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96 Cards in this Set
- Front
- Back
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Conforming loan |
A loan that meets the qualifying standards set by Fannie Mae and Freddie Mac |
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Loan with a constant interest rate remaining for the duration of the loan |
Fixed Rate Loan |
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When points are paid to a lender to reduce the interest rate and loan payments for the entire life of the loan |
Permanent Buydown |
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When points are paid to a lender to reduce the interest rate and payments early in a loan, with interest rate and payments rising later |
Temporary buy down |
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A measure of price changes in a “market basket” of consumer goods and services used to identify periods inflation or deflation |
Consumer Price Index (CPI) |
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A mortgage loan insured by the FHA that protects a lender against losses from default |
FHA-Insured Loan |
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Loan not insured or guaranteed by a gov entity |
Conventional Loan |
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Property zoned and used for business purposes, such as warehouses, restaurants, and office buildings |
Commercial Property |
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Market in which securities are bought and sold subsequent to their being sold to the public for the first time |
Secondary market |
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A deed in which the grantor warrants title against defects that might have arisen before or during his or her period of ownership |
General Warranty Deed |
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Construction only loan would just provide financing for the construction of the home. Once the home is completed, a mortgage for the permanent financing would have to be obtained |
Construction-only Loan |
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Clause used to defeat or cancel a certain right upon the happening of a specific event |
Defeasance Clause |
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Deed that converts any interest in a piece of real property the grantor has at the time the deed is executed. This type of deed is often used to clear up a cloud on the title |
Quitclaim Deed |
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Contract is terminated and both parties return anything acquired under it |
Rescission |
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When existing loan on a property is retained , while the lender (or seller) gives the buyer another, larger loan |
Wraparound Mortgage |
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When one party takes over the responsibility for the loan of another party and the terms of the loan or note remain unchanged |
Assumption |
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Personal Property |
Chattel |
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Binding, legally enforceable contract |
Valid contract |
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Agency of the federal gov that oversees many federal housing programs |
Housing and Urban Development (HUD) |
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Increase in an assets value |
Appreciation |
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Any significant increase in monthly liability that heightens the risk of a loan default |
Payment Shock |
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Loan program through the U.S. Department of Agriculture that either guarantees loans made by the approved private lenders or makes direct loans if no local lender is available |
Section 502 Loan |
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Mortgage loan made by lenders to eligible veterans that is guaranteed by the U.S. Department of Veteran Affairs |
VA-Guaranteed Loan |
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Loan is taken out on property already owned, and the loan amount is above and beyond the cost of transaction, payoff of existing liens, and related expenses |
Cash-Out Refinancing |
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Loan exceeds the maximum loan amount that Fannie Mae and Freddie Mac will buy, making it nonconforming |
Jumbo Loan |
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Cost of consumer credit as a dollar amount |
Finance Charge |
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Loan where the APR of a mortgage loan exceeds the average prime offer rate by 1.5% for conventional first lien mortgage, 2.5% for a “jumbo” loan or 3.5% for a subordinate-lien mortgage |
Higher-Priced Loan |
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Loan in which, in the event of default, the lender can take action against the borrower personally in addition to foreclosing on the property |
Recourse Loan |
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Loans APR exceeds Average prime offer rate by 6.5 percentage points most first lien mortgages. 8.5 percentage points for subordinate lien mortgages; where loans points and fees exceed 5 percent of the total transaction amount |
High-Cost Loan |
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A personal judgment against a borrower if the lender/creditor does not receive the amount of the lien plus the costs associated with foreclosure at a foreclosure cycle |
Deficiency Judgement |
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Method of loan repayment in which the balance of the outstanding loan is not zero at maturity, and thus a ballon payment is due at that time |
Partially Amortized Mortgage |
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A written, legally binding promise to repay debt. Also called a Promissory Note |
Note |
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Financial debt that is paid off over a period of time by a series of periodic payments. A loan can be fully amortized or partially amortized requiring a balloon payment to satisfy the debt at the end of the term |
Amortized Loan |
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Process of a second lien holder moving back into second position in a refinance |
Subordination |
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A clause in the contract that states the agreement is contingent on the buyer obtaining approval for a mortgage loan |
Mortgage Contingency |
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A written Agreement between lien holders on a property that changes the priority of mortgages, judgements, and other liens |
Subordination Agreement |
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Expense items on a settlement statement the seller has already paid in advance, usually at the beginning of the month for the rest of the month, or at the beginning of the year for the rest of the year or longer |
Prepaid Expenses |
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A written Agreement between lien holders on a property that changes the priority of mortgages, judgements, and other liens |
Subordination Agreement |
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When the lender agrees to temporarily reduce, postpone, or suspend the mortgage payment and not proceed with foreclosure as long as the borrower brings the loan current within the specified time |
Forbearance Agreement |
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Effect when a loan balance grows because of a deferred interest when payments are not covering the interest portion of the loan |
Negative Amortization |
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Method of loan repayment in which the dollar amount of each payment is the same. A portion of each payment is applied to interest and the remainder reduces the principal. Over the life of the loan the outstanding balance is reduced to zero |
Fully Amortized Mortgage |
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Loan programs from the U.S. Department of Agriculture; guarantees loans or makes direst loans for the purchase of an existing home, construction of a new home, renovations or repairs, relocation of a home, or the purchase of a site for a home |
USDA Rural Development |
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An encumbrance that is second priority to a previously recorded lien or to a lien which the encumbrance has been subordinated |
Junior Lien |
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Loan programs from the U.S. Department of Agriculture; guarantees loans or makes direst loans for the purchase of an existing home, construction of a new home, renovations or repairs, relocation of a home, or the purchase of a site for a home |
USDA Rural Development |
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An encumbrance that is second priority to a previously recorded lien or to a lien which the encumbrance has been subordinated |
Junior Lien |
