|
IMG's
Glossary of Real Estate Terms A B C D E F G H I J K L M N O P Q R S T U V W X Y Z ABSTRACT OF TITLE: A complete historical summary of all recorded documents affecting the title of a designated parcel of real estate. ACCELERATION CLAUSE: A provision in a mortgage or note providing that the entire principal balance shall become immediately due and payable in the event of default or other predetermined event. ACKNOWLEDGEMENT: A formal declaration by a person (notary) that a party did, in fact, sign a document voluntarily. ADJUSTABLE RATE MORTGAGE (ARM): A mortgage instrument in which the interest rate adjusts periodically according to a predetermined index and margin. AD VALOREM: Latin for "According to value." Real Estate taxes are known as Ad Valorem taxes. ADVERSE ACTION: under the Equal Credit Opportunity Act, adverse action occurs when a completed application is submitted to a lender and the credit request id denied or not approved for the amount or term requested by the applicant. AMORTIZATION (POSITIVE): Repayment of a debt in periodic installments of principal and interest resulting in payment in full at the end of the loan term. ANNUAL PERCENTAGE RATE (APR): Total finance charges - including interest, loan fees, points and other charges - expressed as a percentage of the total amount of the loan. Under the Federal Truth-In-Lending Act (Regulation "Z"), the APR must be disclosed to the borrower within 3 business days of receipt of a loan application. ANTI-COERCION STATEMENT: A state provision that prohibits a lender from requiring an applicant to obtain hazard insurance through a particular company. APPRAISAL: The act of preparing a report by a qualified appraiser setting forth an opinion or estimate of value. The most common type of appraisal for residential properties is the Comparable Sales Approach. Two other appraisal techniques are the Cost Approach and the Income Approach. An appraisal is usually ordered by the lender or the Mortgage Broker. APPRECIATION: An increase in property value caused by economic factors; the opposite of depreciation. ARREARS: Payment of an obligation at the end of the period for which it is due or levied; the opposite of payable in advance. Mortgage interest and real estate taxes are generally paid in arrears. ASSESSED VALUE: The value placed on property for the purpose of taxation. ASSESSMENT: A levy placed against property for a special purpose. ASSIGNEE: The party who receives an ownership interest in a mortgage. ASSIGNOR: The party who transfers an ownership interest in a mortgage. ASSIGNMENT OF MORTGAGE: A document that evidences a transfer of ownership of a mortgage from one investor to another. ASSUMPTION OF MORTGAGE: An agreement by a buyer to assume liability on an existing debt secured by a mortgage with its original terms left intact. An assumption of mortgage by a buyer does not automatically release the seller from liability on the accompanying note. BALANCE SHEET: A financial statement showing assets, liabilities, and the net worth as of a specific date. BALLOON MORTGAGE: A mortgage with periodic installments of principal and interest that do not fully amortize the loan. The balance of the mortgage is due in a lump sum at the end of the term. BANKRUPTCY: A condition of financial insolvency in which a person's liabilities exceed assets and the person is unable to pay current debts. Generally, a person must wait two years following the discharge of the bankruptcy to be eligible for a conventional or government backed mortgage loan. Bankruptcy is reported by most credit agencies for a period of ten years. BASIS POINTS: A unit of measurement used to describe yield. A basis point is 1/100 of 1%. Example: 100 basis points = 1%; 75 basis points = 3/4 %; 50 basis points = ½%. BINDER: A commitment to insure; a temporary report effective for a limited time until a permanent policy is issued. A binder lists all the known liens and defects affecting the title. BIWEEKLY MORTGAGE: A mortgage with payments due every two weeks totaling 26 payments a year thus reducing the cost of a 30-year mortgage to that of a 23-year mortgage. BLANKET MORTAGE: A mortgage lien securing several parcels of property, frequently used by developers who have purchased a single tract of land intending to subdivide into individual parcels. The developer normally requires a "partial release" clause so that individual parcels can be released from the blanker mortgage as they are sold. BRIDGE LOAN (SWING LOAN): Borrowing against the equity of one's present home