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Real Estate Vocab 5
ASREB Real Estate School Vocabulary for Chapter A-5
| Term | Definition |
|---|---|
| Carryback | A transaction in which the seller accepts a note — secured by a mortgage — in place of cash, as full or partial payment of the consideration due under a purchase contract. Usually subordinate to the mortgage used by the buyer to fund most of the purchase |
| Agreement of Sale | constitutes the terms and conditions of sale of a property by the seller to the buyer. ... Sale deed is the document prepared at the time of full payment made by the buyer and when the actual transfer of the property takes place |
| Contract for sale | Formal contract by which a seller agrees to sell and a buyer agrees to buy, under certain terms and conditions spelled out in writing ... |
| PMM (Purchase Money Mortgage) | issued to the borrower by the seller of a home as part of the purchase transaction. Also known a seller or owner financing, this is usually done in situations where the buyer cannot qualify for a mortgage through traditional lending channels. |
| Deed of Trust | Deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender. The equitable title remains with the borrower. |
| Commercial Bank | A bank that offers services to the general public and to companies. |
| CFPB (Consumer Financial Protection Bureau) | An agency of the United States government responsible for consumer protection in the financial sector. |
| Construction Loan | Short/interim loan to cover the constructions costs of a building or development project, with loan proceeds advanced periodically in the form of installment payments as the work progresses. |
| Conventional Loan | A mortgage that is not guaranteed or insured by any government agency, including the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA). It is typically fixed in its terms and rate. |
| Deficiency | A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan, in full. |
| Deficiency Judgement | A judgment made by a court against a debtor indicating that the sale on a foreclosed piece of property did not cover the outstanding mortgage in full. It is a lien placed on the debtor for further money. |
| Anti-deficiency Protection | A form of relief from some aspects of foreclosure, some states have "anti-deficiency" . These laws prohibit lenders from suing their borrowers for the discrepency between the mortgage balance and the selling price at foreclosure. |
| Discounting | Process of determining the present value of a payment or a stream of payments that is to be received in the future. Given the time value of $, a dollar is worth more now than it would be tomorrow. Primary factor used in pricing a stream of tomorrow's cash |
| Endorsement | An endorsement can be a legal term that refers to the signing of a document that allows for the legal transfer of a negotiable from one party to another; it can also refer to an attachment to a document that amends or adds to it. |
| Estoppel Certificates | A document used in mortgage negotiations to establish facts and financial obligations, such as outstanding amounts due that can affect the settlement of a loan. It is required by a lender of a third party in a real estate transaction |
| Federal Agencies | Special government organizations set up for a specific purpose such as the management of resources, financial oversight of industries or national security issues. |
| FDIC (Federal Deposit Ins. Corp.) | preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $250,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect |
| FHB (Federal Home Loan Bank) | The Federal Home Loan Banks (FHLBanks, or FHLBank System) are 11 U.S. government-sponsored banks that provide reliable liquidity to member financial institutions (not individuals) to support housing finance and community investment. |
| FRB (Federal Reserve Board) | Is the central bank of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. |
| FNMA (Federal National Mortgage Assoc.) | Fannie Mae purchases mortgages from lending institutions in an effort to increase affordable lending activity at those institutions. Fannie Mae is not a federal agency. |
| Foreclosure | the action of taking possession of a mortgaged property when the mortgagor fails to keep up their mortgage payments. |
| Acceleration | contract provision that allows a lender to require a borrower to repay all or part of an outstanding loan if certain requirements are not met. An acceleration clause outlines the reasons that the lender can demand loan repayment. |
| Certificate of Sale | Certificate of sale is a certificate issued to the winning bidder at a foreclosure sale. It is a document issued by the court at a judicial sale, entitling the purchaser to receive a deed once the court approves the purchase. |
| Deficiency (Regards to Foreclosure) | A judgment made by a court against a debtor indicating that the sale on a foreclosed piece of property did not cover the outstanding mortgage in full. It is a lien placed on the debtor for further money |
| Excess Monies | Escrow accounts can hold surplus funds to accommodate any increases in these costs, but surpluses are capped at the federal level. |
| Notice | Notice given to the world by recorded documents regarding interests and rights in real estate. ... Deed A written instrument that, when executed and delivered, convey title to or an interest in real estate. |
| (Notice) Actual | Law term, used most frequently in civil procedure. It is notice (usually to a defendant in a civil proceeding) delivered in such a way as to give legally sufficient assurance that actual knowledge of the matter has been conveyed to the recipient. |
| Beneficiaries | typically refers to one who is eligible to receive distributions from a trust, will or life insurance policy. Beneficiaries are either named specifically in these documents or have met the stipulations that make them eligible |
