S Flashcards
SAFE HARBOR
A legal method of lowering or eliminating liability as long as the person has met certain conditions and demonstrated a good faith effort to comply with the law.
SALES CONTRACT
A legally-binding agreement between a buyer and seller, detailing the terms and conditions of the sale of real estate.
SATISFACTION OF MORTGAGE
The document issued by the lender when the borrower pays the mortgage loan in full.
a.k.a.: Release of mortgage
SECOND MORTGAGE
A mortgage recorded after and subordinate to the first mortgage.
SECONDARY MORTGAGE MARKET
The financial market in which private investors and government-sponsored enterprises, such as Fannie Mae and Freddie Mac, buy and securitize mortgages made by primary mortgage lenders. The secondary market provides primary lenders with a source of cash for making new loans.
SECURED LOAN
A loan that is secured by collateral, such as property. The loan agreement contains a provision stating that the lender has a claim against the property if the debt is not paid according to the terms of the agreement.
SECURITIZATION
The process of pooling similar types of loans to create mortgage-backed securities for sale in the financial markets
SELLER CARRY-BACK
A purchase transaction, often involving an assumable mortgage, in which the party selling the property provides all or part of the financing.
a.k.a.: Owner financing
SERVICER
An individual or entity that services a loan by performing responsibilities such as sending statements to borrowers, accepting payments, issuing late payment notices, and managing escrow accounts.
SMALL CREDITOR
A creditor that meets all of the specific criteria set forth under law to qualify for exemptions from certain provisions. Criteria typically depend on factors such as the dollar amount of transactions, the number of loans held in the entity’s portfolio, or the geographical area(s) served. TILA is an example of a law that creates exemptions from certain requirements for entities that meet its specific small creditor criteria.
STANDARD MORTGAGE
A transaction covered by the Dodd-Frank Act that requires regular periodic payment; and does not provide for negative amortization, deferment of principal, or balloon payments; has points and fees that do not exceed 3% of the total loan amount (with some exceptions); has a term that does not exceed 40 years; has an interest rate that is fixed for at least the first five years of the loan term; and that uses the proceeds of the loan solely to pay off the outstanding balance on a
non-standard mortgage and to pay off settlement charges required to be disclosed under RESPA.
STEERING
Directing or influencing a consumer to consummate a transaction that would provide greater compensation for the loan originator than in other transactions that the originator offered or should have offered to the individual.
SUBORDINATE LIEN
A lien on property that is junior, or subsequent, to another lien or liens. In the event of foreclosure, subordinate financing does not receive priority until prior liens are paid.
a.k.a.: Subordinate financing, junior lien, junior financing
SUBPRIME
Below the qualifications set for prime borrowers. Subprime loans are those made available for borrowers with poor credit, an unstable income history, or high debt ratios. Many subprime loan products are no longer available thanks to recent federal legislation.
SUSPICIOUS ACTIVITY REPORT (SAR)
A document that must be filed when there is evidence that funds involved in a transaction were derived from or intended to disguise an illegal activity, that the transaction was designed to evade the Bank Secrecy Act, or was otherwise suspicious or indicative of criminal activity.
