Mlo Definitions And Terms Complete

Front 1

2-1 Buydown

Back 1

A graduated payment buydown where the payments are subsidized for only two years, usually 2% the first year and 1% the second year.

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3/7/3 Rule

Back 2

A provision of the TILA related to required disclosures and waiting periods. Initial disclosure to be delivered within 3 business days of applying; earliest to close a loan is the 7th business day after disclosures are provided; a 3 business-day waiting period imposed after borrower receives re-disclosures before a loan can close.

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3-2-1 Buydown

Back 3

A graduated payment buydown where the payments are subsidized for 3 years, usually 3% the first year, 2% the second year, and 1% the third year.

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Abstractor

Back 4

A person who prepares a summary (or abstract) of public records relating to title to a specific parcel of land.

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Accelerate

Back 5

Making a loan come due faster by having all payments become due immediately.

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Acceleration Clause

Back 6

A contract clause that gives the lender the right to declare the entire loan amount due immediately because of borrower's default, or other reasons as stated in the contract.

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Acceptance

Back 7

1. Agreeing to the terms of an offer to enter into a contract, thereby creating a binding contract 2. Taking a delivery of a deed

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Acknowledgement

Back 8

When a person who has signed a document formally declares to an authorized official (usually a notary public) that he or she signed voluntarily. The official certifies that the signature is voluntary and genuine.

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Acquisition Cost

Back 9

The purchase price of a property, plus allowable buyer paid closing costs.

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Act

Back 10

A law enacted by a legislative body like the US Congress

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Adjustable Rate Loan

Back 11

A loan made by savings and loan associations similar to an adjustable rate mortgage. Also called ALM.

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Adjustable Rate Mortgage

Back 12

(ARM) A mortgage that permits the lender to periodically adjust the interest rate to reflect fluctuations in the cost of money.

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Advancement

Back 13

An improvement in one's employment position, given as a reason for changing employers (as opposed to job hopping for no reason).

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Advertisements

Back 14

Any public notification of property being offered for sale, which must follow guidelines of Reg Z of the TIL Act.

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Advertising

Back 15

Required notification of foreclosure sale, notifying the public of the date and time of the sale, for 3 consecutive weeks in a general circulation newspaper in the county.

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Affiliated Business Arrangement

Back 16

A situation where a person in a position to refer settlement services or an associate of that person has either as affiliate relationship with or a direct beneficial ownership interest of more than 1% in a provider of settlement services and who then refers business to that provider or in some way influences the selection of that provider.

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Agreement

Back 17

An agreement between two or more parties to do, or not to do, a certain thing. The requirements for an enforceable contract are: capacity, mutual consent, lawful objective, and consideration. In addition, certain contracts must be in writing to be enforceable. See also, Contract.

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Alienation

Back 18

The Transfer of ownership or an interest in property from one person to another, by any means.

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Alienation Clause

Back 19

A contract that gives the lender certain stated rights when there's a transfer of ownership in property. ( Often called a due-on-sale clause.)

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Alimony

Back 20

Money paid to an ex-spouse as part of a settlement. Alimony does not have to be revealed as a source of income if its not counted to help repay the loan, but must be revealed as a debt obligation.

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Alternative Financing

Back 21

When real estate is financed with terms or financing concessions, other than those typical for conventional loans.

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Amortization

Back 22

When a loan balance decreases because of periodic installments paid on the principal and interest.

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Amortization Schedule

Back 23

A table or chart that shows the periodic payments, interest and principal requirements, and unpaid loan balance for each period of the life of the loan.

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Amortize

Back 24

To calculate payments to pay off a debt by periodic installments, with payments going to pay principal and interest.

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Amortized Loan

Back 25

Loan with payments applied to principal and interest.

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Annexation

Back 26

The legal term for attaching or affixing personal property to real property.

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Annexer

Back 27

The person who owned the item as personal property and brought it onto the real property.

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Annual Percentage Rate

Back 28

(APR) Relationship between the cost of borrowing and the total amount financed, represented as a percentage.

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Appraisal

Back 29

An estimate or opinion of the value of a piece of property as of a certain date. Also called valuation.

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Appraisal Management Company

Back 30

A business entity that - for a management fee - administers a network of certified and licensed appraisers to fulfill real estate assignments on behalf of mortgage lending institutions.

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Appurtenances

Back 31

Rights that go with real property.

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Area Median Income (AMI)

Back 32

Midpoint in the family-income range for a specific statistical area. The figure often is used as a basis to stratify incomes into low, moderate and upper ranges. These figures are adjusted for a family size and calculated annually by the U.S. Department of Housing and Urban Development (HUD) for every region in the country.

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Arm's Length Transaction

Back 33

A transaction occurring under typical market conditions with each party acting in his or her own best interests.

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Assemblage

Back 34

Combining two or more parcels of land into one large parcel.

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Assessments

Back 35

Taxes levied only against properties that benefit from a public improvement.

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Assets

Back 36

Items of value; usually items owned by a borrower.

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Assign

Back 37

1. To transfer a right or interest to another. 2. When a tenant transfers his or her right of possession, or other interest in leased property, to another person for the entire remainder of the lease term.

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Assumable

Back 38

Any loan for which an assumption may be exercised.

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Assumption

Back 39

When one party takes over the responsibility for the loan of another party and the terms of the loan or note remain unchanged.

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Attachments

Back 40

Things connected to the land, whether natural or man-made.

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Attestation

Back 41

When witnesses sign a legal document to affirm that the parties' signatures are real; the act of witnessing the execution of a legal document.

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Automated Underwriting

Back 42

Process where loan applicant information is entered into a computer and an evaluation comes back within minutes advising the lender to accept the loan, or refers the loan application for further review.

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Automated Valuation Models

Back 43

Computer programs that are able to provide a probable value range for properties by performing a statistical analysis of available data. Also referred to as AVMs.

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Balance

Back 44

When there are slightly more homes available than buyers.

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Balloon Payment

Back 45

A 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.

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Basis Point

Back 46

A unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument, commonly used for calculating changes in interest rates. The relationship can be summarized as 1% change = 100 basis points

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B-C Credit

Back 47

Refers to credit condition of people with less than perfect credit or serious blemishes on their credit report. Also used to refer to Subprime Loans.

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BEACON Score

Back 48

Credit scoring where a number from 300-900 is assigned to a consumer's credit history. the lower the score, the greater the risk of default. Above 660 is an acceptable risk, 620-660 is a marginal risk, below 620 is a high risk. Another type of credit score is FICO Score.

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Beneficiary

Back 49

One who receives a benefit; refers to the lender in a trust deed.

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Bill Consolidation

Back 50

Borrowing a larger sum of money to pay off many smaller debts.

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Bi-Weekly Mortgage

Back 51

A fixed-rate mortgage, similar to a standard mortgage, but with payments made every two weeks instead of every month, thus making an extra payment each year.

