivos revocable trust is the borrower, lenders
also consider any transfer of a beneficial interest in the trust to be
a transfer of ownership.
Transfer tax
State or local tax payable when title passes from one owner to another.
Treasury index
An index that is used to determine interest rate changes for certain adjustable-rate
mortgage (ARM) plans.
Trustee
A party who is given legal responsibility to hold property in the best
interest of or "for the benefit of" another. The trustee is
one placed in a position of responsibility for another, a responsibility
enforceable in a court of law.
Truth-In-Lending
(TIL). A federal law that requires lenders to fully disclose, in writing,
the terms and conditions of a mortgage, including the APR and other charges.
Two- to four-family property
A property that consists of a structure that provides living space (dwelling
units) for two to four families, although ownership of the structure is
evidenced by a single deed.
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Underwriting
The process of evaluating a loan application to determine the risk involved
for the lender. Underwriting involves an analysis of the borrower's creditworthiness
and the quality of the property itself.
Unsecured-loan
A loan that is not backed by collateral.
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Vested
Having the right to use a portion of a fund such as an individual retirement
fund.
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Wraparound mortgage
A mortgage that includes the remaining balance on an existing first mortgage
plus an additional amount requested by the mortgagor. Full payments on
both mortgages are made to the wraparound mortgagee, who then forwards
the payments on the first mortgage to the first mortgagee.
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Zoning Ordinances
The acts of an authorized local government establishing building codes,
and setting forth.
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