Buzz Words

4506 IRS FORM
Allows lender to request tax returns directly from IRS.

ABSTRACT
The notes made by a title examiner based on his examination of the land records. These notes are a concise summary of the transactions affecting the property. The title agency produces a binder from the information in the abstract.

ACCELERATION CLAUSE
A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as the sale of the property, or a delinquency in the repayment of the note.

ACCRETION
The buildup of land from natural forces such as wind or water.

ACKNOWLEDGEMENT
As a verb, the confirmation by a party executing a legal document that this is his signature and voluntary act. This confirmation is made to an authorized officer of the Court or notary public who signs a statement also called an acknowledgment.

ACRE
43,560 square feet of land.

ADJUSTMENT DATE
The date on which the interest rate changes for an Adjustable Rate Loan or Mortgage (ARM).

ADJUSTMENT INTERVAL
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index.

ADJUSTMENT PERIOD
The date on which the interest rates may be changed on an Adjustable Rate Mortgage.

ADVERSE POSSESSION
A claim made against land titled in another person based on open, notorious and hostile possession and use of the land to the exclusion of the titled owner.

AGENCY
A relationship in which the agent is given the authority to act on behalf of another person (Principal).

AGREEMENT
A meeting of minds. A change to the correct or alteration to the original document/agreement without changing its principal essence.

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

AMORTIZED LOAN
A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity.

AMORTIZATION
The periodic principal pay down of a loan.

AMORTIZATION SCHEDULE
A table showing the scheduled amounts of principal and interest due at regular intervals and the resulting unpaid balance of the loan after each payment is made.

AMORTIZATION TERM
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months, so in 360 months the mortgage loan will be completely paid off.

ANNUAL PERCENTAGE RATE (APR)
The cost of credit on an annual basis, expressed as a percentage of the amount financed, including interest and all prepaid expenses required to close a loan.

APPLICATION
A form used to apply for a loan/lease and to record pertinent information concerning a prospective mortgagor and the proposed security.

APPRAISAL
A written report of the estimated value of a property prepared by a certified appraiser.

APPRAISED VALUE
The final opinion of value reached by an appraiser based upon knowledge, experience and a study of pertinent data. Commonly known as fair market value.

APPRAISER
A third party service provider that evaluates the market value of property/buildings.

APPROVED ATTORNEY
An attorney authorized by a title insurance company to handle closings and render title opinions.

APPURTENANCE
Anything attached to the land or used with it passing to the new owner.

ARTICLES OF INCORPORATION
These documents are filed with the state to gain corporate status and define the legal name of the entity incorporated.

ASSESSED VALUATION
The value that a taxing authority places on real property for the purpose of determining the amount of taxation for that property.

ASSESSMENT
A charge against a property for the purposes of taxation. This may be in the form of a levy for a special purpose or a tax in which the property owner pays a share of the cost of community improvements according to the assessed valuation of the property.

ASSET
Anything of monetary value that is owned by a person. Assets include real property, personal property, bank accounts, stocks, bonds, mutual funds, etc.

ASSIGNMENT OF LIFE INSURANCE POLICY AS COLLATERAL FORM
Document used to list the agent information and requirements when life insurance is being held as collateral for a loan.

ASSIGNEE
One who receives an assignment or transfer of rights. An assignment of a contract transfers the right to buy property.

ASSIGNOR
The one who assigns to another person.

ASSUMABLE MORTGAGE
A mortgage that may be transferred by seller to a new buyer wherein the new buyer assumes or takes over the original terms of the mortgage.

ASSUMPTION
The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing cost and new, possibly higher, market-rate interest charges will apply.

ATTACHMENT
Seizure of property through Court process to repay a debt.

AUTOMATED CREDIT SCORING SYSTEM
A computerized system of risk scores allow financial institutions to make credit-related decisions associated with applicants according to the likelihood that credit obligations will be paid as expected.

BALLOON LOAN
A loan with periodic installments of principal and interest that do not fully amortize the loan before its due date. The balance of the mortgage is due in a lump sum at the end of the term of the note.

BALLOON MORTGAGE
A mortgage that is usually a short-term fixed-rate loan with level monthly payments that will amortize it over a stated term but provides for a lump sum payment to be due at the end of an earlier specified term.

