Real Estate - Glossary

 

Are you looking for what a Real Estate term means under Florida law? Our experienced team of Real Estate attorneys in Orlando have compiled and defined a list of general real estate and other related terms in an effort to help you obtain as much information needed as possible. Please read below:

Adjustable-Rate Mortgage (ARM)

An adjustable-rate mortgage is a mortgage loan with an interest rate that is subject to change at certain intervals. These types of loans usually start off with a below-market interest rate, resetting upward every few years until they cap. Back to Real Estate Glossary

Amortization

The process of paying off a debt by making regular installment payments over a set period of time, at the end of which the loan balance is zero. Back to Real Estate Glossary

Appraisal

Appraisal is a written estimate of a property’s current market value prepared by a professional and independent appraiser. Back to Real Estate Glossary

Appraiser

A professional with knowledge of real estate markets and skilled in the practice of appraisal, a written estimate of a property’s current market value. When a property is appraised in connection with a loan, the appraiser is selected by the lender, but the appraisal fee is usually paid by the homeowner. Back to Real Estate Glossary

Balloon Mortgage

A mortgage loan that requires a large payment due at set time in the term of the loan (for example, at the end of 10 years). Back to Real Estate Glossary

Closing

It’s the process of transferring ownership from the seller to the buyer, the disbursement of funds to the seller, and the signing of all the documents associated with the sale and the loan. On a refinance, there is no transfer of ownership, but the closing includes repayment of the old lender. Back to Real Estate Glossary

Co-Homeowners

One or more persons who have signed a loan note, and are equally responsible for repaying the loan. Back to Real Estate Glossary

Convertible ARM

An Adjustable Rate Mortgage loan that can be converted into a fixed-rate mortgage during a certain time period. Back to Real Estate Glossary

Creditor

A creditor is a person or entity that is owed money by another person or entity. Back to Real Estate Glossary

Debt-to-income

A comparison or ratio of gross income to housing and other expenses or debts the homeowner owes. Back to Real Estate Glossary

Deed

A document that legally transfers ownership of property from one party to another. The deed is recorded in the public records with the property description and the owner’s signature. Also known as the title.Back to Real Estate Glossary

Deed-in-lieu of foreclosure

Deed-in-lieu of foreclosure is the process by which a homeowner may voluntarily transfer the deed to a home to the servicer when payments cannot be made.Back to Real Estate Glossary

Deferred payments

Loan payments that are authorized to be postponed as part of a workout process to avoid foreclosure. Back to Real Estate Glossary

Delinquency

Failure to make a payment when it is due. A loan is generally considered delinquent when it is 30 or more days past due.Back to Real Estate Glossary

Dual tracking

Refers to a common bank tactic in which the lender pursues foreclosure at the same time a borrower in default seeks a loan modification.Back to Real Estate Glossary

Equity

An owner’s financial interest in a property. It is calculated by subtracting the amount still owed on the mortgage loan(s) from the current market value of the property. Back to Real Estate Glossary

Escrow account

A separate account into which a portion of each monthly mortgage payment is placed; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc. Back to Real Estate Glossary

Escrow analysis

A periodic review of escrow accounts to make sure that there are sufficient funds to pay the taxes and insurance on a home when they are due. Back to Real Estate Glossary

First mortgage

A mortgage that has a first-priority claim against the property in the event the homeowner defaults on the loan. Back to Real Estate Glossary

Fixed-Rate Mortgage

A mortgage loan with a fixed interest rate that remains the same for the life of the loanBack to Real Estate Glossary

Forbearance

A temporary period of time during which a regular monthly mortgage payment is reduced or suspended.Back to Real Estate Glossary

Foreclosure

The legal process by which a property may be sold and the proceeds of the sale applied to the mortgage debt. A foreclosure occurs when the loan becomes delinquent because payments have not been made or when the homeowner is in default for a reason other than the failure to make timely mortgage payments. Back to Real Estate Glossary

Foreclosure prevention

Steps by which the servicer works with the homeowner to find a permanent solution to resolve an existing or impending loan delinquency. Back to Real Estate Glossary

Government-Sponsored Enterprises Enterprises (GSEs)

Private corporations created by the U.S. Government to reduce borrowing costs. They are chartered by the U.S. Government but are not considered to be direct obligations. For example, Fannie Mae and Freddie Mac are GSE’s.Back to Real Estate Glossary

HAFA Short Sale

When the homeowner sells the property for less than the full amount due on the mortgage. When a homeowner qualifies for the HAFA Short Sale, the servicer approves the Short Sale terms prior to listing the home and then accepts the payoff in full satisfaction of the mortgage.Back to Real Estate Glossary

Hazard insurance

Insurance that is generally required under mortgage contracts to pay for loss or damage to a person’s home or property. Back to Real Estate Glossary

Home Affordable Foreclosure Alternatives Program (HAFA)

A govern-ment program that provides opportunities for homeowners who can no longer afford to stay in their home but want to avoid foreclosure and transition to more affordable housing through a short sale or deed-in-lieu of foreclosure.Back to Real Estate Glossary

Home Affordable Modification Program (HAMP)

A government program that provides eligible homeowners the opportunity to modify their mortgages to make them more affordable. Back to Real Estate Glossary

Home Affordable Refinance Program (HARP)

