Arbor Financial Group Marketing Engines, Inc.

Glossary of Terms

Mortgage. Real Estate & Insurance


Technique in which a seller deeds property to a buyer for a consideration and the buyer simultaneously leases the property back to the seller, usually on a long-term basis.
Sales Comparison Approach to Value
Method of measuring the value of a property based on an analysis of comparable sales, contract offerings, and listings of properties that are the most comparable to the property that is being appraised. Also known as market data approach.
Sales Concessions/Inducements to Buy
Considerations made by the seller, as an inducement to purchase the property.
Discharge of an obligation by payment of the amount due, as on a mortgage, trust deed or contract or payment of a debt awarded, such as a satisfaction of a judgment.
Satisfaction of Mortgage
Recordable instrument given by the lender to evidence payment in full of the mortgage debt. Also known as a release deed.
Schedule A is the list in the Offering Plan of all the apartments being sold in a newly-constructed building or one that is in conversion. It presents allocated shares or unit percentage interest, room count, prices, and other material cost elements including the projected maintenance charges and the tax-deducible portion of the maintenance. It's a section of the Preliminary Title Report/Title Commitment that lists the name of the proposed insured, amount of title insurance, estate or interest in the land, how legal title is vested and the legal description of the property.
Schedule B is the projected estimated cost of operative a co-operative or condominium during its first year. It's a section of the Preliminary Title Report/Title Commitment that lists exceptions to title if any.
Seasoned Mortgage
Mortgage that has been closed for more than one year.  Some lenders require 6 months seasoning only.
Maturing of a mortgage. Length of time that has passed since origination.
Second Mortgage
Mortgage that has rights secondary to the first mortgage, i.e., the proceeds from a foreclosure sale must pay the first mortgage before any funds can go to repay the second mortgage.
A loan secured by a 2nd mortgage or trust deed of real property. Same as PIGGYBACK LOAN.
The financial markets where groups of loans are sold to investors. Example: Primary mortgage lenders originate loans while the secondary market sells funded loans.
A property used by a person as a second residence, not as an investment.
A section of the Federal Truth-in-Lending Act pertaining to high fee loans and the restrictions and compliance issues with which this type of loan transaction must comply.
Secured Party
Party holding a security interest or lien. Also known as the mortgagee, the conditional seller, or the pledgee.
(1) Collateral given, deposited, or pledged to secure the fulfillment of an obligation or the payment of a debt.
(2) Instrument that provides evidence of debt or of rights to share in earnings or the distribution of property.
The security instrument is used to identify and encumber the real property used as collateral for the loan. It's notarized and then recorded with the county in which the property is located. Once recorded, it secures an interest in, or lien against, the property. The security instrument used is state specific. Examples are, deed of trust, security deed, a trust deed or a mortgage. So, it's a mortgage or trust deed evidencing the pledge of real estate security as distinguished from the Note or other credit instrument.
Security Interest
Interest of a creditor in the property of a debtor.
Collection of payments and management of operational procedures related to a mortgage.
A burden resting upon one estate for the benefit or advantage of another. An agreement granting limited permission to use the property. Same as LAND BURDEN.
Final statement of the actual settlement costs of the loan. A Federal requirement under RESPA. Same as HUD-1.
Settlement Costs
Money paid by borrowers and sellers to effect the closing of a mortgage loan. This normally includes an origination fee, discount points, title insurance, survey, attorney's fee, and such prepaid items as taxes and insurance escrow payments.
Sheriff's Deed
Deed given by court order in connection with the sale of property to satisfy a judgment or tax sale.
Interest computed on the unpaid principal balance of a loan, as opposed to compounded interest.
A standard home with no common areas, no homeowners' dues or sharing of common walls. A home intended to be occupied by 1 family.
Single-Width Manufactured Housing Unit
Manufactured housing unit that consists of a single section, which is usually 12 feet wide and from 40 to 64 feet long.
The study of a specific land parcel to determine its suitability for a specific use. For example, if the study of the land parcel reveals it should be used for industrial purposes, yet it's currently being used for residential purposes, then, upon review of the appraisal report, the reviewer would want to take this information into consideration when determining if the loan's collateral is sound.
A concrete floor used as a foundation in homes without a basement.