BALLOON PAYMENT
The final lump sum payment that is made at the maturity date of a balloon mortgage.

BANKRUPT
A person, firm or corporation, who, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court appointed trustee. In some cases, the person may make provision for a repayment of the obligations over an extended period of time with court supervision.

BEACON SCORE
Credit bureau rating that determines the likelihood that debts will be repaid per their agreements.

BENCHMARK
A permanent reference mark for surveyors.

BENEFICIARY
The person designated to receive the income from a trust, estate, or a deed of trust. A contingent beneficiary has conditions attached to their rights.

BEST EFFORTS
The good faith, commercially reasonable best efforts of the party under the circumstances or context in which such party is required to act.

BID
An offer.

BILL OF SALE
The final transfer of assets being purchased that are generally outlined in a purchase agreement.

BINDER
A preliminary agreement, secured by the payment of an earnest money deposit, in which a buyer offers to purchase real estate.

BLANKET MORTGAGE
A mortgage covering at least two pieces of real estate as security for the same mortgage. This sort of loan is more common for commercial property or "special case" loans.

BORROWER
A person who or which executes a Loan Agreement as borrower and thereby becomes obligated to remit the Payments and perform all of the other obligations thereunder. "Borrower" shall also include any Person who or which has guaranteed any or all of the Borrower's obligations under a Loan Agreement.

BROKER
An individual in the business of assisting in arranging funding or negotiating contracts for a client buy does not loan money himself. Brokers usually charge a fee or receive a commission for their services.

BUY-DOWN
A payment to the lender from the seller, buyer, or third party which will cause the lender to reduce the interest rate for either the entire life of the loan (permanent) or during the first few years of the loan (temporary).

BUYER BEWARE
The buyer must inspect the property and satisfy himself it is adequate for his needs. The seller is under no obligation to disclose defects but may not actively conceal a known defect or lie if asked.

CALL OPTION
A provision in the mortgage that gives the mortgagee (the lender) the right to call the mortgage due and payable at the end of a specified period for whatever reason.

CAPITAL GAINS
Capital Improvement: Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.

CASHFLOW LENDING
The amount of cash desired over a certain period of time from an income producing property.

CASH-OUT REFINANCE
A refinance transaction in which the amount of money received from the new loan is in excess of the total money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose, such as college tuition, paying off high interest rate credit card debt, etc. The maximum loan to value for a cash-out refinance is 80% to avoid the requirement of mortgage insurance.

CERTIFICATE OF INCUMBENCY & AUTHORITY
Used for a LLC (Limited Liability Company) only, authorizes person to sign on behalf of the LLC.

CERTIFICATE OF TITLE
A statement provided by an abstract company, title company, or attorney stating that the title to the real estate is legally held by the current owner.

CHAIN OF TITLE
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

CLEAR TITLE
A title that is free of liens or legal questions as to the ownership of the property.

CLOSING
The conclusion or consummation of a transaction. This includes delivery of a deed, signing of all documentation and the disbursement of funds necessary to the sale or loan transaction.

CLOSING AGREEMENT & DISBURSEMENT LETTER
Lists all disbursements, legal agreements signed by third party handling the closing, and the borrower detailing how to receive the wire, collect documentation and disburse loan funds.

CLOSING COSTS
Expenses (over and above the price of the property) incurred by the buyers and usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at the settlement.

CO-BORROWER
Additional borrower(s) whose income and credit contributes to qualifying for the loan and whose name(s) appears on the loan documents with equal legal obligations.

COLLATERAL
An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

COLLECTION
The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.

COMMERCIAL SECURITY AGREEMENT
Document that lists the collateral to be securitized and the guidelines of that securitization.

COMMITMENT FEE
Any fee paid by a potential borrower to a lender for the lender's guarantee to lend money at a specified rate and within a specified time period.

COMMITMENT LETTER
A formal written offer by a lender stating the terms (such as amount, interest rate, etc.) under which it agrees to lend money to a borrower. Also known as a "loan commitment."

COMPARABLES
An abbreviation for "comparable properties" which are used for comparative purposes in the property appraisal process. Comparables are properties that are similar to the property under consideration - they have reasonably the same size, location , and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.

