Zero-Percent Financing
A loan that requires not interest payments; in the U.S., the Internal Revenue Service assigns 10 percent for the borrower and for the lender.

Zoning
A community?s ability to determine how its land may be used.

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WAC (Weighted Average Coupon)
The average coupon rate of the underlying mortgage loans or pools that serve as collateral for a security, weighted by remaining principal balance.

WALA (Weighted Average Loan Age)
The average number of months since the date of note origination of the mortgages in a PC pool, weighted by remaining principal balance.

WAM (Weighted Average Maturity)
The weighted average of remaining terms to maturity of a mortgage, with the weighted factor being the balance of each mortgage as of its issue date.

Warehouse Fee
A fee charged by a mortgage firm to offset losses caused when the prime rate of interest is higher on short term loans than on standard mortgage loans.

Weighted Average Coupon (WAC)
The average coupon rate of the underlying mortgage loans or pools that serve as collateral for a security, weighted by remaining principal balance.

Weighted Average Loan Age (WALA)
The average number of months since the date of note origination of the mortgages in a PC pool, weighted by remaining principal balance.

Weighted Average Maturity (WAM)
The average remaining term to maturity of the underlying mortgage loans that collateralize a security, weighted by remaining principal balance.

With Full Recourse
A term used in the secondary mortgage loan market, referring to a written clause in a sales agreement by which a lender sells mortgages to an investor. It means the seller/lender will fully reimburse the buyer/investor for any losses resulting from the purchased loans. This may be accomplished by the seller taking back any loans that become delinquent.

With Partial Recourse
A secondary mortgage market term, referring to a clause in the sales contract by which lenders sell their mortgage loans to investors. It means the seller/lender is obligated to reimburse the buyer/investor for an agreed-on portion of any losses resulting from default or other problems in the purchased loans.

Without Recourse
A term used in the secondary mortgage market. It is a clause in a sales contract by which a lender sells mortgage loans to an investor. It means the seller/lender is under no obligation to reimburse the buyer/investor for any losses resulting from the purchased loans. See with full recourse.

Wraparound Mortgage
A financing device that permits an existing loan to be refinanced and new, additional money to be advanced at an interest rate between the rate charged on the old loan and the current market interest rate. The creditor combines or 'wraps' the remainder of the old loan with the new loan at the intermediate rate. The borrower makes one payment, to the new lender, who in turn makes the monthly payments to the original lender. The amount of the wraparound mortgage is the total of the outstanding principal of the first mortgage (which remains in effect) and the additional outstanding funds advanced by the wraparound lender.

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VA (Department of Veterans Affairs)
A U.S. federal agency that guarantees loans made to veterans; similar to mortgage insurance, a loan guarantee protects lenders against loss that may result from a borrower default.

VA Loan (VA Mortgage)
Residential mortgage loans made to Veteran borrowers under the VA's loan guaranty programs.

VA Mortgage (VA Loan)
Residential mortgage loans made to Veteran borrowers under the VA's loan guaranty programs.

VA Mortgage Funding Fee
A premium of up to 1-7/8 percent paid on a VA loan.

Variable Rate Mortgage (VRM)
A mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap. Also called Adjustable Rate Mortgage.

Verification of Deposit (VOD)
An official document from the borrower?s financial institution that verifies that status and balance of the borrower?s accounts.

Verification of Employment (VOE)
A document indicating a borrower?s position and salary, signed by the employer.

Vested
The right to use part of a fund, such an individual retirement fund.

VOD (Verification of Deposit)
An official document from the borrower?s financial institution that verifies that status and balance of the borrower?s accounts.

VOE (Verification of Employment)
A document indicating a borrower?s position and salary, signed by the employer.

VRM (Variable Rate Mortgage)
A mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap. Also called Adjustable Rate Mortgage.

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Underwriting
The process of analyzing a loan application to determine the amount of risk involved in making the loan; it includes a review of the potential borrower's credit history and a judgment of the property value.

Unencumbered Property
Property that is fee and clear of debts or liens.

