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Flashcards in Mortgage Term Glossary Deck (495):
1

A certificate issued by the VA certifying a veteran’s eligibility for a VA loan.

Certificate of eligibility

2

A general increase in prices coinciding with a fall in the real value of money.

Inflation

3

A mortgage used to finance a construction project.

Construction mortgage

4

The ________ System was put in place to require the prior purchaser to record their purchase so that a subsequent purchaser can search for prior purchases to determine whether they should buy the land.

Recording

5

The sum of a homeowner’s monthly mortgage principal and interest payments, hazard insurance premiums, property taxes, and homeowner’s association fees, plus monthly debt service.

Monthly Housing Expense

6

The amount borrowed and therefore the amount the borrower owes the lender on the origination date of the loan.

Original Principal Balance

7

An increase in an asset’s value, usually because of inflation.

Appreciation

8

variable rate mortgage

Adjustable Rate Mortgage

9

For an ARM, a limit on the amount that payments can increase or decrease over the life of the mortgage.

Lifetime Payment Cap

10

A fee equal to 1 percent of the loan amount that is prepaid interest on the mortgage loan. The more points, the lower the interest rate.

Discount point

11

The Act also regulates the collection, disclosure, use, and protection of consumers’ nonpublic personal information.

Gramm-Leach-Bliley Act (GLB) 1999

12

The administration of a mortgage loan, including the collection of payments, release liens, and payment of property insurance and taxes.

Servicing

13

A mortgage that is subordinate to another mortgage on the same property.

Junior Mortgage

14

A fee charged by a lender to cover the administrative costs of making a loan.

Loan Origination Fee

15

The portion of a purchase price paid in cash (or its equivalent) at the time the sale agreement is executed

Down payment

16

A tenancy with two or more co-owners who are not spouses on the date of acquisition and have identical interests in a property with the same right of possession.

Joint Tenancy

17

A periodic partial payment of a debt.

Installment

18

Standard form which is used to itemize services and fees charged to the borrower by the lender or broker when applying for a loan for the purpose of purchasing or refinancing real estate.

HUD-1 Settlement Statement

19

A fee charged by a lender for preparing and processing a loan.

Origination Fee

20

Date upon which the rate of interest is subject to change.

Interest Rate Change Date

21

The process by which a borrower applies for a new loan, and a lender processes that application.

Loan Origination

22

A statement of a borrower’s account history and status, given by banks.

Verification of Deposit (VOD)

23

A fixed sum of money payable periodically, usually monthly or annually. These payments terminate upon the death of the designated beneficiary.

Annuity

24

A 2003 amendment to the federal Fair Credit Reporting Act providing for free annual credit reports to consumers and establishing measures intended to help prevent identity.

Fair and Accurate Credit Transactions Act (FACT Act) 2003

25

Established in 1965, headed by the Secretary of Housing and Urban Development.

Housing and Urban Development (HUD)

26

The movement of cash through a business, as a measure of profitability or liquidity.

Cash flow

27

_______ insurance enables homebuyers and homeowners to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.

Section 203(k) Loans

28

Aka convertible arm

Conversion Clause/Option

29

An insurance policy used in FHA loans if your down payment is less than 20 percent.

Mortgage Insurance Premium (MIP)

30

The union of all elements (ownership, possession, and custody) constituting the legal right to control and dispose of property.

Title

31

Means any of the fees, costs, obligations, or characteristics of or associated with the product. It also includes any of the conditions on or related to the availability of the product.

Term

32

A written instrument by which land is conveyed.

Deed

33

An agency in the U.S. Department of Housing and Urban Development responsible for facilitating mortgage lending by insuring mortgage loans on houses meeting the agency’s standards.

Federal Housing Administration (FHA)

34

A defect or potential defect in the owner’s title to a piece of land arising from some claim or encumbrance, such as a lien, an easement, or a court order.

Cloud on title

35

For an ARM, a limit on the amount that the interest rate can increase or decrease over the life of the loan.

Lifetime Rate Cap

36

The statute affects nearly every federal agency with jurisdiction over finance or consumer protection, and nearly every segment of the financial-services industry.

Dodd-Frank Wall Street Reform & Consumer Protection Act

37

A naturally appearing radioactive gas found in some buildings, that, in sufficient concentrations, may cause health problems.

Radon

38

A federal statute that repealed both the part of the Glass-Stegall Act prohibiting combinations among banking, securities, and insurance companies, and related conflict-of-interest provisions for such companies’ officers, directors, and employees.

Gramm-Leach-Bliley Act (GLB) 1999

39

Determination of the rate or amount of something, such as a tax or damages.

Assessment

40

Can refer to a discharge signed by the mortgagee or mortgage holder indicating that the property subject to the mortgage is released or that the mortgage debt has been paid and the mortgage conditions have been fully satisfied.

Satisfaction of Mortgage

41

An agreement to cover a loss resulting from the insured’s liability to a third party, such as a loss incurred by a driver who injures a pedestrian, and usually to defend the insured or to pay for a defense regardless of whether the insured is ultimately found liable.

Liability Insurance

42

A blank account, generally held in the name of the depositor and an escrow agent that is returnable to the depositor or paid to a third person on the fulfillment of specified conditions.

Escrow account

43

An agreement to indemnify against loss arising from a defect in title to real property, usually issued to buyer of the property by the title company that conducted the search.

Title Insurance

44

A daily compilation by the British Association of the rates that major international banks charge each other for large-volume, short-term loans of Eurodollars, with monthly maturity rates calculated out to one year.

London Interbank Offered Rate (LIBOR)

45

Property that is pledged as security against a debt; the property subject to a security interest or agricultural lien.

Collateral

46

The account in which funds are held so they can be applied as each payment comes due for an interest rate buy-down plan.

Buy down account

47

Loosely, the loan on which such a transaction is based.

Mortgage

48

Arrangement that allows the seller to deposit the money to an account, from which the money is released each month to reduce the mortgagor’s monthly payments during the early years of the mortgage.

Interest Rate Buy Down Plan

49

A financial statement that summarizes the revenues, costs, and expenses that a business incurred during a given period.

Profit and Loss Statement

50

A veteran’s mortgage that is guaranteed by the Veterans Administration.

VA Mortgage

51

A deed conveying title to real property to a trustee as security until the grantor repays a loan.

Deed of trust

52

The difference between a loan’s face value and the market value of the collateral that secures the loan.

Margin

53


A corporation that purchases both conventional and federally insured first mortgages from members of the Federal Reserve System and other approved banks.

Federal Home Loan Mortgage Corporation (Freddie Mac/FHLMC)

54

The difference between the value of the property and all encumbrances on it.

Equity

55

One of the Act’s better-known and more heavily litigated provisions prohibits merchants from printing the expiration date or more than the last five digits of the card number on a point-of-sale credit-card or debit-card receipt.

Fair and Accurate Credit Transactions Act (FACT Act) 2003

56

an irs form used to retrieve past tax retuns, w-2, and 1099 transcripts that are on file with the irs

4506-T

57

The value of an asset as determined by an appraiser for tax purposes.

Assessed value

58

Any borrower in addition to the first bar or whose name appears on the application.

Co-borrower

59

The Bureau protects consumers by restricting unfair and deceptive business practices, by promoting financial education, by taking consumer complaints, and by enforcing federal consumer-financial-protection laws

Consumer Financial Protection Bureau (CFPB)

60

Borrowers can typically pay from 0-4 points.
Tax-deductible.

Discount point

61

Equity that results from a buyer giving an existing property as trade for all or part of the down payment on the subject property.

Trade Equity

62

Take-home pay after taxes and payroll deductions.

Net Monthly Income

63

When a business or person revises a payment schedule for repaying debt.

Refinance

64

A banker’s certificate acknowledging the receipt of money and promising to repay the depositor.

