Copy of `Understanding forclosure - Foreclosure Terminology`

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Understanding forclosure - Foreclosure Terminology
Category: Economy and Finance > Foreclosure
Date & country: 21/01/2008, UK
Words: 583


Fixed time
The specific weeks in a year that one of the owners has arranged access to the accommodations.

Fixed-rate mortgage
A mortgage with an interest rate remaining at a specified rate for the entire term of the loan.

Flat fee
Is a predetermined fee to be paid to a broker instead of a commission.

Flood certification
Is the process of determining whether a property is located within a known flood zone; if it is, the lender will require the inclusion of federally provided flood insurance.

Flood insurance
Insurance on property required in designated flood areas.

Flood plain
Areas that are located along waterways that are flood prone.

For sale by owner (FSBO)
The seller acts as their own selling agent and handles all sales proceedings directly with a buyer, whereby eliminating the need to pay any commissions.

Forbearance
Is a course of action that a lender may pursue delaying foreclosure or legal action against a delinquent borrower.

Foreclosure
Is a legal process where the lender takes back a property upon the default of the loan by a borrower. The lender sells the property keeping the proceeds to pay for the mortgage and legal costs and returns the balance, if there is any, to the borrower.

Forfeiture
Is where a delinquent borrower relinquishes property rights.

Fraud
The intentional false statements that were believed and relied on by a person, that suffered a loss as a result.

Freddie Mac
Is the Federal Home Loan Mortgage Corporation who buys mortgages from lending institutions, pools them with other loans, and sells shares to investors.

Free & clear
Refers to the ownership of real property where there is no lien, encumbrance, recorded judgment or the right of anyone to make a claim against the property. The term is used in contracts for sale of real property and deeds, and states that the title has no claim against it.

Freehold estate
Is where the ownership is for an indeterminate length of time.

Freeze order
Is a court order when bankruptcy is filed that prevents any creditor from attempting to collect any debt from the person who declared bankruptcy; creditors may not undertake foreclosure, repossession, eviction, or seizure, or even call or write the debtor demanding payment, and instead must join all other creditors and go through bankruptcy court t …

Front-end ratio
Is a calculation that lenders use to determine a borrowers monthly housing expenses to gross monthly income.

FSA
Is a designation for the Federal Savings Association.

Full assumption
Is an arrangement where a buyer takes title to a house and takes over the payments on the seller's old loan with the full permission of the lender, who evaluates the buyer's ability to show adequate income and creditworthiness by the lender's standards.

Full-service broker
Is a real estate broker who performs all transactions for the sale of a property; including the listing and the selling.

Habendum clause
Means 'to have and to hold' It defines the quantity of the estate that is transferred to the new owner of land.

Hazard insurance
Is insurance covering physical risks such as fire and wind damage. Also known as homeowners or fire insurance.

Hiatus
Is a small piece of property between two parcels of land not belonging to either property owner.

Historic structure
Is a home or building that is certified as historic by the U.S. Secretary of the Interior and listed in the National Register of Historic Places.

Holder in due course
Is a legal doctrine holding that a person or entity who obtains a note without notice of any borrower defenses to its enforcement may enforce payment of that note in a court despite any borrower defense or other reason for not paying.

Home equity conversion mortgage
Are loans that are made to older homeowners that want to convert equity into cash. Also known as reverse mortgages.

Home equity line of credit
Is a loan secured by the owners property which can be repaid and borrowed again at the owners convenience.

Home equity loan
Are owners that borrow against the equity in their homes.

Home inspection
Is a physical examination of a home by an inspector before the purchase; examines construction, condition and internal systems.

Home inspector
Is a professional who evaluates the construction, condition and internal systems of a building.

Home price
Is the agreed price by a buyer and seller for a home.

Home rule
Is a local government`s power to adopt its own land-use regulations.

Home warranty
Is an insurance covering repairs to certain parts of a building and some of its fixtures.

Homeowners association (HOA)
Is a group that governs a subdivision, condominium or planned community. Owners pay monthly fees to the association that is used to pay for common area maintenance, legal and safety issues, the enforcement of covenants, conditions and restrictions set by the developer.

Homeowners association dues
Is a monthly payment owners pay to a homeowners association for common area maintenance, legal and safety issues, the enforcement of covenants, conditions and restrictions set by the developer.

Homeowners insurance
Is an insurance that includes hazard coverage for damages that may affect the value of a home, personal liability and theft.

Homeowners warranty
Is an insurance policy covering specific home repairs for a specified period of time.

Homestead
Is a parcel of land that is used by the owner as a primary residence.

Homesteading
Is a document used to protect specified home equity from lawsuits.

Homogenous
Is a term that is used to describe a neighborhood where the property types are all similar.

Housing discrimination
Is the illegal practice of denying an individual or group the right to buy or rent a home based on race, color, religion, national origin, sex, disability, or family status.

Housing expense ratio
Is a percentage of the gross monthly income devoted to housing costs.

Hypothecate
Is when you use something as security and still retain possession of it.

Impact fees
Are fees collected from developers of new homes to pay for schools, parks and other facilities.

Implied warranty of habitability
Is a legal doctrine stating that all new homes are assumed to be fit for human habitation, as well as, meet all the building codes.

Impound account
Is an account that is held by the lende and used to advance payments of certain expenses or charges incidental to property ownership and that may protect lender's security.

Impounds
Are a portion of the monthly mortgage payments that are set aside in a separate account and used to pay for insurance and property taxes.

In-file credit report
Is an objective history report from the credit repositories.

Income property
Is any property not occupied by the owner, but is used to generate an income.