Unimproved Land
Land in its natural state with no man-made changes in its appearance.

Usury
Interest charges that are higher than allowed by law.

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Takedown
The actual transfer of money from a lender to a borrower under a loan agreement, loan commitment, or line of credit.

Takeout Commitment
A promise by a lender to provide a long-term mortgage loan upon satisfactory completion of construction.

Tax Lien
A government claim against real property for unpaid taxes.

Tax Participation Clause
A provision in a lease stipulating that the tenant will pay all or part of the real estate taxes on the leased property. Also called a tax stop clause

Teaser Rate
An initial, below-market interest rate offered on loans. After the initial time period, the permanent rate takes effect.

Tenancy
The holding of property (including real estate and deposit accounts) either by ownership or by lease.

Tenancy in Common
Unlike joint tenancy, tenancy in common does not pass ownership to other individuals on a title?s property in case of death.

Term Loan
A loan with a maturity of usually three to five years, during which time interest is paid, but no payments to reduce principal are made. The entire principal is due and payable at the end of the loan term.

Term Mortgage
A mortgage loan with a fixed time period, usually five years or less, during which only interest is paid. At the end of the term, the entire principal is due and payable.

Third-party Origination
A process whereby a lender uses a third party to originate, underwrite, or process mortgages, which he or she then puts on the secondary mortgage market.

Thrift Institution
A financial institution designed to encourage savings and home buying.

Title
(a) The ownership right to property, including the right of possession. (b) The document or instrument constituting evidence of such an ownership right.

Title 1
An FHA-insured loan that allows a borrower to make non-luxury improvements (like renovations or repairs) to their home; Title I loans less than $7,500 don't require a property lien.

Title Binder
Written evidence of temporary title insurance coverage in force for a limited period of time, which is to be replaced by a permanent policy.

Title Company
A business that examines real property titles, reports its findings as to the legal status of such titles, and issues insurance policies to indemnify the owner and lender against financial loss resulting from unknown title defects or prior claims against the property.

Title Defect
Any fact, circumstance or lawful right that could successfully claim all or part of a property or could challenge the ownership of the property.

Title Insurance
Protects the lender against any claims that arise from arguments about ownership of the property; also available for homebuyers.

Title Report
A written statement by a title guarantee company that sets forth the condition of title to a specified piece of real estate as of a certain date.

Title Search
A check of public records to be sure that the seller is the recognized owner of the real estate and that there are no unsettled liens or other claims against the property.

Torrens System
A method of registration of title to land with the appropriate public office, by which an official certificate at the office always shows the condition of the title and the person in whom it is vested.

Transaction
(a) Any agreement between two or more parties that establishes a legal obligation. (b) The act of carrying out such an obligation. (c) All activities that effect a deposit account that are performed at the request of the account holder. (d) All events that cause some change in the assets, liabilities or net worth of a business.

Transfer Agent
A party appointed to maintain records of secunties owners, to cancel and issue certificates, and to address issues arising from lost, destroyed or stolen certificates.

Transfer of Ownership
The process through which property goes from one owner to another. This could include assumption of a mortgage debt by the property?s purchaser, or any exchange of property possession under a land sales contract, for example.

Transfer Tax
State or local taxes applied to title that is changing ownership.

Treasury Index
Based on U.S. Treasury auctions (for its bills or securities), the Treasury Index determines rate changes for some adjustable rate mortgages.

Trust
A legal entity created to manage property for the benefit of a specific person or persons. A trust is funded when the owner (the grantor) transfers ownership of property to another (the trustee) for the immediate or eventual benefit of a third person, (the beneficiary). The person who creates a trust is called a grantor, settlor or trustor. The person designated to receive assets at the end of the trust term is called a remainderman.

Trust Account
(a) A savings account, established under a trust agreement, containing funds administered by a trustee for the benefit of another person or persons. (b) An escrow account.

Trust Agreement
A written agreement under which a grantor transfers legal ownership of property to another person or organization charged with administering the property for the benefit of a third person or persons. See deed of trust.

