Regions Mortgage is dedicated to providing you will all of the information you may need in considering your new home purchase, refinance or home equity financing. Our Information Center provides you with an important resource to assist you in making the right decision. A
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A right created by grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another. It is either for the benefit of land (appurtenant), such as right to cross A to get to B or "in gross," such as a public utility easement.
Easement of Necessity
An easement granted by a court when it is determined that said easement is absolutely necessary for the use and enjoyment of the land. Commonly given to landlocked parcels.
A term concerning a right to come and go across the land (public or private) of another. Usually part of the term ingress and egress.
A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title.
A legal fiction applied to a land contract which treats the vendee's (buyer's) interest as a real property interest even though the seller holds legal title, and the seller's interest as a security interest (personal property). This enables the buyer to act as the "owner" of the property without having "legal" title.
(1) A lien against real property (mortgage) which is enforceable in a court of equity, but does not legally constitute a mortgage. (2) A deed given as security for a debt will be held to be a mortgage rather than a transfer of title. Also called a constructive mortgage.
The value of a person's interest in real property after all liens and charges have been deducted.
Equity Line Of Credit
A combination of a line of credit and equity loan. A maximum loan amount is established based on credit and equity. A mortgage (deed of trust) is recorded against the potential borrower's property for said maximum loan amount. The potential borrower has the right to borrow, as needed, up to the amount of the mortgage.
A clause in a lease providing for an increased rental at a future time. May be accomplished by several types of clauses, such as (1) Fixed increase - A clause which calls for a definite, periodic rental increase. (2) Cost of living - A clause which ties the rent to a government cost of living index, with periodic adjustments as the index changes. (3) Direct expense - The rent is adjusted according to changes in the expenses of the property paid by the lessor, such as tax increases, increased maintenance costs, etc.
Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event, modernly, in some states, all instruments necessary to the sale (including funds) are delivered to a third (neutral) party, with instructions as to their use.
Taking by right of eminent domain, more property than actually necessary for the intended purpose. This happens frequently, the excess property being sold at auction after completion of the project.
A provision in a title insurance binder or policy excludes liability for a specified title defect or an outstanding encumbrance.
A written contract between a property owner and a real estate broker, whereby the owner promises to pay a fee or commission to the broker it certain real property of the owner is sold during a stated period, regardless of whether the broker is or is not the cause of the sale. The broker promises to put forth his or her best efforts to sell the property, and may make specific promises as to advertising or other promotion in certain instances.
(1) The degree to which a property for sale, lease, etc., is made noticeable (exposed) to potential buyers, tenants, etc., through advertising, multiple listing groups, etc. (2) The direction in which a property faces. For example: Does a store depending on walk-in trade face the sun in the morning when people walk in the sun to get warm (eastern exposure), or face the sun in the afternoon when people walk in the shade to keep cool (western exposure).
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Fair Market Value
An appraisal term for the price which a property would bring in a competitive market given a willing seller and willing buyer, each of whom has a reasonable knowledge of all pertinent facts, with neither being under any compulsion to buy or sell.
Federal Deposit Insurance Corporation (F.D.I.C.)
The federal corporation which insures against loss of deposits in banks, up to a maximum amount.
Federal Emergency Management Agency (FEMA)
Federal agency which, among other things, directs the activities of the Federal Insurance Administration and establishes flood insurance rates and terms of coverage, issues policies, processes claims, and identifies and maps flood-prone areas.
Federal Home Loan Banks
Banks created under the Federal Home Loan Bank Act of 1932, in order to keep a permanent supply of money available for home financing. The banks are controlled by the Federal Home Loan Bank Board. Savings and loans, insurance companies, and other similar companies making long term mortgage loans may become members of the Federal Home Loan Bank System, and thus may borrow from one of the regional banks throughout the country.
Federal Home Loan Mortgage Corporation - Freddie Mac
Freddie Mac is one of the Government Sponsored Enterprises (GSE), receiving no government funding or backing. It is a stockholder-owned corporation chartered by Congress to increase the supply of funds that lenders could make available to borrowers. It does not lend directly to borrowers, but buys mortgages made to borrowers.
Federal Housing Administration (FHA)
A federal agency which insures first mortgages, enabling lenders to loan a very high percentage of the sale price.
Federal National Mortgage Association - Fannie Mae
Fannie Mae is one of the Government Sponsored Enterprises (GSE), yet receives no government funding or backing. It is a private company, owned by shareholders and chartered by Congress to purchase mortgages thereby making funds available to lenders. It does not lend directly to borrowers; rather it buys mortgages made by lenders.
(1) Modernly, and not in strict legal terms, synonymous with fee simple or "ownership." (2) A charge made by a landlord to a tenant, which is not refundable. For example: A cleaning deposit would be refunded if the tenant left the rented property reasonably clean. A cleaning fee would be a charge by the landlord for cleaning the rented property and would not be refunded regardless of the condition of the property.
