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95 Cards in this Set
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Record of debt repayment, detailing how a borrower has lid debts and obligations in the past, used to predict whether the borrower is likely to pay debts in the future |
Credit History |
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An entity that, for compensation, acts as a third party intermediary by contracting with independent real estate appraisers to perform appraisals for lenders |
Appraisal Management Company (MAC) |
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A certificate establishing the current market value of a property based on an approved VA appraisal. Issued by the VA, this certificate places a limit on the amount of a VA-guaranteed loan |
Certificate of Reasonable Value (CRV) |
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A measure of a bonds price. $10 or 1% of the par value of $1000 |
Point |
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A tool that mortgage brokers can use to lower the upfront closing costs for a borrower |
Yield Spread Premium (YSP) |
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The relationship between unpaid principal balances of ALL mortgage loans and the appraised value (or sales price if it’s lower) of the property |
Combined Loan-to-Value (CLTV) |
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A credit applicant who does not have ownership interest in the security property as indicated on the title but signs the note |
Co-Signor |
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A method of determining the approximate market value of a home by comparing the subject property to similar homes that have sold, are presently for sale, or did not sell in a given area |
Comparative Market Analysis (CMA) |
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Item in a settlement statement for which the cost has been incurred, but the expense has not yet been paid |
Accrued Expense |
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A sworn statement by the seller that the title is good |
Affidavit of Title |
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A document that is given to the winning bidder of a real estate tax or foreclosure sale. Once the sale is confirmed, a deed will be issued to convey title |
Certificate of Purchase |
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National association of title companies, abstractors, and attorneys. Members agree to promote uniformity, quality, and professional standards in the title insurance policies. |
American Land Title Association (ALTA) |
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A document prepared by an attorney stating the attorneys opinion of the status of the title to a piece of property, after performing a title search and reviewing the public records. Also called Opinion of Title |
Certificate of Title |
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Fixed rate mortgage set up like a standard 30-year conventional loan, but payments are made every two weeks instead of every month |
Biweekly Payment Plan |
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An instrument transferring ownership of personal property |
Bill of sale |
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Issued to builders after all inspections have been made and the property is deemed fit for occupancy by meeting the appropriate standards for health and safety |
Certificate of Occupancy |
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Standardized document that presents a final, 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; required for all RESPA-related transactions. Also called Settlement Statement |
Closing Disclosure |
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Pledging to a broker-dealer securities bough on margin as collateral for the margin loan |
Hypothecation |
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Maximum increase in the interest rate, or the maximum interest rate, that a lender can charge on an adjustable rate mortgage |
Cap |
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A claim, encumbrance, or defect that could make the title to real property unmarketable |
Cloud on the Title |
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An appraisal method which estimates the value of real estate by analyzing the amount of revenue, or income, the property currently generates, or could generate, often comparing the subject property to other similar properties |
Income Approach |
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Amount of money owed in a note or other promise to pay |
Debt |
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A temporary Buydown plan where payment subsidies, usually from a seller or developer, in the early years of the loan keep payments low, but payments increase each year until they’re sufficient to fully amortize the loan |
Graduated Payment Buydown |
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Claim with highest priority against property? Also known as a superior to the rights of subsequent lenders. (Recorded First) |
Firs lien |
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The process of making or initiating a new loan |
Origination |
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Required once a borrowers loan is paid off. The lender issues the discharge of contract, and the borrower should record this document. Also called Release of Lien or Satisfaction of Mortgage |
Discharge Mortgage |
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1. Owing payment on things for which one has the use of but has not yet paid for, such as property taxes or mortgage interest that is paid in arrears. 2. Not on time? Late in making payments or completing work |
Arrears |
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The amount of money paid at regular intervals towards reducing the principal and interest owed on a debt |
Debt Service |
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A security instrument with a first lien position, meaning the first mortgage holder is paid first first from a foreclosure sale. One exception is a tax liens in the property, which always takes first lien position |
First Mortgage |
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Insurance that indemnifies a person with an interest in property for its loss |
Property insurance |
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Typical payment on a mortgage loan |
PITI |
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The amount of money borrowed compared to the value (or price) of the property |
Loan-To-Value Ratio (LTV) |
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Professional appraisal standards developed by The Appraisal Foundation, and now recognized throughout the United States as accepted standards of appraisal practice |
Uniform Standards of Professional Appraisal Practice (USPAP) |
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Monthly fees paid by each condominium or cooperative owner for common area expenses such as utilities, management, building maintenance, hazard and liability insurance for the common areas of the property, and other amenities |
Association Fees |
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The purchase price of a property, plus allowable buyer paid closing costs |
Acquisition Cost |
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A brief, chronological summary of the recorded documents affecting the title to a particular parcel of real property |
Abstract title |
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Informal process of determining how much potential a homebuyer might be eligible to borrow |
Prequalification |
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A form sent by a bank directly to a lender verifying the borrowers accounts |
Verification of Deposit (VOD) |
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The relationship of a borrowers total monthly debt to gross monthly income, expressed as a percentage. |
Debt-to-Income Ratio |
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How many payments are needed to be counted towards the debt-to-income ratio |
Housing and long-term debts with more than 10 payments remaining |
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An appraisal method which estimates the value of real estate by figuring the cost of building the house or other improvement on land, minus depreciation, plus the value of the vacant land |
Cost Approach |
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Formal process by which a lender determines if the potential borrowers can be financed through the lender and for why amount of money. |
Preapporoval |
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Closing conducted with all parties present. Also called Face-to-Face closing |
Round table closing |
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A state in which real estate mortgages are regarded as liens; title remains with the mortgagor as long as no default occurs |
Lien Theory State |
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Appraisal method that estimates the value of real property by comparing it with other, recently sold properties i the same area. Also called Market Approach |
Sales Comparison Approach |