Trustee
Someone who controls or holds someone else?s property.

Trustor (Settlor)
An individual who establishes a trust by giving property to a trustee for the benefit of another.

Truth-In-Lending
A federal law obligating a lender to give fuII written disclosure of aII fees, terms, and conditions associated with the loan initial period, and then adjusts to another rate that lasts for the term of the loan.

Two-Step Mortgage
An adjustable rate mortgage with one interest rate for its first five or seven years, and with another interest rate for the rest of its amortization term.

Two-to-Four-Family Property
A single-deeded property, but with units for two to four families.

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Sale-Buyback
A financing arrangement in which the developer sells a property to an investor and then buys it back under a long-term sales contract.

Sale-Leaseback
An arrangement in which a seller deeds property to a buyer for cash or other consideration, and the buyer simultaneously leases the property back to the seller, usually on a long-term basis.

SAM (Shared Appreciation Mortgage) Simple Interest
A mortgage that gives the lender a portion of any future increase in the value of the mortgaged property when sold in return for a lower rate of interest to the borrower.

Satisfaction of Mortgage
The recordable instrument given by the lender that evidences payment in full of the mortgage debt. Also known as a release deed.

Seasoned Mortgage
A mortgage that has been in effect at least one year and on which principal and interest payments are being made on time.

Second Mortgage (Junior Mortgage)
A mortgage that is subordinate to claims of a prior lien or mortgage. Borrowers sometimes use secondary mortgages to obtain additional funds needed for downpayments or closing costs. Lenders tend to discourage junior financing because the borrower has little or no equity in the home.

Secondary Market
The market for securities previously issued and sold.

Secondary Mortgage Market
A market through which existing mortgage loans are bought and sold to other lenders, to government or private agencies, or to investors. Mortgage loans are originated to home buyers in the primary market and sold to investors in the secondary market.

Secured Loan
A loan for which the borrower pledges collateral that will be forfeited to the lender if the borrower fails to repay the loan.

Secured Party (Mortgagee)
The person or organization holding a security interest or lien against collateral. Also known as the mortgagee, the conditional seller, or the pledgee.

Security
(a) The collateral that is given, deposited, or pledged to guarantee an obligation or the payment of a debt. For example, the property on which a mortgage is issued is the security for the mortgage loan. (b) A financial instrument that provides evidence of a debt, or of rights to share in earnings or the distribution of property. Stocks and bonds are securities. (c) Measures taken to protect property against theft or vandalism.

Security Agreement
A document or section of a note that contains a description of the loan collateral. It establishes the lender's rights to the collateral in the event of default on the loan.

Self-Liquidating
The status of an asset that over a period of time returns the total amount of its cost. For example, a fully amortized mortgage is a lender's self-liquidating asset.

Seller Carry-Back
An agreement for the owner of a property to provide financing, often with an assumable mortgage.

Seller-Servicer
An organization approved by the Federal Home Loan Mortgage Corporation (Freddie Mac) that sells mortgages into the secondary market and services mortgages by collecting and forwarding monthly payments, maintaining records and performing any other functions needed to keep the mortgage loans current.

Senior Mortgage
A first mortgage.

Serial Notes
Mortgage-backed Securities comprised of consecutively numbered equal units of $25,000. The units are retired in sequential numeric order. The maturity date indicated on each unit is the date by which the unit would be retired if no prepayments of principal were made on the mortgages in the pool.

Servicer
An organization that collects interest payments and principal from borrowers; also manages escrow accounts. Often services investors? mortgages from the secondary mortgage markets.

Servicing
Collection and aggregation of principal, interest and escrow payments on mortgage loans and mortgage securities, as well as certain operational procedures such as accounting, bookkeeping, insurance, tax records, loan payment follow-up, delinquency loan follow-up, and loan analysis. The party providing servicing, the servicer, receives a servicing fee.

Servicing Fee
The amount withheld from monthly interest payments made on a mortgage which is retained by the mortgage servicer.

