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SECU > First Mortgage Glossary of Terms > Flashcards

First Mortgage Glossary of Terms Flashcards

1
Q

Abandoned Property

A

property status indicating the property has been abandoned, is not being maintained, and is not offered for sale or rent

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2
Q

Abstract of Title

A

a written history of the title transaction or condition bearing on the title to a designated real estate. It covers the period from the original source of title to the present and summarizes all subsequent instruments of public record by setting forth their material parts.

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3
Q

Acceleration Clause

A

a provision in a mortgage contract that gives the lender the right to demand payment of the entire principal balance if the loan is in default

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4
Q

Accrued Interest

A

Interest earned for the period of time since interest was last paid

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5
Q

Acknowledgement

A

a formal declaration, attached to or a part of an instrument, made before a duly authorized office (usually a notary public) by the person who has executed the instrument, which declared, the executive to be his free act and deed

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6
Q

Acre

A

a measurement of land that is 43,560 square feet

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7
Q

Action to Quiet Title

A

a court action to remove any interest or claim to the title to real property. To remove a cloud on the title.

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8
Q

Administrator

A

a person appointed by a probate court to administer the estate of a person who died intestate (without a will)

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9
Q

Ad Valorem

A

“According to the value” Used in connection with taxation.

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10
Q

Advance

A

in real estate, a partial disbursement of funds under a note. Most often used in a construction loan.

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11
Q

Advance Commitment (Conditional)

A

a written promise to make an investment at some time in the future if specified conditions are met

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12
Q

Adverse Possession

A

the right by which someone occupying a piece of land might acquire title against the real owner, if the occupant’s possession has be actual, continuous, hostile, visible, and distinct for a statutory period at time

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13
Q

Affidavit

A

Sworn statement in writing before a proper official, usually a notary

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14
Q

Agent

A

one who legally represents another, called a principal, from who authority has been derived

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15
Q

Agent

A

one who legally represents another, called a principal, from who authority has been derived

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16
Q

Agreement for Sale

A

a written document in which the purchaser agrees to buy certain real estate (or personal property) and the seller agrees to sell under stated terms and conditions. Also called the sales contract, binder, or earnest money contract.

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17
Q

Alienation

A

to transfer real property from one person to another.

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18
Q

ALTA- American Land Title Association

A

a national association of title insurance companies, abstractors, and attorneys, specializing in real property law. The association speaks for the title insurance and abstracting industry, and establishes standard procedures and title policy forms.

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19
Q

Amenity

A

an aspect of a property that enhances its value (e.g., off-street reserved parking within a condominium community, the nearness of good public transportation, tennis courts, or a swimming pool)

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20
Q

Amortization

A

gradual debt reduction. Normally, the reduction is made according to a predetermined schedule of installment payments.

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21
Q

Amortization Schedule

A

Table showing the amounts of principal and interest due at regular intervals and the unpaid balance of the loan after each payment is made.

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22
Q

Annual Percentage Rate (APR)

A

a rate which represents the relationship of the total finance charge (interest, loan fees, and points) to the amount of the loan

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23
Q

Application

A

a form used to apply for a mortgage loan and to record pertinent information concerning a prospective mortgagor and the proposed security

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24
Q

Appraisal

A

a report by a qualified person setting forth an opinion or estimate of value. An appraisal is the process by which this estimate is obtained

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25
Q

Appraised Value

A

an opinion

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26
Q

Appraised Value

A

an opinion of value reached by an appraiser based upon knowledge, experience, and a study of pertinent data

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27
Q

Appreciation

A

an increased in value, the opposite of depreciation

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28
Q

Appurtenance

A

anything attached to the land and thus part of the property, such as a barn, garage, or an easement

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29
Q

Assessed Value

A

the value that a taxing authority places upon real or personal property for the purpose of taxation

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30
Q

Assessment

A

process of placing a value on property for the strict purpose of taxation. May also refer to a levy against property for a special purpose, such as a sewer assessment

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31
Q

Assignee

A

one to whom property or a right is assigned or transferred

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32
Q

Assignment of Mortgage

A

a document that evidences a transfer of ownership

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33
Q

Assignor

A

one who transfers or assigns a right of property

34
Q

Assumption

A

a written agreement by one party to pay an obligation originally incurred by another

35
Q

Assumption Fee

A

the fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage

36
Q

Assumption of Mortgage

A

assumption by a purchaser of the primary liability for payment of an existing mortgage or deed of trust. The seller remains secondarily liable unless specifically released by the lender

37
Q

Attachment

A

Seizure of defendant’s property by court order as security for any judgment the plaintiff may recover in a legal action

38
Q

Balance Sheet

A

financial statement showing assets, liabilities, and the net worth as of a specific date

39
Q

Balloon Mortgage

A

mortgage with periodic installments of principal and interest that do not fully amortize the loan. The balance of the mortgage is due in a lump sum at the end of the term

40
Q

Balloon Payment

A

The unpaid principal amount of a mortgage or other long term loan due at a certain date in the future

41
Q

Bankrupt

A

a person, firm, or corporation, who, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court appointed trustee