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Blanket Mortgage

Back 52

1. Mortgage that covers more than one parcel of real estate. 2. Mortgage that covers an entire building or development, rather than individual unit or lot.

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Blockbusting

Back 53

The illegal practice of inducing owners to sell their homes by suggesting that the ethnic or racial composition of the neighborhood is changing, with implication that property values will decline as a result. Also called panic selling and panic peddling.

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Board of Governors

Back 54

A 7 member committee that controls the Federal Reserve System. Also called the Federal Reserve Board, or Fed.

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Bond-Type Securities

Back 55

Mortgage backed securities issued by Ginnie Mae, which are long term, pay interest semi annually, and provide for repayment at a specified date.

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Bonuses

Back 56

Money paid to someone in addition to his or her regular salary and may only be counted as income if consistent.

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Boot

Back 57

Unlike properties added to a deal to balance the value and are taxable as part of an exchange.

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Bridge Mortgage

Back 58

A mortgage that occurs between the termination of one mortgage and the commencement of another. When the next mortgage is taken out, the bridge is repaid.

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Building Codes

Back 59

Rules the set construction standards, requiring builders to use particular methods and materials.

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Bundle of Rights

Back 60

All real property rights conferred with ownership, including the right of use, the right of enjoyment, and the right of disposal.

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Business Cycles

Back 61

General swings in business activity, resulting in expanding or contracting activity during different phases of the cycle.

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Buydown

Back 62

Additional funds in the form of points paid to a lender at the beginning of a loan to lower the interest rate and monthly payments.

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Buyer's Market

Back 63

A situation in the housing market where buyers have a large selection of properties from which to choose.

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Call Provision

Back 64

Clause that lets lenders demand full payment of a loan immediately. Also referred to as call a note.

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Cancellation

Back 65

Terminating an obligation, such as when a note is cancelled after payment, or when PMI is cancelled after certain conditions are met.

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Capital Gain

Back 66

Profit made from an investment.

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Cash Flow

Back 67

Money available to an individual after subtracting all expenses.

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Cash-Out Mortgage

Back 68

A mortgage that a borrower gives to lenders so that the borrower can get cash for the equity that has built up in property. (home equity loan taken out for a non house purpose, or an investor trying to recoup money invested in fixing up a property)

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Certificate of Eligibility

Back 69

A certificate issued by the Department of Veterans Affairs to establish status and amount of a veteran's eligibility to qualify for loan gaurantee.

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Certificate of Reasonable Value (CRV)

Back 70

A document issued by the VA which states the value of the subject property based on an approved appraisal. The VA loan amount cannot exceed the CRV.

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Chain of Title

Back 71

Chain of deeds passing title for land from owner to owner.

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Character

Back 72

Stability in job and responsibilities such that, even with setbacks, financial obligations will be honored by the borrower.

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Child Support

Back 73

Money paid to the parent or guardian of children as part of a divorce settlement. Child support does not have to be revealed as a source of income if its not counted to help repay the loan, but it must be revealed as a debt obligation.

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Civil Law

Back 74

The body of law concerned with the rights and liabilities of one individual in relation to another.

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Civil Rights

Back 75

Fundamental rights guaranteed to all persons by the law. The term is primarily used in reference to constitutional and statutory protections against discrimination based on race, religion, sex, or national origin.

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Civil Rights Act of 1866

Back 76

Federal law prohibiting public and private racial discrimination in any property transaction in the US.

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Civil Rights of 1968

Back 77

Federal law prohibiting discrimination based on race, color, religion, sex, national origin, disability, or family status. Also called title VIII of Federal Fair Housing Act.

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Clause

Back 78

A paragraph or section of a contract or other document that defines or assigns specific rights and duties to the parties involved.

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Clear Title

Back 79

Property for which the seller has clear title, free of mortgages of other liens.

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Clear to Close

Back 80

All of the conditions necessary to make the loan have been satisfied and the lender gives the final approval to schedule the closing.

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Closing

Back 81

The final stage in a real estate transaction where ownership of real property is transferred from the seller to buyer according to the terms and conditions set forth in a sales contract or escrow agreement.

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Closing Costs

Back 82

Expenses incurred in the transfer of real estate in addition to the purchase price.

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Closing Statement

Back 83

A document that presents detailed accounting for a real estate transaction, listing each party's debits and credits and the amount each will receive or be required to pay at closing.

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Clouds on the Title

Back 84

Encumbrances or outstanding claims that could affect the owner's title; problems or uncertainties with a title to real property.

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Co-Borrower

Back 85

A person who signs a note or other debt obligation with another party and thus accepts joint obligation to repay the note.

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COFI

Back 86

Cost Of Funds Index is an index that reflects the cost of borrowing money as per the 11th District Federal Home Loan Bank. This index is used by Fannie Mae when purchasing ARM loans.

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Collateral

Back 87

Property pledged as security for a debt

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Commercial Banks

Back 88

Financial institutions that provide a variety of financial services.

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Commercial Real Estate Lenders

Back 89

Lenders who loan money for commercial real estate projects.

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Commissions

Back 90

The compensation paid to someone in lieu of, or in addition to, regular salary. Commissions may be a flat rate or percentage of sale price, but can only be counted as income if they are consistent.

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Community Reinvestment Act

Back 91

(CRA) Federal law emphasizing that regulated financial institutions have a continuing obligation to help meet the credit needs of the local communities in which they operate, especially in low-income neighborhoods.

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Co-Mortgagor

Back 92

A person who signs a mortgage with the primary mortgagor and thus accepts a joint obligation to repay the loan. Also called a Co-borrower or Co-Signer.

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Comparables

Back 93

Other similar properties that have sold recently in a certain area.

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Condominium

Back 94

A property developed for co-ownership, where each co-owner has a separate interest in an individual unit, combined with an undivided interest in common areas of the property. Compare to Cooperative.

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Condominium Loan

Back 95

The FHA-insured loan program for condominiums, available only for FHA qualified, single family condos. The borrower must meet all FHA qualifying standards and property cost must not exceed the maximum FHA mortgage amounts. Also called Condominium FHA Loan Program. See Section 234(c) FHA Loan

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Confirmation of Sale

Back 96

A document filed by the court finalizing the sale of property at foreclosure, and after which time the equitable right of redemption is no longer available to the original defaulting borrower.

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Conforming Loans

Back 97

Loans that meet Fannie Mae/Freddie Mac standards and which can be sold on the secondary market. Compare to Nonconforming Loans.

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Conformity

Back 98

Value characteristic that says a particular home achieves its maximum value when its surrounded by homes similar in style and function. Conformity applies to neighborhoods as well.

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Consideration

Back 99

Anything of value, such as money, services, goods, promises, given to induce another to enter into a contract. Sometimes called valuable consideration. Consideration for an option is money.

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Construction Mortgage

Back 100

A temporary loan used to finance the construction of a building on land. replaced with a takeout loan.

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Contingency Clause

Back 101

A provision in a contract, deed, law, regulation, guideline, etc., that makes the parties' rights and obligations depend on the occurrence, or non-occurrence, of a particular event.

