Glossary D-F
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| D |
| DEED-IN-LIEU: A deed given by a mortgagor to a mortgagee to satisfy a debt and avoid foreclosure. |
| DEED OF TRUST: A type of security instrument in which the borrower conveys title to real property to a third party (trustee) to be held in trust as security for the lender, with the condition that the trustee shall reconvey the title upon the payment of the debt and conversely will sell the land and pay the debt in the event of default by the borrower. See mortgage. |
| DEED RESTRICTION: A condition placed in a deed limiting or restricting the use of the real property. |
| DEFAULT: A breach or nonperformance of the terms of a note or the covenants of a mortgage. |
| DELIVERY: In mortgage banking, the physical transfer of loan documents to an investor or agent in conformance with the commitment. |
| DELIVERY DATE: The contracted date when the actual payment of funds and delivery of mortgage-backed securities occurs. |
| DELIVERY MONTH: The calendar month during which a given contract expires and delivery can be made; also called the expiration month. |
| DIRECT ENDORSEMENT (DE): A HUD program that enables an eligible single- family lender to conduct the processing and closing of FHA single-family loan applications without HUD's prior review. |
| DISCOUNT POINT: Amount payable to the lending institution by the borrower to buy down the interest rate on the loan. One point is equal to one percent of the loan. |
| DISCOUNT RATE: In central banking, the rate the Federal Reserve charges to member banks that borrow money from it. |
| DOCUMENTARY STAMP: A mark "stamped" onto a deed certifying the amount of transfer tax paid. |
| DOWER: The rights a widow has to her husband's property at his death. Dower laws are being changed in many states. |
| E |
| EASEMENT: A right to the limited use or enjoyment of land held by another. Also, an interest in land to enable sewer or other utility lines to be laid or to allow access to a property. |
| EGRESS: To go out. It is used with the work ingress (to go in) to describe the right of access to land. |
| ENCROACHMENT: An improvement that illegally violates another's property or right to use that property. |
| ENCUMBRANCE: Anything that affects or limits the fee simple title to property, such as mortgages, leases, easements or restrictions. |
| ENDORSEMENT: Signature on a negotiable instrument by which title to property mentioned therein is assigned and transferred. Also, a notation added to an instrument after execution to change or clarify its contents. In insurance, coverage may be restricted or enlarged by endorsing a policy. In FHA loans, a notation placed on the note by the FHA indicating that the loan is insured under the National Housing Act. |
| 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 or receipt of income from public assistance programs. Also called "Regulation B." |
| EQUITY: Net ownership, the difference between fair market value and current indebtedness, sometimes called owner's interest. |
| ESCROW: An item of value, money or documents, deposited with a third party to be delivered upon the fulfillment of a condition. 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. In some parts of the country, escrows of taxes and insurance premiums are called impounds or reserves. |
| ESCROW ACCOUNT: The segregated trust account in which escrow funds are held. |
| ESCROW AGENT: The person or organization having a fiduciary responsibility to both the buyer and seller (or lender and borrower) to see that the terms of the purchase/sale (or loan) are carried out. Also called escrow company or escrow depository. |
| ESCROW ANALYSIS: The periodic examination of escrow accounts to determine if monthly deposits will provide sufficient funds to pay taxes, insurance and other bills when due. |
| ESCROW COMPANY: An organization established to act as an escrow agent. |
| ESCROW OVERAGE OR SHORTAGE: The difference, determined by escrow analysis, between escrow funds on deposit and escrow funds required to make a payment when it comes due. |
| ESCROW PAYMENT: That portion of a mortgagor's monthly payments held by a lender or servicer to pay taxes, hazard insurance, mortgage insurance, lease payments and other items as they become due. Also called impounds or reserves in some states. |
| ESTOPPEL PAYMENT: A written statement setting forth certain facts about a piece of real estate, such as the precise amount of indebtedness remaining. |
| EVIDENCE OF TITLE: Proof of ownership of property. |
| EXACT OF TITLE: The review of the chain of title as revealed by an abstract of title or public record. |
| EXCEPTION: In legal descriptions, that portion of land to be deleted or excluded. The term is also used to describe an objection to title or public record. |
| EXECUTE: Recordation of the appropriate signature on a document such as a mortgage note, to render it "in effect." |
| F |
| FARMERS HOME ADMINISTRATION: A government agency with the Department of Agriculture that operates under the Consolidated Farm and Rural Development Act of 1921 and Title V of the Housing Act of 1949. This agency provides financing to farmers and other qualified borrowers who are unable to obtain loans elsewhere. |
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FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC): Created by Congress in Title III of the Emergency Home Finance Act of 1970 (12 USC 1451 et seq). This stockholder-owned corporation, a portion of whose board of directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase and securitization programs. Also called Freddie Mac. |
| FEDERAL HOUSING ADMINISTRATION (FHA): A federal agency within the Department of I-lousing and Urban Development (HUD) that provides mortgage insurance for residential mortgages and sets standards for construction and underwriting. |
| FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): The nation's largest mortgage investor. Created in 1968 by an amendment to Title III of the National Housing Act (12 USC 1716 et seq.), this stockholder-owned corporation, a portion of whose board of directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property with mortgage purchase and securitization programs. Also called Fannie Mae. |
| FEE SIMPLE: The greatest possible interest a person can have in real estate, including the right to dispose of the property or pass it on to one's heirs. |
| FHA LOAN: A loan made through an approved lender and insured by the Federal Housing Administration. While there are limits to the size of FHA loans, they are intended to finance moderately priced homes. |
| FHA VALUE: The value established by the FHA as the basis for determining the maximum mortgage amount that may be insured on a specific property. The Fl-IA value is the sum of the appraised value of the property plus HUD/FHA's estimate of closing costs. |
| FINAL ENDORSEMENT: The date upon which HUD/FHA accepts the credit instrument evidencing the permanent mortgage loan for mortgage insurance. |
| FIRST MORTGAGE: A mortgage that gives the mortgagee a security right over all other mortgages of the mortgaged property. |
| FIXED RATE MORTGAGE: A mortgage in which the interest rate and payments remain the same for the life of the loan. |
| FLOATING RATE LOAN: A loan originated without a firm commitment to the borrower, thereby closing at the market rate. |
| FLOOD PLAIN: Those lands subject to flooding when a stream or river is at flood stage. |
| FORECLOSURE: A legal procedure in which a mortgaged property is sold to pay the outstanding debt in case of default. |
| FUNDING: Payment of money by lenders for a mortgage loan settlement, or the receipt of money by lenders from investors that purchase mortgages. |
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