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Glossary of Terms

Mortgage. Real Estate & Insurance

R

Rate and Term Refinance 
Refinance loan with proceeds that are used only to pay off the outstanding principal balance of an existing first mortgage, to pay off the outstanding principal balance of any existing subordinate mortgage that was used in whole to acquire the subject property, to finance closing costs (including prepaid expenses), and to allow cash back to the borrower in an amount no more than the lesser of 2% of the balance of the new refinance mortgage or $2000.
RATE CHANGE DATE
On an adjustable rate loan, this is the date a new interest rate will be put into effect . This change can occur every 6 months, 24 months or 36 months depending on the terms of the note.
RATE INDEX
See INDEX.
Raw Land
Land in its natural state, having no physical improvements such as grading, sewers, or erected structures.
Real Estate Owned (REO)
Property a lender acquires as the result of foreclosure.
RE-RECORDING
The recording of a deed for a second time to correct an error contained in the deed originally recorded.
REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)
A Federal law that requires lenders to disclose, in advance, an estimate of the costs associated with a loan and prohibits "kickbacks" for referring business to 3rd parties associated with a loan.
REAL PROPERTY
Real Property is land and generally whatever is erected upon or affixed thereto. It's a Land and all attachments to the land, such as buildings, crops or mineral rights. Ownership of real property can be divided into various types of interests and rights.
REBUILD LETTER
A letter provided by the appropriate municipality, stating a structure on a specific property can be rebuilt as originally constructed in the case of damage or destruction.
Recast
To re-amortize the remaining principal balance for the remaining term of the loan. Typically used in negative amortization loans.
RECISION
The legal remedy for canceling, a contract and restoring the parties to their original positions; a return to status quo.
Recognition Agreement
A Recognition Agreement, also known as an Aztech Form, is generally provided by the lender to be signed by the cooperative. It recognizes the secured rights of a lender to the shares of stock and the proprietary lease on an apartment.
Reconveyance
Transfer of the title of land from one person to the immediate proceeding owner. It is used when the performance of debt is satisfied under the terms of a deed of trust.
RECORDING
The act of recording a document such as a deed or mortgage in a public registry thereby giving notice to future purchasers, creditors or other interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing of an instrument to be recorded.
RECORDING CONFIRMATION
Notification from the title company verifying the lien has recorded as instructed.
RECORDING FEES
The amount charged by a public records office to record the security instrument within the county.
Recurring Charges
Any debt that matures in more than six (6) months or is continuous in nature, i.e., child support, child care, installment and revolving accounts. Any large monthly debt that matures in less than six (6) months must be given underwriting consideration.
Redemption Period
Specified period in which a mortgagor can reclaim foreclosed property by making full payment of the mortgage debt, under a legally enforceable right of redemption in some states.
Refinance Transaction
Repayment of a debt from the proceeds of a new loan using the same property as security. We also consider the current owner's placement of financing on a property that is not financed as a refinance transaction.
Regulation Z   
Regulation written by the Federal Reserve Board to implement the Truth-in-Lending Act. It is a comprehensive regulation, containing a full restatement of all the requirements of the act and is enforced by the Federal Trade Commission (FTC). Both new real estate loans and assumptions of existing loans come under Regulation Z's purview.
Reinstatement
Curing of all defaults by a borrower. Restoration of a loan to current status through payment of arrearages.
Relative
Borrower's spouse, child, or dependent or any other individual related to the borrower by blood, marriage, adoption, or legal guardianship.
RELEASE OF LIEN
When a lien against the property is satisfied, the note holder records a document that reflects the discharge of the obligation and releases the lien recorded against the property.
Release of Liability
Agreement by a lender to terminate the personal obligation of a borrower to pay a debt.
RELEASE OF MORTGAGE
A recordable instrument that transfers title from a mortgagee to the mortgagor when title is held as collateral security for a debt. Most commonly used upon payment in full of a mortgage.
Remaining Economic Life
Estimated period of time during which a property can be utilized profitably. See the front page of the URAR, Improvement Analysis section for the Estimated Remaining Economic Life of a property. The Remaining Economic Life must equal or exceed the term of the loan.
RENTAL AGREEMENT