to enable the purchase of another home before the existing one sells. BUY-DOWN: A cash payment to a lender to reduce the interest rate a borrower must pay. Buy-downs are usually temporary and help the borrower qualify at a lower rate. CERTIFICATE OF ELIGIBILITY: A document used by the Department of Veteran Affairs to certify a veteran's eligibility for a VA loan. CERTIFICATE OF REASONABLE VALUE (CRV): A VA appraisal. CHATTEL MORTGAGE: A mortgage on personal property. CLOSING: Final settlement between the buyer and seller; the date of which title passes from the seller to the buyer. CLOSING COSTS: Money paid by the borrower to affect the closing of a mortgage loan. This normally includes an origination fee, title insurance, survey, attorney's fees, and prepaid items such as taxes and insurance escrow payments. CLOSING STATEMENT: A financial disclosure accounting for all funds received and expected at settlement. The HUD-1 settlement statement shows how costs are allocated between the buyer and the seller. The HUD-1 is not required if the buyer has no closing costs. CLOUD ON TITLE: Any condition that adversely affects the title of real estate or curtails an owner's rights. COMMITMENT: A written promise to make or insure a loan for a specified amount on specified terms. CONFORMING LOAN: A mortgage loan in compliance with the underwriting criteria of "Fannie Mae" and "Freddie Mac". CONSTRUCTION LOAN: A short-term loan where the proceeds are used to finance the actual construction of a dwelling. The loan is typically made in partial disbursements called "draws" as construction progresses. CONSTRUCTION/PERMANENT LOAN: A loan where the proceeds are used to finance the actual construction of a dwelling. The loan is typically made in partial disbursements called "draws" as construction progresses. CONSTRUCTIVE NOTICE: The recording of a document or an instrument in the public records in the county where a property is located that is designed to give adequate notice to everyone. CONTINGENCY: Something that requires completion of a certain act or the happening of a particular event. Example: financing "contingency" in a real estate contract. CONTRACT FOR DEED (LAND CONTRACT, AGREEMENT FOR DEED, INSTALLMENT SALES CONTRACT): A method of selling and financing property whereby the buyer obtains possession but the seller retains the legal title. CONVENTIONAL MORTGAGE: A private mortgage loan neither government insured (FHA) nor government guaranteed (VA). CONVEYANCE: The transfer of the title to land from one person or class of persons to anther. COVENANT: A legally enforceable promise or restriction in a mortgage or deed. CREDIT REPORT: A report of an individual's credit history prepared by a credit bureau and used by the lender in determining a loan applicant's credit worthiness. CREDIT SCORING: A numerical measurement that reflects the ability of a borrower to manage credit. DEBT SERVICE: The periodic payment of principal and interest as specified in a promissory note. DEED: A written document that transfers an ownership interest in real property from a seller (grantor) to a buyer (grantee). DEED IN LIEU OF FORECLOSURE: A deed given by a mortgagor to a mortgagee to satisfy a debt and avoid foreclosure. DEED OF TRUST: An instrument used in some states in place of a mortgage. The borrower conveys legal title to a trustee who holds the title as collateral for the benefit of a lender and subsequently re-conveys the title to the borrower upon payment of the debt. DEED RESTRICTION: A limitation placed in a deed limiting or restricting the use of real property. DEFAULT: Breach or non-performance of a clause in a note or mortgage which, if not cured, could lead to foreclosure. DEFEASANCE CLAUSE: Upon payment in full to the lender, this clause in a mortgage requires the lender to "give back" his security interest in the property and issue to the borrower a recordable Satisfaction of Mortgage. This clause also prohibits the lender from foreclosing as long as the borrower complies with all the terms and conditions of the mortgage. DEFICIENCY JUDGEMENT: A personal judgment levied against the borrower for the balance of the mortgage debt when a foreclosure sale fails to generate funds sufficient to satisfy the debt. DEPRECIATION: A loss of value in real estate brought about by age, physical deterioration, functional or economic obsolescence. Broadly, a loss in value from any cause; the opposite of appreciation. DESKTOP UNDERWRITER: Fannie Mae's automated underwriting system designed to enable mortgage