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Contingent Interest

Back 102

A term used to describe the lenders share of the appreciation paid on a shared appreciation mortgage (SAM) loan or other participation plan loan.

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Contract Escrow

Back 103

An approach used to ensure that payments are made on an existing mortgage, whereby an escrow account or servicing agreement is set up. Buyer makes payments into the escrow account; escrow agent then pays the existing mortgage and passes the surplus money to seller. Often used for land contracts with existing mortgages.

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Contribution

Back 104

A value theory that says a particular item or feature of a home is only worth what is actually contributes in value to the property.

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Contributory Value

Back 105

The actual amount that a particular item or feature of a property actually adds in value.

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Conventional Financing

Back 106

When real estate is paid for or financed with a conventional loan.

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Conventional Loan

Back 107

Loan not insured or guaranteed by a government entity.

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Conventional Mortgage

Back 108

A loan that is not insured or guaranteed by a government entity.

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Conversion Option

Back 109

A right the borrower has to convert from an ARM to a fixed-rate mortgage one time during the loan term, provided certain conditions are met.

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Convertible

Back 110

Able to be changed or converted; such as with an ARM loan where the borrower can change from a variable rate to a fixed rate. Often stated in a conversion option clause.

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Conveyance

Back 111

The transfer of title to real property from one person to another by means of a written document, such as a deed.

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Cooperative

Back 112

A building owned by a corporation, where residents are shareholders in the corporation; each shareholder receives a proprietary lease on an individual unit and has the right to use common areas.

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Cost Inflation

Back 113

An increase in the cost of goods or services. Compare to Demand Inflation.

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Cost of Money

Back 114

The interest rate people or businesses pay to use another's money for their own purposes.

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Coupon Rate

Back 115

The interest rate stated in a note. Also called Nominal Rate or Note Rate.

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Covenant

Back 116

1. A contract 2. A promise

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Credit

Back 117

The availability of money; the ability to borrow money.

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Credit History

Back 118

A persons record of debt repayment detailing how a person paid credit accounts in the past.

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Credit Report

Back 119

A listing of a borrowers credit history, including amount of debt, record of repayment, job info, address info, etc.

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Credit Scoring

Back 120

A means by which the lender makes certain determinations regarding the creditworthiness of potential borrowers. This involves a lender assigning specified numerical values to different aspects of a borrower.

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Credit Unions

Back 121

Financial Institutions that are a type of cooperative organization where members share something in common, pool their deposits together, pay members better interest rates, and loan money to fellow members.

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Creditor

Back 122

A person or other entity, such as a bank, who is owed a debt.

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Dealer

Back 123

A person who holds property for the sole purpose of reselling it.

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Debit

Back 124

A sum of money that is owed.

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Debt

Back 125

Recurring monetary obligation that cannot be cancelled.

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Debt Service Ratio

Back 126

The relationship of a borowers total monthly debt obligations, including housing and long term debts with more than ten payments remaining, to income, expressed as a percentage.

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Debtor

Back 127

A person or other entity who owes money to another.

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Declining Market

Back 128

A somewhat vague term used generally to describe areas where home prices are going down, due to any number of factors.

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Deed in Lieu of Foreclosure

Back 129

Deed given by borrower to lender to satisfy a debt, avoiding foreclosure. Also called Voluntary Conveyance.

Front 130

Deed of Trust

Back 130

An instrument held by a third party as security for the payment of a note. Also called a Trust Deed. Like a mortgage, it creates a voluntary lien on real property to secure repayment of a debt.

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Deed Restrictions

Back 131

Limitations on real property use, imposed by a former owner through language included in the deed. Also called restrictive covenants.

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Default

Back 132

Failure to fulfill an obligation, duty, or promise, as when borrower fails to make payments, tenant fails to pay rent, pr party fails to perform a contract. Mortgage, note, or other document defines what constitutes default.

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Defeasance Clause

Back 133

1. Used to defeat a cancel a certain right upon the happening of a specific event 2. Used to give a borrower the right to redeem real estate after default on a note by paying the full amount due plus fees and court costs 3. Used in title theory states, whereby a mortgagee agrees to deed property back to the mortgagor after all contract terms have been performed as agreed.

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Defense

Back 134

Reasons used to justify certain actions such as non-payment of a note.

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Deferment

Back 135

Permission to delay fulfillment of an obligation until a later date.

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Deferred Interest

Back 136

Accrued interest that is not paid by regularly scheduled payments: interest that is accumulated during payment periods but is not paid until a later date. This can be an element of ARMs and may cause negative amortization to occur.

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Deficiency Judgement

Back 137

A court order stating that the debtor owes money to the creditor when the collateral property does not bring enough at foreclosure sale to cover the entire loan amount, accrued interest, and other costs.

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Deficit Spending

Back 138

When the government spends more money than it takes in from tax revenue.

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Delayed Exchange

Back 139

When value in a property is traded for a value in another property. Properties must be of like kind, held for use in trade or business, or as investment to qualify for tax deferment. An equity exchange can also be a delayed exchange, with a promise to provide a replacement property. To qualify for tax deferment, the replacement property must be located within 45 days and closed within 180 days of the first exchange.

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Demand Deposits

Back 140

Money that is immediately accessible and a customer may elect to withdraw from the bank at any time.

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Demand Inflation

Back 141

Too much money chasing too few goods.

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Department of Veterans Affairs

Back 142

Federal agency that oversees programs for veterans of the US armed services, including the Veterans Benefits Administration and Veterans Health Administration.

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Deposit

Back 143

1. Money offered as an indication of good faith regarding the future performance of a purchase agreement. Also called earnest money. 2. A tenants security deposit.

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Depreciate

Back 144

To decline in value

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Depreciation

Back 145

1. A 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 IRS to be an asset's useful life.

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Derogatory Credit

Back 146

Credit history showing previous problems in meeting financial obligations.

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Desktop Underwriter (DU)

Back 147

An electronic system that puts lenders in direct contact with Fannie Mae, providing a streamlined process of document submission, underwriting, and loan approval.

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Direct Endorsers

Back 148

Lenders authorized to underwrite their own FHA loan applications and who are responsible for the entire loan process through closing.

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Disability Payments

Back 149

Payments made as a result of an injury, illness, or other infirmary. The payments may be permanent if the disability is permanent, and thus may be counted as part of stable monthly income.

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Disclosure Statement

Back 150

A document required by law that reveals specific information. For example, federal law requires that lenders give buyers a disclosure statement detailing the actual cost of borrowing money from the lender. See GFE.

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Disclosures

Back 151

Points or facts that must be revealed. For example, the law requires certain financial disclosures, specific disclosures for ARMs, and disclosures under the TIL Act.

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Discount

Back 152

The difference between the stated amount of an obligation and the amount paid.