Certificate of deposit

65

The program was developed by the Home Owners Warranty Corporation, a subsidiary of the National Association of Home Builders.

Homeowner’s Warranty (HOW)

66

Borrowers generally must have high credit ratings to be approved for this type of loan.

Unsecured Loan

67

A number, usually expressed in the form of a percentage or ratio, that indicates or measures a series of observations, especially those involving a market or the economy.

Index

68

The actual cost of borrowing money, expressed in the form of an annualized interest rate.

Annual Percentage Rate (APR)

69

A mortgage loan under the maximum amount of loans that Fannie Mae and Freddie Mac are legally allowed to buy.

Conforming loan

70

The cap is usually defined in terms of rate, but the dollar amount of the principal and interest payment can be capped as well.

Payment Cap

71

An official who evaluates or makes assessments, especially for purposes of taxation.

Assessor

72

The fee paid to an agent for a transaction, usually as a percentage of the money received from the transaction.

Commission

73

After the fixed-interest rate expires, the interest rate starts to adjust based on an index plus a margin.

Fixed-Period Adjustable-Rate Mortgage

74

One’s ability to borrow money

Credit

75

The total cost of the fund is divided by the fund’s total assets to arrive at a percentage amount.

Total Expense Ratio

76

A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.

Non-Assumption Clause

77

A single real-estate unit in a multi-unit development in which a person has both separate ownership of a unit and a common interest, along with the development’s other owners, in the common areas.

Condominium

78

This differs from a tenancy in common because each joint tenant has a right of survivorship to the other’s share

Joint Tenancy

79

If the specific event is covered within the policy, the property owner will receive compensation to cover the cost of any damage incurred.

Hazard Insurance

80

A gift imposed on the transfer of property, especially by will, inheritance, or gift.

Transfer Tax

81

Financing that is ranked behind that held by secured lender in terms of the order in which the debt is repaid.

Subordinate Financing

82

The maximum interest rate that a financial institution can charge a borrower for an ARM or loan according to the contractual terms of the mortgage loan.

Interest Rate Ceiling (Cap)

83

One who is engaged for another, usually on a commission, to negotiate contracts relating to property in which he or she has no custodial or proprietary interest.

Real Estate Agent/Broker

84

The date when a new monthly payment amount takes effect.

Payment Change Date

85

The method used to determine the monthly payment required to repay the remaining balance of a mortgage, in substantially equal installments over the remaining term of the mortgage, at the current interest rate.

Standard Payment Calculation

86

Offers protections for service members, and sometimes their family members, such as protection for small-business owners.

Service Members Civil Relief Act

87

If things line up, the buyer can force seller to sell. If not, buyer is out its consideration paid.

Option Contract

88

A mortgage-application interest rate that is established and guaranteed for a specified period.

Lock-In-Rate

89

This type of deed resembles a mortgage.

Deed of trust

90

The interest rate that a commercial bank holds out as its lowest rate for a short-term loan to its most creditworthy borrowers, usually large corporations.

Prime Rate

91

Rent paid by a tenant under a long-term lease for the use of undeveloped land, usually for the construction of a commercial building.

Ground rent

92

a concise statement, usually prepared for a mortgagee or purchaser of real property, summarizing the history of a piece of loan, including all conveyances, interests, liens, and encumbrances that affect title to the property.

Abstract of Title

93

There are three types of ________ acts: race, notice, and race-notice. Which recording act applies depends on the state.

Recording

94

A conveyance of title to property that is given as security for the payment of a debt or the performance of a duty and that will become void upon payment or performance according to the stipulated terms.

Mortgage

95

It implies that the debt ranks behind the first secured lender, and means that the secured lenders will be paid back before subordinate debt holders.

Subordinate Financing

96

A mortgage that covers the costs of rehabilitating a property.

Rehabilitation Mortgage

97

An index based on the auctions of U.S. Treasury bills or on the U.S. Treasury’s daily yield curve, which is used in determining mortgage rates for mortgages with an unfixed component.

Treasury Index

98

A type of asset that is not easily turned into cash. Real estate is considered a non-liquid asset.

Non-Liquid Asset

99

These initial periods are offered in 3, 5, 7, and 10 year terms.

hybrid loan

100

A form of housing tenure where a person owns the home in which he or she lives.

Owner-Occupied Property

101

Ratio of debt to income and housing expense to income that is used by mortgage lenders to determine a borrower’s credit-worthiness for certain loan amounts.

Qualifying Ratios

102

A dispute-resolution process in which the disputing parties choose one or more neutral third parties to make a final and binding decision resolving the dispute.
The parties to the dispute may choose a third party directly by mutual agreement, or indirectly, such as by agreeing to have an arbitration organization select the third party.

Arbitration

103

An office in the U.S. Department of the Treasury responsible for regulating and examining thrift institutions to ensure that they are financially sound.

Office of Thrift Supervision (OTS)

104

A real-estate agent who is a member of the National Association of Realtors.

Realtor

105

The percentage of gross monthly income that goes toward paying for monthly housing expenses, alimony, child support, car payments, and other installment debts, and payments on revolving or open-ended accounts, such as credit cards.

Debt-to-income ratio

106

Means any written or oral statement, illustration, or depiction, whether in English or any other language, that is designed to effect a sale or create interest in purchasing goods or services, whether it appears on or in a label, package, package insert, radio, television, cable television, brochure, newspaper, magazine, pamphlet, leaflet, circular, mailer, book insert, free standing insert, letter,
catalogue, poster, chart, billboard, public transit card, point of purchase display, film, slide, audio program transmitted over a telephone system, telemarketing script, on-hold script, upsell script, training materials provided to telemarketing firms, program-length commercial (“infomercial”), the internet, cellular network, or any other medium.

Commercial communication

107

A warranty and insurance program that, among other coverage, insures a new home for ten years against major structural defects.

Homeowner’s Warranty (HOW)

108

In real estate, it is generally a percentage of the purchase price and may be a substantial sum. Though it rarely exceeds 10 percent of the purchase price.

Earnest Money Deposit

109

An agreement to pay off a mortgage if the insured dies or becomes disabled.

Mortgage Insurance (MI)

110

The voluntary yielding to a demand for the sake of a settlement
In a real-estate transaction, something given up or agreed to in sale negotiations. For example, the sellers may agree to help pay for closing costs.

Concessions

111

Obsolescence that results from external economic factors, such as decreased demand or changed governmental regulations.

Economic Obsolescence

112

A contractual provision by which an owner of realty enters an agreement with another allowing the latter to rent the property upon signing the lease with the option to buy the property at the end of the lease term, usually for a reduced rate.

Rent with Option to Buy

113

This conveyance is a lien against the property
Also refers to the instrument specifying the terms of such a transaction.

Mortgage

114

A loan which allows for gradual interest rate increase during the first few years of the loan.
Subordinate Financing
Financing that is ranked behind that held by secured lender in terms of the order in which the debt is repaid.
It implies that the debt ranks behind the first secured lender, and means that the secured lenders will be paid back before subordinate debt holders.

Step Rate Mortgage

115

Truth-in-Lending Act (TILA/Regulation Z)
A 1968 federal statute enacted as the first subchapter of the Consumer Credit Protection Act to safeguard consumers in the use of credit by regulating the use of credit cards.

Truth-in-Lending Act (TILA/Regulation Z)

116


These mortgages, which feature a fixed periodic payment and interest throughout the mortgage term, are typically used for home financing.

Conventional Mortgage

117

An ordinary ___________is revocable and automatically terminates upon the death or incapacity of the principal.

Power of Attorney

118

Financially sound enough that a lender will extend credit in the belief that default is unlikely. Fiscally healthy.

Creditworthy

119

Insurance that protects property owners against damage caused by fires, severe storms, earthquakes, or other natural events.