lenders to process loan applications efficiently and objectively. DIRECT ENDORSEMENT PROGRAM: Authorization provided to an approved lender to originate and underwrite FHA insured loans without obtaining approval from the FHA FHA prior to funding the loan. DISCOUNT: The sale of a note for less than its face value. The purpose of a discount is to adjust the annual yield on the note. DISCOUNT POINT: One percentage of the face amount of the loan. Discount points are a one-time charge assessed at closing by the lender to increase the yield to a competitive level. DISINTERMEDIATION: The flow of funds out of savings institutions into short-term investments in which interest rates may be higher. This shift normally results in a new decrease in the amount of funds available for long-term real estate financing. DOCUMENTARY STAMPS: A tax by the Florida Department of Revenue on deeds of conveyance and mortgage notes. DUE-ON-SALE (ALIENATION) CLAUSE: A form of acceleration clause that gives a lender the option to call a mortgage loan due upon the sale or transfer of the property. A mortgage with a Due-On-Sale clause is not assumable. EASEMENT: A right or interest in the land of another entitling the easement holder to a specific limited use, such as installing power and telephone lines, or crossing over the property. Ingress is the right to enter upon another's land, whereas egress is the ability to move about and exit unchallenged from that land. While size and location are important aspects of an easement, the age is immaterial. ENCROASHMENT: A physical intrusion upon the property of another. It is usually revealed by a survey. ENCUMBRANCE: Items that affect or limit the fee simple title such as mortgages, leases, easements, and restrictions. EQUAL CREDIT OPPORTUNITY ACT (ECOA): A federal law that deals with discrimination (Regulation "B"). EQUITY: The difference between a property's fair market value and the current indebtedness. ESCHEAT: The reversion of property to the state if the owner dies intestate and without heirs. ESCROW: Documents entrusted to a disinterested third party who assumes responsibility for disbursement of paperwork and funds. ESCROW IMPOUNDS: That portion of a mortgagor's monthly payment held by the lender to pay for real estate taxes, hazard insurance, and mortgage insurance, as the become due. ESTATE: The ownership interest of an individual in real property which is measured by its potential duration; the degree, quantity, nature, and extent of interest that a party has in real property. ESTOPPEL CERTIFICATE (LETTER): A written statement that bars the signer from making a claim that is inconsistent with that party's prior statement. An estoppel certificate verifies the loan balance and is sometimes referred to as a "payoff letter." EXCULPATORY CLAUSE: A provision in a mortgage or note in which the lender waives the right to a deficiency judgment against the borrower and the borrower is relived of personal liability to repay the loan. EXECUTE: To sign or to ratify a document. FAIR ISAAC & CO. (FICO): The developer of a credit scoring system used by many credit-reporting agencies. FARMERS HOME ADMINISTRATION (FMHA): A government agency that guarantees mortgages secured by a residential properties located in rural areas if the borrower's income is less that HUD's local median income for the area. FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA): A federal agency that provides assistance to victims of natural disasters. FEMA publishes Flood Insurance Rate Maps. FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC): A private corporation authorized by Congress in 1970 to provide secondary mortgage market support for conventional mortgages originated by Savings & Loan Associations. Commonly known as "Freddie Mac". Today, FHLMC is a publicly owned corporation. FEDERAL HOUSING ADMINISTRATION (FHA): A division of HUD. Its main activity is insuring residential mortgage loans made by private lenders. FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): A privately owned corporation created by Congress in 1938 to support the secondary mortgage market by purchasing and selling government underwritten residential mortgages. Today, FNMA purchases more conventional mortgages than FHA or VA and their stock is publicly traded. Commonly known as "Fannie Mae." FEDERAL TRADE COMMISSION (FTC): A federal agency that monitors advertising practices and investigates and prosecutes unfair and deceptive trade practices. FEE SIMPLE ABSOLUTE: The most complete ownership in land