CONDOMINIUM
A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project, and sometimes the exclusive use of certain limited common areas. Each individual owner may sell or encumber his/her own unit.

CONFORMING MORTGAGE LOAN
A mortgage loan that conforms to regulatory limits such as loan-to-value ratio, term, and other characteristics. These mortgages are eligible for sales and delivery to either Fannie Mae or Freddie Mac.

CONSTRUCTION LOAN
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the construction work progresses.

CONSTRUCTION-PERMANENT LOAN
A construction loan that automatically converts to a regular mortgage (referred to as “permanent” financing) once construction has been completed.

CONSUMER REPORTING AGENCY (OR BUREAU)
An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository (see definition) as well as from other sources.

CONTINGENCY
A condition that must be met before a contract is legally binding.

CONVENTIONAL LOAN
A loan that is not insured or guaranteed by a government agency such as FHA or VA..

CONVENTIONAL MORTGAGE
A mortgage that is not obtained under a federal government insured program, such as FHA or VA.

CREDIT HISTORY
A record of an individual's open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.

CREDIT REPORT
A report detailing an individual's credit history and current status of an individual's credit standing prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.

CREDIT REPOSITORY
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

DEBT RATIO - BUSINESS
A percentage relationship between a business' gross monthly income and total monthly outstanding obligations. It is derived by dividing the gross allowable monthly income by the borrowers monthly debt payments and can be shown as a ratio like 1.25:1 meaning the business has $1.25 for every $1 of debt payments.

DEBT RATIO - PERSONAL
A percentage relationship between a borrower(s)’ gross monthly income and total monthly outstanding obligations. It is derived by adding the borrower(s)’ monthly housing payment plus continuing monthly debt payments and dividing by gross allowable monthly income.

DEED
The legal document conveying title to a property.

DEED OF TRUST
A document used in some states in place of a mortgage. Property is transferred to a trustee by the borrower (trustor), in favor of the lender (beneficiary) and reconveyed upon payment in full.

DEFAULT
Failure to make mortgage payments on a timely basis or failure to comply with other requirements of the mortgage.

DELINQUENCY
Failure to make mortgage payments when mortgage payments are due, but still within the period allowed before actual default is declared.

DEPOSIT
A sum of money given to bind the sale of real estate (AKA, earnest money), or a sum of money given to ensure payment or an advance of funds in the processing of a loan.

DEPRECIATION
A decline in the value of property brought about by age, physical deterioration, functional or economic obsolescence, etc.

DISCOUNT POINTS
The amount of discount expressed as a percent of the value. One point equals one percent. Also referred to as a "Point".

DISCOUNTED LOAN
When the note rate on a loan is less than the market rate, the lender requires additional points to raise the yield on the loan to the market rate.

DOWN PAYMENT
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

EARNEST MONEY
Funds given by the purchaser of property at the signing of a contract to help guarantee the purchaser’s performance of the contract. Also called a binder fee or escrow deposit.

EASEMENT
A right of way giving persons other than the owner access to or over a property for a specific limited purpose.

EFFECTIVE AGE
A real estate appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

EMINENT DOMAIN
The power of the state to take private property for public use upon payment of just compensation.

ENCROACHMENT
The physical intrusion of a structure or improvement on the land of another. For example, a neighbor's fence or driveway that crosses over your property line.

ENCUMBRANCE
Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

ENVIRONMENTAL INSPECTION FIRM
A third party service provider used for deals over $1mm, or when property has a questionable environmental history.

EQUAL CREDIT OPPORTUNITY ACT (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, receipt of income from public assistance programs, or past exercising of rights under the Consumer Credit Protection Act.

EQUIPMENT
Certain types of new equipment together with all components and spare parts and replacements, substitutions, and accessories thereto, leased under a Lease Agreement or serving as security under a Loan Agreement.

EQUIPMENT INSPECTION REPORT
Confirms that the Equipment subject to a Contract is in the possession of the subject Obligor at the location required under the terms of the Contract.

EQUIPMENT LISTING FORM/SCHEDULE A
Lists a detailed description of pledged assets.

EQUITY
The difference between the fair market value of the property and the amount still owed on its mortgage.

