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Mortgage Dictionary
By Robert Irwin, Global Home Loans & Finance

Select the first letter of the term you wish to find:
[ A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z ]

Joint and Several Liability
A creditor can demand full repayment from any and all of those who have borrowed. Each borrower is liable for the full debt, not just the prorated share.

Joint Tenancy 
Ownership of a property by 2 or more people, each of whom has an undivided interest with the right of survivorship. 
Example : John and Mary own a house in joint tenancy. Each owns half of the entire (undivided) property. If John dies, Mary will own the entire property and vice versa.

The decision of a court of law stating that one individual is indebted to another and fixing the amount of indebtedness. Judgements, when recorded, become a lien on real property owned by the defendant. 

Judgement Lien
The claim on the property of a debtor resulting from a judgement. 

Jumbo Loan 
Loan size that is larger than the limit established by Fannie Mae or Freddie Mac

Junior Mortgage
A mortgage subordinate to another mortgage. In the case of a foreclosure a senior mortgage will be paid prior to a junior mortgage. 

A payment required by a mortgage in addition to normal principal and interest. Sometimes known as a participation loan. 

Land Contract
A real estate installment selling arrangement whereby the buyer may use and occupy land, but no deed is given by seller until the sales price has been paid.

Lease with Option to Purchase
A lease under which the lessee has the right to purchase the property. The option may run for a portion or for the full length of the lease 

Leasehold Estate
Tenant's right of possession for a specific period of time under a lease agreement. 

Legal Description
Legally acceptable identification of real estate by one of the following: 

* the government rectangular survey 
* metes and bounds 
* recorded plat (lot and block number) 

A person to whom property is rented under a lease. (Tenant) 

A person who rents property to another under a lease. (Landlord) 

A claim against the property for the payment of a debt, judgement, mortgage or taxes. 
Example : Unpaid contractors may file a mechanic's lien. 

Life Estate
An estate in real property for the life of a living person. The estate then reverts back to the grantor or to a third party. 

Lis Pendens
Latin for "lawsuit pending." Recorded notice that litigation is pending on a property. Most lenders will require the clearance of the Lis Pendens prior to closing. 

Loan Application
A document required by a lender prior to loan approval. The application includes detailed information about the borrower and the property. 

Loan origination fee or points
Charge by a lender or broker connected with originating a loan. This is different from discount points which are used to buy down the rate of interest. 

Loan to Value Ratio (LTV)
The loan amount divided by the value of the property. 

Loan Servicing
The act of collecting loan payments, handling property tax and insurance escrows, foreclosing on defaulted loans and remitting payments to the investors. 

A fixed number added to the index to compute the rate on an adjustable rate mortgage. 

Marketable Title 
Title that is free of liens, clouds and other legal defects and hence is readily acceptable by a buyer. 

Market Value
The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.

Mechanics Lien
The right of an unpaid contractor or subcontractor to file a lien against property to recover the amount due to him/her. 

A written instrument that creates a lien upon real estate as security for the payment of a specified debt. 

Mortgage Backed Security (MBS)
A bond or other financial obligation secured by a pool of mortgage loans. 

Mortgage Banker
Specializes in originating and servicing loans. They generally sell their loans to investors, but may continue to service them. 

Mortgage Broker
Arranges financing for a borrower by placing loans with lenders. Mortgage brokers are paid a fee by the borrower or the lender when a loan closes. 

The lender. 

The borrower. 

Mortgage Insurance
See private mortgage insurance (PMI) 

Mortgage Note
A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment. 

Negative Amortization
An increase in principal balance which occurs when the monthly payments do not cover all of the interest cost. The interest cost which is not covered by the payment is added to the unpaid principal balance. 

Net Effective Income
The borrowers gross income minus federal income tax. 

Non-conforming loan
Loans that do not comply with Fannie Mae or Freddie Mac guidelines.

A written instrument that acknowledges a debt and promises to pay. 

Notary Public
One authorized to take acknowledgments of certain types of documents, such as deeds, contracts, and mortgages. 

Notice of default
A letter sent to the defaulting party as a reminder of the default. 

An expression of willingness to purchase a property at a specified price. 

One who receives the offer. When the buyer makes an offer to the seller the seller is an offeree. 

One who makes the offer. When the buyer makes an offer to the seller the buyer is an offeror. 

Office of Comptroller Currency
The oldest federal financial regulatory body that oversees the nation's federally chartered banks. 

Office of Thrift Supervision
The OTS charters federal thrift institutions and is the primary regulator of all federal and many state-chartered thrift institutions. 

Open House
A method of showing a home for sale to prospective buyers where the home is left open for inspection by those who may be interested in making a purchase. 

Open End Mortgage
A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions. 

Origination Fee 
See Loan Origination Fee. 

One who receives or purchases an option. 

One who gives or sells an option. 

Oral Contract
A verbal agreement. Verbal agreements for the sale or use of real estate are normally unenforceable. 

Owner of Record
The individual named on a deed that has been recorded at the county recorders office. 

Owner Occupant
A tenant of a residence who also owns the property. 

Select the first letter of the term you wish to find:
[ A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z ]

Robert Irwin