Settlement (Closing)
The time at which the property is formally sold and transferred from the seller to the buyer; it is at this time that the borrower takes on the loan obligation, pays all closing costs, and receives title from the seller.

Settlement Costs
Customary costs above and beyond the sale price of the property that must be paid to cover the transfer of ownership at closing; these costs generally vary by geographic location and are typically detailed to the borrower after submission of a loan application.

Settlement Date
The date agreed upon by the parties to a transaction for the delivery of securities and payment of funds. This may vary from other bonds.

Settling
(a) The process of balancing in-coming drafts that are accepted, as well as returned checks that an institution receives and making payment for the drafts within the check-collection system. (b) The process of delivering and paying for items previously purchased. (c) An agreement reached between two or more parties in contention. (d) A property arrangement to satisfy a dispute, as between a husband and wife. (e) The winding up and final distribution of an estate.

Settlor (Grantor, Trustor)
An individual who establishes a trust by giving property to a trustee for the benefit of another.

Shared Appreciation Mortgage (SAM) Simple Interest
A mortgage that gives the lender a portion of any future increase in the value of the mortgaged property when sold in return for a lower rate of interest to the borrower.

Shared Equity Loan
A loan in which the lender shares in the equity of the mortgaged property in return for a lower interest rate to the borrower.

Sheriff's Deed
A deed given by court order to convey title to property that has been sold to satisfy a judgment of delinquent taxes.

Single-Issuer Pool
A mortgage-backed securities pool issued under the Ginnie Mae I or II programs, which consists of only one loan package and which has only one issuer.

Site Value
The worth of raw land, without improvements.

Skip-Payment Clause
A provision of some mortgage contracts that allows the borrower to skip monthly payments up to the amount of payments that have previously been paid ahead of schedule.

SMMEA
Secondary Mortgage Market Enhancement Act of 1984.

SMMEA securities
Securities that are both ultimately secured by a first-lien mortgage loan and rated in one of the top two rating categories by at least one nationally recognized statistical rating organization. The complete definition may be found in Section 3(a)(41) of the Securities Exchange Act of 1934, as amended. Institutional investors should check state laws regarding investments in SMMEA securities.

Special Forbearance
A loss mitigation option where the lender arranges a revised repayment plan for the borrower that may include a temporary reduction or suspension of monthly loan payments.

Standard Program (Baseline Program)
Another name for the standard program, under which the U.S. Federal Home Loan Mortgage Corporation purchases mortgages for cash.

Stop Date
The date on which a balloon payment is due, for a term loan.

Subdivision
A housing development that is divided into individual lots, which are then put up for sale or lease.

Subordinate
To place in a rank of lesser importance or to make one claim secondary to another.

Subordinate Financing
A mortgage or lien with a lower priority than that of a first mortgage.

Survey
A property diagram that indicates legal boundaries, easements, encroachments, rights of way, improvement locations, etc.

Swap
(a) A technique of the Federal Home Loan Mortgage Corporation by which original lenders exchange the mortgages they have made for Freddie Mac Participation Certificates (PCs), which provide the lender with ownership interests in the same mortgages. Freddie Mac refers to the transaction as the Guarantor Program, because the corporation adds its own guarantees to the safety of the mortgage investment. (b) A financial transaction in which two counterparties agree to exchange streams of payments over a period of time according to a predetermined rule. For example, the counterparties may swap interest payments, with each paying the other's interest on the same amount of principal. Usually a fixed rate interest obligation is swapped for a floating rate interest obligation, so that both parties can match the form of interest they owe on their debts with the form of interest income they expect to receive on their assets -- fixed with fixed, or floating with floating. Or, the counterparties may swap payments in one denomination of currency for payments in another country's currency. Both interest rate swaps and currency swaps are designed to lessen market exposure of paying off debt in an environment of potentially changing interest rates.

Sweat Equity
Using labor to build or improve a property as part of the down payment.

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QTI (Qualified Thrift Investment)
Housing-related assets that a savings institution can count toward meeting its qualified thrift lender test.