| (Notice) Constructive | is the legal fiction that signifies that a person or entity should have known, as a reasonable person would have, of a legal action taken or to be taken, even if they have no actual knowledge of it. |
| Land Contract | An agreement between a buyer and seller of property in which the buyer makes payments toward full ownership (as with a mortgage), but in a land contract, the title or deed is held by the owner until the full payment is made. |
| Procedure | A real estate transaction is the process whereby rights in a unit of property (or designated real estate) is transferred between two or more parties, e.g. in case of conveyance one party being the seller(s) and the other being the buyer(s). |
| (Procedure) Judicial | of, by, or appropriate to a court or judge. |
| (Procedure) Power of Sale | A clause written into a mortgage authorizing the mortgagee (lender) to sell the property in the event of default, in order to repay the mortgage debt. As a mortgage term, power of sale is equivalent to the term foreclosure. |
| Sheriff's Deed | A document giving ownership rights in property to a buyer at a sheriff's sale (a sale held by a sheriff to pay a court judgment against the owner of the property). A deed given at a sheriff's sale in fore-closure of a mortgage. |
| Trustee's Deed | A deed of trust or trust deed is a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender. The equitable title remains with the borrower. |
| Holder in Due Course | A person who has received a negotiable instrument in good faith and without notice that it is overdue, that there is any prior claim, or that there is a defect in the title of the person who negotiated it. Origin of holder in due course. |
| Interest | Money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. |
| Interim Financing | Is the process of obtaining temporary, short term financing to close a real estate transaction. ... Interim financing is used to cover the remaining purchase price of the second home until the proceeds of the first sale are received. |
| Money Market | The trade in short-term loans between banks and other financial institutions. |
| (Money Market) Primary | Is the part of the capital market that deals with issuing of new securities. In prime market, co.s, gov.s or pub sector institutions can raise funds through bond issues and corps can raise cap through the sale of new stock through an IPO). |
| (Money Market) Secondary | Is where investors purchase securities or assets from other investors, rather than from the issuing companies themselves. |
| Moratorium | A temporary prohibition of an activity. A moratorium period is the duration in the loan term when the borrower doesn't have to pay any money i.e. no repayment or EMI. |
| Mortgage Broker (Correspondent) | Lender is a mortgage lender that originates and funds home loans in their own name. Shortly after the loan closes, they sell these loans to larger mortgage lenders who service the loans and may also sell them to the secondary market. |
| Mortgage Banker | A company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. |
| Note | is a promissory note secured by a specified mortgage loan; it is a written promise to repay a specified sum of money plus interest at a specified rate and length of time to fulfill the promise. |
| (Note) Co-Maker | AKA co-signer A person who signs a promissory note in such a capacity that he or she has equal and primary liability with another. |
| (Note) Negotiable Instrument | is a doc that promises payment to a specified person or the assignee. A check is considered a negotiable instrument. This type of instrument is a transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. |
| (Note) Seasoned | Seasoning in real estate usually refers to the length of time that a homeowner has owned a particular home, known as title seasoning. ... Mortgage lenders usually have title seasoning requirements before they issue a home loan. |
| Prior Mortgage Clause | A lien that is recorded prior to any other claims. Prior liens must therefore be paid before any other claims in the event that the collateral that is pledged against the loan must be liquidated. Junior liens are subordinated to prior liens. |
| RESPA (Real Estate Settlement Procedures Act) | This act was designed to protect potential homeowners and enable them to become more intelligent consumers. RESPA requires that lenders provide greater amounts of information to prospective borrowers at certain points in the loan settlement process. |
| Secondary Financing | Second-mortgage loan on an asset or property over which the first-mortgage takes precedence. |
| Truth - in- Lending (TILA) (Req. Z) | A principal purpose of TILA is to promote the informed use of consumer credit by requiring disclosures about its terms and cost |
| Usury | The act of lending money at an interest rate that is considered unreasonably high or that is higher than the rate permitted by law. |
| Warehousing | line of credit is a credit line used by mortgage bankers. It is a short-term revolving credit facility extended by a financial institution to a mortgage loan originator for the funding of mortgage loans. |
| Without Recourse | loan that allows a lender to seek financial dmgs if the borrower fails to pay liability, if value of the underlying asset is not enough to cover it. A recourse loan allows the lender to go after the debtor's assets that were not used as loan collateral. |
| Yield | A yield is a measurement of future income on an investment. It is generally calculated annually as a percentage, based on the asset's (or investment's) cost or market value. It has nothing to do with a capital gain on a property |
| Initial Public Offering (IPO). | An initial public offering (IPO) is the first time that the stock of a private company is offered to the public. |
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