MLO Flashcards
1
Q
1003
A
A Fannie Mae loan application form designed by Fannie Mae and Freddie Mac that is used by lenders to obtain personal financial information from borrowers who apply for mortgage loan secured by a on-to-four unit resident real estate. Also known as: Uniform Residential Loan Application (URLA). It has been widely adopted by mortgage lenders as a standard loan application form and is often pronounced “ten-oh-three.” Freddie Mac also uses the same application form, referring to it as the Freddie Mac form 65.
2
Q
1031
A
A 1031 exchange allows resident and non-resident United States federal taxpayers to defer capital gains and recaptured depreciation taxes when exchanging real or person property held for productive use in a trade, business, or for investment for like-kind real or person property held for productive use in a trade, business, or for investment. The tax otherwise paid in a tradition sale is deferred indefinitely until the replacement property is sold or another 1031 exchange is initiated.
3
Q
4506-T
A
An IRS Form used to retrieve past tax returns, W-2, and 1099 transcripts that are on file with the IRS. It is used to validate income documentation for underwriting and quality control purposes.
4
Q
Abstract of Title
A
A concise statement, usually prepared for a mortgage or purchaser of real property, summarizing the history of a piece of a loan, including all conveyances, interests, liens, and encumbrances that affect title to the property. A good and merchantable abstract of title shows clear and marketable title, rather than showing the only the history of the property.
5
Q
Acceleration Clause
A
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 or to maintain insurance.
6
Q
Accrued Interest
A
Interest that is earned but not yet paid. For example: interest that accrues on real estate will be paid when the property is sold if the rental income does not cover the mortgage payments.
7
Q
Acquisition Costs
A
The original cost of an asset.
8
Q
Adjustable Rate Mortgage (ARM)
A
A mortgage in which the lender can periodically adjust the mortgage interest rate in accordance with fluctuations in an external market index. Also known as: Variable Rate Mortgage (VRM).
9
Q
Adjusted Basis
A
Basis increased by capital improvements and decreased by depreciation deductions.
10
Q
Adjustment Interval
A
On an Adjustable Rate Mortgage (ARM), the time between changes in the interest rate and/or monthly payment. Typically one, three, or five years depending on the index.
11
Q
Adjustment Period
A
Time between the adjustment dates for an Adjustable Rate Mortgage (ARM).
12
Q
Affiliated Business Arrangement (ABA)
A
An arrangement in which a person refers a business to a real estate service involving a federally related mortgage loan that has either an affiliate relationship with or a beneficial ownership interest. Such persons directly or indirectly refer business to that provider and may influence the selection of that provider. An Affiliated Business Arrangement (ABA) is not a violation of Section 8 of the Real Estate Settlement Procedures Act (RESPA).
13
Q
Agreement of Sale
A
An agreement that obligates someone to sell and may include a corresponding obligation for someone else to buy.
14
Q
Alternative Documentation
A
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.
15
Q
Amortization
A
The act or results of gradually extinguishing a debt, such as a mortgage, usually by contributing payments or principal each time a periodic interest payment is due.
16
Q
Amortization Term
A
The length of time it will take to amortize the mortgage loan expressed in months. For example, 30-year mortgage is a 360-month amortization term.
17
Q
Annual Percentage Rate (APR)
A
The actual cost of borrowing money, expressed in the form of an annualized interest rate.
18
Q
Annuity
A
A fixed sum of money payable periodically, usually monthly or annually. These payments terminate upon the death of the designated beneficiary. Also, a right, often acquired under a life-insurance contract, to receive fixed payments periodically for a specified duration.
19
Q
Appraisal
A
The determination of what constitutes a fair price for something or how its condition can be fairly state at a point in time.
20
Q
Appraiser
A
An impartial person who estimates the value of something such as real estate.
21
Q
Appreciation
A
An increase in an asset’s value (often because of inflation).
22
Q
Arbitration
A
A dispute-resolution process in which the disputing parties choose one or more neutral third parties to make a final and binding resolving the dispute. A third party may be chosen directly by mutual agreement, or indirectly by agreeing to have an arbitration organization select the third party.
23
Q
Adjustable Rate Mortgage Disclosure
A
Describes the features of the Adjustable Rate Mortgage (ARM) loan which must be presented to the consumer within 3 days of application.