QTL (Qualified Thrift Lender)
A savings institution that qualifies for low cost advances from its Federal Home Loan Bank and/or qualifies for federal tax benefits by virtue of having at least a certain percentage of its assets in housing-related investments. Traditionally, the minimum has ranged between 60 and 70 percent of assets. See Qualified Thrift Investment.

Qualified Thrift Investment (QTI)
Housing-related assets that a savings institution can count toward meeting its qualified thrift lender test.

Qualified Thrift Lender (QTL)
A savings institution that qualifies for low cost advances from its Federal Home Loan Bank and/or qualifies for federal tax benefits by virtue of having at least a certain percentage of its assets in housing-related investments. Traditionally, the minimum has ranged between 60 and 70 percent of assets. See Qualified Thrift Investment.

Qualifying Ratios
Calculations made to determine a borrower?s eligibility for a mortgage. The `top? ratio refers to the borrower?s monthly housing costs as a percentage of his or her income; the `bottom? ratio includes other monthly debt as well.

Quick Take
The acquisition by government of private real property under the power of eminent domain, prior to the completion of condemnation proceedings, in order to avoid loss of time.

Quiet Title Action
A legal process to eliminate any claims against a property by persons other than the owner. The procedure is used to perfect the title to the property when quitclaim deeds can not be obtained from those who may have such claims on the property.

Quitclaim Deed
A deed that transfers a grantor?s remaining interest or title (without warranty) when the conveyance is made.

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Radon
A radioactive gas found in some homes that, if occurring in strong enough concentrations, can cause health problems.

RAM (Reverse Annuity Mortgage)
A mortgage wherein the lender makes payments to the purchaser, not vice versa. This allows older home owners to convert their home equity into cash. This contrasts with traditional home equity loans, where a borrower must qualify on the basis of income; instead, one qualifies on the basis of the value of his or her home. The loan need not be repaid until the property is sold.

Rate Lock
A specified interest rate, guaranteed to the borrower throughout a given period.

Ratings
Designations used by investors' services to give relative indications of credit quality.

Raw Land
Land in its natural state, with no man-made improvements such as grading, sewers, roads or buildings.

Real Estate
Land and all physical property on, below or attached to the land. Houses, sewers, trees and fences are all real estate.

Real Estate Agent
An individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.

Real Estate Investment Trust (REIT)
A primarily real estate and mortgage trust that passes losses and income to its investors.

Real Estate Mortgage Investment Conduit (REMIC)
An entity through which an issuer can sell multiple class securities with call protection to investors. A REMIC may be a corporation, trust, association, or partnership, but in order to qualify, it must confine its investments to mortgages, cash, government securities, foreclosure property acquired in connection with imminent default of a mortgage, or other REMICs. Typically, a REMIC invests in a pool of mortgages, and sells interests in those mortgages through securities with one or more senior classes and a subordinated class that assumes the credit risk of defaults and delinquencies. This creates a form of self-insurance that increases the investment ratings for the senior securities. A REMIC does not keep its mortgage assets on its books, but sells them to investors through its securities.

Real Estate Owned (REO)
Real estate owned by a savings institution as the result of default by borrowers and subsequent foreclosure by the institution.

Real Estate Settlement Procedures Act (RESPA)
A law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships.

Real Property
All immovable property such as land and the buildings or other objects permanently affixed to the land.

Realtor
A real estate agent or broker who is a member of the National Association of Realtors, and its local and state associations.

Recast
To extend an existing loan for at least its previous period, in order to reduce a borrower?s payments.

Recision
The replacing of a contract by mutual consent or by either party for reasonable cause.

Reconveyance
The transfer of the title of property from the current owner to the most recent previous owner.

Record Date
The date for determining the owner entitled to the next scheduled payment of principal or interest on a mortgage security.

Recorder
A public official, sometimes known as `Registrar of Deeds? or `County Clerk,? who maintains all records of real estate transactions within a certain area.

Recording
The details of a properly executed legal document, such as a mortgage note, which are made available to the public.