ESCROW
Funds and documents that are set aside and held in trust by a third party, usually for payment of taxes and insurance on real property. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.

ESCROW ACCOUNT
Funds held by a lender to cover the payment of anticipated expenses on a property, such as taxes or insurance.

ESCROW ANALYSIS
The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance, and other bills when due.

ESCROW COLLECTIONS
Funds collected by the servicer and set aside in an escrow account to pay the borrower's property taxes, mortgage insurance, and hazard insurance.

ESCROW DISBURSEMENTS
The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

ESCROW PAYMENT
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Known as "impounds" or "reserves" in some states.

ESTATE
The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.

EXAMINATION OF TITLE
The report on the title of a property from the public records or an abstract of the title.

FAIR MARKET VALUE
The price which a property will bring in a competitive market under all conditions required to a fair sale which results from negotiations between the buyer and a seller, each acting prudently, with knowledge and without undue stimulus.

FAIR CREDIT REPORTING ACT
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record. Also, if a lender is rejecting a loan request because of adverse credit information, then the lender is required to inform the borrower of the source of that information.

FAIR MARKET VALUE
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) (Freddie Mac)
A private corporation authorized by Congress to purchase loans in the mortgage market. It is commonly known as Freddie Mac.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) (Fannie Mae)
A privately owned corporation created by Congress to purchase loans in the secondary mortgage market. It is commonly known as Fannie Mae.

FIRM COMMITMENT
A promise from a lender to make a mortgage loan.

FIRST MORTGAGE
A mortgage that is the primary lien against a property and has priority over any subsequently recorded mortgages.

FIXED RATE MORTGAGE (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.

FLOOD CERTIFICATION FIRM
A third party service provider contracted to verify whether borrower's real estate lies in a flood zone, thus resulting in the need for flood insurance.

FORECLOSURE
An authorized procedure taken by a mortgagee or lender under the terms of a mortgage or deed of trust for the purpose of having the property applied to the payment of a defaulted debt.

FULLY AMORTIZING LOAN
A loan with monthly payments which follow a predetermined schedule that allows the principal and interest due to be paid in equal installments over the remaining term of the loan.

GRADUATED PAYMENT MORTGAGE (GMM)
A type of mortgage where the payments increase for a specified period of time and then level off to consistent payments. This type of mortgage involves negative amortization.

GRANTOR
One who grants collateral to be pledged in a loan on behalf of the borrower.

GROSS MONTHLY INCOME
Your total monthly income earned before taxes are deducted, which is why it is also known as before-tax income.

HAZARD INSURANCE AUTHORIZATION
Used to verify property and liability insurance, names the bank as additional insured loss payee.

HOUSING EXPENSES-TO-INCOME RATIO
The ratio of the monthly housing payment in total (PITI - Principal, Interest, Taxes, and Insurance) divided by the gross monthly income (for conventional loans) or net effective income (for FHA/VA loans). This ratio is also sometimes referred to as the top ratio or front end ratio.

IMPOUND
In the event that you do not have a 20 percent down payment, lenders will allow a smaller down payment - as low as 3 percent in some cases. With the smaller down payment loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on you loan's structure.

INDEX
A published interest rate to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. Some commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI) and they are used to determine the adjustment to the interest rate on ARMs.

INSTALLMENT LEASE ($1.00 BUYOUT)
Purchase option: at the end of the term, clear title passes with the completion of payments. customer is able to depreciate the cost of equipment as a tax deduction.

INSURED LOAN
A loan insured by FHA or a private mortgage insurance company (PMI).

INTEREST RATE
The percentage of a loan amount which is paid for being allowed to use the loan amount for a specified time.

INTERIM FINANCING
A construction loan made during construction of a building or a project. A permanent loan typically replaces the construction loan once the building is completed.

INVESTMENT PROPERTY
Real estate owned with the intent of supplementing one's income and is not intended for owner occupancy (i.e., rental houses, apartment buildings, etc).

JOINT OWNERSHIP AGREEMENT
An agreement between owners defining their rights, ownership, monetary obligations and responsibilities.

JOINT TENANCY
Two or more persons own a property. Joint tenants with common law right of survivorship means that the survivor inherits the property without reference to the deceased's will. Creditors may sue to have the property divided to settle claims against one of the owners.