A contract used by property owners who rent their property to another individual. Rental agreements should state the amount of rent the customer will collect from the renter.
Rent Loss Insurance
Insurance that protects the landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent.
Reproduction Cost
Money required to reproduce a building using the same or equivalent materials, design, and construction methods, less an allowance for depreciation. Element of the cost-approach method of appraisal.
REQUEST FOR FULL RECONVEYANCE
Written instructions provided by the beneficiary to the trustee to issue a deed of Reconveyance when the conditions of obligation have been fulfilled.
REQUIREMENTS TO BE MET
Exceptions to be cleared and other actions that must be taken for a title company to issue a final title policy per the lender's instructions.
RESCIND
To void or cancel in such a way as to treat the contract, or other object of the rescission, as if it never existed.
Rescission
Cancellation or annulment of a transaction or contract by law or by mutual consent.
Residential Home Mortgage
Mortgage that covers a one(1) to four (4)-family dwelling that is used to provide living accommodations.
Residential Mortgage Credit Report
Detailed account of the credit, employment, and residence history (as well as public records information) of an individual.
RESPA
Real Estate Settlement Procedures Act, a federal law that requires lenders to provide home mortgage borrowers with information of known or estimated settlement costs.
Retention (for OTC loans)
A portion of construction loan funds that are held back from disbursement until the project is complete.
Revolving Debt
Arrangement for credit, e.g., charge cards, in which the customer receives purchases or services on an ongoing basis prior to payment. Repayment is usually at regular intervals but not for a specified amount or term.
RIDER
A rider is an addition to the security instrument.
Right of First Refusal
Provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
Right of Ingress or Egress
Right to enter upon or leave from designated premises.
Right of First Refusal
A Right of First Refusal is a condition found in many condominium by-laws which permits the board to review any party seeking to purchase or rent an apartment. It gives the board permission to refuse the applicant. If the applicant is refused, the condominium must purchase or rent the apartment under the terms and conditions stipulated in the contract or lease.
Right of Survivorship
Co-ownership of property where, if one owner dies, the undivided estate passes to the surviving owner(s) in the case of joint tenancy and tenancy by entirety (husband and wife).
Right of Way
Privilege operating as an easement upon land, whereby a land owner, by grant or agreement, gives another the right to pass over land.
Riparian Rights
Right of owners to the water and land below the eight water mark. These rights vary according to state law.
Rooms
Real Estate agents generally refer to the size of an apartment based on the following specifications. According to the New York City Rent Guidelines Board, a "room" in Manhattan, except for a kitchen, must be at least 65 square feet and include a window. Baths are not counted as "rooms."
  • Classic Twelve - A prewar apartment comprised of a living room, formal dining room, library, kitchen, four bedrooms, and four maids' rooms.
  • Classic 9 to 11 Rooms - A prewar apartment offering a living room, formal dining room, library, three bedrooms, and two to four maids' rooms.
  • Classic Seven or Eight - A prewar apartment with a living room, dining room, kitchen, three bedrooms, and one or two maids' rooms.
  • Classic Six - A prewar apartment that consists of a living room, dining room, kitchen, two bedrooms, and one maid's room.
  • Classic Five - A prewar apartment that includes a living room, formal dining room, kitchen, and two bedrooms.
  • Five Rooms - A living room, kitchen, and three bedrooms.
  • Four Rooms - A living room, kitchen, and two bedrooms.
  • Three Rooms - A living room, kitchen, and one bedroom.
  • Two Rooms - A living room and a kitchen, a.k.a. a "Studio".
  • 1/2 Room - Added to any of the above, typically either a foyer that is large enough to dine in, or a separate alcove intended for dining or, often in the case of a Studio ("2 1/2 Room") apartment, for sleeping in.
  • Duplex - Although in many markets, a duplex refers to a house with two units, in New York City, it is a single apartment with two floors or levels.
  • Loft - Open living space, usually with separate bedrooms.
  • Loft Area - Additional space created in apartments with very high ceilings, usually accessed by stairs or a ladder and often used for sleeping.
ROOM RENTS
Income a homeowner receives from renting rooms in the same property in which they live.
Rule of 78s
Method used to calculate an interest rebate when an installment loan that had add-on interest is paid off (or refinanced) prior to its maturity date.
RURAL
A term used to describe a property's location. For example, rural properties are in remote locations, on non-paved access roads or streets with support services more than 10 miles away. Rural is also a term used to describe the country as opposed to the city.