24
Q
Adjustable Rate Mortgage Handbook (CHARM)
A
The consumer Handbook to Adjustable-Rate Mortgages must be presented within 3 days of application.
25
Assessed Value
The value of an asset as determined by an appraiser for tax purposes.
26
Assessment
Determination of the rate or amount of something, such as tax or damages.
27
Assessor
An official who evaluates or makes assessments, especially for purposes of taxation.
28
Asset
An owned item that has value.
29
Assignment
The transfer of rights or poverty.
30
Assignment of Mortgage
An assignment in which a mortgage lender or borrower transfers the mortgage to a third party.
31
Assumptions (of Mortgage or Trust Deed)
The acquisition of real property coupled with the assumption of personal liability for debt secured by that property.
32
Assumption Fee
The fee paid to a lender when an assumption takes place. It is usually paid by the purchaser.
33
Balance Sheet
A statement of financial position as of the statement’s date, disclosing the value of assets, liabilities, and equity.
34
Balloon Mortgage
A mortgage requiring periodic payments for a specified time and a lump-sum payment of the outstanding balance at maturity.
35
Balloon Payment
A final loan payment that is usually much larger than the preceding regular payments. This payment discharges the principal balance of the loan.
36
Basis Point
Basis points are used in computing and calculating the interest rate in real estate transaction. One basis point is equal to 1/100th of 1% or 0.01%, and is used to denote the percentage change in a financial instrument.
37
Bankruptcy
A statutory procedure by which a usually insolvent debtor contains financial relied and undergoes a judicially supervised reorganization or liquidation of the the debtor’s assets for the benefit of creditors.
38
Blanket Mortgage
A mortgage that covers an aggregation or property, or that secures indebtedness previously existing in various forms. For example: a mortgage covering two or more properties that are pledged to support a debt.
39
Bona fide
Made in good faith without fraud or deceit.
40
Bridge Loan
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.
41
Borrower (Mortgagor)
Someone who mortgages property.
42
Building Code
A law or regulation setting forth standards for the construction, maintenance, occupancy, use, or appearance of buildings and dwelling units.
43
Buy-Down
Money paid by the buyer of a house to reduce the mortgage-interest payments.
44
Buy-Down Account
The account in which funds are held so they can be applied as each payment comes due for an interest rate buy-down plan.
45
Buyer’s Broker/Agent
A real estate broker who acts as the agent of a purchaser of property. Statutes un many states permit prospective buyers to retain a licensed real estate agent. In some states, a buyer’s broker is treated as the subagent of the broker with whom the owner lists property for sale and not the agent of the buyer.
46
Buyer’s Market
A market in which supply significantly exceeds demand, resulting in lower prices.
47
Call Option
An option to buy something at a fixed rate price even if the market rises; the right to require another to sell.
48
Capacity
The power to create a legal agreement under the same circumstances in which a normal person would. It is with 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, etc. A party wishing to raise the issue of capacity must do so by specific negative pleading.
49
Cash Flow
The movement of cash through a business as a measure of profitability or liquidity.
50
Cashier’s Check
A check drawn by a bank payable to another person. This is evidence that the payee has authorization from the bank for the amount of money represent by the check.
51
Certificate of Deposit
A banker’s certificate acknowledging the receipt of money and promising to repay the depositor.
52
Certificate of Eligibility
A certificate issued by the Department of Veterans Affairs (VA) certifying a veteran’s eligibility for a VA loan.
53
Certificate of Occupancy
A document indicating that a building complex with zoning and building ordinances and is ready to be occupied. A certificate of occupancy is often required before title can be transferred and the building occupied.
54
Certificate of Reasonable Value (CRV)
An appraisal issued by the Department of Veterans Affairs (VA) showing the property’s fair market value.
55
Certificate of Title
A document indicating the ownership of real or personal property. This document also identifies any liens or other encumbrances.
56
Certificate of Veteran Status
Certificate given to veterans to reservists who have served 90 days of continuous active duty (including training time), which enables veterans to obtain lower down payments on certain Fair Housing Act (FHA) loans.