Front 153

Discount Points

Back 153

An amount paid to a lender when a loan is made to make up the difference between the current market interest rate and the rate a lender gives a borrower on a note. Discount points increase a lenders yield, allowing the lender to give a borrower a lower interest rate, Also referred to as discounts or points.

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Discount Rate

Back 154

The interest rate charged by the Federal Reserve Banks on loans to member commercial banks. Also referred to as Federal Discount Rate.

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Discrimination

Back 155

Violating civil rights law by treating people unequally because of their race, religion, sex, national origin, age, or some other characteristic of a protected class.

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Disintermediation

Back 156

The loss of deposits to competing investments that offer higher returns.

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Disparate Impact

Back 157

When a law that isn't discriminatory on its face has an adverse impact on a minority group.

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Do Not Call Registry

Back 158

National registry managed by the Federal Trade Commission that limits commercial telemarketers from phoning consumers who place their phone numbers on a list.

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Dower

Back 159

A special real property interest the law gives in many states as a statutory life estate to a spouse when a married person owns real property.

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Down Payment

Back 160

The amount of money a buyer pays to obtain a property in addition to the money that the buyer borrows.

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Drive-by Appraisal

Back 161

An appraisal performed according to ASPAP guidelines, but with only an exterior inspection of the subject property.

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Due on Sale Clause

Back 162

Mortgage clause that prohibits assignment by making the entire mortgage balance due when property is sold.

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Durability

Back 163

(of stable monthly income) The likelihood or probability that a person's source of income will continue into the future

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Earnest Money

Back 164

Money offered as an indication of good faith regarding the future performance of a purchase agreement.

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Earnest Money Agreement

Back 165

A contract in which a seller promises to convey title to real property to a buyer in exchange for the purchase price.

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Easement

Back 166

A right to use another persons real property for a particular purpose.

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Easy Qualifier Loan

Back 167

A conventional loan with a LTV ratio of 75% or less; a loan where lenders require the same documentation as other conventional loans, but relax qualifying standards due to increased equity the borrower is putting into the home. Lenders view this loan as less risky since borrower has more to lose and lenders can more easily recoup 75% of a homes value in foreclosure.

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ECOA

Back 168

Federal law that prohibits discrimination in granting credit to people based on sex, age, marital status, race, color, religion, national origin, or receipt of public assistance.

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Economic Base

Back 169

The main business or industry that a community uses to support and sustain itself. A good economic base is critical for home values.

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Effective Demand

Back 170

When a prospective buyer has enough disposable income available to satisfy his or her needs or desires, Also called purchase ability.

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EIS

Back 171

(Environmental Impact Statement) Study required for all federal and federally related projects by the National Environmental Policy Act, which details a development projects impact on energy use, sewage systems, drainage, water facilities, schools, and other environmental, economic, and social areas.

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Elements of Comparison

Back 172

Any aspect of a property that causes a difference in value.

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Eligibility for VA Loans

Back 173

A certificate issued by the Department of Veteran's Affairs to establish status and amount of a veterans eligibility to qualify for loan guarantee.

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Eminent Domain

Back 174

The governments constitutional power to take private property for public use, as long as the owner is paid just compensation.

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Encroachment

Back 175

A physical object intruding onto neighboring property, often due to a mistake regarding the boundary.

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Encumbered Property

Back 176

Property with mortgages, liens, or other restrictions against it that prevent or restrict its transfer.

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Encumbrance

Back 177

A non-possessory interest in property; a lien, easement, or restrictive covenant burdening the property owner's title.

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Entitlement

Back 178

The dollar amount of loan guarantee to which an eligible veteran is entitled.

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Equitable Lien

Back 179

Written contract or court judgement placing lien on property as collateral for a loan.

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Equitable Right of Redemption

Back 180

The right of a debtor to redeem property from foreclosure proceedings prior to confirmation of sale.

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Equitable Title

Back 181

An interest created in property upon the execution of a valid sales contract, whereby actual title is transferred by deed at a closing. the buyers interest in property under a land contract. Also called equitable interest.

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Equity

Back 182

The difference between market value of a property and the sum of the mortgages and liens against it.

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Equity Exchange

Back 183

When value in a property is traded for value in another property. Properties must be of like kind, held for use in trade or business, or as investment to qualify for tax deferment. An equity exchange can also be a delayed exchange, with a promise to provide a replacement property. To qualify for tax deferment, the replacement property must be located within 45 days and closed within 180 days of the first exchange.

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Equity Participation Mortgage

Back 184

A mortgage that lets the lender share part of the earnings, income, or profits from a real estate project.

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Escheat

Back 185

When property reverts to the state after a person without a valid will and without heirs dies.

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Escrow Closing

Back 186

A closing by a disinterested third party, often an escrow agent.

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Escrow Instructions

Back 187

The contract that authorizes an escrow agent to deliver items deposited in escrow once the parties have complied with specified conditions. This can be the purchase contract for real estate or a separate document.

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Escrows

Back 188

Prepayable expenses the lender requires a borrower to set aside prior to closing.

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Estate

Back 189

A possessory interest in real property.

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Estimated Closing Costs

Back 190

An approximation of the amount of money a borrower will need to buy a particular property.

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Estoppel

Back 191

A legal doctrine that prevents a person from asserting rights or facts that are inconsistent with earlier actions or statements when he or she failed to object or attempt to stop another person's actions.

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Estoppel Letter

Back 192

A lenders written consent to a sale acknowledging the transfer and waiving any right to accelerate the loan because of the sale.

Front 193

Exclusionary Zoning

Back 193

A zoning law that effectively prevents certain groups, such as minorities or the poor, from living in a particular community.

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External Obsolescence

Back 194

Any influence that falls outside the actual property site and negatively affects a property's value.

Front 195

Fair and Accurate Credit Transaction Act

Back 195

FACT Act Amendment to the federal Fair Credit Reporting Act intended primarily to help consumers fight the growing crime of identity theft; includes provisions for fraud alerts and credit freezes.

Front 196

Fair Credit Reporting Act

Back 196

FCRA Federal law dealing with the granting of credit, access to credit information, the rights of debtors, and the responsibilities of creditors.

Front 197

Fair Market Value

Back 197

The price a property would sell for on the open market.

Front 198

Familial Status

Back 198

A protected class under the Federal Fair Housing Act and many state Civil Rights Laws, making it illegal to discriminate against a person because he or she is the parent or guardian of a child younger than 18 years of age.

Front 199

Fannie Mae

Back 199

The nations largest, privately owned, investor in residential mortgages. Federal National Mortgage Association.

Front 200

Farmers Home Administration

Back 200

(FmHA) Former name of the program now called Rural Economic Community Development (RECD)

Front 201

FDIC

Back 201

Federal Deposit Insurance Corporation. A public corporation, established in 1933, that insures up to $100,000 for each depositor for most member commercial banks and S & Ls. FDIC has its own reserves and can also borrow from the US Treasury.

Front 202

Fed Funds Rate

Back 202

The Federal Reserve's target for short-term interest rates.

