Important Study Glossary Terms

Front 1

Adjustable Rate Mortgage (ARM)

Back 1

A mortgage instrument in which the interest rate adjusts periodically according to a predetermined index and margin.

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Annual Percentage Rate (APR)

Back 2

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), must be disclosed to the borrower within 3 business days of receipt of a loan application.

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Assignee

Back 3

The party who receives an onwership interest in a mortgage.

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Assignor

Back 4

The party who transfers an onwership interest in a mortgage.

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Bankruptcy

Back 5

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 4 years following discharge to be eligible for a mortgage loan.

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Certificate of Eligibility

Back 6

A document used by the Department of Veteran's Affairs(DVA) to certify a veteran's eligibility for a VA loan.

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Conforming Loan

Back 7

A mortgage loan in compliance with the underwriting criteria and current loan limits of "Fannie Mae" and "Freddie Mac".

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Constructive Notice

Back 8

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.

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Conventional Mortgage

Back 9

A private mortgage loan neither government insured (FHA) nor government guaranteed (VA). "Frannie Mae and Freddie Mac".

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Debt Service

Back 10

The perodic payment of principal and interest as specified in a promissory note.

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Default

Back 11

Breach or non-performance of a clause in a note or mortgage which, if not cured, could lead to foreclosure.

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Discount Point

Back 12

One percent of the face amount of the loan. Are a one-time charge assessed at closing by the lender to increase the lender's yield to a competitive level.

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Documentary Stamps

Back 13

A tax by the Florida Department of Revenue on deeds of conveyance and mortgage notes.

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Fair Isaac & Co. (FICO)

Back 14

The developer of a credict scoring system used by many credit reporting agencies.

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Federal Housing Administration (FHA)

Back 15

A division of HUD. Its main activity is insuring residential mortgage loans made by private lenders.

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FICO Score

Back 16

A credit score developed by Fair Isaac & Co. Credit. A method of determining the likelihood that credit users will pay their bills. Scorig has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrower's credit history into a single number.

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First Mortgage

Back 17

A mortgage having priority over all other voluntary liens against certain property, as evidenced by recording; the earliest recorded mortgage remaining unpaid.

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Grantee

Back 18

The party who receives a deed. "Buyer"

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Grantor

Back 19

The party who signs and gives a deed. "Seller"

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Hypothecate

Back 20

To give a thing as security without the necessity of relinquishing title or possession.

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Intangible Tax

Back 21

A state tax on certain items of intangible personal property such as mortgages.

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Late Charge

Back 22

A penalty computed on the principal & interest which a borrower is required to pay for failure to pay a regular installment when due.

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Lien Theory

Back 23

A concept followed in several states, including Florida, providing that a mortgage represents a lien on property with the mortgagor(borrower) retaining legal title.

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Lis Pendens

Back 24

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 proceedings or to place a lien on the property.

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Loan-To-Value Ratio (LTV)

Back 25

The relationship between the mortgage amount and the appraised market value(or sales price if lower) of the security property, and expressed as a percent.

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Metes and Bounds

Back 26

The most accurate method of land description; "Mmeasurements and "boundaries".

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Mill

Back 27

The measure used to express a real estate property tax rate; One-tenth of one percent.

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Mortgage Broker

Back 28

A licensee who brings a borrower and lender together and receives a fee for services performed.

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Mortgage Insurance Premiums (MIP)

Back 29

Fees paid by FHA borrowers to obtain a loan(upfront and annual)

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Mortgagee

Back 30

The party in a mortgage transaction who receives and holds the mortgage as security; the lender.

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Mortgagor

Back 31

The party in a mortgage transaction who gives the mortgage as security for the debt; "Borrower"

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Mortgage Insurance

Back 32

An insurance policy to protect a lender against loss caused by a borrower's default.

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Non-Conforming Loan

Back 33

A conventional mortgage loan that does not comply with the underwriting criteria established by "Fannie Mae" or "Freddie Mac".

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Novation

Back 34

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.

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Origination Fee

Back 35

The fee for the work involved in the evaluation, preparation, and submission of a proposed mortgage loan from individual borrowers.

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Private Mortgage Insurance (PMI)

Back 36

Insurance provided by a private company protecting conventional mortgage lenders against loss resulting from a mortgagor's (borrower) default.

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Real Estate Settlement Procedures Act (RESPA)

Back 37

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 rights may be transferred and limits the amount held in escrow to pay for taxes and insurance.

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Satisfaction of Mortgage(Notice of Satisfaction)

Back 38

A recordable instrument provided by the lender evidencing payment in full of the mortgage debt.

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Simultaneous issue

Back 39

The act of a title insurance company providing both an owner's title policy and mortgagee's title policy at the same time.

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Tenancy in the Entireties

Back 40

The ownership of property by a husband and wife providing for the automatic right of surviorship to the surviving spouse.

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Truth-In-Lending Act(Regulation Z)

Back 41

A federal regulation requiring disclosure of the APR, certain finance charges, the 3-day right of recession when refinancing a primary residence, and certain additional disclosures when advertising finance terms.

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Disintermediation

Back 42

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 net decrease in the amount of funds available for long-term real estate financing.

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Statute of Frauds

Back 43

A state law requiring certain contracts relating to real property be in writing and signed in order to be legally enforceable.

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Subordination of Debt

Back 44

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. "Junior mortgage"

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Usury

Back 45

Charging more for the use of money than allowed by law.