Recording Fees
Money paid to a lender to record a home sale with local government, thus making it public record.

Recourse
(a) The right of a holder in due course to demand payment from the maker or endorser of a negotiable instrument, or from prior endorsers, if the instrument is dishonored by the maker. (b) The acceptance, assumption or retention of some or all of the risk of loss associated with an asset owned by another party. (c) In the secondary mortgage market, recourse refers to a provision in a sales contract by which a mortgage seller agrees to buy back the loan if default and foreclosure occur. See with full recourse, without recourse, with partial recourse.

Recourse Servicing
Mortgage servicing in which the company servicing a mortgage has assumed the financial risk in the event the borrower defaults on the loan.

Redeem
To buy back, as in an issuer redeeming bonds at maturity, or a property owner redeeming his or her property after a foreclosure sale.

Redlining
The refusal of a savings institution or other business to extend credit to, lend to, insure, or otherwise assume some financial risk involving property or a business located in a high-risk geographical area, usually a declining inner-city neighborhood. Redlining also refers to setting prohibitively high fees for financial services in a high-risk area.

Refinancing
Paying off one loan by obtaining another; generally done to secure better loan terms (such as a lower interest rate).

Registered Owner
The name in which a security is registered, as stated on the certificate or on the books of the paying agent. Principal and interest payments are made to the registered owner on the record date.

Rehabilitation Mortgage
A mortgage that covers the costs of rehabilitating (repairing or Improving) a property; some rehabilitation mortgages - like the FHA's 203(k) - allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.

REIT (Real Estate Investment Trust)
An investment vehicle established for the benefit of a group of real estate investors. A REIT is an unincorporated trust or association, managed by one or more trustees who hold title to the assets of the trust and control its acquisitions and investments. Real estate investments commonly include office buildings, apartment houses and shopping centers.

Release
(a) The discharge of property from a mortgage lien. (b) A written statement that an obligation has been satisfied.

Remaining Balance (Principal Balance)
The portion of a loan not yet repaid, exclusive of interest or other charges.

Remaining Term
The amortization term minus payments already applied.

REMIC (Real Estate Mortgage Investment Conduit)
An entity through which an issuer can sell multiple class securities with call protection to investors. A REMIC may be a corporation, trust, association, or partnership, but in order to qualify, it must confine its investments to mortgages, cash, government securities, foreclosure property acquired in connection with imminent default of a mortgage, or other REMICs. Typically, a REMIC invests in a pool of mortgages, and sells interests in those mortgages through securities with one or more senior classes and a subordinated class that assumes the credit risk of defaults and delinquencies. This creates a form of self-insurance that increases the investment ratings for the senior securities. A REMIC does not keep its mortgage assets on its books, but sells them to investors through its securities.

Renegotiable Rate Mortgage
An alternative mortgage loan in which the interest rate is renegotiated periodically. The loan may be either a long-term loan with periodic interest rate adjustments, or a short-term loan that is renewed periodically at new interest rates, but based on a long-term mortgage.

Rent Loss Insurance
Insures a landlord against loss of rent, as a result of fire or other circumstances that prevents the property from being rented.

REO (Real Estate Owned)
Real estate owned by a savings institution as the result of default by borrowers and subsequent foreclosure by the institution.

Repayment Plan
A plan to repay delinquent installments.

Replacement Reserve Fund
A special fund designated to replace common property, including furniture, for example, in a condominium or PUD.

Repossession
The process of a lender or his agent taking back items that were bought on credit or were pledged as collateral for a loan from a borrower who has fallen behind on loan payments.

Residual Qualifying
Using housing expenses in order to qualify for a VA loan.

RESPA (Real Estate Settlement Procedures Act)
A law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships.

Restrictions
Generally refers to certain rules designed to preserve property values.

Restrictive Covenant
A clause in a deed limiting the use of the property.