with indefinite duration, freely transferable, and inheritable. FIDUCIARY: A party in a position of trust and confidence for another. FIRST MORTGAGE: A mortgage having priority over all other voluntary liens against certain property, as evidenced by recording; the earliest recorded mortgage remaining unpaid. FIXED RATE MORTGAGE (FRM): A mortgage in which the interest rate and monthly payments remain constant over the life of the loan. FLOOD CERTIFICATION FEE: A fee paid to an independent third party to determine whether or not property improvements are located in a flood zone. FLOOD INSURANCE: Insurance subsidized by the federal government required for property improvements located in federally designated flood areas (A & V zones). FORBEARANCE: The act of refraining from taking legal action despite the fact that a mortgage is in default. FORECLOSURE: The legal procedure undertaken by a mortgagee for the purpose of having property sold and the proceeds applied to the payment of a defaulted debt. FUNDING: The disbursement of funds to complete a transaction that occurs when a lender provides money to close a loan, or an investor provides funds to the lender to purchase a mortgage loan. GNMA MORTGAGE-BACKED SECURITIES: Securities guaranteed by GNMA that are issued by mortgage bankers, commercial bankers, savings and loan associations, savings banks, and other institutions. The GNMA security holder is protected by the "full faith and credit of the U.S." GNMA securities are backed by FHA, VA, or FMHA mortgages. GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA): A government agency (Division of HUD) that administers the mortgage-backed securities program which channels new funds into residential financing through the sale of privately issued securities carrying a GNMA guarantee. Commonly known as "Ginnie Mae." GRADUATED PAYMENT MORTGAGE (GPM): A residential mortgage loan which has initial low monthly payments that increase gradually and then level off for the duration of the loan term. A GPM with an adjustable interest rate may result in initial negative amortization. GRANT: A generic term applicable to transfers of real property. GRANTEE: The party who receives a deed; the buyer. GRANTOR: The party who signs and gives a deed; the seller. HAZARD INSURANCE: A contract whereby an insurer, for a premium, undertakes to compensate the insured for a loss on a specific property due to fire, windstorm, and other natural hazards. HIGHEST AND BEST USE: A principle of value that focuses on the most profitable, legal use to which a property can be put. HOME EQUITY LINE OF CREDIT: A revolving line of credit against the equity in one's home allowing the homeowner to borrow as needed, up to a predetermined maximum amount. HOMEOWNERS PROTECTION ACT: A federal law requiring automatic cancellation of Private Mortgage Insurance (PMI) when the loan-to-value ratio is reduced to 78%. HOMESTEAD TAX EXEMPTION: The Florida Constitution allows a tax exemption from assessed property value. The standard homestead tax exemption is $25,000 for all qualifying homestead and is deducted from the assessed value when calculating taxable value. HOUSING AND URBAN DEVELOPMENT, DEPARTMENT OF (HUD): Established in 1965 to implement and administer government and urban development programs. The range of programs include, community planning, equal opportunity in housing and FHA mortgage loans. HYPOTECATE: To give a thing as security without the necessity of relinquishing title or possession. INDEX: An economic measurement of the cost of funds used as a base to determine the periodic interest rate adjustments for Adjustable Rate Mortgages. Common indexes include 1 year Treasury Bills, and both the 4th and 11 Federal Home Loan Bank District Cost of Funds. INSTITUTIONAL LENDER: A financial institution that invests in mortgages typically carried in its own portfolio, such as savings & loan associations, commercial banks, life insurance companies, and pension and trust funds. INTANGIBLE TAX: A state tax on certain items of intangible personal property such as mortgages. INTEREST: Consideration paid for the use of money, usually expressed as an annual percentage. INTERMEDIATION: The process whereby financial middlemen consolidate small savings accounts of individual depositors and invest those funds in large, stable, diversified projects; the opposite of disinter mediation. JUDGEMENT LIEN: A lien placed on property involuntarily as a result of a court action. JUNIOR MORTGAGE: Any lien subsequent to the claims of the holder