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Definition
| A document which serves as evidence that debt exists between a borrower and a lender and contains the terms under which the loan must be repaid. |
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| Transaction where one party pledges real property to another party. |
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Definition
| A loan is made by a borrower to purchase real estate consisting of existing property. |
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Definition
| Promises, duties, and responsibilities of the borrower, in addition to payments required under the terms of the note. |
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| Allows the mortgagee to accelerate the debt (to make it immediately due and payable) when the property is transfered. |
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| Mortgage for Future Advances/Open-Ended Mortgate |
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Definition
| Here the borrower arranges in advance with a mortgagee for at total amount, usually definitely stated in the mortgage, that will be advanced, in stages, under the mortgage to meet the part of the cost of the construction as it progresses. |
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Definition
| A subordination clause effectively makes the current claim in the agreement senior to any other agreements that come along after the original agreement. |
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| Assumption of the Mortgage |
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Definition
| When the buyer agrees to become liable for payment of the mortgage debt and relieve the seller of his or her personal obligation. |
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| "Subject to" The Mortgage |
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Definition
| Assignment or transfer of real estate where the purchaser agrees to take over monthly payments of principal and interest, but does not assume personal liability for the obligation. |
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| Is an item of tangible personal property that has become affixed to or is intended to be used with the real estate, so as to be considered part of the property. |
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| After-Aquired Property Clause |
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Definition
| Property acquired subsequent to the execution of the mortgage becomes part of the real estate and is included in the security covered by the mortgage. |
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| Senior or prior mortgage on a property. |
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Definition
| All other mortgages are given the name of junior mortgages after the senior mortgage. |
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Definition
| Sometimes used to bridge the gap between the price of the property and the sum of the first mortgage and the amount of money available to the purchaser to use as a down payment. |
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Definition
| A loan provided by the seller of a property or business to the purchaser |
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| A 'land contract' (sometimes known as a “contract for deed” or an “installment sale agreement”) is a contract between a seller and buyer of real property in which the seller provides financing to buy the property for an agreed-upon purchase price and the buyer repays the loan in installments. |
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Definition
| Any breach of the mortgage contract. |
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Definition
| Various activities undertaken to deal with a mortgagor who is in financial trouble. |
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Term
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Definition
| A mortgagor in financial difficulty may seem permission from the mortgagee to extend the mortgage terms for a period of time. |
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Term
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Definition
| The new purchaser may be willing to accept the transfer of mortgage if he or she thinks the value of the property eceeds the balance due on the mortgage. |
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Term
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Definition
| If the value of an equity is less than the mortgage balance, the lenders will accept title and release the mortgagors from the mortgage debt. In this case the cost of foreclosure usually exceeds the expected benefit of pursuing that course of action. |
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Term
| Deed in Lieu of Foreclosure |
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Definition
| Conveyance to the mortgagees in exchange for a release from the mortgage debt. |
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Term
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Definition
| Foreclosure action in which the borrower submits to the jurisdiction of the court, agreeing to coopering with the lender in the litigation. This shortens the time required to effect a foreclosure. |
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Term
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Definition
| Borrowers agree with all their creditors to the terms on which they will turn their assets over to their creditors in exchange for a discharge of liabilities. |
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Term
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Definition
| A sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan. |
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Term
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Definition
| Foreclosure is a specific legal process where a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan |
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Definition
| The lender sues on the debt, obtains judgments, and executes judgments against the property. |
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Definition
| Process of canceling or annulling a title conveyed by a foreclosure sale by paying the debt or fulfilling the other conditions in the mortgage. |
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Term
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Definition
| Wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender |
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Definition
| Any deficit remaining after a foreclosure and sale of the property. |
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Term
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Definition
| A tax sale refers to property (usually real property) being sold by a taxing authority or the court to recover delinquent taxes. |
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Definition
| Proceeding in which the court takes over the property of a debtor to satisfy the claims of creditors. |
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Definition
| Straight Bankruptcy, giving debtors a fresh start by discharging all of their debts and liquidating their nonexempt assets. |
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Term
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Definition
| Alternative to Chapter 7 which is available to owners of a business. |
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Term
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Definition
| When the court decides that the bankruptcy plan is satisfactory in spite of objections from creditors. |
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Term
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Definition
| Wage Earner Proceeding, such plans provide that funding of the plan will come from future wages of the earnings of the debtor. Less than $100,000 in unsecured debts and less than $350000 of secured debts qualifies. |
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Term
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Definition
| Annual Percentage Yield, is a normalized representation of an interest rate, based on a compounding period of one year. |
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Term
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Definition
| When determining how much should be paid today for an investment that is expected to produce income in the future. |
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Term
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Definition
| The series of deposits or payments. |
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Term
| Future Value of an Annuity |
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Definition
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Term
| Present Value of an Annuity |
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Definition
| The series of annual income receipts the investment produces over time. |
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Term
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Definition
| Demand for mortgage loans is determined by the demand for real estate. |
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Term
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Definition
| Minimum interest that must be earned by savers to induce them to divert the use of funds from present consumption to future consumption. |
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Term
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Definition
| Contract interest rate agreed on by borrowers and lenders. |
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Term
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Definition
| Risk that borrowers will default on obligations to repay interest and principal. |
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Definition
| The uncertainty about what interest rate to charge when a loan is made. |
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Term
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Definition
| Risk that the loan will be prepaid when interest rates fall below the loan contract rate. |
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Definition
| Risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss. |
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Definition
| Changes in the regulatory environment in which markets operate. |
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Term
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Definition
| The amount of interest accrued and owed to the lender at the end of the month (or day, week, year, etc.) |
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Term
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Definition
| The ratio of payments to the loan amount. |
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Term
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Definition
| Pay rate will exceed the accrual rate. Monthly payments will exceed accrued interest. |
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Term
| Partially Amortizing Loan |
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Definition
| Pay rate will exceed accrued interest, but not enough to pay accrued interest and the full principal payment. |
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Term
| Interest Only Loan (Zero Amortizing Loan) |
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Definition