Incumbrance
Is a general term for any claim or lien on a parcel of real property including mortgages, deeds of trust, recorded abstracts of judgment, unpaid real property taxes, tax liens, mechanic's liens, easements and water or timber rights. While the owner has title, any encumbrance is usually on record and must be paid for at some point.

Incurable defect
Is a defect in the property that cannot be fixed or would cost too much to repair relative to the value of the property as it currently exists.

Independent contractor
Is a contractor that was hired for a specific job; the contractor receives payment for work done, but pays for their own expenses and taxes and receives no employee benefits.

Initial interest rate
Is the original interest rate on an adjustable rate mortgage.

Initial rate cap
Is a specified limit that states the interest rate may increase defined in some adjustable rate loans.

Initial rate duration
Is an initial interest rate in an adjustable rate loan, below the current market rate, for a specified period of time.

Inspection fee
Is a fee paid to a home inspector for the inspection of a building.

Inspection report
Is a report that is completed by a home inspector after they inspect the buildings exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roof and interior.

Installment
Is an agreement where payments of money, delivery of goods or performance of services will be made in a series of payments, deliveries or performances, on specific dates or upon certain things happening.

Installment contract
Is a purchase agreement where the buyer cannot receive title to the property until all installments are paid.

Installment sale
Is a real estate transaction where the sales price is set to be paid in installments.

Instrument
Is a legal written document.

Insurable title
Is the title to a property that is insurable.

Insurance
Are policies owners can purchase to guarantee compensation for specific losses or damages.

Insurance binder
Is a temporary arrangement put into effect until a permanent policy is obtained.

Interest
Is the fee that borrowers pay for a loan in addition to the principle; this fee is calculated based on the percentage of the total loan.

Interest accrual rate
Is the rate at which interest accrues on a mortgage.

Interest rate
The fee that is charged by the lender for a loan; expressed as a percentage.

Interest rate buy-down plans
Is an advancement of funds from the sale of a home for the purpose of buying down the interest rate and reducing the buyer`s monthly payment obligation.

Interest rate cap
Is the maximum interest rate allowable charge on the monthly payment of an adjustable rate mortgage during the adjustment period.

Interest rate ceiling
Is the highest interest rate a lender can charge for an adjustable rate mortgage.

Interest-only loan
Is a loan where the borrower only pays the interest that accrues on a loan balance each month; since all the payments go toward interest the outstanding balance of the loan does not decline with the payments.

Interim financing
Is short-term financing that is used by sellers to bridge the gap between the sale of one house and the purchase of another. This is also known as a bridge or swing loan.

Investment property
Is real estate property that generates an income for the owner.

Involuntary lien
Is a lien that is imposed against a property without the consent of an owner—such as taxes, special assessments.

Jeopardy
Is to have your property or liberty subjected to an adverse decree of a court or agency. The danger of being charged with or convicted.

Joint tenancy
Is the ownership of a property by two or more persons. Each has an undivided interest with right of survivorship.

Judgment
The final decision by a court.

Judicial foreclosure
Is a judgment given by a court in favor of the foreclosure of a mortgage or deed of trust. This judgment orders that the real property that has secured the debt is to be sold under foreclosure proceedings to pay the debt. The party suing probably has chosen to seek a judicial foreclosure rather than use the foreclosure provisions of the mortgage or …

Jumbo loan
Loans that exceed the conforming limits for mortgages.

Junior lienholder
A holder of the right to force the sale of property that is inferior and subordinate to another lienholder's right to do the same. A junior lienholder who forces the sale of the real estate must either pay off the senior lien or make arrangements to make payments on it to prevent it from being foreclosed. The foreclosure of the first lien destroys …

Junior mortgage
A mortgage second to the primary loan or subsequent in lien to a previous mortgage.

Land contract
Is a document transferring the ownership rights, but not title, and may be used to sell a property.

Landlord
Is a person owning real property and renting or leasing it to another person, called a 'tenant.'

Lease
Is a legal agreement that contains the terms and/or conditions of a renters occupancy.

Lease option
Is a lease that contains an option allowing the purchase of a property for a specified price within a specified time frame.

Legal description
The identification of a property that is acceptable to the courts.

Lender
Is a company offering home loans.

Life estate
Is the conveyance of title to a property for duration of the life of the grantee.

Listing Agreement
An accord where the seller hires a real estate broker to sell a property, usually for a commission.

Loan-To-Value (LTV)
Is the ratio for a loan as determined by the loan amount in comparison to the value of the property.

Lot book report
Is a document from title company identifying encumbrances recorded against a particular property; it does not identify liens recorded in the name of the owner that may affect property.

Margin
Is the amount added to the index through the entirety of a loan.

Market value
Is the price a piece of property sells for at a particular point in time.

Marketable Title
Is the title to a real property that has no encumbrances (claim, deed of trust, lien or mortgage) and which is free from any reasonable objection. A court will enforce contracts to buy and sell real estate if there is marketable title.

Mechanic's lien
An encumbrance that a subcontractor or supplier files against a property in order to seek payment.

Moratorium
Is any suspension of activity, particularly suspension of collections of debts by a private enterprise, the government or pursuant to court order.

Mortgage
a document in which the owner pledges its title to a real property to the lender as security for a loan described in a promissory note.

Mortgage broker
Is a company that brings lenders together with prospective borrowers.

Mortgage insurance
Is an insurance that lenders require buyers to have as a protection on some loans; mostly on loans with down payments that are less than 20-percent of the property value.

Mortgagee
Is the person or business that is making a loan secured by the real property of the person (mortgagor) who owes him/her/it money.

Mortgagor
Is the person who has borrowed money and pledged his/her real property as security for the money provided by the lender