LANDLORD WAIVER FORM
Used if borrower leases building (for customer and/or grantor), even from himself (ex. PC for practice with building owned personally). It states that the landlord acknowledges the lender's first security interest in the property at the location being leased, and that the landlord will notify lender in the event of default of the lease agreement.

LEGAL DESCRIPTION
A property description recognized by law which is sufficient to locate and identify the property. This may be by a map and lot number, monuments, metes and bounds, or U.S. Government Survey.

LESSEE
A person who or which executes a Lease Agreement as lessee (or borrower) and thereby becomes obligated to remit the Payments and perform all of the other obligations thereunder. "Lessee" shall also include any Person who or which has guaranteed all of the Lessee's obligations under a Lease Agreement.

LIABILITIES
Those amounts which are owed by a borrower or company. They will be classified as current liabilities, those coming due within a year, or long-term liabilities, those due after one year from the date of the statement.

LIEN
A legal claim or attachment against property as security for payment of an obligation. Liens may be either voluntary or involuntary, but all liens must be removed in order to clear the title.

LIEN RELEASE
Document releases any lien showing up on a UCC search that has already been paid.

LOAN TO VALUE RATIO (LTV)
The relationship between the amount of the loan and the value of the property, expressed as a percentage. Value is defined as the lower of sales price or appraised value of the property. The ratio of the amount of your loan to the appraised value of the home. The LTV will affect loan programs available to the borrower and generally, the lower the LTV the more favorable the terms of the loan programs offered by lenders.

MATERIAL ADVERSE CHANGE
Any adverse change in, or any occurrence which may adversely affect domestic or international financial, liquidity, banking, capital or syndication markets, or the banks availability or access thereto, either generally, or specifically with respect to a Transaction or any deterioration in any national or international situation (whether monetary, financial, legal, economic, or political) which, in the sole judgment of the bank, would adversely affect any Transaction or the banks interests under a loan agreement.

MATURITY
The termination or due date on which final payment on a loan must be paid in full.

MORTGAGE
A legal document that pledges a property to the lender as security for payment of the loan for that property.

MORTGAGE AND ASSIGNMENT OF RENTS
Legal documents recorded at the county level to secure a lien on real estate property and all rents collectable on said property.

MORTGAGE BROKER
An individual who is in the business of assisting in the arranging of funding for clients with lenders. The broker, himself, does not loan the money.

MORTGAGE DISABILITY INSURANCE
A disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time.

MORTGAGE PAYMENT
The periodic payments due to repay a lender for the proceeds of a loan. It includes principal repayment, interest repayment and often escrows for taxes and insurance premiums.

MORTGAGEE
The mortgage lender.

MORTGAGOR
The mortgage borrower.

NEGATIVE AMORTIZATION
This type of amortization occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan, which may cause the home buyer to owe more than the original amount of the loan.

NON ASSUMPTION CLAUSE
A statement in a mortgage contract forbidding the assumption of the mortgage (AKA, assumable loan) without the prior approval of the lender.

NOTE
A written agreement containing a promise of the signer to pay to a named person, or order, or bearer, a definite sum of money at a specified date or on demand.

ORIGINATION FEE
A fee or charge for the work involved in loan origination.

OWNER FINANCING
A property purchase transaction in which the property seller provides all or part of the financing.

PARTNERSHIP AGREEMENT
Used for a partnership only, authorizes person to sign on behalf of partnership.

PITI
Principal, interest, taxes and insurance which are the components of a monthly mortgage payment.

POINT
An amount equal to 1 percent of the principal amount of an investment or note. Loan discount points are a one-time charge assessed at closing by the lender to increase the yield on the mortgage loan to a competitive position with other types of investments.

POWER OF ATTORNEY FORM (POA)
Used to perfect security interest in collateral, some states require an original signature, therefore, we have a separate POA form to send to the state.

PREPAYMENT PENALTY
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule.

PRINCIPAL
The amount of debt, not including interest. The face value of a note or mortgage.

PRIVATE MORTGAGE INSURANCE (PMI)
Insurance written by a private company protecting the mortgage lender against loss occasioned by a mortgage default. Sometimes referred to as mortgage insurance or MI coverage.