Hazard Insurance

120

A soft gray mineral that does not burn that was used especially as a building material in the past. It can cause serious diseases of the lungs when its dust is breathed in.

Asbestos

121

Gives you an estimate of the costs of the mortgage loan.

Good Faith Estimate

122

The process by which a company collects interest, principal, and escrow payments from a borrower.

Loan Servicing/Administration

123

A listing giving one agent has the right to be the only person, other than the owner, to sell the property during a specified period.

Exclusive Agency Listing

124

The act or an instance of improving the value of economically useless land by physically changing the land, such as irrigating a desert.

Reclamation

125

A listing stating the agent will allow other agents to try to sell the property.

Multiple Listing Service (MLS)

126

A person or entity from which money is borrowed.

Lender

127

The expenses that must be paid, usually in lump sum at closing, apart from the purchase price and interest.

Closing cost

128

An additional fee assessed on a debt when a payment is not received by the due date.

Late Charge

129

The acquisition of real property coupled with the assumption of personal liability for debt secured by that property.

Assumption (of Mortgage or Trust Deed)

130

These may include taxes, title insurance, and attorney’s fees.

Closing cost

131

The pro-rated amount of interest due calculated and paid at loan closings

Per Diem Interest

132

It was established by the Dodd-Frank Act in 2010 and began operating in 2011.

Consumer Financial Protection Bureau (CFPB)

133

A federally owned corporation in the U.S. Department of Housing and Urban Development responsible for guaranteeing mortgage-backed securities composed of FHA-insured or VA- guaranteed mortgage loans.

Government National Mortgage Association (Ginnie Mae/GNMA)

134

Non-invasive visual examination of a residential dwelling, performed for a fee, which is designed to identify observed material defects within specific components of said dwelling.

Home Inspection

135

Long-term mortgage loan.

Permanent Loan

136

The amount by which an interest in property exceeds secured claims or liens.

Equity

137

Listing agreement upon which the broker gets commission even if seller is the one who sells the house during the agreement period or for a certain period thereafter.

Exclusive Right-to-Sell Listing

138

It performs like a fixed and adjustable rate loan. It has a fixed rate for an initial period before turning into an ARM.

Hybrid Loan

139

A Fannie MAE loan application form designed by fannie mae and freddie mac that is used by lenders to obtain financial personal information from borrowers who apply for a mortgage loan secured by a one-to-four unit residential real estate

1003 (ten-oh-three)

140

An arrangement by which a borrower agrees to make additional payments to pay down past due amounts while still making regularly scheduled payments.

Repayment Plan

141

A destruction or deprivation of some estate or right because of the failure to perform some contractual obligation or condition.

Forfeiture

142

In some states, this right must be clearly express in the conveyance – otherwise, the tenancy will be presumed to be a tenancy in common.

Joint Tenancy

143

The price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm’s-length transaction, the point at which supply and demand intersect.

Fair Market Value

144

A tax-deferred retirement program developed for the self-employed.

Keogh Plan

145

A loan with a fixed rate for the first year that has a rate that changes yearly for the remaining life of the loan.

One Year Adjustment Rate Mortgage

146

The actual annual rate, which incorporates compounding when calculating interest, rather than the stated rate or coupon rate.

Effective Interest Rate

147

A promise from a lender to make a mortgage loan.

Firm commitment

148

______ is usually performed by the lender or the lender’s agent, for a fee.

Servicing

149

A residential mortgage on a dwelling that is designed to house more than four families, such as an apartment complex.

Multifamily Mortgage

150

The right to sell a principal’s products or to act as the seller’s real-estate agent to the exclusion of all others, including the owner.

Exclusive Right-to-Sell Listing

151

A mortgage that is senior to all other mortgages on the same property.

First mortgage

152

This plan is also known as an H.R. 10 plan, after the House of Representatives bill that established the plan.

Keogh Plan

153

A clause within the sales contract stating that a certain condition that must be met before a contract is legally binding, before the sale can close.
Real estate contracts often have a specific date by which this must be met.

Contingency clause

154

The act or result of gradually extinguishing a debt, such as a mortgage, usually by contributing payments or principal each time a periodic interest payment is due.

Amortization

155

A period of extra time allowed for taking some required action (such as making payment) without incurring the usual penalty for being late.

Grace period

156

The third-party depositary of an escrow.

Escrow agent

157

Article 9 of the UCC provides for a 20-day ______ _____, after the collateral is received, during which a purchase-money security interest must be perfected to have priority over any conflicting security interests.

Grace period

158

Was enacted to provide sufficient time for consumers to review the disclosures before consummation can take place.

Mortgage Disclosure Improvement Act (MDIA) 2008

159

A document indicating that a building complies with zoning and building ordinances and is ready to be occupied

Certificate of occupancy

160

A charge to a borrower when a mortgage banker or other small lender must borrower money on a short-term basis to loan money on mortgage loans.


Warehouse Fee

161

_____ is generally available as a remedy or defense for a non-defaulting party and is accompanied by restitution of any partial performance, thus restoring the parties to their precontractual positions.

Rescission

162

An initial evaluation of the credit worthiness of a potential borrower that is used to determine the estimated amount that the person can afford to borrow.

Pre-Qualification

163

Any property right that is not an ownership interest.

Encumbrance

164

Prepaid interest on the mortgage loan. The more points paid, the lower the interest rate.

Loan Discount Points

165

A clause in a mortgage contract that says if the mortgage is prepaid within a certain time, a penalty will be assessed.

Pre-Payment Penalty

166

A notification given to a borrower stating that they have not made their payments by the predetermined deadline, or is otherwise in default on the mortgage contract.

Notice of Default (NOD)

167

A mortgage that is guaranteed by a third party.

Guarantee Mortgage

168

Intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations.

Community Reinvestment Act (1977)

169

Such a mortgage covers both the outstanding balance of the first mortgage and the additional funds loaned.

Wraparound Mortgage

170

time between adjustment dates for an arm

adjustment period

171

A price extended to another party at which one is ready to buy or sell.

Offer

172

The measuring of a tract of land and its boundaries and contents. Also refers to the map indicating the results of such measurements.

Survey

173

Known as: uniform residential loan application

1003 (ten-oh-three)

174

Origination from a third party where the person is involved in the process of making mortgages and gathering borrower information for a mortgage application, which is then transferred or sold to the actual mortgage lender.

Third-Party Origination

175

A credit report that contains information from at least three credit repositories. Any duplicate entries are combined to provide a concise summary of outstanding liabilities and credit history.

Merged Credit Report

176

A modification of the original construction plans ordered by the property owner or general contractor.

Change order

177

The omission or failure to perform a legal or contractual duty, especially the failure to pay a debt when due.

Default

178

It compromises 12 central banks supervised by a Board of Governors whose members are appointed by the President and confirmed by the Senate.

Federal Reserve System (FRS)

179

The ownership history of a piece of land, from its first owner to the present one.

Chain of title

180

Fee issued to the client which covers the cost of the assessment and is included in closing costs and fee

Flood certificate fee

181

A contractual stipulation

Term

182

If the mortgage is prepraid within a certaintime, the penalty is usually based on percentage of the remaining mortgage balance or a certain number of months’ worth of interest.

Pre-Payment Penalty

183

The sale of property on the understanding, or with the express option, that the seller may lease the property from the buyer, usually immediately after the sale.

Sale-Leaseback

184

A lien imposed on a judgment debtor’s nonexempt property.

Judgment Lien

185

Designed to enhance consumer protection and reduce fraud through the setting of minimum standards for the licensing and registration of state-licensed mortgage loan originators.

Secure and Fair Enforcement Act (S.A.F.E. Act) 2008

186

Assumption of the liability of another’s debts in the event of default.

Guarantee

187

The Association purchases, on the secondary market, residential mortgages originated by local lenders; it then issues federally insured securities backed by these mortgages.