57
Chain of Title
The ownership history of a piece of land, from its first owner to the present one. For the holder to have a good title, every prior negotiation must have been proper. If necessary endorsement is missing or forged, the chain of title is broken and no later transferee can become a holder.
58
Change Orders
A modification of the original construction plans ordered by the property owner or general contractor.
59
Clear Title
A title free from any encumbrances, burdens, or other limitations. I.e. a good and marketable title.
60
Civil Rights Act (1866)
Affirmed that all citizens are equally protected by the law. Enacted April 9, 1866.
61
Change Frequency
Change in the frequency of payment or interest rate or Adjustable Rate Mortgage (ARM).
62
Closing/Settlement
The final transaction between the buyer and seller whereby the conveyance of documents is concluded and the money and property transferred.
63
Closing Agent
An agent who represents the buyer in the negotiation and closing of real property transactions by handling financial calculations and transfer of documents.
64
Closing Costs
The expenses that must be paid, usually in a lump sum at closing, apart from the purchase price and interest. These may include taxes, title insurance, and attorney’s fees.
65
Closing Date
The date scheduled for the concussion of the real estate transaction.
66
Closing Statement
A written breakdown of the costs involved in the real estate transaction, usually prepared by a lender or an escrow agent.
67
Cloud on Title
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 court order.
68
Co-Borrower
Any borrower in addition to the first borrower whose name appears on the application. The co-borrower’s income, assets, liabilities, and credit history are considered in determining creditworthiness.
69
Collateral
Property that is pledged as security against a debt; the property subject interest or agricultural lien.
70
Combined Loan-to-Value (CLTV)
Ratio of the total mortgage liens against the property to the lesser of either the appraised value or the sales price.
71
Commission
The fee paid to an agent for a transaction usually as a percentage of the money received from the transaction.
72
Commitment
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.
73
Common Areas
The realty that all tenants may use, though the landlord retains control over and responsibility for it. An area owned and used in common by the residents of a condominium, subdivision, or planned-unit development.
74
Community Reinvestment Act (1977)
Intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low to moderate income neighborhoods, consistent with safe and sound banking operations.
75
Comparables
An abbreviation for “comparable properties” used in the appraisal process. Comparable's are properties similar to the property under consideration. They have reasonably the same size, location, and amenities and have recently been sold. Comparable’s help the appraiser determine the approximate fair market value of the subject property.
76
Concession
The Voluntary yielding to a demand for the sake of a settlement. In a real estate transaction, something given up or agreed to insane negotiations. For example, the sellers may agree to help pay for closing costs.
77
Condition
A stipulation or prerequisite in a sales contract. If a court construes a contractual term to be a condition, then its breach will entitle the party to whom it is made to be discharged from all liabilities under the contract.
78
Conforming Loan
A mortgage loan under the maximum amount of loans that Fannie Mae and Freddie Mac are legally allowed to buy.
79
Construction Mortgage
A mortgage used to finance a construction project.
80
Consumer Financial Protection Bureau (CFPB)
An independent federal agency that regulates consumer financial products and services. The Bureau protects consumers by restricting unfair and deceptive business practices, by promoting financial education, taking consumer complaints, and enforcing federal consumer-financial-protection laws. It was established by the Dodd-Frank Act in 2010 and began operating in 2011.
81
Consumer Reporting Agency (Credit Bureau)
An independent firm that collects, compiles and reports the credit activities of individuals which is made available, for a fee, to lenders or credit issuing entities investigating the creditworthiness of those applying for credit. Consumers may also access reports from each of the three major reporting agencies for free as required by law.
82
Contingency Clause
A clause within the sales contract stating that a certain condition must be met before a contract is legally binding, and the sale can close. Real estate contracts often have a specific date by which the contingency must be met. E.g. The buyer will often include an inspection contingency, requiring the home to be inspected for physical damages or problems before the sale contract is binding. The buyer will have the right to rescind if the contingency is not met.
83
Conventional Mortgage
A mortgage, not backed by government insurance, which the borrower transfers a lien or title to the lending bank or other financial institution. These mortgages, which feature a fixed periodic payment and interest throughout the mortgage term, are typically used for home financing.
84
Conversion Clause/Option
A provision in an Adjustable Rate Mortgage (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. Also known as a Convertible ARM.