A government program that provides homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. Back to Real Estate Glossary

Home Affordable Unemployment Program (UP)

A government program that provides unemployed homeowners a temporary forbearance, which is a period of time during which a regular monthly mortgage payment is reduced or suspended.Back to Real Estate Glossary

Home Equity Line of Credit (HELOC)

A way of borrowing money against the equity in one’s home to pay for things such as home repairs, college education, or other personal uses. Back to Real Estate Glossary

Housing expense

The sum of a homeowner’s mortgage payment, hazard insurance, property taxes, and homeowner association fees.Back to Real Estate Glossary

Interest-only mortgage

A mortgage where the homeowner pays only the interest and none of the outstanding principal balance on a loan for a specified amount of time.Back to Real Estate Glossary

Investment property

A property not considered to be a primary residence that is purchased in order to generate income, profit from appreciation, or to take advantage of certain tax benefits.Back to Real Estate Glossary

Lender-placed insurance

Insurance placed on a home or property by a lender to protect its interest in the collateral which secures the loan. Back to Real Estate Glossary

Lien

The lender’s right to claim the homeowner’s property in the event the homeowner defaults. If there is more than one lien, the claim of the lender holding the first lien will be satisfied before the claim of the lender holding the second lien, which in turn will be satisfied before the claim of a lender holding a third lien, etc. Back to Real Estate Glossary

Loan-To-Value (LTV) Ratio

In real estate lending, the outstanding principal amount of the loan divided by the appraised value of the property underlying the loan. Back to Real Estate Glossary

Monthly gross income

The total income of all homeowners who sign a mortgage before any taxes or other deductions are made.Back to Real Estate Glossary

Mortgage

A legal document that pledges property to a lender as security for the repayment of a loan. The term is also used to refer to the loan itself. Back to Real Estate Glossary

Mortgage Insurance (MI)

Insurance that protects lenders against losses caused by a homeowner’s default on a mortgage loan. MI typically is required if the homeowner’s down payment is less than 20% of the purchase price.Back to Real Estate Glossary

Mortgage modification

A change in the terms of a loan, usually with a lower interest rate and/or longer term, in response to the homeowner’s inability to make the payments under the existing contract. Back to Real Estate Glossary

Mortgage payment

The amount of money paid on a monthly basis for principal, interest, property taxes, hazard insurance and homeowner’s association fees, if applicable.Back to Real Estate Glossary

Mortgage payment guideline

The calculation within HAMP that helps determine a homeowners eligibility. It is calculated as 31% of the homeowner’s current monthly gross income. If the monthly mortgage payment is above this amount, a homeowner may be eligible for HAMP. Back to Real Estate Glossary

Negative equity

The condition of owing more on the property than the property is worth. Back to Real Estate Glossary

Pre-foreclosure sale

When the lender allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Also referred to as a short sale. Back to Real Estate Glossary

Primary or principal residence

The property in which the homeowner will live most of the time, as distinct from a second home or an investor property that will be rented.Back to Real Estate Glossary

Private-label mortgages

Loans that are not owned or guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae, or another federal agency. Back to Real Estate Glossary

Refinance

The process of replacing an existing mortgage with a new one by paying off the existing debt with a new loan under different terms. Back to Real Estate Glossary

Repayment plan

A process where a homeowner promises to pay down past due amounts on a mortgage while continuing to make regular monthly payments on a property.Back to Real Estate Glossary

Second Lien Modification Program (2MP)

A program that provides homeowners a way to modify their second mortgages to make them more affordable when their first mortgage is modified under HAMP. Back to Real Estate Glossary

Second mortgage

A loan with a second-priority claim against a property in the event that the homeowner defaults. The lender who holds the second mortgage gets paid only after the lender holding the first mortgage is paid. Back to Real Estate Glossary

Servicer

A firm that works on behalf of the lender in support of a mortgage, including collecting mortgage payments, ensuring payment of taxes and insurance, managing escrow accounts, managing communications with the homeowner, and loss mitigation or foreclosure when necessary. Back to Real Estate Glossary

Servicing transfer

When one servicer is replaced by another.Back to Real Estate Glossary

Short sale

When the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Back to Real Estate Glossary

Title

The documented evidence that a person or organization has ownership of real property.Back to Real Estate Glossary

Trial period or trial period plan

HAMP requires homeowners to enter into a trial period plan before receiving a permanent HAMP modification. The purpose of the trial period is to see if the new reduced payment is sustainable, while providing relief and preventing any possible foreclosure sales from occurring. The trial period is at minimum three or four months, during which the homeowner must make payments on time. Only after all trial payments are made on time and all documents are submitted and verified can the original loan be permanently modified. Back to Real Estate Glossary

Trust

A relationship in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another. Back to Real Estate Glossary

Underwriting

The process of examining all the data about a homeowner’s property and income documentation to determine whether the mortgage modification should be issued. The person who does this is called an underwriter. Back to Real Estate Glossary

Unpaid Principal Balance (UPB)

Amount of a loan that is due to the lender. This does not include additional charges, such as interest. Back to Real Estate Glossary

Weighted average life

Average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding. Back to Real Estate Glossary

Workout

A way to resolve or restructure a loan to prevent a homeowner from going into foreclosure through a loan modification, forbearance or short sale. Back to Real Estate Glossary