Government National Mortgage Association (Ginnie Mae/GNMA)

188

An assignment in which a mortgage lender or borrower transfer the mortgage to a third party.

Assignment of mortgage

189

Truth-in-Lending Act (TILA/Regulation Z)
A 1968 federal statute enacted as the first subchapter of the Consumer Credit Protection Act to safeguard consumers in the use of credit by (1) requiring full disclosure of the terms of loan agreements, including finance charges.

Truth-in-Lending Act (TILA/Regulation Z)

190

Also, a right, often acquired under a life-insurance contract, to receive fixed payments periodically for a specified duration

Annuity

191

A loan in which its entirety, or a portion of it, can be forgiven or deferred for a period by the lender when certain conditions are met.

Soft Second Loan

192

Reasons include the loan amount is higher than the conforming loan limit, lack of sufficient credit, the unorthodox nature of the use of funds, or the collateral backing it.

Non-Conforming Loan

193

The land burdened by an easement

Servient estate

194

A land area zoned for a single-community subdivision with flexible restrictions on residential, commercial, and public uses.

Planned Unit Development (PUD)

195

A mortgage that is fully amortized over a significantly shorter term than the traditional 25- to 30- year mortgage, with increasing payments each year.

Growing-Equity Mortgage (GEM)

196

Offers protections for service members, and sometimes their family members, such as eviction prevention.

Service Members Civil Relief Act

197

A guarantee that the lender will deliver a specific combination of interest rate and points if the mortgage closes by a specified date.

Lock

198

An escrow holder is not a common-law agent because the holder does not act subject to the control of the parties to the escrow agreement.

Escrow agent

199

Handbook about Adjustable-Rate Mortgages
Must be presented within 3 days of application.

Consumer Handbook on Adjustable Rate Mortgages

200

A debt, such as one for delinquent taxes, that is not released through bankruptcy.

Non-Discharge Debt

201

Buyer pays seller consideration to make offer irrevocable for a certain period, with attached terms of sale.

Option Contract

202

An unconditional written promise, signed by the maker, to pay absolutely and in any event a certain sum of money either to, or to the order of, the bearer or a designated person.

Promissory Note

203

An area owned and used in common by the residents of a condominium, subdivision, or planned- unit development

Common area

204

When a condition is not likely to occur until the obligee has relied on the expected exchange by, for example, performing or preparing to perform, nonoccurrence of the condition results in the obligee’s loss of its reliance interest when the obligee loses the right to that exchange.

Forfeiture

205

A measure of the total costs associated with managing and operating an investment fund.

Total Expense Ratio

206

An abbreviation for “comparable properties” used for comparative purposes in the appraisal process.

Comparables

207

The final transaction between the buyer and seller, whereby the conveyancing of documents is concluded and the money and property transferred.

Closing/Settlement

208

A ratio comparing housing expenses to before-tax income that is used by lenders to qualify borrowers for a mortgage.

Housing Expenses-to-Income Ratio

209

The original term of the loan after the number of payments made has been subtracted.

Remaining Term

210

A short-term loan that is used to cover costs until more permanent financing is arranged or to cover a portion of costs that are expected to be covered by an imminent sale.

Bridge loan

211

A check drawn by a bank on itself, payable to another person, and evidencing the payee’s authorization to receive from the bank the amount of money represented by the check; a draft for which the drawer and drawee are the same bank, or different branches of the same bank.

Cashiers check

212

A clause found in an ARM contract that limits the possible increase in the loan’s interest rate to a certain amount each year.

Payment Cap

213

A transaction that has the intent but not the form of a mortgage, and that a court of equity will treat as a mortgage.

Equitable mortgage

214

That portion of the total monthly payment that is applied toward principal and interest.

Monthly Fixed Installment

215

An interest-bearing account at a bank or other financial institution.

Money Market Account

216

Insurance that covers both damage to the insured’s residence and liability claims made against the insured, especially those arising from the insured’s negligence.

Homeowner’s Insurance

217

Offers protections for service members, and sometimes their family members, such as postponed civil court matters.

Service Members Civil Relief Act

218

An adjustable rate mortgage with an initial fixed-interest-rate period.

Fixed-Period Adjustable-Rate Mortgage

219

the tax otherwise paid in a traditional sale is deferred indefinitely until the replacement property is sold or another _________ is initiated

1031 exchange

220

A covenant by which the grantor in a deed promises to secure to the grantee the estate conveyed in the deed, and pledges to compensate the grantee if the grantee is evicted by someone having better title.
The covenant is binding on the grantor’s heirs.
Historically, a warrantor was expected to turn over land, but cash compensation could be substituted.

Warranty

221

Credit cards, home equity lines of credit (HELOC) and personal lines of credit are all examples of ________.

Revolving Debt

222

A credit bureau’s report on a person’s financial status, usually including the approximate amounts and locations of a person’s bank accounts, charge accounts, loans, and other debts, bill- paying habits, defaults, bankruptcies, foreclosures, marital status, occupation, income, and lawsuits.

Credit report

223

(Credit Bureau)

Consumer Reporting Agency

224

The restoration or return of something to a former owner or holder.

Reconveyance

225

Someone who stands in a fiduciary or confidential relation to another, especially one who, having legal title to property, holds it in trust for the benefit of another and owes a fiduciary duty to that beneficiary.

Trustee

226

The cost of a substitute asset that is equivalent to an asset currently held.
The new asset has the same utility but may or may not be identical to the one replaced.

Replacement cost

227

Seller promises that there were no defects in title that arose or were created while seller owned the property, but no promises about defects arising while someone prior to the seller owned the property.

Special Warranty Deed

228

A legal document or property delivered by a promisor to a third party to be held by the third party for a given amount of time or until the occurrence of a condition at which time the third party is to hand over the document or property to the promisee.

Escrow

229

A law or regulation setting forth standards for the construction, maintenance, occupancy, use, or appearance of buildings and dwelling units.

Housing Code

230

Mortgage loan originators who work for an insured depository or its owned or controlled subsidiary that is regulated by a federal banking agency, or for an institution regulated by the Farm Credit Administration, are registered.
All other mortgage loan originators are licensed by the states.

Secure and Fair Enforcement Act (S.A.F.E. Act) 2008

231

A savings or brokerage account to which a person may contribute up to a specified amount of earned income each year.

Individual Retirement Account (IRA)

232

A sales contract in which ownership of property is transferred from a seller to a buyer for a fixed sum at a fixed date.

Purchase/Sales Agreement

233

An absolute right to a benefit granted immediately upon legal requirement.

Entitlement

234

Typically, borrowers can pay for 0-4 points.

Loan Discount Points

235

A payment for less than the full amount claimed by the creditor.

Partial Payment

236

The fee paid to a lender when an assumption takes place.
Usually paid by the purchaser

Assumption fee

237

The interest rate used in calculating the initial mortgage payment in qualifying a borrower.

Qualifying Rate

238

If the policyholder were to die while the ______ ____ _____ was in force, the policy would pay out a capital sum that will be just sufficient to repay the outstanding mortgage.

Mortgage Life Insurance

239

A title free from any encumbrances, burdens, or other limitations. i.e., good and marketable title

Clear title

240

The instruction given to the third-party depositary of an escrow.

Escrow agreement

241

A rent-to-own purchase plan under which the buyer takes possession of the property with the first payment and takes ownership with the final payment.

Lease-Purchase Option

242

A real-estate broker who acts as the agent of a purchaser of property
Statutes in many states permit prospective buyers to retain a licensed real-estate agent as their agent.
In some states, this entity is treated as the subagent of the broker with whom the owner lists property for sale and not the agent of the buyer.

Buyer’s Broker/Agent

243

An individual or organization that markets mortgage loans and brings lenders and borrowers together.