Reverse Annuity Mortgage (RAM)
A mortgage wherein the lender makes payments to the purchaser, not vice versa. This allows older home owners to convert their home equity into cash. This contrasts with traditional home equity loans, where a borrower must qualify on the basis of income; instead, one qualifies on the basis of the value of his or her home. The loan need not be repaid until the property is sold.

Revocable Trust
A trust in which the grantor retains the right to revoke, and reclaim property that had been placed in the trust.

Revolving Credit
A line of credit extended to customers who may use it as often as desired up to a certain dollar limit. Items purchased using this line of credit, may be paid in full upon receipt of a monthly statement, or they may be paid for in several installments, for which an interest charge is added.

Revolving Debt
Credit that enables a someone to borrow against a preapproved line of credit to purchase goods and services, for which he or she is billed, plus interest.

RHS (Rural Housing Service)
U.S. federal government agency, formerly known as the Farmers Home Administration (FmHA), established to provide mortgage credit to qualified borrowers in rural communities. RHS guarantees loans for rural housing.

Right of First Refusal
A provision in an agreement stating that a specified party must be given an opportunity -- before any others -- to either accept or reject an offer. The right of first refusal may extend, for example, to the act of selling property. In this case, if and when the owner decides to sell, the property must first be offered to the specified party. Upon refusal by the specified party, the property may then be offered under the same terms and conditions to others.

Right of Foreclosure
The right of a lending institution to take over mortgaged property and close out the mortgagor's interest in it if the mortgagor violates the terms of the mortgage or loan note.

Right of Ingress or Egress
The right to enter or leave the premises.

Right of Recission
The borrower's statutory right under the Truth-in-Lending law to change his or her mind and cancel a loan within three business days from the date of the loan application.

Right of Redemption
A right provided by law in some states permitting a mortgagor to reclaim foreclosed property by making full payment of the mortgage debt, including interest and fees, or the foreclosure sales price. The redemption period is for a specified period of time.

Right of Survivorship
A right when property is co-owned and one owner dies. In that case, the entire, undivided property passes to the ownership of the surviving owner(s).

Right of Way
Authority granted to others by the owner of land to pass across the land, sometimes in the form of an access easement. Streets and sidewalks are normally part of the public right of way.

Rollover Loan
A loan with a call date that is earlier than the usual amortization period.

Rule of 78
Enables one to calculate the amount of interest a borrower must pay when he or she repays a loan, in full, before it matures.

Rural Housing Service (RHS)
U.S. federal government agency, formerly known as the Farmers Home Administration (FmHA), established to provide mortgage credit to qualified borrowers in rural communities. RHS guarantees loans for rural housing.

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Updated: Wednesday, 31 May 2006 8:20 PM EDT

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Offer
Indication by a potential buyer of a willingness to purchase a home at a specific price; generally put forth in writing.

Office of Thrift Supervision (OTS)
A bureau of the Treasury Department that was authorized by Congress in the Financial Institutions Reform, Recovery and Enforcement Act of 1989, to charter, regulate, examine and supervise savings institutions.

Offsite Improvements
Improvements in land development that are off the development site, such as utility lines, sidewalks, gutters and curbs, that enhance the value of the development.

On Account
Describes the application of a payment to reduce the outstanding principal of a loan.

Onsite Improvements
Any construction of buildings or other improvements within the boundaries of a property that increases the value of the property.

Open Mortgage
A mortgage loan that can be paid off, without penalty, at any time prior to maturity.

Open-End Credit
A consumer line of credit that may be used repeatedly up to an established overall limit. Commonly known as revolving credit or a charge account, in which the customer may pay in full or in installments that include a finance charge. The term does not include negotiated advances under an open-end real estate mortgage or a letter of credit.

Open-End Lease
A lease that requires a balloon payment based on the value of the leased property when the lease expires.

Open-End Mortgage Clause
A provision in mortgage contracts in some states, that declares the mortgaged real estate may be used as security for future additional advances from the original lender, if the lender and borrower agree. All subsequent advances under this clause represent a claim on the property dating back to the time of recording the original mortgage.

Original Face
The face value or original principal amount of a security on its issue date.