An estate under which the owner owns a contract interest in the property and is entitled to the unrestricted enjoyment of the property, including the right to dispose property.
A total of all costs imposed directly or indirectly by the creditor and payable either directly or indirectly by the customer, as defined by the Federal Truth-In-Lending laws.
An accounting statement showing assets and liabilities of a person or company. Used generally for large loans or other instances when the credit report (history of payment of debts) in itself is not sufficient.
A fee paid to someone who finds a buyer or property for a broker, buyer, etc. The term is sometimes used to attempt to pay a commission to an unlicensed person. Generally, a finder's fee is considered a commission and may only be paid to one who holds a real estate license.
A mortgage on property that is superior in position to any other mortgage.
Fixed Rate Loan
A loan on which the same rate of interest is charged for the life of the loan.
Insurance that reimburses the policyholder for damage to property caused by the peril of flood.
FNMA (Federal National Mortgage Association) accepts loans containing a buy down provision on single family residential, owner occupied properties. A prepayment (points) will buy a lower rate of interest during the first one to five years of the loan. Restrictions apply as to the amount of the buydown and rise in payment amount as the loan progresses.
A legal procedure in which a mortgage property is sold in a legal process to pay the outstanding debt in case of default.
The taking of an individual's properly by a government, because the individual has committed a crime. In the United States, private property cannot be taken, except by eminent domain upon payment of just compensation, or for nonpayment of taxes.
In real estate, revealing all the known facts which may affect the decision of a buyer or tenant. A broker must disclose known defects in the property for sale or lease. A builder must give to a potential buyer the facts of his new development (are there adequate school facilities? sewer facilities? (an airport nearby?, etc.). A broker cannot charge a commission to buyer and seller unless both know (disclosure) and agree.
Future Acquired Property
Property acquired after a loan or sale. For example: A loan agreement may state that the loan is a lien on all property presently owned or which the borrower may acquire in the future.
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A legal proceeding under which a person's money in control of another (such as salary) is taken for payment of a debt. The amount which may be taken is set by statute (usually as a percentage), and, in most states, a judgment is necessary before garnishment.
(1) A lien such as a tax lien or judgment lien which attaches to all property of the debtor rather than the lien of, for example, a trust deed, which attaches only to specific property. (2) The right of a creditor to hold personal property of a debtor for payment of a debt not associated with the property being held. Must be done under an agreement since against general precepts of law.
A partnership made up of general partners,without special (limited) partners.
GNMA (Government National Mortgage Association) Options
A method of purchasing GNMA securities through "puts" and calls." A GNMA Call Option is the right to buy GNMA securities at a specific yield for a specified time, A Put Option is the right to sell GNMA securities at a specific yield for a specified time. The buyer pays for the option and may exercise it, not exercise it, or sell it.
Good Faith Estimate (GFE)
A document which tells borrower the approximate costs they will pay at or before settlement, based on common practice in the locality. Under requirements of the Real Estate Settlement Procedures Act (RESPA), the mortgage banker must deliver or mail the GFE to the applicant within three business days after the application is received.
Graduated Payment Mortgage
A mortgage, deed, or trust calling for increasingly higher payments over the term of the loan. This allows the buyer low beginning payments. The payments then increase as (theoretically) the buyer's earnings increase.
One to whom a grant is made. The purchaser of real property.
One who has made a grant. The seller of real property.
Grantor Grantee Index
The record of the passing of title to all the properties in a county as kept by the county recorder's office. Property is checked by tracing the names of the sellers and buyers (chain of title). Title companies usually have more efficient methods by keeping records according to property description, rather than peoples names.
The scheduled (total) income, either actual or estimated, derived from a business or property.
Gross Income Multiplier
A figure which, when multiplied by the annual gross income, will theoretically determine the market value. A general rule of thumb which varies with specific properties and areas.
A lease which obligates the lessor to pay all or part of the expenses of the leased property, such as taxes, insurance, maintenance. utilities, etc.
Agreement to pay the debt or perform the obligation of another in the event the debt is not paid or obligation not performed. Differs from a surety agreement in that there must be a failure to pay or perform before the guaranty can be in effect.
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Insurance coverage which provides compensation to the insured in case of a property loss or damage.
An encumbrance on a title that is not apparent in the public records; for example, unknown heirs, secret marriages and forged instruments.
Portion of a loan held back by the lender until a contingency is met. In the sale of a home insured by VA or FHA., funds may be held back to make necessary improvements to bring the property to VA or FHA standards. The money to make these repairs may not be available until closing. One and one halt to double the estimated amount necessary is held back. If repairs are not made in the time allowed, these funds are used to make the repairs. In construction financing, funds are held back until, for example, a certain percentage of a subdivision has been sold, or a certain portion of a building has been constructed.