85
Conveyance
The voluntary transfer of property.
86
Cooperative (Co-op) Project
A project in which a corporation holds the title to a residential property and sells shares to individual buyers, who then receive a proprietary lease as their title.
87
Counteroffer
An offer’s new offer that varies the terms of the original offer and that ordinarily rejects and terminates the original offer. A late or defective acceptance is considered a counteroffer.
88
Covenants
A formal agreement or promise to perform, or not perform, a particular act.
89
Credit
One’s ability to borrow money.
90
Credit History
Information in the files of a credit bureau regarding and individual’s debts and repayments (or non-repayments).
91
Credit Life Insurance
Life insurance on a borrower, usually in a consumer installment loan, in which the amount due is paid if the borrower dies.
92
Credit Report
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, other debts, bill-paying habits, defaults, bankruptcies, foreclosures, martial status, occupation, income, and lawsuits.
93
Credit Score
Statistically derived numeric expression of a person’s creditworthiness that is used by lenders to assess the likelihood that the individual will repay their debts.
94
Creditor
One who gives credit for money or goods.
95
Creditworthy
Financially sound enough that a lender will extend credit in the belief that default is unlikely.
96
Debt
Liability on a claim.
97
Debt-to-Income Ratio
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.
98
Deed
A legal document that is signed and delivered regarding the ownership of property.
99
Deed-in-Lieu of Foreclosure
Deed in which the mortgagor conveys all interest in the property of the mortgage to satisfy a loan that is in default to avoid foreclosure proceedings. A written settlement agreement will always accompany deed-in-lieu. The lender waives the right to collect any deficiency based on a promissory note.
100
Deed of Trust
A deed conveying the title of real property o a trustee as security until the grantor repays a loan. This type of deed resembles a mortgage. It is an alternative to a mortgage preferred by lenders because it is faster and cheaper to foreclose.
101
Default
The omission or failure to perform a legal contractual duty, especially the failure to pay a debt when due.
102
Delinquency
A debt that is overdue in payment.
103
Department of Veterans Affairs (VA)
The cabinet-level department of the federal government responsible for operating programs that benefit veterans of military service and their families. It is headed by the Secretary of Veterans Affairs.
104
Depreciation
A reduction in the value or price of something, specifically, a decline in an asset’s value because of use, wear, obsolescence, or age.
105
Discount Point
A fee equal to 1 percent of the loan amount that is prepared interest on the mortgage loan. The more points, the lower the interest rate. Borrowers can typically pay from 0-4 points. It is also tax-deductible.
106
Dodd-Frank Wall Street Reform & Consumer Protection Act
A 2010 federal statue that promotes the financial stability of the United States by improving accountability and transparency in the financial system. The statue affects nearly every federal agency with jurisdiction over finance or consumer protection, and nearly every segment of the financial-services industry.
107
Down Payment
A portion of the purchase price paid in cash )or its equivalent) at the time the sale agreement is executed.
108
Due-on-Sale Clause
A mortgage provision that gives a lender the option to accelerate the debt if the borrower transfers any part of the mortgaged real estate without the lender’s consent.
109
Earnest Money Deposit
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. It is generally a percentage of the purchase price and it rarely exceeds 10 percent.
110
Easement
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 specific limited purpose. E.g., an ingress and egress easement for the right to access the land through the land of another. The land benefitting from an easement is called the dominant estate, while the land burdened by an easement is called the servant estate. Unlike a lease or license, an easement may last forever, but it does not give the holder the right to assess, take from, improve upon, or sell the land.
111
The Primary recognized easements are:
1. A right-of-way
2. A right of entry for any purpose relating to the dominant estate
3. A right to support of land and buildings
4. a right of light and air
5. a right to water
6. a right to do some act that would otherwise amount to a nuisance
7. a right to place or keep something on the servant estate
112
Economic Obsolescence
Obsolescence that results from external economic factors, such as decreased demand or changed governmental regulations.
113
Effective Interest Rate
The actual annual rate, which incorporates compounding when calculating interest, rather than the state rate or coupon rate.
114
Eminent Domain
The internet power of a governmental entity to take privately owned property and convert it to public use, subject to reasonable compensation for the taking.