Mortgage Broker

244

A written promise by one party to pay money to another party or to bearer.
Notice of Default (NOD)
A notification given to a borrower stating that they have not made their payments by the predetermined deadline, or is otherwise in default on the mortgage contract.

Note

245

The rate of interest charged by a mortgage lender.

Mortgage Rate

246

A process used by banks and mortgage lenders to review the employment history of a borrower, to determine the borrower’s job stability and cross-reference income history with that stated on the Uniform Residential Loan Application.

Verification of Employment (VOE)

247

The national market in which existing mortgages are bought and sold, usually on a package basis.

Secondary Mortgage Market

248

In real estate projects, it is obtained after completion of construction, usually to repay the short- term construction loan.

Permanent Loan

249

The current single family loan limit is $453,100. $533,850 for a two-unit home. $645,300 for a three-unit home. $801,950 for a four-unit home.

Fannie Mae/Freddie Mac Loan Limit

250

Local governments often impose _________ to finance school districts, municipal projects, and the like.

Property Tax

251

A 1968 federal statute that prohibits discrimination based on race, sex, religion, family status, or national origin in the sale or rental of a dwelling, especially in the refusal to sell or rent.

Fair Housing Act (FHA)

252

A stipulation or prerequisite in a sales contract, constituting the essence of the instrument.

Condition

253

Liability shared by two or more parties.

Joint Liability

254

If a court construes a contractual term to be a ____________, then its untruth or breach will entitle the party to whom it is made to be discharged from all liabilities under the contract.

Condition

255

Money paid by the buyer of a house to reduce the mortgage-interest payments.

Buy-down

256

A comprehensive _________ usu. regulates the height of buildings and the proportion of the lot area that must be kept free from buildings.

Zoning Ordinance

257

Enacted April 9, 1866.
Affirmed that all citizens are equally protected by the law.

Civil Rights Act (1866)

258

Takings Clause of the Fifth Amendment: “Nor shall private property be taken for public use without just compensation.”

Eminent Domain

259

A statutory lien that secures payment for labor or materials supplied in improving, repairing, or maintaining real or personal property.

Mechanic’s Lien

260

Builders often provide this type of coverage, and may states provide similar warranty protection by statute.

Homeowner’s Warranty (HOW)

261

A type of asset that arises on a balance sheet because a business made payment for goods and services to be received.

Pre-Paid Expenses

262

An investment company that invests its shareholders’ money in a usually diversified selection of securities.

Mutual Funds

263

Such a lease is usually treated as an installment sale. Under a capital lease, the lessee is responsible for paying taxes and other expenses on the property.

Lease-Purchase Option

264

Open-ended accounts, usually with variable interest rates, pre-determined credit limits and payments that are calculated as a percentage of the unpaid balance.

Revolving Debt

265

A law or regulation setting forth standards for the construction, maintenance, occupancy, use, or appearance of buildings and dwelling units.

Building code

266

An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property.

First-Time Home Buyer

267

A form of insurance specifically designed to protect a repayment mortgage.

Mortgage Life Insurance

268

A method of documenting a loan file by using information such as pay stubs, W-2 forms, and bank stubs instead of waiting on verifications sent to third parties for confirmation of statements made on the application.

Alternative documentation

269

An interest in land owned by another person, consisting of the right to use or control the land, or an area above or below it, for a specific limited purpose.

Easement

270

an arrangement in which a person who is in a position to refer business incident to a real estate settlement service involving a federally related mortgage loan has either an affiliate relationship with or a direct or beneficial ownership inters of more than 1 percent in a provider of settlement services: and either of such persons directly or indirectly refers such business to that provider or affirmatively influences the selection of that provider.

Affiliated business arrangement

271

Generally includes all the steps from taking a loan application up to disbursal of funds.

Origination

272

Under the federal Fair Credit Reporting Act, someone who, for fees, dues, or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer-credit information or other information about consumers for the purpose of furnishing consumer reports to third parties, and who uses any means or facility of interstate commerce to prepare or furnish consumer reports.

Consumer Reporting Agency (Credit Bureau)

273

A loan that fails to meet bank criteria for funding.

Non-Conforming Loan

274

An agent who represents the purchaser or buyer in the negotiation and closing of a real-property transaction by handling financial calculations and transfers of documents.

Closing agent

275

A debt that is evidenced by a legal judgment or brought about by a successful lawsuit against the debtor.

Installment Debt

276

This rate, which can vary slightly from bank to bank, often dictates other interest rates for various personal and commercial loans.

Prime Rate

277

A deposit paid (often in escrow) by a prospective buyer to show a good-faith intention to complete the transaction, and ordinarily forfeited if the buyer defaults.

Earnest Money Deposit

278

A _______search is typically conducted by a title company or a real-estate lawyer at a prospective buyer’s or mortgagee’s request.

Title Search

279

A project in which a corporation hold title to a residential property and sells shares to individual buyers, who then receive a proprietary lease as their title.

Cooperative (Co-op) Project

280

AKA Conventional Loan

Conventional Mortgage

281

Collectively, the word includes any aggregation of rights, privileges, powers, and immunities, distributively, it refers to any one right, privilege, power, or immunity.

Interest

282

On an Arm, typically one, three or five years depending on the index.

Adjustment interval

283

A loan that is obtained without the use of property as collateral for the loan.

Unsecured Loan

284

Ratio of the total mortgage liens against the property to the lesser of either the appraised value or the sales price.

Combined Loan-to-Value (CLTV)

285

An agency in the U.S. Department of Agriculture responsible for making or guaranteeing loans for rural housing.

Rural Housing Service (RHS)

286

The housing expense measure includes mortgage principal, interest payments, property taxes, hazard insurance, mortgage insurance, and association fees.
The limit is generally 28 percent.

Housing Expenses-to-Income Ratio

287

The ratio, usually expressed as a percentage, between the amount of a mortgage loan and the value of the property pledged as security for the mortgage.

Loan-to-Value Ratio (LTV)

288

Made in good faith; without fraud or deceit

Bona fide

289

Offers protections for service members, and sometimes their family members, such as postponement of foreclosures.

Service Members Civil Relief Act

290

This is often required before title can be transferred and the building occupied

Certificate of occupancy

291

When a mortgage allows the borrower to make minimum payments that are less that the entire amount of interest owed, the unpaid interest is deferred by adding it to the loan balance.

Negative Amortization

292

A reduction in the value or price of something, specifically, a decline in an asset’s value because of use, wear, obsolescence, or age.

Depreciation

293

Listing agreement upon which the broker does not get commission if seller sells the property himself.

Exclusive Agency Listing

294

Was enacted in 1994 as an amendment to TILA to address abusive practices in refinances and closed-end home equity loans with high interest rates or high fees.

Home Ownership and Equity Protection Act (HOEPA) 1994

295

The amount of after-tax income produced by a specific asset or group of assets, calculated by subtracting federal income tax from gross income.

Net Effective Income

296

it is used to validate income documentation for underwriting and quality control purposes.

4506-T

297

Liability on a claim

Debt

298

The date when a debt falls due, such as a debt on a promissory note or bond.

Maturity Date

299

Financial obligations in a specified amount.

Liabilities

300

The interest paid on the principal only and not on accumulated interest.

Simple Interest

301

A line of bank credit given to a homeowner, using as collateral the homeowner’s equity in the home.

Home equity loan

302

The requirement that certain kinds of contracts be memorialized in a writing, signed by the party to be charged, with sufficient content to evidence the contract.

Statute of Frauds

303

The date scheduled for the conclusion of the real estate transaction.

Closing date

304

A loan provided by the seller of a property or business to the purchaser.

Owner Financing

305

Under this agreement, the original agent gives the selling agent a percentage of the commission or some other stipulated amount.