Documentation specifying the frequency and amount of Social Security payments an individual is eligible to receive. Social Security Award Letters are re-issued annually.
Legal title in a single individual or an entity.
Ownership of a business, with no formal entity as a vehicle or structure. The sole proprietorship reports its tax information on Federal tax form 1040.
Soft Costs
Architectural, engineering, and legal fees, distinguished from land and construction costs.
Soft Market
Any area that shows evidence of declining property values, an over supply of property, or a marketing time of more than six (6) months.
Source of Funds
Source of the buyers funds for the required cash investment.
Special Warranty Deed
Deed containing a covenant whereby the grantor agrees to protect the grantee against any claims arising during the grantor's period of ownership.
Spot Development
Construction project that is free-standing on a purchased lot and not associated with a specific development, tract or subdivision.
A title insurance policy used in several states, not having as broad a coverage as the nationally recognized American Land Title Association policies. See AMERICAN LAND TITLE ASSOCIATION.
Standalone Condo (Site Condo) 
A project built as a condominium project with an HOA. The unit is not connected to other units at any point.
Start Rate
The initial interest rate charged on an adjustable-rate mortgage loan.  Also, see Note Rate.
A confidential form filled out by buyer or seller to help a title company determine if any liens are recorded against either. Very helpful when people with common names are involved.
Statement of Service
DD Form 13, used to verify the military service of an active duty veteran.
Straw Buyer
One who purchases land or property on behalf of another and holds the title but passes control to the real purchaser. Also known as a dummy purchase, a nominee, or a front.
Streamlined Refinancing Documentation
Alternative documentation procedure specifically designed for no cash-out refinance transactions, which allows lenders to use substitute documentation to verify the borrower's employment and income. It also relies on the lender's warranty of the property value instead of requiring a new appraisal report under certain circumstances.
Strict Foreclosure
Type of foreclosure proceeding used in some states, in which title is invested directly in the mortgagee by court decree without holding a foreclosure sale.
Subchapter S
Provisions of the Internal Revenue Code under which certain qualifying small business corporations may elect to eliminate income tax at the corporate level, with the corporation's income taxed directly to the shareholders.
Housing development that is created by dividing a tract of land into individual lots for sale or lease.
Subject to Financing
Subject to Financing, also known as Financing Contingency, is a term stipulating that the agreement is conditioned upon the buyer obtaining financing from a financial institution in an agreed-upon amount.
Lease executed by a lessee to a third person for a term no longer than the remaining portion of the original lease.
Subordinate Financing
Any mortgage or other lien that has priority lower than that of the first mortgage.
Act of a party acknowledging, by written recorded instrument, that a debt is inferior to the interest of another in the same property. Subordination may apply not only to mortgages, but to leases, real estate rights, and any other types of debt instruments.
This refers to a complete loan application package submitted for loan approval.
A lien taking a legal title position junior to another lien that recorded later. For example, if a mortgage lien recorded in 1996, it can subordinate to a lien recorded in 1999. Subordination may apply not only to mortgages, but also to leases, real estate rights and any other type of debt instruments.
Substitution of one person for another in reference to a debt, claim, or right.
An agreement by which a lien holder agrees to accept a lien position junior to that of a later-recorded lien. For example, when a lien holder agrees to subordinate, a formal agreement must be drawn, signed and recorded to make it a legal transaction. Subordinations may apply not only to mortgages, but also to leases, real estate rights and any other types of debt interests.
A document that is recorded to change the trustee named in a deed of trust.
The area around a city. Usually residential with some small businesses.
Super Lien
Lien imposed on a piece of property by the government that supersedes all other liens on that property, including a lender's lien. It is put on the property for violation of environmental and public health and safety rules. Failure of a property owner to clean up its hazardous or toxic wastes is an example of cause for a super lien against that property.
Additional taxes assessed by the city and/or county on property. These taxes are in addition to any taxes impounded in an escrow account.
Obligation of a guarantor to pay a second party upon default by a third party in the performance it owes to the second party.
Measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any improvements.
Sweat Equity
Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.