A prime tenant who has the highest credit rating.
The intentional relinquishment of claim or title to personal or real property.
A decrease or reduction in the assessed valuation of real property taxes.
property (usually income producing) by
a non-occupant who employs others to
manage and maintain the property.
The level of property units
rented or sold after which price
concessions must be made for market
demand to continue at current levels.
Used to determine the feasibility of
new residential or commercial
A written history
of ownership of a parcel of land,
summarizing the material parts of any
occurrence affecting title of said
for computing depreciation by
comparing the replacement cost of the
improvements to the sales price less
cost recovery system (ACRS)
of the Economic Recovery Act of 1981,
an accounting method which allows for
a shorter depreciation period for real
property over traditional depreciation
method of calculating depreciation in
which a larger portion of depreciation
is charged in early years than in
remittance cycle (ARC)
option available to Freddie Mac's
sellers and servicers which allows the
lender to decrease the guarantee fee
due Freddie Mac in return for
shortening the monthly remittance
delay by paying principal and interest
A common provision of
a mortgage which allows the holder to
demand the entire outstanding mortgage
balance due and payable in the event
of a breach of the mortgage contract.
An offeree's consent to enter into a
contract and be bound by the terms of
document signed by a construction loan
borrower stating that all work is
complete and of acceptable quality.
right to ingress and egress from one's
property; may be implied or expressed.
and health premium
of the amount paid by a borrower for
mortgage insurance that ensures the
continuance of mortgage payments in
the event of a mortgagor's disability
person who lends his name to guarantee
a loan for another by signing a note,
bill, or other negotiable instrument;
the endorser becomes the guarantor of
the loan and is therefore responsible
for its repayment.
Money owed by a
business to suppliers of goods or
services. Accounts payable are
considered current liabilities on the
Money owed to a
business for goods or services
provided to customers. Accounts
receivable are classified as current
assets on the balance sheet, with a
contra account for bad debts on
Residential Underwriter (ARU)
professional designation awarded by
the Mortgage Bankers Association of
America, in recognition of excellence
in residential underwriting.
A build up of land by natural forces,
such as wind, waves, or the flow of
A bond on which the
interest accrues, but is not paid to
the investor during period of accrual.
Instead, the amount accrued is added
to the principal balance and is paid
at maturity. Also called accretion
bonds or Z-bonds.
accrual basis of
accounting method under which income
and expenses are charged to the
periods for which they are applicable,
rather than when payment is made or
received. In contrast, cash accounting
is the method calling for income and
expenses to be based on payment being
made or received.
Interest earned for
the period of time elapsed since
interest was last paid.
A formal declaration attached
to or part of an instrument, made
before a duly authorized officer
(usually a notary public) by the
person who has executed that
instrument, the execution being a free
act and deed.
and development loan (A and D loan)
loan for the purchase and preparation
of raw land for development. Usually a
construction loan or land sale is the
source of repayment.
a HUD/FHA transaction, the price the
borrower paid for the property plus
any of the following costs: closing,
repairs, or financing (except
discounts in other than a refinance
transaction). Does not include prepaid
discounts in a purchase transaction,
mortgage insurance premiums, or
See land acquisition
A unit of
measure for land, 43,560 square feet.
action to quiet
court action to remove any interest or
claim in or title to real property; to
remove a cloud on title.
which causes damage by nature such as
a flood, earthquake, or winds; an
occurrence which was not caused by
rehabilitation of old property for a
agreement or list that is added to a
contract, agreement, or other document
such as a letter of intent. FHA and VA
require that an addendum be added to
or incorporated in a sales contract,
if it is written prior to the
full amount of interest calculated on
the original principal for the term of
the loan. This interest is added to
the original principal, thereby
becoming a part of the face amount of
the promissory note.
loan or deed of trust which allows the
lender to adjust the interest rate in
accordance with a specified index
periodically and as agreed to at the
inception of the loan. Also called
variable rate mortgages (VRM).
original cost of a property, plus the
value of any capital expenditures for
improvements to the property, minus
any depreciation taken.
The date of periodic
interest rate adjustments for an
adjustable mortgage loan.