Multiple Listing Service (MLS)

306

The original cost of an asset

Acquisition Cost

307

A report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land, together with the liens and encumbrances thereon which will not be covered under a subsequent title insurance policy.

Preliminary Title Report

308

A statutory procedure by which a usually insolvent debtor obtains financial relief and undergoes a judicially supervised reorganization or liquidation of the debtor’s assets for the benefit of creditors

Bankruptcy

309

Was enacted to ensure that consumers receive good faith estimates of TILA disclosures at the beginning of the application process.

Mortgage Disclosure Improvement Act (MDIA) 2008

310

The amount of a debt, investment, or other fund, not including interest, earnings, or profits.

Principal

311

The realty that all tenants may use, though the landlord retains control over and responsibility for it.

Common areas

312

The monthly payment due on a mortgage loan which includes both principal and interest.

Fixed Installment

313

The voluntary transfer of property

Conveyance

314

An independent federal agency that regulates consumer financial products and services

Consumer Financial Protection Bureau (CFPB)

315

A formal agreement or promise to perform, or not perform, a particular act.

Covenants

316

A good and merchantable _________ shows clear and marketable title, rather than showing only the history of the property.

Abstract of Title

317

A mortgage provision that gives the lender the option to accelerate the debt if the borrower transfers or conveys any part of the mortgaged real estate without the lender’s consent.

Due-on-Sale Clause

318

The central bank that sets credit and monetary policy by fixing the reserves to be maintained by depository institutions, determining the discount rate charged by Federal Reserve Banks, and regulating the amount of credit that may be extended on any security.

Federal Reserve System (FRS)

319

An individual, freestanding, unattached dwelling unit, typically built on a lot larger than the structure itself.

Single-Family Properties

320

Land and anything growing on, attached to, or erected on it, excluding anything that may be served without injury to the land.

Real Property

321

Describes the features of the ARM loan, which must be presented to the consumer within 3 days of application.

ARM Disclosure

322

The contract among buyer, seller, and escrow holder, setting forth the rights and responsibilities of each.

Escrow contract

323

A request for a copy of your credit report by a lender or other business, often when you fill out a credit application and/or request more credit.

Inquiry

324

A provision in an ARM which allows the loan to be converted from an ARM to a fixed-rate mortgage at specified times during the term.
Usually allowed at the end of the first adjustment period.

Conversion Clause/Option

325

A claim or liability that is attached to property and that may lessen its value, such as a lien or mortgage.

Encumbrance

326

Someone who mortgages property

Borrower (Mortgagor)

327

A mortgage with an interest rate that remains the same over the life of the mortgage regardless of market conditions.

Fixed-Rate Mortgage (FRM)

328

A fee charged by a licensed certified appraiser to determine a fair market value at a point in time.

Appraisal fee

329

A 1970 federal statute that regulates disclosure and use of consumer-credit information and ensures the right of consumers to have access to and to correct their credit reports.
Many states have enacted similar statutes.

Fair Credit Reporting Act (FCRA/Regulation V)

330

A form that lists basic information about the terms of a mortgage for which the applicant has applied.

Good Faith Estimate

331

The portion of a monthly mortgage payment that is earmarked to pay property taxes and property-insurance premiums.

Impound

332

The act of refraining from enforcing a right, obligation, or debt.

Forbearance

333

Typically, the creditor does not take possession of the property on which the ____ has been obtained.

Lien

334

An individual or organization that originates real-estate loans for a fee, resells them to other parties, and services the monthly payments.

Mortgage Banker

335

A mortgage in which the lender can periodically adjust the mortgage's inters rate in accordance with fluctuation in some external market index.

Adjustable Rate Mortgage

336

These are properties like the property under consideration. They have reasonably the same size, location, and amenities and have recently been sold.
These properties help the appraiser determine the approximate fair market value of the subject property.

Comparables

337

An interest in land that, being the broadest property interest allowed by law, endures until the current holder dies without heirs; especially a fee simple absolute.

Fee simple

338

The power to create or enter into a legal relation under the same circumstances in which a normal person would have the power to create or enter into such a relation; specifically, the satisfaction of a legal qualification, such as legal age or soundness of mind, that determines one’s ability to sue or be sued, enter a binding contract, and the like.

Capacity

339

Seller promises that there are no defects in title that arose or were created while seller owned the property or while anyone prior to seller owned the property.

General Warranty Deed

340

The determination of what constitutes a fair price for something or how its condition can be fairly stated

Appraisal

341

At maturity, the periodic payments will have completely repaid the loan

Fully Amortized Mortgage

342

A program in which an employer assists its employees in purchasing homes by helping with the down payment, closing costs, or monthly payments.

Employer-Assisted Housing

343

A limitation placed on the use or enjoyment of property.

Restriction

344

Fannie Mae uses this application form, referring to it as the freddie mac form 65

1003 (ten-oh-three)

345

A loan that is secured by property. AKA collateral loan

Secured Loan

346

Protects active-duty service members, including National Guard and reserve members, who have been activated by the federal government.

Service Members Civil Relief Act

347

An occasion when real estate offered for sale can be viewed by prospective buyers without an appointment.

Open House

348

A title that a reasonable buyer would accept because it appears to lack any defect and to cover the entire property that the seller has purported to sell.

Marketable title

349

The total amount of a person’s income before taxes.

Gross monthly income

350

These costs consist primarily of management fees and additional expenses such as trading fees, legal fees, auditor fees, and other operational expenses.

Total Expense Ratio

351

A document indicating ownership of real or personal property. This document usually identifies any liens or other encumbrances.

Certificate of title

352

The cabinet-level department of the federal government responsible for operating programs that benefit veterans of military service and their families.

Department of Veterans Affairs (VA)

353

Basis increased by capital improvements and decreased by depreciation deduction

Adjusted Basis

354

Commercial and Residential uses at the same time.

Mixed Use Property

355

Offers protections for service members, and sometimes their family members, such as termination of lease agreements and prevention of repossession of property.

Service Members Civil Relief Act

356

Loosely, any real-property security transaction, including a deed of trust.

Mortgage

357

The cabinet-level department of the federal government responsible for overseeing programs that are concerned with housing needs and fair-housing opportunities, and with improving and developing the country’s communities.

Housing and Urban Development (HUD)

358

This can be for the entire balance or for any upcoming payment that is paid in advance of the date for which the borrower is contractually obligated to pay it.

Pre-Payment

359

A potential buyer’s contractual right to meet the terms of a third party’s higher offer.

Right of First Refusal

360

An instrument granting someone authority to act as agent or attorney-in-fact for the grantor.

Power of Attorney

361

The national market in which mortgages are originated.

Primary Mortgage Market

362

A city ordinance that regulates the use to which land within various parts of the city may be put.
It allocates uses to the various districts of a municipality, as by allocating residences to certain parts and businesses to other parts.

Zoning Ordinance

363

A legal right or interest that a creditor has in another’s property, lasting usually until a debt or duty that it secures is satisfied.

Lien

364

A feature of some mortgages, usually fixed-rate, that helps you buy a home with a low-down payment.

Low-Down-Payment Feature

365

A mortgage that a buyer gives the seller, when the property is conveyed, to secure the unpaid balance of the purchase price.

Purchase Money Mortgage (PMM)

366

Mortgagee

Lender

367

The inherent power of a governmental entity to take privately owned property and convert it to public use, subject to reasonable compensation for the taking.

Eminent Domain

368

Also refers to a lien on real estate in favor of a state or local government that may be foreclosed for nonpayment of taxes.
Most state have adopted the Uniform Federal Tax Lien Registration Act.
Tax Sale
A sale of property because of nonpayment of taxes.
Term
A contractual stipulation

Tax Lien

369

When a mortgage negatively amortizes, the ______ _____ _______does not include any amount for principal reduction and does not cover all the interest. The loan balance therefore increase instead of decreasing.