Front 203

Federal Advisory Council

Back 203

A body of 12 members, elected one each by the 12 Federal Reserve Banks as district representatives. They meet quarterly with the Board of Governors to discuss business conditions and make policy recommendations.

Front 204

Federal Budget Deficit

Back 204

When federal government income is less than its expenditures.

Front 205

Federal Discount Rate

Back 205

The interest rate charged to banks by the Federal Reserve on loans to member commercial banks.

Front 206

Federal Fair Housing Act

Back 206

Common name for Title VIII of the Civil Rights Act of 1968.

Front 207

Federal Funds Rate

Back 207

The Federal Reserves target for short-term interest rates.

Front 208

Federal Home Loan Mortgage Corporation

Back 208

(Freddie Mac) Nonprofit, federally chartered institution (now privately owned) that functions as buyer and seller of residential mortgages.

Front 209

Federal Housing Administration

Back 209

(FHA) Government agency that insures mortgage loans.

Front 210

Federal Housing Finance Agency

Back 210

(FHFA) Government agency that merged the powers and regulatory authority of the Federal Housing Finance Board (FHFB) and the Office of Federal Housing Enterprise Oversight (OFHEO), as well as the GSE mission office at the Department of Housing and Urban Development (HUD); the conservator of Fannie Mae and Freddie Mac.

Front 211

Federal Open Market Committee

Back 211

(FOMC) A body that controls the Fed's sale and purchase of government securities. The FOMC consists of the seven members of the Federal Reserve Board, plus the President of the Federal Reserve Bank of New York, and four other Federal Reserve Bank presidents.

Front 212

Federal Regulations

Back 212

Laws enacted by the federal government

Front 213

Federal Reserve Banks

Back 213

Banks that provide services to financial institutions, which have one main office in each Federal Reserve district. All nationally chartered commercial banks must join the Federal Reserve and buy stock in its district reserve bank.

Front 214

Federal Reserve Board

Back 214

( the Fed) the body responsible for US monetary policy, maintaining economic stability and regulating commercial banks. Also referred to as Board of Governors.

Front 215

Federal Reserve System

Back 215

Established by the Federal Reserve Act of 1913 with 12 Federal Reserve Banks as a lender of last resort.

Front 216

Fee at Closing

Back 216

Refers to a PMI payment due at closing.

Front 217

Fee Simple

Back 217

The greatest estate one can have in real property. It is freely transferable and inheritable, and of indefinite duration, with no conditions on the title.

Front 218

Fiduciary Deeds

Back 218

Deeds executed by a trustee, executor, or other fiduciary, conveying property the fiduciary doesn't own but is authorized to manage.

Front 219

Fiduciary

Back 219

Person in a position of trust, held by law to high standards of good faith and loyalty.

Front 220

Finance Companies

Back 220

Financial Institutions that specialize in making higher risk loans at higher interest rates.

Front 221

Finance Instrument

Back 221

A written document used in the borrowing or lending of money. The most common type is a promissory note.

Front 222

Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)

Back 222

A federal law passed in 1990 in response to the crisis in the savings and loan industry. It revised the regulation of thrifts (S&Ls) and created several new agencies, such as Office of Thrift Supervision (OTS) and Resolution Trust Corporation (RTC)

Front 223

Financial Statement

Back 223

A document that shows assets and liabilities for an individual, covering a specific period of time or a specific point in time.

Front 224

Financing Statement

Back 224

A brief document that, when recorded, gives constructive notice of a creditor's security interest in an item of personal property.

Front 225

Financing Tools

Back 225

Alternative financing methods that can help a borrower get approved for a loan more easily or with less of a down payment.

Front 226

Finder's Fee

Back 226

A referral fee paid for directing a buyer or seller to a certain company or provider.

Front 227

First Lien Position

Back 227

The spot held by the lien with the highest priority when theres more than one mortgage or other debt or obligation secured by the property.

Front 228

First Mortgage

Back 228

A security instrument with a first lien position, meaning the first mortgage holder is paid first from a foreclosure sale. One exception is a tax lien on the property, which always takes first lien position.

Front 229

Fiscal Policy

Back 229

The government's plan for spending, taxation, and debt management.

Front 230

Fixed Disbursement Plan

Back 230

A type of construction mortgage payout schedule where a percentage of funds is paid at a set time.

Front 231

Fixed Rate Loan

Back 231

Loan with a constant interest rate remaining for the duration of the loan.

Front 232

Fixed Term

Back 232

A period of time with a definite ending date.

Front 233

Fixtures

Back 233

Man-made attachments.

Front 234

Flipping

Back 234

Defined by Fannie Mae as the process of purchasing existing properties with the intention of immediately reselling them for profit.

Front 235

Foreclosure

Back 235

When a lienholder causes property to be sold, so unpaid debt secured by the lien can be satisfied from the sale proceeds.

Front 236

Foreclosure Actoin

Back 236

A lawsuit filed by a creditor to begin foreclosure proceedings.

Front 237

Forefeiture

Back 237

Loss of a right or something else of value as a result of failure to perform as obligation or condition.

Front 238

Forward Commitment Purchase Program

Back 238

Program with a commitment made by Freddie Mac to buy mortgages for 6 to 8 months, with delivery of mortgages at the option of the seller.

Front 239

Fraud

Back 239

An intentional or negligent misrepresentation or concealment of a material fact; making statements that a person knows, or should realize, are false or misleading.

Front 240

Freddie Mac

Back 240

(Federal Home Loan Mortgage Corporation) Nonprofit, federally chartered institution (now privately owned) that functions as buyer and seller of residential mortgages.

Front 241

Freehold Estate

Back 241

A possessory interest of uncertain duration; it may end, but no one knows when.

Front 242

Freely Transferable

Back 242

When the lender or creditor can obtain immediate cash by selling the note (e.g., when real estate notes are sold to the secondary market).

Front 243

Frontage

Back 243

The dimension across the access side of a parcel of land. When referring to lot size, frontage is the first number. For example, if a lot size in 150' x 100', the frontage is 150'.

Front 244

FSLIC

Back 244

The Federal Savings and Loan Insurance Corporation, which formerly provided insurance to S & Ls, but was abolished in 1990 with the passage of FIRREA. S & L deposit insurance is now provided by FDIC.

Front 245

Fully Amortized Loans

Back 245

Loans where the total payments over the life of the loan pay off the entire balance of principal and interest due at the end of the loan term.

Front 246

Fully Amortized Note

Back 246

A note that calls for regular payments of principal and interest, calculated to pay off the entire balance of the loan by the end of the loan term.

Front 247

Fully Amortized Second Mortgage

Back 247

A second mortgage that is a fully amortized loan.

Front 248

Functional Obsolescence

Back 248

Loss in property value resulting from changes in tastes, preferences, or market standards.

Front 249

Funding Fee

Back 249

A fee charged on VA-guaranteed loans in place of mortgage insurance.