PROMISSORY NOTE
Loan agreement between borrower and lender.

PURCHASE CONTRACT (AGREEMENT OR OFFER)
An agreement between the buyer and the seller of the property, which sets forth the price and terms of the sale. Also known as a sales contract.

QUITCLAIM DEED
A deed releasing whatever interest you may hold in a property but making no warranty whatsoever.

RATE
Percentage at which principal and interest on payments will be calculated over a stated period of time.

REAL ASSETS
Real estate or real property owned by an individual or business.

RECORDING FEES
Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.

REFINANCE
The repayment of a debt from the proceeds of a new loan using the same property as security.

SATISFACTION OF MORTGAGE
The recordable instrument issued by the lender verifying full payment of a mortgage debt.

SECOND MORTGAGE
A mortgage made subsequent to the first mortgage and is always subordinate to the first mortgage.

SECRETARY’S CERTIFICATE/BOARD RESOLUTION
Used for a corporation only, authorizes person to sign on behalf of corporation.

SECURITY
In lending, security refers to the collateral given, deposited, or pledged to secure the payment of the loan.

SECURITY DEPOSIT
Any prepaid amount howsoever denominated as paid by a Lessee to be held as collateral for future Payments and/or applied thereto pursuant to the terms of a Lease Agreement.

SELLER CARRY BACK
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage.

SIMPLE INTEREST
Interest which is computed only on the principal balance.

SPREAD (FIXED COST OF MONEY)
The margin between T-bill rate and what the interest rate is.

SUBORDINATION OF DEBT
Document that subordinates other lenders to our loan for any lien showing up on a UCC search that is not being paid off as part of the debt restructure.

TAX ID # OF THE BORROWER
Can be found on the tax returns. This number is the social security number of an individual and the EIN of a corporation/partnership/LLC.

TAX(ES)
Any and all sales, use, property, documentary stamp, intangible, excise or similar taxes, levies, assessments, etc. (by whatever name) assessed or imposed in connection with the purchase, sale or use of the Equipment or the Transaction.

T-BILLS
Treasury Note obligation issued by the United States Government.

TERM
The time limit within which a loan must be repaid.

TITLE
The document that provides legal evidence that the person has the right to the possession of the land.

TITLE COMPANY OR ATTORNEY FOR CLOSING
Company or individual who acts as a third party representative for the lender, handling the collection of documents and the disbursement of funds for loan closing.

TITLE INSURANCE
Insurance that protects lender against loss or damage as a result of defect in ownership title to a particular piece of property.

TITLE SEARCH
An investigation of public records into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear ownership.

TOTAL DEBT RATIO
Monthly debt and housing payments divided by gross monthly income. Also known as Obligations-to-Income Ratio or Back-End Ratio.

TRANSACTION
A contract entered into between an Obligor and Seller in the form of the Contract assigned or to be assigned, as applicable, to The bank pursuant to Section 3.1 and for purposes of any Assignment Agreement shall include all of Seller's right and interest in, to and under the Purchased Assets, title to or a perfected security interest in the Equipment, and all other rights ancillary to the Contract which Seller has or possesses.

TRUE LEASE (FAIR MARKET VALUE BUYOUT)
Purchase option: at the end of the initial term, the lessee may purchase the equipment for the greater of 10% or the fair market value; or continue renting the equipment for 1.25% of the original acquisition cost per month for an additional twelve months. Customer is able to expense 100% of monthly payment as a tax deduction.

TRUTH-IN-LENDING
A federal law requiring a disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.

UCC SEARCH
Can be done at either the state or county level. Provides a listing of UCC's already filed against the party searched.

UCC STATEMENT
Public record showing security interests/liens filed against an individual for specific property being held as collateral.

UNDERWRITING
Analysis of risk and setting of an appropriate rate and term for a loan on a given asset for given borrowers.

USURY
Interest charged in excess of the legal rate established by law.

VARIABLE RATE MORTGAGE
A mortgage agreement that allows for adjustment of the interest rate in keeping with a fluctuating market and terms agreed upon in the note. Also referred to as a "Adjustable Rate Mortgage (ARM)".

YIELD MAINTENANCE
Specified amount of interest expected if note was held to maturity.