| Only interest is paid. The full, originial loan amount will have to be paid at maturity. |
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Term
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Definition
| Borrowers and lenders agree that the pay rate will be less than the accrual rate. Loan balance increases each month. |
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Term
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Definition
| The process of loan repayment over time. |
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Term
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Definition
| When a borrower and a lender agree to have a balance on the maturity date. |
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Term
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Definition
| Monthly payment / Present Value of the Loan |
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Term
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Definition
| Cover expenses incurred by the lender for processing and underwriting loan applications, including other expenses the lender wants recovered by the borrower. |
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Term
| Loan Discount Fees or Points |
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Definition
| Borrower pays a lender "points" in order to increase the yield on the loan and decrease monthly payments. |
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Term
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Definition
| Fee incurred should the borrower desire to prepay the loan. |
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Term
| Constant Amortizing Mortgage (CAM) |
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Definition
| Paying the same amount of Amortization on the loan each month, with interest then being added to that amount. |
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Term
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Definition
| Described as a process of adjusting the loan terms to achieve desired results. |
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Term
| ARMS-Adjustable Rate Mortgages |
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Definition
| Mortgage loans with interest rates tied up to a market rate, ARMS are for single family residences. |
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Term
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Definition
| When financing commercial properties. |
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Term
| ARMS do what with interest rate risk? |
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Definition
| Share the risk between the lenders and the borrowers. |
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Term
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Definition
| Time period between when interests rates on a mortgage are adjusted. |
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Term
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Definition
| Interest rate series agreed on by both the lender and borrow, where the lender has no control. |
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Term
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Definition
| A premium in addition to the index chosen. |
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Term
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Definition
| Point in time when the mortgage payments will be adjusted. |
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Term
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Definition
| Maximum increases allowed in payments on reset dates. |
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Term
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Definition
| Maximum reductions in payments or interest rates on reset dates. |
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Term
| Marginal Cost of Borrowing |
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Definition
| Looking at different choices for loan alternatives. |
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Term
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Definition
| Amount that a new lender or investor would pay to receive the remaining payments on the loan. |
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Term
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Definition
| Seller of the property pays an amount to a lender to buy down, or lower, the interest rate on the loan for the borrower for a specific period of time. |
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Term
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Definition
| Used to obtain additional financing on a property while keeping an existing loan in place. |
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Term
| Expected Rate of Appreciation in House Prices |
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Definition
| Housing Price year 1 - Housing Price Year 0 / Housing Price Year 0 |
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Term
| Expected Appreciation Rate on Home Equity |
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Definition
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Term
| Base, or Driver Industries |
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Definition
| Businesses producing the greatest profits. |
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Term
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Definition
| Relate the quality of the public services that individuals receive relative to the taxes that are paid. |
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Term
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Definition
| Relationship of the size of the city and how cost effectively services are provided from the government. |
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Term
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Definition
| The most probable price that would be paid for a property under competitive market conditions. |
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Definition
| Showing two properties of relative similarity price and feature wise. |
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Term
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Definition
| Estimating the cost to reproduce the structure, then adding the value of the land. |
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Term
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Definition
| Comparing two residences that are currently renting for income are used to estimate the value of the subject. |
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Term
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Definition
| Seller of a comparable is attempting to help the buyer qualify for a loan. |
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Term
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Definition
| Ratio of sale price to monthly rental income. |
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Term
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Definition
| Process of evaluating a borrower's loan request in terms of profitability and risk. |
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Term
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Definition
| The borrower purchases this insurance policy to protect the lender from potential losses should the borrower default on the loan. |
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Term
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Definition
| Monthly payment on the loan divided by the borrowers income. |
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Term
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Definition
| Loan amount requested divided by the estimated property value. |
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Term
| Conventional Mortgage Loans |
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Definition
| Negotiated between a borrower and lender. Loan to Value Ratio, Interest Rate, and the payment-to-income ratio are established. |
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Term
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Definition
| Required by lenders if the borrower cannot afford 20% of the purchase price of a home. |
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Term
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Definition
| Private companies that operate by collecting premiums from borrowers. |
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Term
| FHA- Federal Housing Administration |
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Definition
| FHA mortgage insurance insures the lender completely against any default losses. Does not make loans, but provides insurance. |
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Term
| Department of Veterans Affairs (VA) |
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Definition
| Provides guarantees that compensate lenders for losses on loans made to veterans. |
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Term
| Certificate of Reasonable Value (CRV) |
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Definition
| The amount of the loan that may be guaranteed. |
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Term
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Definition
| A process where gross income is reduced by all monthly outlays for housing, expenses, taxes, all debt obligations, and recurring job-related expenses. |
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Term
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Definition
| Land and all things personally attached. |
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Term
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Definition
| Elaborate system of public record keeping where ownership of all realty could be categorized. |
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Term
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Definition
| Lasts for an indefinite period of time. |
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Term
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Definition
| Expires on a definite date. |
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Term
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Definition
| Freehold estate that represents the most complete form of ownership. |
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Term
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Definition
| Freehold estate that lasts only as long as the life of the owner of the estate of life of some other person. |
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Term
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Definition
| When the owner of an estate grants a leasehold estate or life estate to the grantee, and when the life of the grantee ends or the lease ends the property is reverted back to its original owner. |
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Term
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Definition
| Lease that specifies an exact duration for the tenancy. |
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Term
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Definition
| Continues for successive periods until either party gives proper notice of its intent to terminate a the end of a period. |
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Definition
| Title is conveyed from one person to another. |
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