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"Your Education Center" |
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Satisfaction of Mortgage
The document issued by the mortgagee when the mortgage loan
is paid in full. Also called a "release of mortgage."
Second Mortgage
A mortgage made subsequent to another mortgage and
subordinate to the first one.
Secondary Mortgage Market
The place where primary mortgage lenders sell the mortgages
they make to obtain more funds to originate more new loans. It
provides liquidity for the lenders.
Security
The property that will be pledged as collateral for a loan.
Seller Carry Back
An agreement in which the owner of a property provides
financing, often in combination with an assumable mortgage. See
owner financing.
Servicer
An organization that collects principal and interest payments
from borrowers and manages borrowers’ escrow accounts. The
servicer often services mortgages that have been purchased by an
investor in the secondary mortgage market.
Servicing
All the steps and operations a lender performs to keep a loan
in good standing, such as collection of payments, payment of
taxes, insurance, property inspections and the like.
Settlement/Settlement Costs
see closing/closing costs
Shared Appreciation Mortgage (SAM)
A mortgage in which a borrower receives a below market
interest rate in return for which the lender (or another investor
such as a family member or other partner) receives a portion of
the future appreciation in the value of the property. May also
apply to mortgage where the borrowers shares the monthly
principal and interest payments with another party in exchange
for part of the appreciation.
Simple Interest
Interest which is computed only on the principle balance.
Standard Payment Calculation
The method used to determine the monthly payment required to
repay the remaining balance of a mortgage in substantially equal
installments over the remaining term of the mortgage at the
current interest rate.
A mortgage that allows for the interest rate to increase
according to a specified schedule (i.e., seven years), resulting
in increased payments as well. At the end of the specified
period, the rate and payments will remain constant for the
remainder of the loan.
Survey
A 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 buildings.
Sweat Equity
Equity created by a purchaser performing work on a property
being purchased.
When a lender uses another party to completely or partially
originate, process, underwrite, close, fund, or package the
mortgages it plans to deliver to the secondary mortgage market.
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