Holder In Due Course
A holder of a check or note who takes, for value and in good faith, the note before it is overdue or the check without knowledge that it has bounced, if, in fact it has.
The time period used by the IRS to determine along or short term capital gain. The period during which the taxpayer owns the capital asset.
Home Mortgage Disclosure Act (HMDA)
Federal legislation which requires certain types of lenders to compile and disclose data on where their mortgage and home improvement loans are being made.
The dwelling (house and contiguous land) of the head of a family. Some states grant statutory exemptions, protecting homestead property (usually to a set maximum amount) against the rights of creditors. Property tax exemptions (for all or part of the tax) are also available in some states. Statutory requirements to establish a homestead may include a formal declaration to be recorded.
Home Warranty Insurance
Private insurance insuring a buyer against defects (usually in plumbing, heating, and electrical) in the home he has purchased. The period of insurance varies and both new and used homes may be insured.
To mortgage or pledge without delivery of the security to the lender.
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Account held by a lender for payment of taxes, insurance, or other periodic debts against real property. The mortgagor or trustor pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays the tax bill from the accumulated funds.
Generally, buildings, but may include any permanent structure or other development, such as a street, utilities, etc.
A tax on the transfer of property from a deceased person: based on the right to acquire the property rather than the property itself.
A method of purchasing by installment (usually monthly) payments. When referring to real property, it is usually called a land contract.
Banks, savings and loan associations, and other businesses which make loans to the public in the ordinary course of business, rather than individuals, or companies which may make loans to employees.
A mortgage insured against loss to the mortgagee in the event of default and a failure of the mortgaged property to satisfy the balance owing plus costs of foreclosure. May be insured by FHA, VA, or by private mortgage insurance companies.
Interest Rate Cap
The maximum interest rate increase of an Adjustable Mortgage Loan. An interest rate cap places a limit on the amount your interest rate can increase. Interest caps come in two versions:
- Periodic caps, which limit the interest rate increase from one adjustment period to the next; and
- Overall caps, which limit the interest rate increase over the life of a loan.
A lien imposed against property without consent of the owner. Examples include property tax liens, special assessments, federal income tax liens, judgment liens, mechanic’s liens, and liens for materials.
IRS 4506/Request for Copy of Tax Forms
IRS Form required by lenders. This form allows the lender to pull tax returns on the borrower directly from the IRS, usually accomplished as a quality control check on a certain number of cases.
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An undivided interest in property, taken by two or more joint tenants. The interests must be equal, accruing under the same conveyance, and beginning at the same time. Upon the death of a joint tenant, the interest passes to the surviving joint tenants, rather than to the heirs of the deceased.
The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant.
A lien against the property of a judgment debtor. An involuntary lien.
A mortgage which is larger than the legislated purchase limits of Fannie Mae and Freddie Mac.
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In oil and gas leases, the portion of the value of each barrel of oil which goes to the property owner.
A penalty for failure to pay an installment payment on time. Usually not allowed as interest for tax deductions. May or may not be included as usury. If not, the amount of late charge is either set by statute or must be "reasonable."
Lease With Option To Purchase
A lease under which the lessee has the right to purchase the property. The price and terms of the purchase must be set forth for the option to be valid. The option may run for the length of the lease or only for a portion of the lease period. Legal Description: A description by which property can be definitely located by reference to surveys or recorded maps. Sometimes referred to simply as the legal.
The term has come to be used as a technical difference from the equitable owner, and not as opposed to an illegal owner. The legal owner has title to the property, although the title may actually carry no rights to the property other than a lien.
In appraising the value of a lessees interest to determine the value of a potential sublease of assignment (sale) of the lease, the value is the market value of the property, less the interest of the lessor. The lessor's interest would be largely determined by the ratio of the return on the lease to the market value without the lease.
London Interbank Offered Rates, which is the average rate of interest that major London banks are willing to pay each other for U.S. dollar deposits for various terms.
A recorded document which claims an interest in real property as security for a debt owed. Such liability may be created by contract, such as a deed of trust, or by a court judgment.
Lien Waiver (Waiver Of Liens)
For our purposes, a waiver of mechanic's lien rights, signed by subcontractors so that the owner or general contractor can receive a draw on a construction loan.
The ratio, expressed as a percentage, of the amount of a loan to the value or selling price of real property. Usually, the higher the percentage, the greater the interest charged. Maximum percentages for banks, savings and loans, or government insured loans, is set by statute.
Loan to Value Ratio
The ratio of the mortgage loan's principal to the property's appraised value or its sales price, whichever is lower.
Long Term Capital Gain
Gain on the sale of a capital asset which has been held for a specified time or longer. Long term capital gain is taxed at a special rate and not as ordinary income.
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