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An electronic system that puts lenders in direct contact with Freddie Mac, providing a streamlined process of document submission, underwriting, and loan approval |
Loan Advisor |
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Loan programs from the U.S. Department of Agriculture; guarantees loans or makes direst loans for the purchase of an existing home, construction of a new home, renovations or repairs, relocation of a home, or the purchase of a site for a home |
USDA Rural Development |
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An encumbrance that is second priority to a previously recorded lien or to a lien which the encumbrance has been subordinated |
Junior Lien |
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An electronic system that puts lenders in direct contact with Freddie Mac, providing a streamlined process of document submission, underwriting, and loan approval |
Loan Advisor |
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Interest rate a lender will charge a borrower without adjustments to lender credits or discount points |
Par rate |
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A non-amortized loan in which the regular payments cover only the interest over the term of the loan. Also called Bullet Loan or Term Mortgage |
Straight Loan |
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Loan that does not meet Fannie Mae/Freddie Mac standard and, this cannot be sold on the secondary market |
Nonconforming loan |
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Final payment at the end of a loan term to pay off the entire remaining balance of principal and interest not covered by payments during the loan term |
Balloon Payment |
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Physical object intruding onto neighboring property, often due to a mistake regarding the boundary |
Encroachment |
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An instrument that is evidence of a promise to pay a specific debt |
Promissory Note |
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The difference between money made from an investment and the money actually invested |
Profit |
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A seller; particularly, someone selling property by means of a land contract |
Vendor |
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The difference between money made from an investment and the money actually invested |
Profit |
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A seller; particularly, someone selling property by means of a land contract |
Vendor |
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When a homeowner age 62 or over, with little or no outstanding liens, mortgages his or her home to a lender and, in return, receives a monthly check. |
Reverse mortgage |
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Dollar loan amount of a loan guarantee to which an eligible veteran is entitled. See VA entitlement |
Entitlement |
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Governments plan for spending, taxation and debt management |
Fiscal Policy |
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Governments plan for spending, taxation and debt management |
Fiscal Policy |
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State-charted banks, located mostly in the northeastern U.S., owned by depositors and operated for their benefit. Usually, a large portion of their assets are mortgages |
Mutual Savings Banks |
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Interval at which the borrowers actual interest rate changes with an ARM. Most often 1 year |
Rate Adjustment |
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Interest rate stated in a note. Also called Nominal Rate |
Note Rate |
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Interest rate stated in a note. Also called Coupon Rate or Note Rate |
Nominal Rate |
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Loan used to pay off a construction loan when construction is complete |
Takeout Loan |
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When additional funds in the form of points are paid to a lender at the beginning of a loan to lower the interest rate and monthly payments on the loan |
Buydown |
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Legal term for attaching or affixing persona property to real property |
Annexation |
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A limit on the amount of mortgage payment increase that can occur with an adjustable-rate mortgage. Also called: Mortgage Payment Cap |
Payment Cap |
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A right to use some party of another persons real property for a particular purpose. |
Easement |
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Standard FHA-insured loan program. There are no income limits on this type of loan. The borrower must meet all FHA qualifying standards and the property cost must not exceed the maximum FHA mortgage amounts. Also called the Standard FHA Loan Program |
Section 203(b) FHA Loan |
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An instrument that conveys ownership of real property from the grantor to the grantee |
Deed |
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Interval at which a borrowers actual mortgage payments change with an ARM |
Payment Adjustment Period |
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Act of pooling mortgages, then selling them as mortgage-backed securities |
Securitization |
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The loss of deposits to competing investments that offer higher returns |
Disintermediation |
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A written document used in the borrowing or lending of money. The most common type is the promissory note |
Finance instrument |
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1. Loss in property value for any reason 2. For taxes, the expensing of the cost of business or investment property over a set number of years, determined by the IRS to be an assets useful life |
Depreciation |
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Amount of income a borrower has left after subtracting taxes, housing expense, and all recurring debts and obligations |
Residual income |
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5,000+ commercial banks across the U.S. that are subject to the rules and policies implemented by the Fed |
Member Banks |
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A business owned and managed by one person( or tax purposes, a husband and wife). |
Sole proprietorship |
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Ability to freely sell, buy, encumber, or dispose of property in any way the owner sees fit |
Transferability |
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1. Mortgage that covers more than one parcel of real estate. 2. Mortgage that covers an entire building or development, rather than an individual unit or lot |
Blanket Mortgage |
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Criteria an underwriter uses to determine if a borrower or property qualifies for a loan |
Underwriting Standards |
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In some states, property is owned jointly jointly by a married couple. Only Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington have this property system laws |
Community Property |
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Criteria used to evaluate the quality and durability of a borrowers source of income, in conjunction with an assessment of the borrowers housing expense ratio and total debt service ratio |
Income Qualifying Standards |
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Amount of goods or services offered in the marketplace in exchange for something |
Value |
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Situation in the housing market where the sellers can choose from a large number of buyers looking for houses in an area |
Sellers market |
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A situation in the housing market where buyers have a large selection of properties to choose from |
Buyers market |
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Difference between the stated amount of an obligation and the amount paid |
Discount |
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A contract clause that gives the lender the right to declare the entire loan amount due immediately because of the borrowers default, or other reasons as stated in the contract |
Acceleration clause |
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Filing a document at the county recorders office, so that it will be placed in the public record |
Recording |
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A person who grants another person (an agent) authority to represent him or her in dealings with third parties |
Principal |
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Lowest interest rate that banks charge their best commercial customers |
Prime Rate |
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Compensation paid to someone in lieu of, or in addition to, refusal salary |
Commissions |