Front 250

Garnishment

Back 250

Legal process by which a creditor gains access to a debtor's personal property or funds in the hands of a third party. If a debtor's wages are garnished, the employer pays part of them directly to the creditor.

Front 251

GEM

Back 251

Growth Equity Mortgage. A fixed rate mortgage set up like a 30-year conventional loan, but payments increase regularly like an ARM. Also called a Rapidly Amortizing Mortgage.

Front 252

General Brochure

Back 252

A booklet lenders are required to give loan applicants under Reg Z of the TIL Act. A lender may comply with this by giving potential borrowers Consumer Handbook on ARMs prepared by the Federal Reserve and the Federal Home Loan Bank Board.

Front 253

General Lien

Back 253

A lien that attaches to all of the debtors property.

Front 254

General Partner

Back 254

A partner who has unlimited liability for the obligation of a partnership.

Front 255

General Partnership

Back 255

Voluntary association of two or more people as co-owners in a for-profit organization.

Front 256

General Real Estate Tax

Back 256

An annual tax levied on the value of real property.

Front 257

Ginnie Mae

Back 257

Government National Mortgage Association. Government-owner corporation that guarantees payment of principal and interest to investors who buy its mortgage backed securities on the secondary market.

Front 258

GLA

Back 258

Gross Living Area. Residential space that's finished, heated, and above grade. Garages, finished basements, and storage areas don't count in GLA.

Front 259

Good Faith Estimate

Back 259

GFE. The lender's estimate of closing costs the borrower must pay for a real estate loan. The lender must give this to the borrower within three business days of loan application is made.

Front 260

Government Financing

Back 260

Real estate loans that are insured, guaranteed, or in some other way sponsored by government programs on the federal level. Traditionally, this does not refer to involvement of the government in the secondary market.

Front 261

Government Sponsored Enterprise

Back 261

GSE. A group of financial services corporations created by the United States Congress to enhance the flow of credit to targeted sectors of the economy and to make those segments more efficient and transparent.

Front 262

GPM

Back 262

Graduated Payment Mortgage. Payment structure that allows the borrower to make smaller payments in the early years of the mortgage, with payments increasing on a scheduled basis at a predetermined point until they are sufficient to fully amortize the loan over the remainder of its term.

Front 263

Graduated Payment Buydown

Back 263

A temporary buydown plan where payment subsidies in the early years of a loann keep payments low, but payments increase each year until they're sufficient to fully amortize the loan.

Front 264

Graduated Payment Loans

Back 264

The FHA-insured graduated payment loan program, which makes payments lower in the early years of the loan. The borrower must meet all FHA qualifying standards and property cost cannot exceed maximum FHA mortgage amounts.

Front 265

Graduated Payment Term

Back 265

The number of years during which payments may be adjusted in a graduated payment mortgage.

Front 266

Gramm-Leach Bliley Act

Back 266

Also known as the Financial Modernization Act of 1999, includes provisions in Title V to protect and regulate the disclosure of consumers' personal financial information.

Front 267

Grantee

Back 267

Person receiving a grant of real property; the seller in a typical real estate transaction.

Front 268

Grantor

Back 268

Person who grants an interest in real property to another; the buyer in a typical real estate transaction.

Front 269

Gross Income

Back 269

Income before taxes and other expenses have been deducted.

Front 270

Guardian

Back 270

A person appointed by a court to administer the affairs of a minor or an incompetent person.

Front 271

Hard Money Mortgage

Back 271

A mortgage where the borrower receives cash

Front 272

Highest and Best Use

Back 272

The most profitable, legally permitted, feasible, and physically possible use of a piece of property.

Front 273

HMDA

Back 273

Home Mortgage Disclosure Act. A law requiring all institutional mortgage lenders with asset of more than $10 million to make annual reports of all mortgage loans made in a given geographic area where they have at least one office. This law is designed to help the government detect patterns of redlining.

Front 274

Holder in Due Course

Back 274

One who acquires a negotiable instrument in good faith and for consideration, and thus has certain rights above the original payee.

Front 275

HELOC

Back 275

Home Equity Line of Credit. Available money that can be borrowed by a homeowner, secured by a second mortgage on the principal residence. Home equity lines of credit can be accessed at any time up to a predetermined borrowing limit and are often used for non-housing expenditures.

Front 276

Home Equity Loan

Back 276

A loan taken by a homeowner, secured by a second mortgage on the principal residence. Home equity loans are usually a one-time loan for a specific amount of money and obtained for a specific, and often non-housing, expenditure.

Front 277

Home Mortgage Disclosure Act

Back 277

A law requiring all institutional mortgage lenders with asset of more than $10 million to make annual reports of all mortgage loans made in a given geographic area where they have at least one office. This law is designed to help the government detect patterns of redlining.

Front 278

Home Ownership equity Protection Act

Back 278

Part of Reg Z TIL Act establishing disclosure requirements and prohibiting equity stripping and other abusive practices associated with high cost loans.

Front 279

HomeValuation Code of Conduct

Back 279

HVCC. Intended to set standards on solicitation, selection, compensation, conflicts of interest, and appraiser independence with a primary goal of ensuring that real estate appraisers are not coerced in any way into establishing a pre-determined or desired valuation on a property.

Front 280

Homeowners Protection Act

Back 280

HPA. Federal law that requires lenders or servicers to provide certain disclosures and notifications concerning private mortgage insurance on residential loan transactions.

Front 281

Homestead Protection

Back 281

Limited protection for a debtor against claims of judgement creditors; applies to property of the debtor's residence.

Front 282

Housing and Economic Recovery Act of 2008

Back 282

HERA. Major federal law designed to assist with the revitalization of the US housing market; includes provisions related to foreclosure prevention and consumer protections, as well as establishing minimum standards for licensing and registration of mortgage loan originators.

Front 283

Housing Expense Ratio

Back 283

the relationship of a borrowers total monthly housing expense to income, expressed as a percentage.

Front 284

HUD

Back 284

the Department of Housing and Urban Development; government agency that deals with housing issues.

Front 285

HUD Uniform Settle Statement

Back 285

HUD-1 A settlement statement, required under RESPAA, that details all costs associated with closing a loan, showing how much was paid, to what companies or parties, and for what purpose.

Front 286

Hypothecate

Back 286

To make property security for a loan without giving up possession of it, as with a mortgage.

Front 287

Illegal Flipping

Back 287

Property purchased at a low price, appraised at a high value without valid reason, and resold at the higher price.

Front 288

Immediate Delivery Program

Back 288

A Freddie Mac program whereby sellers have up to 60 days to deliver mortgages that Freddie Mac has agreed to buy on the secondary market.

Front 289

Immobilty

Back 289

A physical characteristic of real estate referring to the fast that it cant move from one place to another.

Front 290

Impounds

Back 290

Prepayable expenses the lender requires a borrower to set aside prior to closing.

Front 291

Improvement

Back 291

A major fixture that impacts the value of the property, such as a building.