Original Principal Balance
The total principle owing on a mortgage before regular payments commence.

Original-Issue Discount
The amount by which a security's price at issuance is lower than its par value.

Origination
The process of preparing, submitting, and evaluating a loan application; generally includes a credit check, verification of employment, and a property appraisal.

Origination Fee
The charge for originating a loan; is usually calculated in the form of points and paid at closing.

OTS (Office of Thrift Supervision)
A bureau of the Treasury Department that was authorized by Congress in the Financial Institutions Reform, Recovery and Enforcement Act of 1989, to charter, regulate, examine and supervise savings institutions.

Overages
The difference between the lowest available price and any higher price that the home buyer agrees to pay for the loan. Loan officers and brokers are often allowed to keep some or all of this difference as extra compensation.

Owner Financing
A property purchase for which the seller provides at least part of the financing.

Owners' Title Policy
A policy that protects a buyer from any future title disputes.

Posted by TheBlogMachine.com at 8:03 PM EDT

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Nationwide Loan
A mortgage loan on improved real property located outside a lending institution's normal business territory but within the United States, its territories or possessions.

Negative Amortization
The result of a mortgage repayment plan in which the borrower makes payments that amount to less than the interest due. Unpaid interest is then added to the outstanding loan balance, causing the outstanding loan balance to increase instead of decrease.

Neighborhood Housing Services Programs
Programs aimed at halting the further decline of neighborhoods that have begun to deteriorate. They are based on a partnership of community residents, lenders, and local government. NHS is administered by the Neighborhood Reinvestment Corporation.

Neighborhood Reinvestment Program
Created by the Housing and Community Development Act of 1978 to help establish locally run self-help coalitions of business leaders, residents, and local government officials, called Neighborhood Housing Services (NHS) programs, that encourage communities to revitalize depressed urban neighborhoods and thus make home financing more attractive in these areas.

Net Effective Income
A borrower?s total after tax income.

Net Rentable Area
The actual square footage of a building that can be rented. Halls, lobbies, stairways, elevator shafts, maintenance areas and the like are not included.

No Cash-Out Refinance
A refinance transaction that calculates a new balance to cover the balance due on the present loan, instead of providing cash to the borrower.

No-Cost Loan
Loans offered without costs normally paid to the lender, and/or covering other purchase and refinance transactions (such as escrow fees, settlement fees, notary fees, etc.).

Non Assumption Clause
A statement in a mortgage contract that forbids assumption of the mortgage, unless the lender?s approval has been obtained.

Nonconforming Loan (Jumbo Loan)
A loan exceeding Fannie Mae and Freddie Mac?s loan limits.

Nonmortgage Loan
An advance of funds not secured by a real estate mortgage.

Nonperforming Loan
A loan that is not earning income and: (a) full payment of principal and interest is no longer anticipated, (b) principal or interest is 90 days or more delinquent, or (c) the maturity date has passed and payment in full has not been made.

Nonrecourse Loan
A type of loan in which the only remedy available to the lender in the event of the borrower's default is to foreclose on the collateral; the borrower is not personally liable for repayment.

Nonresidential Mortgage Loan
A mortgage loan secured by nonresidential property such as an office building, store, factory, or church.

Note
A written promise to pay a stipulated sum of money to a specified party under conditions mutually agreed upon. Also called a promissory note, promise, or bond.

Note Rate
The interest rate on a mortgage note.

Notice of Commencement
A document used in some states and recorded after a construction loan mortgage has been recorded. All mechanics' liens relate back to the date the notice of commencement was recorded, thus enabling the construction mortgage to remain a first lien, not subordinated to any labor or supplier claim for nonpayment of bills.

Notice of Completion
Legal notice recorded after completion of construction. Mechanics' liens must be filed within a specified period thereafter.

Notice of Default
Formal notice given to a borrower that a default has taken place, and of possible legal action.

Posted by TheBlogMachine.com at 7:15 PM EDT

Updated: Wednesday, 31 May 2006 7:33 PM EDT

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