Real estate taxes on the assessed
value of property.
estate, a partial disbursement of
funds under a note. Most often used in
connection with construction lending.
written promise to make an investment
at some time in the future if
specified conditions are met.
right by which someone occupying a
piece of land acquires title against
the real owner, if the occupant's
possession has been actual,
continuous, hostile, visible, and
distinct for a statutory period.
statement in writing, usually
The property a
debtor acquires after the execution of
a mortgage or other form of
indebtedness that additionally secures
the indebtedness. If the mortgage note
contains a statement on after-acquired
property it is said to have an
The cash flow
remaining after deduction of an
allowance for taxes attributable to
who legally represents another, called
a principal, from whom express or
implied authority has been derived.
insurance endorsement used with a
policy containing a coinsurance
clause. It binds the insurance company
to an agreement that the amount of
insurance carried under the policy is
sufficient to meet the requirements of
the coinsurance clause in the policy.
contract for the sale of property in
which transfer of title to the buyer
is contingent on the fulfillment of
A written document
in which the purchaser agrees to buy
certain real estate or personal
property and the seller agrees to sell
under stated conditions. Also called a
sales contract, binder, or earnest
The ownership of the
right to use, control, or occupy the
air space over a designated property,
without the right to use the land
above the surface of land that is
owned by the landowner and that may be
divided and sold or leased to others.
The transfer of title to real
property from one owner to another.
A type of
acceleration clause that demands
payment of the entire balance upon
sale or other transfer of title; also
called a "due-on-sale"
refinancing technique involving the
creation of a new deed of trust that
includes the balance due on the
existing note plus new funds advanced;
also known as a wrap-around mortgage.
A method of site
valuation in which the appraiser
deducts the estimated value of the
building from the total sales price of
an improved property to arrive at the
estimated land value.
allowance for vacancy and
an estimated amount reflecting
probable vacancy, non-payment of rent
by tenants, and any other income loss.
these funds are set aside to cover
either expected or unanticipated
mortgage that differs from the typical
mortgage instrument either in the
amount of principal, the interest
rate, the periodic or monthly
payments, or terms for repayment.
A feature that enhances
property value. Examples are
off-street reserved parking within a
condominium community, the proximity
of public transportation, tennis
courts, or a swimming pool.
land Title Association (ALTA)
national association of title
insurance companies, abstractors, and
attorneys specializing in real
property laws. The association speaks
for the title insurance and
abstracting industry and establishes
standard procedures and title policy
of a mortgage debt with equal periodic
payments of both principal and
interest, calculated to retire the
obligation at the end of a fixed
period of time.
A table showing the
amounts of principal and interest due
at regular intervals and the unpaid
mortgage balance after each payment is
The amount of
money, or fair market value of other
property, received in a sale or
to make the project operational (AMPO)
An allowance, ordinarily a
percentage of the replacement cost,
that can be included in the mortgage
insured by HUD/FHA to provide a
nonprofit sponsor with working capital
during the initial period of operation
of a project.
prime tenant in a shopping center,
such as an established department
store, which attracts the bulk of
customers to the center.
Smaller tenants are referred to as
annual contributions contract
A contract under which
HUD makes payments to public housing
agencies to cover debt service
payments on public housing projects or
to provide rent subsidies and
administrative costs under the Section
8 Housing Assistance Payments Program.
housing survey (AHS)
yearly HUD/Census Bureau study of
housing units and trends in the
movement of owners and renters.
report prepared by the lender or
servicing agent for the mortgagor,
stating the amount of taxes,
insurance, and interest that was paid
during the year, and the outstanding
annual percentage rate (APR)
term defined in section 106 of the
federal Truth in Lending Act (PL
90-321; 15 USC 1606), which expresses
on an annualized basis the charges
imposed on the borrower to obtain a
loan (defined in the Act as 'finance
charges"), including interest,
discount and other costs.
Periodic fixed payments to be
received for a specified period of
time or for life, in consideration for
prior lump sum or installment payments
made to the other party in the annuity
The first day
of the first period for which an
amount is due as payment under an
and separate living unit in a building
containing at least one other like
An apartment complex
which provides some hotel services,
such as a restaurant or cleaning and
linen services. Units are furnished
and tenants may stay for extended
A prospective borrower who
has completed an application. An
application is a series of steps,
usually including the completion of
documents, a lender requires of those
seeking a loan.