42
Q

Basis Point

A

1/100 of 1 percent. Used to describe the amount of change in yield in many debt instruments, including mortgages

43
Q

Beneficiary

A

the person designated to receive the income from a trust, estate, or from a trust deed

44
Q

Bill of Sale

A

document in writing that transfers title to personal property

45
Q

Bill of Sale

A

document in writing that transfers title to personal property

46
Q

Binder, Insurance

A

written evidence of temporary hazard or title coverage that only runs for a limited time and must be replaced by a permanent policy

47
Q

Blanket Mortgage

A

a lien on more than one parcel or unit of land frequently incurred by subdivides or developers who have purchased a single tract of land for the purpose of dividing it into smaller parcels for sale or development

48
Q

Bona Fide

A

in good faith without fraud

49
Q

Bona Fide

A

in good faith without fraud

50
Q

Borrower

A

One who receives the funds with the expressed or implied intention of repaying the loan in full

51
Q

Breach

A

violation of a legal obligation

52
Q

Break Even Point

A

in residential or commercial property, the figure at which occupancy income is equal to all required expenses and debt service

53
Q

Broker

A

one who for a commission or a fee brings parties together and assists in negotiating contracts between them

54
Q

Building Code

A

the local regulations that control design, construction, and materials used in construction. Based on safety and health standards

55
Q

Bundle of Rights

A

the rights or interests that a person has in a property. It is the exclusive right of an individual to own, possess, use, enjoy, and dispose of real property

56
Q

Buy-Sell Agreement

A

an agreement entered into by an interim and a permanent lender for the sale and assignment of the mortgage to the permanent lender when a building has been completed. Often the mortgagor is a party to this agreement on the theory that the mortgagor should have a contractual right to insist that the permanent lender buy the mortgage

57
Q

Call Provision

A

in the mortgage deed of trust, a clause giving the mortgagee or beneficiary the right to accelerate payment of the mortgage debt in full on a certain date or on the happening of specified conditions

58
Q

Capital

A

Money used to create income, the accumulated wealth of a person or business

59
Q

Capitalization Rate

A

rate which is believed to represent the proper relationship between real property and the net income it produces

60
Q

Cash Flow

A

income from an investment after subtracting from gross income all operating expenses, loan payments, and the allowance for the income tax attributed to the income

61
Q

Cash-on-Cash Return

A

Rate of return on an investment measured by the cash returned to the investor based on the investor’s cash investment without regard to income tax savings or the use of borrowed funds

62
Q

Certificate of Occupancy

A

written authorization given by a local municipality that allows a newly completed or substantially completed structure to be inhabited

63
Q

Certificate of Occupancy

A

written authorization given by a local municipality that allows a newly completed or substantially completed structure to be inhabited

64
Q

Certificate of Title

A

A statement furnished by an abstract or Title Company or an attorney to a client stating that the title to real estate is legally vested in the present owner

65
Q

Chain of Title

A

the history of all the documents transferring title to a parcel of real property starting with the earliest existing document and ending with the most recent

66
Q

Chattel

A

Personal Property

67
Q

Closing

A

conclusion or consummation of a transaction. In real estate, closing includes the delivery of a deed, financial adjustments, the signing of the notes, and the disbursement of funds necessary to the sale or loan transaction

68
Q

Closing Cost

A

Expenses incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, and others

69
Q

Closing Statement

A

financial disclosure giving an account of all funds received and expected at closing, including escrow deposits for taxes, hazard insurance, and mortgage insurance for the escrow account

70
Q

Cloud on Title

A

any conditions revealed by title search that adversely affects the title to real estate. Usually, a cloud on title cannot be removed except by a quitclaim deed, release, or court action

71
Q

CMB Certified Mortgage Banker

A

Professional designation of the mortgage banking industry

72
Q

Coinsurance

A

a sharing of insurance risk between insurer and insured depending on the relation of the amount of the policy and a specified percentage of the actual value of the property insured at the time of loss

73
Q

Coinsurance

A

a sharing of insurance risk between insurer and insured depending on the relation of the amount of the policy and a specified percentage of the actual value of the property insured at the time of loss

74
Q

Collateral

A

any property pledged as security for a debt

75
Q

Collection

A

procedure followed to bring the mortgage account current and to file the necessary notices to proceed with foreclosure when necessary

76
Q

Commercial Loan

A

mortgage loan on property that produces income

77
Q

Commission

A

agents fee for negotiating a real estate or loan transaction

78
Q

Commitment

A

agreement, often in writing, in which a lender agrees to loan money to a borrower under certain conditions

79
Q

Commitment Fee

A

any fee paid by a borrower to a lender for the lender’s promise to lend money at a specified date in the future. The lender may or may not expect to fund the commitment

80
Q

Community Property

A

in some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse

81
Q

Common Law

A

an unwritten body of law based on general custom in England and used to extent in the Untied States

82
Q

Comparables

A

an abbreviation for comparable properties used for comparative purposes in the appraisal process (Are facilities of reasonably the same size and location with similar amenities. Comparables are also properties which have been recently sold, which have characteristics similar to property under consideration, thereby indicating the approximate fair market value of the subject property

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