of a prior senior mortgage as evidenced by the time and date of recording. L LEGAL DESCRIPTION: A property description sufficient to locate and identify the property. Legal descriptions are found on all loan applications, appraisals, real estate contracts, mortgages, surveys, and deeds. LEVERAGE: The use of borrowed funds to finance the purchase of an asset; the use of another's money to make more money. LIEN: A legal hold or claim of one person on the property of another as security for a debt or charge. A mortgage is a voluntary lien. LIEN THEORY: A concept followed in several states, including Florida, providing that a mortgage represents a lien on the property with the mortgagor retaining legal title. LIS PENDEDS: A notice recorded in the official records of a county to indicate there is a pending suit affecting property in that jurisdiction; notice of intent to file foreclosure proceeding or to place a lien on the property. LOAN: A sum of money provided by a lender to be repaid with or without interest. LOAN CLOSING: The process of formulating, executing, and delivering all documents required by a permanent investor, the disbursement of the mortgage funds, and providing for the protection of the investor's security. LOAN PROCESSING: The assembling of a mortgage loan application and related documents for consideration for the purpose of making a mortgage loan. LOAN SUBMISSION: Documentation delivered to a prospective lender for review and consideration for the purpose of making a mortgage loan. LOAN-TO-VALUE RATIO (LTV): The relationship between the mortgage amount and the appraised value (or sales price if lower) of the security property, and expressed as a percent. LOSS PAYABLE CLAUSE: A clause in an insurance policy listing the priority of claims in the even of damage to the insured property. A mortgagee is generally the party appearing in the clause being paid the amount owed under the mortgage before the owner is paid. MARGIN: The number of basis points a lender adds to the index to determine the interest rate for an Adjustable Rate Mortgage. MECHANIC'S LIEN: A lien placed against property by unpaid workmen or material suppliers. METES AND BOUDNDS: The most accurate method of land description; "metes" means measurements and "bounds" means boundaries. MILL: The measure used to express a real estate property tax rate; One-tenth of one percent. MORTGAGE: A pledge of real property given as security for the payment of a debt. Most mortgages mature in more than one year and are considered capital market instruments. MORTGAGE-BACKED SECURITIES (MBS): Bond-type instruments representing an undivided interest in a pool of mortgages. MORTGAGE BROKER: A licensee who brings a borrower and lender together and receives a fee for services performed. MORTGAGE INSURANCE PREMIUMS (MIPs): Fees paid by FHA borrowers to obtain a loan (upfront and annual). MORTGAGE PORTFOLIO:
The aggregate of mortgage loans held by an investor, or serviced
by a mortgage lender. MORTGAGOR: The party in a mortgage transaction who gives the mortgage as security for the debt; the borrower. MORTGAGE INSURANCE: An insurance policy to protect a lender against loss caused by a borrower's default. N
NET WORTH: The value of all assets less total liabilities. NON-CONFORMING LOAN: A conventional mortgage loan that does not comply with the underwriting criteria established by "Fannie Mae" and "Freddie Mac." NOTE (PROMISSORY): A written promise to pay a sum of money at a stated interest rate during a specified term; sometimes referred to as a "mortgage note." NOTE ENDORSED WITH RECOURSE: A mortgage note assigned in the secondary market with the right of the new note holder (assignee) to seek payment from the endorser (assignor); not limiting recovery solely from the property. NOTE ENDORSED WITH NON-RECOURSE: A mortgage note assigned in the secondary market without the right of the new note holder (assignee) to seek payment from the endorser (assignor); not limiting recovery solely from the property. NOVATION: A mortgagee's or current note holder's willingness to permit substitution of a new debtor (buyer) and release a former debtor (seller) from liability on a note. OBSOLESENCE: The loss in value of a property occasioned by outdated styling and lack of modern functional requirements. OFFICE OF COMPTROLLER OF THE CURRENCY (OCC/COC): The federal agency that oversees nationally chartered commercial banks. OFFICE OF THRIFT SUPERVISION (OTS): The federal agency responsible for regulating Savings and Loan Associations. OPEN-END