An auction with no minimum bid, where the highest bidder buys the property.
Absolute Net Lease
Requires the payment of all or part of the insurance, real estate taxes and other expenses. Also called a net-net-net lease.
Abstract of Title
A summary of the original grant and all subsequent conveyances and encumbrances affecting the property and a certification that the history is complete and accurate.
Abstract Plant
A collection of documents and information relating to the title of a particular property.
Acceleration Clause
The clause in a deed of trust or mortgage that makes the entire debt due and payable immediately if the borrower defaults.
Acceptance
The term referring to the seller's acceptance of an offer from the buyer.
43,560 square feet of land.
Accrued
Line items of expenses on the HUD-1 Settlement Statement that are incurred but not yet payable, such as real estate taxes.
Addendum
An addition or change to a contract.
Adjustable Rate Mortgage
A mortgage loan with an interest rate that adjusts periodically.
Ad Valorem
Means According to Value. A method of imposing real estate taxes.
Agency
The relationship between an agent and principal.
Agent
An individual licensed by the state to conduct real estate transactions.
Agreement of Sale
A signed, written contract entered into between the seller and the buyer for the sale of real property under specific terms and conditions.
Alienation
The transfer of property from one person to another.
Alienation Clause
The same as the Due-On-Sale Clause.
Amortized Loan
A loan where principal and interest are paid back in installments.
Annual Percentage Rate
The actual annual interest rate including the interest and other costs. The Truth in Lending Act requires the disclosure of the APR by lenders.
Appraisal
Evaluation of real estate by a disinterested person with suitable qualifications.
Arbitration
Binding or non-binding settlement of a dispute by a third-party arbitrator.
APR
Annual Percentage Rate
ARM
Adjustable Rate Mortgage
Arrears
Being overdue with an installment payment.
Assessor
A municipal employee who estimates the value of properties for the purpose of setting taxes.
A large final payment of a loan necessary to pay off the loan because the loan amount was not fully amortized.
Basis Point
One hundredth of one percent.
Bill of Sale
A formal instrument for the conveyance or transfer of title to goods and chattels.
Bond
An insurance agreement pledging surety for financial loss caused to another by the act or default of a third person or by some contingency over which the third person may have no control.
Bridge Loan
A short-term loan used to finance a real estate transaction pending the receipt of other funds received from the sale of another property.
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The increase in value of an asset (as stock or real estate) between the time it is bought and the time it is sold.
Caveat Emptor
"Let the Buyer Beware".
Certificate of Occupancy
An authorization by the municipality allowing newly constructed property to be occupied.
Chain of Title
A succession of conveyances that comprise the title record history to a specific parcel of real property.
Chattel
Personal Property
Clear Title
Title having no defects or encumbrances.
Closing Costs
All costs incurred in real estate transaction.
Closing Statement
The same as a HUD-1 Settlement Statement. The written statement provided by the Escrow Company to each of the parties to the loan transaction showing the amounts received and paid out for various items.
Cloud on Title
Any conditions revealed by a title seach which affect the title to property.
Collateral
Real estate or personal property which is pledged as security for a debt.
Collusion
A secret agreement or cooperation especially for an illegal or deceitful purpose.
Compound Interest
Compound interest is the concept of adding accumulated interest back to the principal, so that interest is earned on interest from that moment on.
Contingency
A specified condition that must be fulfilled before a contract becomes binding.
Conventional Loan
Any mortgage loan other than a VA or an FHA loan.
Conveyance
Transfer of the Title of real estate from one to another.
Counter Offer
The rejection of an offer to buy or sell real estate that simultaneously makes a different offer, changing the terms in some way.
Credit Report
A report outlining an individuals credit history, public records and credit worthiness.
Credit Score
A measure of credit risk calculated from a credit report using a standardized formula.
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A written instrument that, when properly executed and delivered, conveys title to real property.
Deed-In-Lieu-Of-Foreclosure
A process by which the homeowner, with the approval of the lender, deeds the property to the lender to avoid foreclosure.
Deficiency Judgement
A judgement that may be entered against a homeowner when the proceeds of a short sale or a foreclosure sale are less than the amount owed, known as the deficiency.
Desktop Underwriting
Online Automatic Mortgage Underwriting
Due-On-Sale Clause
A mortgage clause that requires that the mortgage be paid in full upon the sale of the property.
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Refers to the Federal National Mortgage Association (FNMA), which is an agency that buys mortgages from lenders and resells them as securities on the secondary mortgage market.
Federal Emergency Management Agency
Known as FEMA, it is an agency of the Federal government that provides assistance to victims of natural disasters.
FHA
Federal Housing Administration is a division of the U.S. Dept. of Housing and Urban Development (HUD)whose main activity is administering the government insurance programs for residential mortgage loans made by private lenders.