A pro-rated division and
distribution of prepaid or accrued
taxes, prepaid insurance premiums,
prepaid rents, and other income and
expenses. When a property is sold,
apportionment is used to distribute or
collect funds due from the buyer and
seller for income and expenses.
An opinion or estimate of
value. Also refers to the process by
which a value estimate is obtained.
qualified by education, training, and
experience to estimate the value of
real and personal property.
An increase in value for any
reason, except inflation.
Anything belonging to or attached to
land such as a barn, garage, or
easement, that is part of the property
and is therefore included in a sale or
simultaneous buying and selling of any
securities including mortgages,
mortgage-backed securities, or futures
contracts in different markets for the
purpose of realizing a profit from
differences in pnce.
usually issued by an independent
architect, verifying that a certain
portion of construction on a project
has been completed in accordance with
approved plans and specifications.
This document is often required by
construction lenders when advances of
funds are to be made at specific
stages of construction. Also known as
an architect's progress certificate.
transaction in which the parties
involved are entirely independent of
each other, deal with each other as
strangers, and have no reason for
situation in which mortgage interest
and real estate taxes are paid at or
after the end of the period for which
they are levied. Late payment is also
described as being in arrears.
insulative, fire and heat resistant
material commonly used in insulation
The offering or
sales price at which a security would
be sold by a securities dealer to an
The process of acquiring
adjacent parcels of land to combine
into a single site for development.
The value that a
taxing authority places upon real
property that becomes the base for
computing local property taxes.
factor assigned to real property and
used to determine real property taxes.
The process of reaching the assessed
valuation. Also, an add-on tax to
raise money for a special purpose.
public record of taxable property.
A public official who
appraises taxable property to reach
its assessed valuation or base on
which taxes are calculated.
A property or
right owned, tangible or intangible,
that has monetary value and is capable
of providing future benefits to its
ratio of sales over total assets used
as an indicator of how well the total
investment in assets is being used to
The person to whom ownership, rights
or interest in property is transferred
transfer of ownership, rights, or
interests in property, as in a
mortgage, lease, or deed of trust.
A mortgage clause
that passes control of leases on an
income producing property to the
lender. Often a condition to making a
loan to ensure, in the case of
mortgage default, that any continuing
income from the property goes directly
to the lender.
A document that
evidences the transfer of a mortgage
from one party to another.
A transfer to the
mortgagee of the right to collect
rents from tenants in the event of
default by the property owner.
One who transfers to another ownership
or interest in property.
agreement by one party to pay an
obligation originally incurred by
The amount paid a lender
for the paperwork and processing of
records necessary to approve and
document a new debtor.
buyer's acceptance of primary
liability for payment of an existing
note secured by a mortgage or deed of
trust. The seller remains secondarily
liable, unless specifically released
by the lender.
Service rules restricting leverage
opportunities by limiting a taxpayer's
deductible losses to the amount one
has "at-risk." One is
"at-risk" to the extent of
cash contributed and amounts borrowed
for which one is responsible for
payment from personal assets.
options trading, the point at which
the strike price is equal to the
market price of the underlying
The act of taking property by
judicial order into the custody of the
court as security for payment of a
judgment in an impending suit.
The agent who is granted
authorization to perform specific acts
on behalf of another.
See letter of
The official examination and
verification of bookkeeping accounts
to prove the accuracy of figures and
the adequacy of accounting controls.
An audit may be done by public
accountants hired for this purpose or
by a company's own employees. The
latter is called an internal audit.
VA program that enables eligible
single-family lenders to conduct the
processing and closing of VA
single-family loan applications
without VA's prior review. The VA is,
however, responsible for performing
the appraisal report for all VA loans
including those performed via the
Automatic Lender program.
life of a mortgage
statistic used to estimate the yield
on mortgages. Most mortgages written
for long terms pay off earlier, either
voluntarily or by foreclosure after
default. For example, 30-year
mortgages have traditionally been
considered to have approximately a
twelve year average life. Investors
base impact of discounts or premiums
on the yield of a mortgage on the
average life, as opposed to the
average rate of
The return on an investment as
calculated by averaging the total cash
flows over the years during which the
cash flows are received by the
An abrupt and extensive
erosion of land by a force of water
and its subsequent deposit onto the
property of another owner.