Monthly Fixed Installment

370

Information in the files of a credit bureau, regarding an individual’s debts and repayments (or non-repayments) of such.

Credit history

371

Collateral given or pledged to guarantee the fulfillment of an obligation, especially that a creditor will be repaid (usually with interest) any money or credit extended to a debtor.

Security

372

A short-term loan secured to cover certain major expenditures, such as construction costs, until permanent financing is obtained.

Interim Financing

373

A federal statute that requires lenders to provide home buyers with information about known or estimated settlement costs

Real Estate Settlement Procedures Act (RESPA/Regulation X)

374

Unless necessary to sow the court’s jurisdiction, a plaintiff’s pleadings need not assert the legal capacity of any party. A party wishing to raise the issue of _________ must do so by specific negative pleading.

Capacity

375

A legal proceeding to terminate a mortgagor’s interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale to satisfy the unpaid debt secured by the property.

Foreclosure

376

Loosely, any real-estate agent or broker.

Realtor

377

A structure, transportable in one or more sections, that when traveling is 8 body feet or more in width or 40 body feet or more in length, or when erected on site, is 320 or more square feet, and that is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and that has within it plumbing, heating, air-conditioning, and electrical systems.

Manufactured Housing

378

A mortgage requiring periodic payments for a specified time and a lump-sum payment of the outstanding balance at maturity

Balloon mortgage

379

These daily rates are used as the underlying interest rates for derivative contracts in currencies other than the euro.

London Interbank Offered Rate (LIBOR)

380

A set restriction on how much payments can increase or decrease over a single adjustment period.

Periodic Payment Cap

381

Any movable or intangible thing that is subject to ownership and not classified as real property.

Personal Property

382

a loan agreement provision that requires the debtor to pay off the balance sooner than the due date if some specified event occurs, such as failure to pay an installment of to maintain insurance.

Acceleration Clause

383

A mortgage whose initial payments are lower than its later payments.

Graduated Payment Mortgage (GPM)

384

A privately owned and managed corporation chartered by the U.S. government that provides a secondary mortgage market for the purchase and sale of mortgages guaranteed by the Veterans Administration and those insured under the Federal Housing Administration.

Federal National Mortgage Association (Fannie Mae/FNMA)

385

Change in the frequency of payment or interest rate of ARM.

Change frequency

386

Any asset purchased to produce a profit, whether from income or resale.

Investment Property

387

Mortgage insured by a government entity, such as FHA, VA or RHS.

Government mortgage

388

The components of a monthly mortgage payment.

Principal, Interest, Taxes, and Insurance (PITI)

389

Life insurance on a borrower, usually in a consumer installment loan, in which the amount due is paid if the borrower dies.

Credit life insurance

390

The pro-rated amount of interest due for remaining days in a month.

Per Diem Interest

391

A mortgage in which the lender disburses money over a long period to provide regular income to the borrower, and in which the loan is repaid in a lump sum when the borrower dies or when the property is sold

Reverse Annuity Mortgage (RAM)

392

Offers protections for service members, and sometimes their family members, such as life insurance coverage protection, and suspension of professional liability insurance.

Service Members Civil Relief Act

393

Equity that results from a buyer giving an existing property as trade for all or part of the down payment on the subject property.

Trade Equity

394

A mortgage that is insured fully or partially by the Federal Housing Administration.

FHA mortgage

395

A party’s unilateral unmaking of a contract for a legally sufficient reason, such as the other party’s material breach, or a judgment rescinding the contract.

Rescission

396

AKA self-liquidating mortgage

Fully Amortized Mortgage

397

An alternative financing option for low- and moderate-income households.
Survey
The measuring of a tract of land and its boundaries and contents. Also refers to the map indicating the results of such measurements.

Subsidized Second Mortgage

398

Criteria used to determine the eligibility for a loan.

Qualifying Guidelines

399

A second mortgage issued when a lender assumes the payments on the borrower’s low-interest first mortgage (usually issued through a different lender) and lends additional funds.

Wraparound Mortgage

400

A 1968 federal statute enacted as the first subchapter of the Consumer Credit Protection Act to safeguard consumers in the use of credit by restricting the garnishment of wages.

Truth-in-Lending Act (TILA/Regulation Z)

401

This regulation provides the public loan data that can be used to assist in determining whether financial institutions are serving the housing needs of their communities, public officials in distributing public-sector investments to attract private investment to areas where it is needed, and in identifying possible discriminatory lending patterns.

Home Mortgage Disclosure Act of 1975 (HMDA/Regulation C)

402

A mortgage in which the mortgagor pays the interest as well as a portion of the principal in the periodic payment.

Fully Amortized Mortgage

403

The condition of being unable to pay debts as they fall due or in the usual course of business.

Insolvency

404

This lien gives the judgment creditor the right to attach the judgment debtor’s property.

Judgment Lien

405

When a seller wants to close a sale of real estate but the buyer is not yet able to fully fund the purchase, the parties can close the sale with the seller taking from the buyer a purchase money note and mortgage in lieu of an all-cash payment.

Seller Take-Back

406

Unscrupulous actions carried out by a lender to entice, induce, and/or assist a borrower in taking a mortgage that carries high fees, a high interest rate, strips the borrower of equity, or places the borrower in a lower credit rated loan to the benefit of the lender.

Predatory Lending

407

A statement of a financial position as of the statement’s date, disclosing the value of assets, liabilities, and equity

Balance sheet

408

Such an account, usually pays interest competitive with money-market funds but allows a limited number of transactions per month.

Money Market Account

409

A loan that is issued and supported only by the borrower’s creditworthiness, rather than by a type of collateral.

Unsecured Loan

410

A measure of one’s wealth, usually calculated as the excess of total assets over total liabilities.
Non-Assumption Clause
A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.

Net Worth

411

One who gives credit for money or goods.

Creditor

412

Known as a deferred interest.

Negative Amortization

413

A mortgage loan in a principal amount that exceeds the dollar limits for a government guarantee.

Jumbo Mortgage

414

If the interest rate on the short-term loan is too large to make money on the spread, the mortgage broker will charge a _________ to cover its costs until it can assemble enough loans in its virtual warehouse and sell them to someone else making enough money to pay off its short-term loans.

Warehouse Fee

415

A debt that is overdue in payment

Delinquency

416

For the holder to have good title, every prior negotiation must have been proper. If necessary indorsement is missing or forged, the __________ ________ ________ is broken and no later transferee can become a holder.

Chain of title

417

Means any form of credit that is secured by real property or a dwelling and that is offered or extended to a consumer primarily for personal, family, or household purposes.

Mortgage Credit Product

418

A final loan payment that is usually much larger than the preceding regular payments and that discharges the principal balance of the loan.

Balloon payment

419

Insurance that indemnifies against a loss caused by a flood. This type of insurance is often sold privately but subsidized by the federal government.

Flood insurance

420

The rate of interest that is added to the principal of a financial instrument between cash payments of that interest.

Interest Accrual Rate

421

An option to buy something at a fixed rate price even if the market rises; the right to require another to sell.

Call option

422

This is used to calculate the interest rate on an ARM.

Indexed Rate

423

An act of lending

Loan

424

For example, if Beth has a _________ on the purchase of Sam’s house, and if Terry offers to buy the house for $300,000, then Beth can match this offer and prevent Terry from buying it.

Right of First Refusal

425

A binding offer by a lender to make a loan under certain terms or conditions to a borrower.
Includes the amount of the mortgage, the interest rate, and repayment terms.

Commitment

426

A mortgage that covers an aggregation of property or that secures or provides for indebtedness previously existing in various forms.
Especially, a mortgage covering two or more properties that are pledged to support a debt

Blanket mortgage

427

A federal statute that prohibits creditors from discriminating against credit applicants based on race, color, religion, national origin, age, sex, or marital status with respect to any aspect of a credit transaction.

