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| Borrower retains title to the property, the lender is protected with a lien on the real propertyto secure payment of the mortgage debt. |
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| Title to the mortgaged propertyis conveyed to the lender through a mortgage deed, or to a trustee through a deed of trust. |
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| Legal evidence of a debt that must accompany a mortgage in Florida; a legally executed pledge to pay a stipulated sum of money. |
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| A written agreement that pledges property as security for payment of a debt. |
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| To pledge real or personal property as security for a debt or obligation without giving up possession of the property. |
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| Borrower who gives a mortgage on the borrower's property in order to obtain a loan from a lender. |
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| A lender who holds a mortgage on specific property as security for the money loaned to the borrower. |
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| A legal instrument that states that the mortgage assigns(transfers) the mortgage and promissory note to the purchaser. |
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| A written statement that bars the signer from making a claim inconsistent with the instrument(commonly used with a mortgage assumption) |
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| A certificate issued by the lender when the debt obligation is paid in full. |
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| Deed in Lieu of Foreclosure |
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| Friendly foreclosure(nonjudicial procedure) in which the mortgagor gives title to the mortgagee. |
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| The right of a mortgagor, before a foreclosure sale, to reclaim forfeited property by paying the entire indebtedness. |
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| A provision in a conventional mortgage that entitles the lender to require the entire loan balance to be paid in full if the property is sold. |
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| Stipulation in a mortgage that the entire unpaid balance of the debt may become due and payable if a default of expressed conditions should occur. |
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| A provision in a mortgage that specifies the terms and conditions to be met in order to avoid default and therby defeat the mortgage. |
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| provision in a mortgage that allows the mortgagor to pay the mortgage debt ahead of schedule without penalty. |
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| The amount set by the creditor that the debtor is charged for retiring the debt early. |
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| A provision in a mortgage in which the lender voluntarily permits a prior or subsequent mortgage to take priority over the lender's otherwise superior mortgage; the act of yielding priority. |
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| One debt instrument covering two or more parcels. |
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| Stipulates the conditions under which the mortgagee will grant freeing building lots from a mortgage lien upon payment of a certain amount of money. |
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| A provision in a mortgage, related to income-producing property, that is designed to require that income derived shall be used to make mortgage payments in the event the mortgagor (borrower) defaults |
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| a loan that is not insured or guaranteed by a government agency. |
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| Include FHA and VA guaranteed loans. Typically require a smaller down payment compared with conventional loans because with non-con. loans, the government provides some risk protection to the lender. |
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| Mortgage Insurance premium |
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Definition
| Fee paid by FHA borrowers to obtain a loan(up front and annual) |
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| That portion of a VA-guaranteed loan that protects the lender if the borrower defaults. |
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| A loan characterized by payment of a debt by regular installment payments. |
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| a loan that is amortized the same way as other loans with monthly payments, except the borrower makes a payment every two weeks. |
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| partially amortized mortgage |
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Definition
| buyer makes payments smaller than are required to completely pay off the loan by its date of termination. balloon payment due on loan maturity date. |
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| A loan that includes both real and personal property as security for the debt. |
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| A mortgage given as part of the buyer's consideration for the purchase of real property. |
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| 4 ways to purchase mortgaged property |
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Definition
| cash, subject to the mortgage, assumption of an existing mortgage, novation. |
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Definition
| the sub. of a new debtor (the buyer) and release of a former debtor (the sellor) for an existing debt by mutual agreement and with approval of the lender. |
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| A financing technique wherein the seller agrees to deliver the deed at some future date and the buyer takes possession while paying the agreed amount(also called land contract, installment sale contract, agreement for deed) |
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Definition
| A financing technique in which the payment of the existing mortgage is continued (by the seller) and a new, higher interest rate mortgage, which is larger than the existing mortgage, is paid by the buyer borrower. |
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| Adjustable - rate mortgage |
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| A financing technique in which the lender can raise or lower the interest rate according to a set index. |
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| The fixed component that is added to the index to calculate the interest rate in an adjustable rate mortgage. the margin represents the lenders cost of doing business plus profit. |
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| Occurs when the mortgage payments are not large enough to cover the interest expense. |
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| A mortgaged secured by a personal residence. It provides a line of credit available for draws when needed by the homeowner. |
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| Relationship between amount borrowed and appraised value (or sale price) of a property. |
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| The actions undertaken by the Fed to influence the availability and cost of money and credit. |
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Definition
| Involve the purchase and sale of U.S. treasury and federal agency securities. When the Fed sells securities through open market bulk trading this reduces the supply of money. When the Fed buys securities more money is released back into circulation. |
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| Interest rate charged member banks for borrowing money from the fed. Amount of interest the federal reserve charges to lend money to its eligible banks. |
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| The amount of funds that an institution must hold in reserve against deposit liabilities. |
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| Office of Thrift Supervision |
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Definition
| A branch of the U.S. Treasury Dept. that replaced the Federal Home Loan Bank Board as regulator of the thrift industry. |
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Definition
| The market where securities or goods are actually created. A source for the purchase of a mortgage loan by a borrower. |
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| Secure and Fair Enforcement of Mortgage Licensing Act(SAFE Act) sets a minimum standard for licensing and registering mortgage loan originators. |
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| One who finds a lender for a potential borrower, and vice versa. |
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| A company that makes loans with the expectation of reselling them to institutional lenders. |
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| A business entity that originates, sells, and then services mortgage loans. Mortgage broker companies are not depository institutions. they originate loans and then package the loans together and sell the entire package. |
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| The process whereby financial middlemen consolidate many small savings accounts belonging to individual depositors and invest those funds in large, diversified projects. |
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| A disengagement process when depositors withdraw money from savings for direct investment in stocks, money market funds, and other securities. |
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| Checking accounts; payable on demand by holder. |
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| Secondary mortgage market |
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Definition
| an investor market that buys and sells existing mortgages. |
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| A method for increasing a lender's yield. |
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| A charge of 1% of the mortgage value; assesment by a lender to increase the interest yield to compete with the interest yield from other types of investments. |
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Term
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Definition
| Each point is equal to 1% of the loan amount; example: On a $40,000 loan for which the lender is charging 6 points , find the dollar cost of the points. 6% of $40,000; $40,000 x .06 = $2,400 |
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