Forbearance
The act of refraining from taking legal action, such as foreclosure, despite the fact that a mortgage is in default.
Foreclosure
A proceeding to extinguish all rights, title and interest of the owners of the property in order to sell the property to satisfy a lien against it.
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A government agency, which is a division of HUD, that administers the mortgage-backed securities program which channels new funds into residential financing through the sale of privately issued securities carrying the Ginnie Mae guarantee.
Good Faith Estimate
An estimate of the settlement charges the mortgagor incurs at closing. A good faith estimate of settlement charges is required by the Real Estate Settlement Procedures Act (RESPA).
Grant
A term applicable to the transfer of real property.
Grantee
The party to receives a deed.
Grantor
Individual taking the action in the execution of a conveyance document for real estate.
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A type of insurance coverage that protects the homeowner and the mortgage lender in the event of physical destruction of the property as a result of fire or other natural disaster.
Homeowner's Insurance
Insurance coverage available for owner-occupied properties to protect against personal liability and physical damage for a dwellig and its contents.
Hypothecate
To mortgage or pledge without delivery of the security to the lender.
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Borrowed funds repaid in a specific number of payment at regular intervals for a specific amount and term.
Interest
Consideration in the form of money charged for the use of money, usually expressed in an annual percentage. Also, a share, right, or title in property.
Intermediation
The process whereby financial middlemen cosolidate small savings accounts of individual depositors and invest those funds in large, stable, diversified projects.
Involuntary Lien
A lien imposed against property without an owner's consent.
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Ownership of property by two or more parties. Each party owns an undivided interest with the right of survivorship. In the event of death of one of the owners, the surviving owners inherit the property.
Judgment
A formal decision by a court of law. A judgment can result in a lien against property or a garnishment of wages so that a creditor may collect the debt.
Junior Mortgage
Any lien subsequent to the claims of the holder of a prior senior mortgage as evidenced by the time and date of recording.
Junk Fees
Excess fees charged to the borrower by the lender.
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Property description recognized by law that locates and identifies real property.
Liability
A debt.
Lien
A legal hold of a creditor on the property of another as security for a debt owed.
Lis Pendens
A notice recorded in the official county records to indicate there is a pending suit affecting real property in that jurisdiction, such as a notice of intent to file foreclosure proceedings.
Loan
A sum of money provided by a lender to be repair with or without interest.
Loan-to-Value Ratio
The ratio which measures the relationship between the mortgage amount to the lesser of appraised value or sales price.
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The component of an Adjustable Rate Mortgage that remains constant and is added to the index on the adjustment anniversary date for purposes of determining the new rate.
Mechanic's Lien
A lien placed against property by unpaid workmen or material suppliers.
Mills
The measure used to express a real estate property tax rate; 1/10th of 1%.
Mortgage
A written instrument creating a lien upon real estate for the security of payment of a specified debt.
Mortgagee
A person or firm to whom property is conveyed as security for a loan made by such a person or firm.
Mortgagor
One who borrows money, giving a mortgage or deed of trust on real property as security.
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Unpaid interest which is added to the mortgage principal in a loan where the principal balance increases over time rather than decreases because the mortgage payments do not cover the full amount of interest due.
Net Worth
The value of all assets minus all liabilities.
Note
A term for any kind of paper or document signed by a borrower that is an acknowledgment of the debt and is a promise to pay.
Novation
A mortgagee's or current not holder's willingness to permit substitution of a new debtor (buyer) and release a former debtor (seller) from liability on a note.
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Pricing for a mortgage loan that involves neither a discount nor premium.
Partial Release
A clause in a mortgage allowing for release of certain individual parcels upon payment of a specified sum.
Permanent Buydown
A mortgage with a below market interest rate made by a lender in return for an interest rate subsidy in the form of additional discount points paid by the builder, seller or buyer.
Personal Property
Any property that is not real estate.
Plat
A map or chart of a specific land area. A plat shows property with its precise location or boundaries.
Purchase and Sale Agreement
A written legal document between a buyer and seller, that states the purchase price and terms of sale for real property.
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Relationship between the borrower's gross monthly income and either PITI or PITI plus long-term monthly obligations.
Quit Claim Deed
A deed which conveys oly the grantor's rights in the property without disclosing the nature of the rights and with no warranties of ownership. A deed by which the grantor releases to the grantee any interest or title in the property which the grantor possesses.
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The analysis of information relating to risk and making a decision whether or not to accept that risk. The underwriter evaluates the borrower's ability and willingness to repay the obligation and establishes that the property represents adequate security for the debt.
Usury
Charging an illegal rate or amount of interest on a loan.
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The depositing of loans by a lender (mortgage company)in a commercial bank for sale at a later date. The lender then borrows against these loans using a revolving line of credit.
Warranty Deed
A deed in which the grantor warrants or guarantees title against any and all claims.
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