Front 292

Incapacity

Back 292

When someone is not able to sign a note or enter into any other kind of contract

Front 293

Income

Back 293

The money one receives from a job, investment, or other skills or capital.

Front 294

Income Qualifying Standards

Back 294

The criteria used to evaluate the quality and durability of a borrowers source of income, in conjunction with an assessment of the borrower's housing expense ratio and total debt service ratio.

Front 295

Income Ratios

Back 295

The relationship of a borrower's total monthly housing expense to income, expressed as a percentage.

Front 296

Indemnify

Back 296

To protect another against loss or damage. to compensate a party for loss.

Front 297

Independent Contractors

Back 297

Self-employed individuals paid based on jobs completed rather than hours worked, and who are responsible for setting their own hours and paying their own taxes.

Front 298

Indestructibility

Back 298

A physical characteristic of real estate referring to the fact that it cannot be destroyed.

Front 299

Index

Back 299

A statistical report that is generally a reliable indicator of the approximate change in the cost of money, and is often used to adjust the interest rate in ARMs.

Front 300

Indicated Value Range

Back 300

A range of possible values for a property based on the data analyzed by the appraiser.

Front 301

Inflation

Back 301

An increase in the cost of goods or services; or, too much money chasing too few goods.

Front 302

Initial Premium

Back 302

The first insurance premium paid for PMI.

Front 303

Installment Note

Back 303

A note that calls for periodic payments of principal and/or interest during the term of the note.

Front 304

Installment Sales Contract

Back 304

A real estate installment agreement where a buyer makes payment to a seller in exchange for the right to occupy and use property, but no deed or title transfers until all, or specified portion of, payments have been made. Also called land contract, installment sales contract, real estate contract, and other names.

Front 305

Instrument

Back 305

Any document that transfers title (such as a deed), creates a lien ( such as a mortgage), or gives a right to payment ( such as a note or contract).

Front 306

Insurance Companies

Back 306

Institutions with large sums of stable, long-term investment capital, looking for high return investments, such as long-term commercial real estate projects; investors in secondary mortgage markets.

Front 307

Interest

Back 307

A right or share in something, such as a piece of real estate. A charge a borrower pays to a lender for the use of the lender's money.

Front 308

Interest Only Loan

Back 308

A loan where scheduled payments only pay accrued interest and not any portion of the principal. A balloon payment equal to the entire principal amount of the loan is due at the end of the loan term.

Front 309

Interest Only Second Mortgage

Back 309

A second mortgage that is an interest only loan.

Front 310

Interest Rate

Back 310

The rate which is charged or paid for the use of money, generally expressed as a percentage of the principal.

Front 311

Interest Rate Cap

Back 311

A limit on the amount of interest rate increase that can occur with an adjustable rate mortgage.

Front 312

Interest Shortfall

Back 312

Any accumulated interest accrued, but not collected, through regular payments because of the adjustable rate or guaranteed payment feature of a loan.

Front 313

Interest Yielding Investments

Back 313

Investments that pay interest or other dividends as a form of income to the holder or bearer. These earnings may be counted as stable monthly income if the payments are consistent and do not deplete the principal amount of the investment.

Front 314

Interim Loan

Back 314

A temporary loan used to finance the construction on a building of a land. replaced with a takeout loan.

Front 315

Intermediary

Back 315

A person or institution that originates and/or services on behalf of another party.

Front 316

Involuntary Alienation

Back 316

The transfer of an interest in property against the will of the owner, or without action by the owner, occurring through operation of law, natural processes, or adverse possession.

Front 317

Involuntary Lien

Back 317

A lien that arises by operation of law without the consent of the property owner.

Front 318

Judgement Creditor

Back 318

One who has received a judgement for money from a judgement debtor.

Front 319

Judgement Debtor

Back 319

One against whom a judgment has been issued by a court for money owed.

Front 320

Judicial Foreclosure

Back 320

A lawsuit filed by a lender or other creditor to foreclose on a mortgage or other lien; a court ordered sheriff's sale of the property to repay the debt.

Front 321

Jumbo Loans

Back 321

Loans that exceed the maximum loan amount that Fannie Mae/Freddie Mac will buy, making them nonconforming. As of 2006, the limit is $417,000 on a single family home.

Front 322

Junior Lienholder

Back 322

Secured creditor with a lower priority lien than another lien on the same land.

Front 323

Junior Mortgage

Back 323

Any mortgage that has a lower lien position than another mortgage.

Front 324

Junk Fees

Back 324

Charges assessed to a borrower by a loan originator that serve little if any function and are often hidden in mortgage documents.

Front 325

Just Compensation

Back 325

Appropriate or fair value for private land taken by the government for public use.

Front 326

Land Contract

Back 326

A real estate installment agreement where a buyer makes payment to a seller in exchange for the right to occupy and use property, bot no deed or title transfers until al, or a specified portion of, payments have been made.

Front 327

Land Use Controls

Back 327

Public or private restrictions on how land may be used.

Front 328

Landlord

Back 328

An owner who leases property to a tenant. Also called the lessor.

Front 329

Law of Decreasing Returns

Back 329

Theory that says that beyond a certain point, added value of a feature, addition, repair, etc., is less that the actual cost of that item. Also called diminishing returns

Front 330

Law of Increasing Returns

Back 330

Theory that says that the added value of a feature, etc., is more than the actual cost of that item.

Front 331

Lease/Option

Back 331

When a seller leases property to someone for a specific term, with an option to buy the property at a predetermined price during the lease term, usually with a portion of the lease payments applied to the purchase price.

Front 332

Lease/Purchase

Back 332

When a seller leases property to someone for a specific term, with the tenant agreeing to buy the property at a set price during or following the lease term.

Front 333

Leasehold Estate

Back 333

An interest that gives the holder temporary right to possession of the estate without title.

Front 334

Lender First and Lender Second

Back 334

When a lender holds two different mortgages on the same property, often at different interest rates.

Front 335

Lender's Yield

Back 335

The total amount of money that can be made from an investment.

Front 336

Lessee

Back 336

A person who leases property from another; a tenant.

Front 337

Lessor

Back 337

A person who leases property to another; landlord

Front 338

Level Payment

Back 338

A buydown plan where the interest rate reduction, and hence the payment, is constant throughout the buydown period.

Front 339

Liabilities

Back 339

Financial obligations or debt. Any money that is owed.

Front 340

LIBOR

Back 340

London InterBank Offering Rate. An index used by lenders when making ARM loans; the rate (in Euros) that international banks charge each other for loans.

Front 341

License

Back 341

A revocable, non-assignable permission to enter another's land for a particular purpose.

Front 342

Lien

Back 342

A non-possessory interest in property, giving a lienholder the right to foreclose if the owner does not pay a debt owed to their lienholder; a financial encumbrance on the owner's title.

Front 343

Lien Priority

Back 343

The order in which liens are paid out of the proceeds of a foreclosure sale. For example, tax liens always have the highest priority and a first mortgage would have the next highest priority.