Equal Credit Opportunity Act (ECOA/Regulation B)

428

An item that is owned and has value.

Asset

429

A promise to answer for the payment of some debt, or the performance of some duty, in case of the failure of another who is liable in the first instance; a collateral undertaking by one person to be answerable for the payment of some debt or performance of some duty or contract for another person who stands first bound to pay or perform.

Guaranty

430

An appraisal issued by the VA showing the property’s fair market value.

Certificate of Reasonable Value (CRV)

431

Form used in mortgage lending to verify monthly rents paid and late payments, if any.

Verification of Rent (VOR)

432

The government official who keeps the public records affecting real property, such as deeds, liens, and judgments.

Recorder

433

A process used to make sure that companies participating in the issuance of mortgages comply with all state and national laws related to those mortgages.

Quality Control

434

A mortgage, not backed by government insurance, by which the borrower transfer a lien or title to the lending bank or other financial institution.

Conventional Mortgage

435

Interest that is earned but not yet paid, such as interest that accrues on real estate and that will be paid when the property is sold if, in the meantime, the rental income does not cover the mortgage payments.

Accrued Interest

436

Offers protections for service members, and sometimes their family members, such as deferred income taxes.

Service Members Civil Relief Act

437

Headed by the Comptroller of the Currency.

Office of Comptroller Currency

438

An offeree’s new offer that varies the terms of the original offer and that ordinarily rejects and terminates the original offer.

Counteroffer

439

A lien on property, and all right to property, imposed by the federal government for unpaid federal taxes.

Tax Lien

440

Property that produces income, such as rental property.

Income Property

441

Usury
The charging of an illegal rate of interest as a condition to lending money.

Unsecured Loan

442

An examination of a structure by a qualified person to determine the existence of termite infestation.

Termite Inspection

443

A sale of property because of nonpayment of taxes.

Tax Sale

444

For example, an $80,000 loan on property worth $100,000 results in this ratio of 80 percent - which is usually the highest ratio that lenders will agree to without requiring the debtor to buy mortgage insurance.

Loan-to-Value Ratio (LTV)

445

an agreement that obligates someone to sell and may include a corresponding obligation for someone else to buy.

Agreement of sale

446

A fee the buyer pays a lender when applying for a mortgage.

Loan Application Fee

447

A note evidencing a loan for which real property has been offered as security.

Mortgage Note

448

A letter to the lender from the donor stating a gift of money has been made to the buyer to purchase specific property. The relationship of the donor and done is stated, as well as the amount of the gift.

Gift Letter

449

The act of assuming a risk by insuring it.

Underwriting

450

Offers protections for service members, and sometimes their family members, such as protection against default judgments

Service Members Civil Relief Act

451

System was established by the Federal Reserve Act of 1913.

Federal Reserve System (FRS)

452

A tax levied on the owner of property, usually based on the property’s value.

Property Tax

453

The transfer of rights or property.

Assignment

454

this allows resident and non resident united states federal taxpayers to defer capital gains and recaptured depreciation taxes when exchanging real or personal property held for productive use in a trade, business, or for investment for like-kind real personal property held for productive use in a trade, business, or for investment

1031 exchange

455

The complete payment of a mortgage.

Satisfaction of Mortgage

456

Financial equity created in property by the owner’s labor in improving the property.

Sweat Equity

457

Some ________ mortgages allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.

Rehabilitation Mortgage

458

A mortgage that is junior to a first mortgage on the same property, but that is senior to any later mortgage.

Second Mortgage

459

A legal share in something, all or part of a legal or equitable claim to or right in property.
Collectively, the word includes any aggregation of rights, privileges, powers, and immunities, distributively, it refers to any one right, privilege, power, or immunity.

Interest

460

A clause in a sales contract that allows the buyer to examine the property being purchased at a specified time immediately before the closing.

Walk-Through

461

A single parent who has only owned with a former spouse while married.

First-Time Home Buyer

462

The FHA assesses either an “upfront”______ at the time of closing, or an annual _____ that is calculated every year and paid in 12 installments.

Mortgage Insurance Premium (MIP)

463

on an ARM, the time between changes in the interest rate and/or monthly payment

Adjustment interval

464

An interest rate charged on loans to borrowers that is calculated by taking the sum of a is used to calculate the interest rate on an ARM.

Indexed Rate

465

No promises concerning the quality of the title.
Radon
A naturally appearing radioactive gas found in some buildings, that, in sufficient concentrations, may cause health problems.

Quitclaim Deed

466

The length of time it will take to amortize the mortgage loan expressed in months.
For example, a 30-year mortgage is a 360-month amortization term

Amortization Term

467

A _____ _____ does not originate or service mortgage loans.

Mortgage Broker

468

Someone who contracts for the completion of an estate project, including purchasing all materials, hiring and paying subcontractors, and coordinating all the work.

General Contractor

469

A 2010 federal statute whose stated purposes include promoting the financial stability of the United States by improving accountability and transparency in the financial system.

Dodd-Frank Wall Street Reform & Consumer Protection Act

470

Any asset purchased to produce a profit, whether from income or resale.

Investment Property

471

Certificate given to veterans or reservists who have served 90 days of continuous active duty (including training time), which enables veterans to obtain lower down payments on certain FHA loans.

Certificate of veteran status

472

The minimum interest rate allowed according to the contractual terms of the mortgage loan.

Interest Rate Floor

473

A U.S. federal agency that serves to charter, regulate, and supervise the national banks and the federal branches and agencies of foreign banks.

Office of Comptroller Currency

474

The insured’s claim under the policy arises once the insured’s liability to a third party has been asserted.

Liability Insurance

475

An interference with or intrusion onto another’s property.

Encroachment

476

Statistically derived numeric expression of a person’s creditworthiness that is used by lenders to access the likelihood that a person will repay their debts.

Credit score

477

The lowest limit, such as the lowest interest rate allowed by law or the smallest permissible payment under a contract.

Floor

478

The satisfaction of a debt or installment payment before its official due date.
it.

Pre-Payment

479

A process where the terms of a payment are modified outside the original terms of the contract agreed to by the lender and borrower.

Modification

480

An asset that is readily convertible into cash, such as a marketable security, a note, or an account receivable.

Liquid Asset

481

Offers protections for service members, and sometimes their family members, such as, reduced interest rates.

Service Members Civil Relief Act

482

The act or process of legally dispossessing a person of land or rental property.

Eviction

483

An examination of the public records to determine whether any defects or encumbrances exist in a given property’s chain of title.

Title Search

484

The payments are intended to gradually increase, as the borrower’s income increases over time.

Graduated Payment Mortgage (GPM)

485

A sales contract in which an offer has been made and accepted, and the contract has been signed and initialed by all parties involved.

Ratified Sales Contract

486

The contributions, along with any interest earned in the account, are not taxed until the money is withdrawn after a participant reaches 591/2 (or before then, if a 10 percent penalty is paid).

Individual Retirement Account (IRA)

487

A person named by a testator to carry out the provisions of the testator’s will.

Executor

488

These are used in computing investment yields and in apportioning costs and calculating interest rate in real-estate transaction.

Basis point

489

The land benefitting from an easement

Dominant Estate

490

_______ can be either corporeal (soil and buildings) or incorporeal (easements).

Real Property

491

It is an alternative to a mortgage preferred by lenders because it is faster and cheaper to foreclose.

Deed of trust

492

An impartial person who estimates the value of something, such as real estate.

Appraiser

493

The interest rate that applies on the first day of the loan’s term.

Initial Interest Rate

494

_______ financing is when a seller acts as the bank or lender and carries a second mortgage on the subject property, which the buyer pays down each month.

Seller Carry Back

495

It is headed by the Secretary of Veterans Affairs.

Department of Veterans Affairs (VA)