115
Employer-Assisted Housing
A program in which an employer assists its employees in purchasing homes by helping with the down payment, closing costs, or monthly payments
116
Encroachment
An interference with or intrusion onto another’s property.
117
Encumbrance
A claim or liability that is attached to property and that may lessen its value, such as a lien or mortgage. An encumbrance cannot defeat that transfer or possession, but it remains after the property or right is transferred.
118
Entitlement
An absolute right to a benefit granted immediately upon legal retirement.
119
Equal Credit Opportunity Act (ECOA/Regulation B)
A federal statue 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.
120
Equitable Mortgage
A transaction that has the intent but not the form of a mortgage, and that a count of equity will treat as a mortgage.
121
Equity
The amount by which an interest in property exceeds secured claims or liens. The difference between the value of the property and all encumbrances on it.
122
Escrow
A legal document or property delivered by a promiser to a third party to be held by that third party for a given amount of time or until occurrence of a condition at which time the third party is to hand over the document or property to the promisee.
123
Escrow Amount
A bank 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.
124
Escrow Agent
The third-party depositary of an escrow. An escrow holder is not the common-law agent because the holder does not act subject to the control of the parties to the escrow agreement.
125
Escrow Agreement
The instruction given to the third-party depositary of an escrow.
126
Escrow Contract
The contract amount buyer, seller, and escrow holder, setting forth the rights and responsibilities of each.
127
Eviction
The act or process of legally dispossessing a person of land or rental property.
128
Exclusive Right-to-Sell listing
The right to sell a principal’s products or to act as the seller’s real estate agent to the exclusion of all the others, including the owner. The listing agreement upon which the broker gets commission even if seller is the one who sells the house curing the agreement period or for a certain period thereafter.
129
Exclusive Agency Listing
A listing giving one agent the right to be the only person, other than the owner, to sell the property during a specified period. A listing agreement upon which the broker does not get commission if the seller sells the property themselves.
130
Executor
A person named by a testator to carry out the provisions of the testator’s will.
131
Fair and Accurate Credit Transactions Act (FACT Act) 2003
A 2003 amendment to the federal Fair Credit Reporting Act providing free annual credit reports to consumers and establishing measures intended to help prevent identity theft. 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 receipts.
132
Fair Credit Reporting Act (FCRA/Regulation V)
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.
133
Fair Housing Act (FHA)
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.
134
Fair Market Value
The price that a seller is willing to accept and buyer is willing to pay on the open market and in an arm’s-lenght transaction, the point at which supply and demand intersect.
135
Fannie Mae/Freddie Mac Loan Limit
The current loan limits are: $484,350 for a single family unit home, $620,200 for a two-unit home, $749,650 for a three-unit home and $931,600 for a four-unit home. These numbers are higher in Alaska, Hawaii, Guam, and the U.S Virgin Islands.
136
Federal National Mortgage Association (Fannie Mae/FNMA)
A privately owned and managed corporation characters 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.
137
Federal Home Loan Mortgage Corporation (Freddie Mac/FHLMC)
A corporation that purchases both conventional and federal insured first mortgages from members of the Federal Reserve System and other approved banks.
138
Federal Housing Administration (FHA)
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. Created in 1934.
139
Federal Reserve System (FRS)
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 the Federal Reserve Banks, and regulating the amount of credit that may be extended on any security. The Federal Reserve System was established by the Federal Reserve Act of 1913. It incorporates 12 central banks supervised by a Board of Governors whose members are appointed by the President and confirmed by the Senate.
140
Fee Simple
An interest in land that, being the broadest property interest allowed by law, endures until the current holder dies with our heirs.
141
FHA Mortgage
A mortgage that is insured fully or partially by the Federal Housing Administration. (FHA)
142
FHA Mortgage Insurance
Current Federal Housing Administration (FHA) upfront mortgage insurance premiums are 1.75 percent of the loan size. If an FHA-backed mortgage is used for a purchase mortgage and your loan size is $300,000, then your upfront Mortgage Insurance Premium (MIP) will be $5,250.
143
Firm Commitment
A promise from a lender to make a mortgage loan.
144
First Mortgage
A mortgage that is senior to all other mortgages on the same property.