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Transfer of ownership or an interest in property from one person to another, by any means |
Alienation |
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Income that can reasonably be expects to continue in the future |
Stable monthly income |
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Standardized form from Fannie Mae or Freddie Mac that lenders require potential borrowers to completer with pertinent info about the borrower and the property |
Uniform Residential Loan Application (URLA) |
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One who is expects to perform valuation services competently and in a manner that is independent, impartial and objective |
Appraiser |
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A person who signs a note (or other debt obligation) with another party and thus accepts joint obligation to rely the note |
Co-Borrower |
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TILA-RESPA integrated Disclosure rule, issued by the CFPB to creat standardized, consumer friendly disclosure documents, including the LE and closing disclosure |
TRID Rule |
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Charges for filing documents at the county recorders office so that they become part of the public record |
Recording fees |
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Standard appraisal report form used by lenders and appraisers because it has been developed and approved by secondary mortgage market players Fannie Mae and Freddie Mac |
Uniform Residential Appraisal Report (URAR) |
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Transfer of title to real property from one person to another by means of a written document, such as a deed |
Conveyance |
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Insurance that indemnifies against losses resulting from undiscovered title defects and encumbrances |
Title Insurance |
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Title that is free and clear from undisclosed encumbrances or other detest that would expose a purchases to litigation or impede a purchasers ability to enjoy the property or to later sell the property. |
Marketable Title |
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Total yearly cost of credit |
Annual Percentage rate (APR) |
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A report issued by the title company, disclosing the condition of the title to a specific piece of property |
Title Report |
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Disclosure of loan terms, annual percentage rate and other credit costs, and estimated settlement costs that lenders must present to borrowers within 3 business days of a completed loan app in order to satisfy provisions of the Truth in Lending Act and RESPA |
Loan Estimate |
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Title insurance policy issued for the benefit of a lender as well as any future holder of the loan |
Lenders Policy |
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Written or electronically transmitted agreement between a lender and an applicant for a mortgage loan which, subject to the terms set forth in the agreement, obligates the lender to make a mortgage loan at a specified rate and a specific time period |
Lock-In Agreement |
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The right to undisturbed use and control of air space over a parcel of land; may be transferred separately form the land |
Air rights |
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Inspection of the public record to determine all rights and encumbrances affecting title to a piece of property |
Title Search |
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Person charged with coordinating activists and docs necessary for completing a real estate transaction; usually the one who prepares the settlement statement and conducts the closing. |
Settlement Officer |
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Buyer borrows money from another source in addition to the primary lender to pay for part of the purchase price or closing costs |
Secondary Financing |
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Amount of money a buyer pays to obtain property in addition to the money that the buyer borrows |
Down Payment |
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Account in which the lender maintains the borrowers extra 1/12th, monthly deposits to cover next years insurance and tax payments. Also called Reserve account |
Escrow Account |
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Charging an interest rate that exceeds legal limits |
Usury |
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Any service provided in connection with prospective or actual settlement of a real estate transaction, including, but not limited to, those provided by lenders, title companies etc |
Settlement services |
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Buyer borrows money from another source in addition to the primary lender to pay for part of the purchase price or closing costs |
Secondary Financing |
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Charging an interest rate that exceeds legal limits |
Usury |
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Final stage in a real estate transaction where the ownership for a real property is transferred from seller to buyer according to the terms and conditions set forth in a sales contract or escrow agreement. |
Closing |
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Chain of deeds passing title for land from owner to owner |
Chain of Title |
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Credit history showing previous problems in meeting financial obligations |
Derogatory Credit |
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Company that examines and insures title claims for real estate purposes through and thorough examination of property records |
Title company |
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Nonpossessory interest in property, giving a lien holder the right to foreclose if the owner does not pay a debt owed to the lien holder; a financial encumbrance on the owners title |
Lien |
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Difference between market value of a property and the sum of the mortgages and liens against it |
Equity |
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State in which a mortgagee holds the actual title to property until the loan is paid |
Title theory State |
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An amount of money set aside for future repairs that may be needed for major items, such as the roof or heating |
Reserves |
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Process of evaluating a risk for the purpose of issuing insurance coverage on it |
Underwriting |
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Lawful ownership of real property. Also, in informal usage, the deed or other document that is evidence of ownership |
Title |
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Total amount of money that can be made from an investment |
Yield |
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Fee charged by lender to cover the administrative costs of making a loan, usually based on a percentage of the loan (where 1%= 1 point) |
Origination Fee |
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When a borrower redoes or expands the loan on a property, usually to get a better interest rate or pay off other debts |
Refinancing |
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Property pledged as a security for a debt |
Collateral |
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Interest created in property upon the execution of a valid sales contract, whereby actual title will be transferred by deed at a future date. Also, the vendees (buyers) interest in property under a land contract |
Equitable Title |
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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 |
Credit Scoring |
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Relationship of a borrowers total monthly housing expense to income, expressed as a percentage |
Housing Expense Ratio |
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Ongoing operating expenses that must be paid regardless of occupancy levels of the property |
Fixed Expenses |
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Contract in which a seller promises to convey title to real property to a buyer in exchange for the purchase price. |
Purchase Agreement |
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A contract clause that gives the lender certain stated rights when there’s a transfer of ownership in property |
Alienation Clause |
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Listing of a borrowers credit history, including amount of debt, record of repayment, job info, address info etc. |
Credit Report |
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One who receives benefit; refers to the lender in a trust deed |
Beneficiary |
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Other similar properties that have sold in a certain area. Also called comps. |
Comparables |
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One who insures another or takes risk, such as by approving a loan |
Underwriter |