CLAUSE: Permits the mortgagor to re-borrow funds which had been previously repaid, up to the original face amount of the loan, upon agreement of both lender and borrower; a clause allowing future advances. ORIGINATION FEE: The fee for the work involved in the evaluation, preparation, and submission of a proposed mortgage loan from individual borrowers. PACKAGE MORTGAGE: A mortgage which includes personal property (chattel) together with the real property. PAR: The face amount of a mortgage or charge with no premium or discount. PARTICIPATION LOAN: A mortgage originated with funds provided by multiple lenders each being a participant in the total amount loaned. PERSONAL PROPERTY: Any property that is not real property. PONT OF BEGINNING (POB): The starting and ending place in a land survey using the metes and bounds method of property description. PREPAYMENT PENALTY CLAUSE: A provision in a mortgage that requires the borrower to pay a monetary penalty if the mortgage payments are made in advance of the normal due date or if the mortgage payments are made in advance of the normal due date or if the mortgage is paid in full ahead of schedule. PREPAYMENT PRIVELEGE CLAUSE: The right given a borrower to pay all or part of a debt prior to maturity without penalty. A penalty is not permitted on any government-underwritten loan. PRIMARY MORTGAGE MARKET: The market where loans are funded by institutions or investors directly to borrowers. PRINCIPAL: The amount of debt, not including interest; the outstanding balance of a loan. PRIVATE MORTGAGE INSURANCE (PMI): Insurance provided by a private company protecting conventional mortgage lenders against loss resulting from a mortgagor's default. PROFIT AND LOSS STATEMENT: The schedule of income and expenses reflecting a net profit or loss during a specified period of time; also know as an Operating Statement or Income Statement. PURCHASE MONEY MORTGAGE (PMM): A mortgage given (in lieu of cash) by the purchaser of real property to the seller as part of the consideration in the sales transaction; often considered "seller financing." PURCHASE MONEY TRANSACTION: A real estate transaction for the acquisition of a real parcel of real estate by a buyer. QUITCLAIM DEED: A deed transferring (with no warranty) the interest or right the grantor may have at that time; a release. REAL ESTATE SALES CONTRACT: A written agreement whereupon a seller commits to sell and a buyer commits to purchase certain real estate. Provisions include; price, terms, financing, down payment, and responsibility for property settlement expenses. Most contracts provide for buyer or seller to cancel the contract and permit return of buyer's deposit if diligent efforts to meet financing contingencies have been unsuccessful. REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA): A federal law requiring that all closing costs be disclosed on a Good Faith Estimate within 3 business days, use of a HUD-1 Settlement Statement, requires lenders disclose the likelihood that the servicing right may be transferred and limits the amount held in escrow to pay for taxes and insurance. REAL PROPERTY: Land, appurtenances, structures, minerals, and all the right, interests, and benefits inherent therein. RECORDING: Providing constructive notice with the clerk of the circuit court of details of a properly executed legal document, such as a deed, mortgage, or satisfaction of mortgage. RELEASE (PARTIAL RELEASE) CLAUSE: A clause in a blanker mortgage allowing for release of certain individual parcels upon payment of a specified amount. REVERSE MORTGAGE: A mortgage in which a lender may make scheduled monthly payments to the borrower using mortgage-free property as collateral. RIGHT OF REDEMPTION (EQUITABLE RIGHT OF REDEMPTION): The right to redeem property during the foreclosure period by paying the amount owed, including fees and interest. SATISFACTION OF MORTGAGE: A recordable instrument provided by the lender evidencing payment in full of the mortgage debt. SECONDARY MORTGAGE MARKET: The market where existing mortgages are bough and sold. It contrasts with the primary mortgage market, where mortgage are originated. SECURITY INTEREST: An interest that a lender takes in the borrower's property to assure repayment of a debt. SERVICING: The
collection for an investor of periodic payments of principal, interest,
and trust items (hazard insurance and taxes) in accordance with