145
First-Time Home Buyer
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. This includes a spouse. If either meets the test, they are considered first-time homebuyers.
A single parent who has only owned with a former spouse while married.
146
Fixed Installment
The monthly payment due on a mortgage loan which includes both principal and interest.
147
Fixed Period Adjustable Rate Mortgage
An adjustable rate mortgage with an initial fixed interest rate period. After the fixed interest rate expires, the interest rate starts to adjust based on an index plus a margin. The amount by which the interest rate can adjust after the fixed period is usually subject to an interest rate cap.
148
Fixed-Rate Mortgage (FRM)
A mortgage with an interest rate that remains the same over the life of the mortgage regardless of market conditions.
149
Flood Certification Fee
Fee issued to the client which covers the cost of the assessment and is included in closing costs and fees.
150
Flood Insurance
Insurance that indemnifies against a loss caused by a flood. This type of insurance is often sold privately but subsidized by the federal government.
151
Floor
The lowest limit, such as the lowest interest rate allowed by law or the smallest permissible payment under a contract.
152
Forbearance
The act of refraining from enforcing a right, obligation, or debt. Permitting one to retain a loan of money after it has become due and payable is forbearing it. Forbearance, within the meaning of usury laws, is the giving of further time for the return of payment of money after the date upon which it became due.
153
Foreclosure
A legal proceeding to terminate a mortgagor’s interest in property, instated by the lender (the mortgagee) either to gain title or to force a sale to satisfy the unpaid debt secured by the property.
154
Forfeiture
A destruction or deprivation of some estate or right because of the failure to perform some contractual obligation or condition. When a condition is not likely to occur until the oblige has relied on the expected exchange by, for example, performing or preparing to perform, nonoccurence of the condition results in the obligee’s loss of its reliance interest when the obligee loses the right to that exchange. This loss of reliance interest is often described as forfeiture.
155
Fully Amortized Mortgage
A mortgage in which the mortgagor pays the interest as well as a portion of the principal in the periodic payment. A maturity, the periodic payments will have completely repaid the loan. Also known as a self-liquidating mortgage.
156
General Contractor
Someone who contracts for the completion of an estate project, including purchasing all materials, hiring and paying subcontractors, and coordinating all the works.
157
General Warranty Deed
A seller promises that there are no defects in the title that arose or were created while the seller owned the property or while anyone prior to the seller owned property.
158
Gift Letter
A letter to the lender from the donor stating a gift of money has been made to the buyer to purchase a specific property. The relationship of the donor and donee is stated, as well as the amount of the gift.
159
Good Faith Estimate
Gives you an estimate of the costs of the mortgage loan. A form that lists basic information about the terms of a mortgage for which the applicant has applied. If the applicant applied for a mortgage before October 3, 2015, or if the applicant is applying for a reverse mortgage, they will receive a Good Faith Estimate (GFE).
160
Government Mortgage
Mortgage insured by a government entity, such as Federal Housing Administration (FHA), Veteran’s Administration (VA) or Rural Housing Service (RHS).
161
Government National Mortgage Association (Ginnie Mae/GNMA)
A federal 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. The Association purchases, on the secondary market, residential mortgages originated by local lenders; it then issues federally insured securities backed by these mortgages.
162
Graduated Payment Mortgage (GPM)
A mortgage whose initial payments are lower than its later payments. The payments are intended to gradually increase, as the borrower’s income increases over time.
163
Grace Period
An extra period of time allowed for taking some required action (such as making payment) without incurring the usual penalty for being late. Article 9 of the Uniform Commercial Code (UCC) provides for a 20-day grace period after the collateral is received. During that time a purchase-money security interest must be perfected to have priority over any conflicting security interests.
164
Gramm-Leach-Bliley Act (GLB) 1999
A federal statute that repealed both parts of the Glass-Stegall Act prohibiting combinations among banking, securities, and insurance companies, as well as related conflict-of-interest provisions for such companies’ officers, directors, and employees. The Act also regulates the collection, disclosure, use, and protection of consumers’ nonpublic personal information.
165
Gross Monthly Income
The total amount of a person’s income before taxes.
166
Ground Rent
Rent paid by a tenant under a long-term lease for the use of undeveloped land, usually for the construction of a commercial building.