Front 344

Lien Theory States

Back 344

States where a mortgagee holds only a lien against property (not actual title) until the loan is repaid. The mortgagor holds the actual title.

Front 345

Life Estate

Back 345

A freehold estate that lasts only as long as a specified person lives, thus a life estate cannot be willed.

Front 346

Life Tenant

Back 346

The holder of a life estate.

Front 347

Like Kind Property

Back 347

The same type of property (such as real estate for real estate), as a necessary condition for a tax-free exchange.

Front 348

Line of Credit Loan

Back 348

One type of reverse equity mortgage where an elderly homeowner mortgages the home to the bank in exchange for the ability to borrow money up to a maximum number of times or a maximum dollar amount. The line of credit is repaid only when the borrower dies, sells, or moves.

Front 349

Liquid Assets

Back 349

Cash and any other assets, such as stocks or bonds, that can quickly be converted to cash.

Front 350

Loan Application

Back 350

the form lenders require potential borrowers to complete, listing all pertinent information about the borrower and property.

Front 351

Loan Flipping

Back 351

Refinancing a loan over and over.

Front 352

Loan Prospector

Back 352

An electronic system that puts lenders in direct contact with Freddie Mac, providing a streamlined process of document submission, underwriting, and a loan approval.

Front 353

Local Market

Back 353

When lenders make mortgage loans directly to borrowers. This is also referred to simply as Primary Markets

Front 354

Location Survey

Back 354

A survey that determines if a property's buildings encroach on adjoining property, or if any adjoining property's buildings encroach on the subject property.

Front 355

Long-term

Back 355

Loans in real estate that have payments spread over 25-20 years.

Front 356

Lot

Back 356

A parcel of land; a parcel in a subdivision.

Front 357

Maintenance Payments

Back 357

Money paid as part of a divorce settlement. Maintenance payments do not have to be revealed as a source of income if not counted to help repay a loan, but must be revealed as a debt obligation.

Front 358

Maker

Back 358

One promising to pay money in a note.

Front 359

Market Area

Back 359

Group of houses or properties that shares common characteristics. Also called a neighborhood.

Front 360

Market Price

Back 360

The price for which a piece of real estate is actually sold.

Front 361

Market Value

Back 361

The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale.

Front 362

Marketable Title Record

Back 362

Unbroken chain of recorded titles going back a set number of years.

Front 363

Matched Pair Analysis

Back 363

The process of determining the value of specific property characteristics or features by comparing pairs of similar properties. Also called paired data analysis.

Front 364

Maximum Guaranteed Amount

Back 364

The maximum amount that can be guaranteed by a VA loan.

Front 365

Maximum Mortgage Amount

Back 365

The maximum amount that can be financed by an FHA loan.

Front 366

Member Banks

Back 366

5,000+ commercial banks across the US that are subject to the rules and policies implemented by the Fed.

Front 367

Merger

Back 367

The uniting of two or more separate properties by transferring ownership of them all to one person.

Front 368

Military Eligibility

Back 368

A certificate issued by the Department of Veteran's Affairs to establish status and amount of a veteran's eligibility to qualify for loan guarantee.

Front 369

MIP

Back 369

Mortgage Insurance Premium. The fee charged for FHA mortgage insurance coverage. The initial premium can be financed, and there may be a renewal premium.

Front 370

Monetary Policy

Back 370

Means by which government exerts control over the supply and cost of money.

Front 371

Moral Suasion

Back 371

Trying to use persuasive influences on the public and financial markets so they will perceive credit in a specific way.

Front 372

Mortgage Backed Security

Back 372

MBS. A Fannie Mae security that represents an undivided interest in a group of mortgages. Principal and interest payments from the individual mortgage loans are grouped and paid out to the MBS holders.

Front 373

Mortgage Banker

Back 373

One who originates, sells, and services mortgage loans, and usually acts as the originator and servicer of loans on behalf of large investors, such as insurance companies, pension plans, or Fannie Mae.

Front 374

Mortgage Broker

Back 374

One who, for a fee, places loans with investors, but typically does not service such loans.

Front 375

Mortgage Disclosure Improvement Act

Back 375

MDIA. An amendment to the TIL Act enacted in 2009 that adds additional disclosure requirements, APR tolerances, and waiting periods on closing mortgage loans, as well as limiting fees that can be charged prior to disclosure.

Front 376

Mortgage Insurance

Back 376

Insurance offered by private companies (PMI) or the government through the FHA (MIP) to insure a lender against default on a loan by a borrower.

Front 377

Mortgage Insurance Premium

Back 377

MIP. The fee charged for FHA mortgage insurance coverage. The initial premium can be financed, and there may be a renewal premium. Also called Upfront Mortgage Insurance Premium. UFMIP.

Front 378

Mortgage Payment Adjustment Period

Back 378

The interval at which a borrower's actual mortgage payments change with an ARM.

Front 379

Mortgage Payment Cap

Back 379

A limit on the amount of mortgage payment increase that can occur with an adjustable rate mortgage.

Front 380

Mrs. Murphy Exemption

Back 380

An exemption to the Federal Fair Housing Act, which holds that the rental of a unit or a room in an owner-occupied dwelling containing four units or less is exempt from the Fair Housing Law, provided rental ads are not discriminatory and a real estate agent is not used to locate tenants. Some states do NOT recognize this exemption.

Front 381

Mutual Mortgage Insurance Fund

Back 381

Name of FHA residential mortgage insurance program.

Front 382

Mutual Savings Banks

Back 382

State-chartered banks, located mostly in the northeastern US owned by depositors and operated for their benefit. Usually, a large portion of their assets are mortgages.

Front 383

National Market

Back 383

The private investors and government agencies that buy and sell real estate mortgages.

Front 384

Natural Attachments

Back 384

Plants growing on the land.

Front 385

Negative Amortization

Back 385

When a loan balance grows because of deferred interest.

Front 386

Negative Amortization Cap

Back 386

A limit on the amount of negative amortization that can occur with an adjustable rate mortgage.

Front 387

Negligence

Back 387

Unintentional breach of a legal duty. It's a tort if it causes harm.

Front 388

Negotiable Instrument

Back 388

Promissory note or other finance instrument that is freely transferable.

Front 389

Net and Gross Adjustment Theory

Back 389

A means of limiting total adjustments that may be made to comparable sales to determine how closely they resemble the subject.

Front 390

Net Income

Back 390

Income after expenses.

Front 391

Net to Seller

Back 391

An estimate of the money a seller should receive from a real estate transaction, based on a certain selling price after all costs and expenses have been paid.

Front 392

No Document Loan

Back 392

A loan where a borrower has good credit, but trouble providing income documentation, so the loan is decided on other merits. these loans may be offered as a lower LTV, and the lender may still require tax returns. Also called Stated Doc or No Doc.

Front 393

Nominal Rate

Back 393

The interest rate stated in a note. Also called Coupon Rate or Note Rate.