the terms of the note and mortgage. SETBACK: Restrictions established in a deed or by zoning on the space required between lot lines on its behalf. SHARED APPRECIATION MORTGAGE (SAM): A mortgage in which a lender charges a below-market interest rate in exchange for a share of the property's appreciation upon the sale or maturity of the loan. SIMULTANEOUS ISSUE: The act of a title insurance company providing both an owner's title policy and mortgagee's title policy at the same time. STAND-BY COMMITMENT: A commitment to purchase a loan whereby both parties understand that delivery is not likely unless circumstances warrant. STAND-BY FEE: The fee charged by an investor for a stand-by commitment. The fee is earned upon issuance and acceptance of the commitment. STATUTE OF FRAUDS: A state law requiring certain contracts relating to real property be in writing and signed in order to be legally enforceable. STATUTE OF LIMITATIONS: A law limiting the time period during which a legal action may be commenced. SUBJECT TO THE MORTGAGE: A purchaser acquires property with an existing mortgage, upon which purchaser makes payments but does not take personal liability for the promissory note. SUBORDINATION: Voluntary acceptance of a lower mortgage priority than one would otherwise be entitled to have in that property. A subordinated mortgage is inferior to a senior mortgage. SUBSTITUTION, PRINCIPLE OF: An economic concept of value; no rational buyer would pay more for a property than the cost of an equally desirable comparable property. SURVEY: The procedure used to measure and describe a specific tract of land for the purpose of determining exact boundaries and the area contained therein. SWEAT EQUITY: An applicant's contribution to the construction or improvement of a property in the form of a labor or services provided, in lieu of cash for part of the down payment or other costs. TABLE FUNDING:
A financing technique that occurs when a correspondent lender or
lender closes a mortgage loan with funds belonging to an acquiring
investor and immediately assigns the loan to that investor. TAXABLE VALUE: The assessed value less allowable exemptions resulting in an amount to which the millage rate is applied to determine property taxes due. TENANCY IN THE ENTIRETIES: The ownership of property by a husband and wife that provides for the automatic right of survivorship to the surviving spouse. TERM MORTGAGE: A mortgage wherein only interest is periodically paid, with the entire principal amount due in one lump sum upon maturity. TITLE: The evidence of the right to ownership of property. TITLE INSURANCE POLICY: A contract by which the insurer agrees to pay the insured a specific amount for any loss resulting from certain defects in the title to real estate. TITLE SEARCH: An analysis of the abstract of title on a specific piece of property in order to determine the present condition of title. TITLE THEORY: A concept used in some states providing that the mortgagee holds legal title to the property, as opposed to holding a lien against the property. TRUTH-IN-LENDING ACT (REGULATION "Z"): A federal regulation requiring disclosure of the APR, certain finance charges, the 3-day right of rescission when refinancing a primary residence, and certain additional disclosure when advertising financing terms. UNDERWRITING: The analysis of information relating to risk and making a decision whether or not to accept that risk. The underwriter evaluates the borrower's ability and willingness to repay the obligation and establishes that the property represents adequate security for the debt. UNENCUMBERED PROPERTY: A property the title to which is free and clear. USURY: Charging more the use of money than allowed by law. V WAREHOUSING: A revolving line of credit with a commercial bank secured by the pledge of first mortgages on residential property; the accumulation and holding of mortgage loans pending sale to an investor or other provider of financing. WDO INSPECTION REPORT: A report from a certified pest control inspector determining the presence or absence of visible, active, termite infestation, or any visible evidence of structural damage exists. WHOLE LOAN: Total ownership of a loan, as opposed to multiple lenders participating in the ownership of a single loan. WRAPAROUND MORTGAGE: A junior mortgage which secures a debt that includes the balance due on an existing senior mortgage plus an additional amount due to the wraparound mortgageee. The wraparound mortgagee thereafter receives all payments and then remits the payments on the senior mortgage. YIELD: The return on an investment stated as a percentage of the equity invested.
|
