An escrow set up to
facilitate the simultaneous purchase
of one property and the sale of
another property by the same party.
A secondary offer to buy property
although the first offer has been
accepted, useful in case the first
A report of the financial
position of a business at a specific
point in time, showing its assets,
liabilities, and owner’s equity.
mortgage with periodic
installments of principal and interest
that do not fully amortize the loan.
The balance of the mortgage is due in
a lump sum at a specified date,
usually at the end of the term.
A scheduled payment on a
mortgage that is larger than other,
periodic payments, usually the
unamortized final payment.
A corporation that owns a
controlling interest in one or more
An individual, firm or corporation
who, through a court proceeding, is
relieved from the payment of all
debts. Bankruptcy may be declared
under one of several chapters of the
federal bankruptcy code: Chapter 7,
which covers liquidation of individual
or business assets; Chapter 11, which
covers reorganization of bankrupt
businesses; Chapter 12, which covers
certain farm bankruptcies; and Chapter
13, which covers workouts of debts by
minimum fixed guaranteed rent in a
commercial property lease.
The rent charged in a subsidized
housing project and computed on the
basis of a maximum subsidy.
cost of a property, including
improvements, refinancing costs,
closing costs, and similar costs, less
depreciation. Basis is used for tax
purposes to calculate any profit or
loss realized on the sale of a
one-hundredth of one percent. Used
primarily to describe changes in yield
or price on debt instruments,
including mortgages and
A market characterized by falling
prices. A bear market in the mortgage
industry may be triggered by rising
A suburban residential
area where most residents commute to
neighboring metropolitan areas to
Gross income minus all
expenses, except income taxes.
Market Interest Rate (BMIR)
mortgage insurance programs where the
interest rates on the mortgages are
below that ordinarily charged for
similar conventional financing; used
to assist low- and moderate-income
families to rent or buy dwelling
person who benefits from a life
insurance policy, will, contract, or
deed of trust. In the latter case, the
lender is the beneficiary.
statement under a deed of trust,
detailing the remaining principal
balance, monthly payment, and interest
rate on the loan. Also called a bene
statement, offset statement, or
improvement, replacement or
maintenance which results in a higher
price at which a seller will sell
particular securities. In the
securities and commodities trade, the
highest price offered for a security
or commodity at a given time. Also
called a quotation or quote.
The difference between the
highest price offered for securities
and the lowest price that will prompt
a seller to sell.
A document signed by a seller that
certifies a transfer of ownership of
Temporary hazard or title insurance
granted prior to the issuance of a
permanent policy. In real estate, a
preliminary agreement between a buyer
and seller which includes the price
and terms of the contract.
A mortgage with payments
due every two weeks, totaling 26
payments a year.
coverage of more than one piece of
property under one instrument, such as
blanket insurance policy, blanket deed
of trust, blanket assignment, or
A mortgage that covers
more than one parcel of real estate
owned by the mortgagor.
square or rectangular portion of a
city or town enclosed by streets.
Often used as part of a subdivision
State laws covering the
registration and sale of new
Latin term meaning "in good
faith," without fraud.
obligation written under seal. For
example, the obligation may be to make
good if a third party defaults
(performance bond), or betrays a trust
(fidelity bond), or an obligation to
pay interest and principal as
specified. The latter type of bond is
a debt instrument which may be secured
by a mortgage or a pool of mortgages.
state-sponsored method of assisting
low income borrowers and first time
homeowners in the purchase of a home
at a reduced interest rate.
The actual cost of assets purchased or
capitalized cost of an asset, less
depreciation taken for accounting
purposes, based on the method used for
the computing of depreciation over the
useful life of the asset. The actual
value of an asset after deducting
depreciation and all liabilities is
the net book value.
One who receives funds in the form of
a loan with the obligation of repaying
the loan in full with interest.
A variable-rate loan that attempts
to smooth the impact of rate increases
on borrowers by deferring a portion of
high interest rates until maturity.
Usually, all interest above a certain
rate is deferred to maturity.
to perform under a contract or
violation of a legal obligation.
The figure at which
occupancy income is equal to all
required expenses and debt service.
Used to determine the amount of cash
flow necessary to operate a
residential or commercial property.
A loan spanning the gap
between the termination of one loan
(generally short-term) and the start
of another (generally permanent
long-term) loan. Also called gap
individual employed on a fee or
commission basis as agent to bring
buyers and sellers together and assist
in negotiating contracts between them.
A project sponsor
specifically organized to build or
rehabilitate and sell a project
immediately upon completion to a
private, nonprofit organization, at
the certified cost of the project. The
nonprofit sponsor buys a total
and Sponsor’s Profit and Risk
against the required equity
contribution in HUD/FHA insurance
programs granted the developer for its
services in sponsoring and building
Fire and extended
coverage insurance for a building
under construction. Coverage increases
automatically as the building
progresses and terminates at
Regulations based on safety
and health standards that govern
design, construction, and materials
used in construction.
A ration of net
rentable area to gross building area.
Written authorization from
a local government for the
construction of a new building, or for
extensive repairs or improvements on
an existing structure.
A method of real estate
appraisal used to determine the value
of a building when the land value is
Permanent, immovable appliances or
Interim financing for leased-up
properties often used to repay the
construction loan; typically an
interest-only loan for two to ten
years that cannot be prepaid.
market characterized by rising prices.
In the mortgage industry, a bull
market may be promoted by falling
to a business owner or operator for
income lost when the business is
closed due to fire or any other
A mortgage with a
below-market interest rate made by a
lender in return for an interest rate
subsidy in the form of additional
discount points paid by the builder,
seller or buyer.
An agreement between an
interim and permanent lender for the
sale and assignment of a mortgage to
the permanent lender upon the
completion of a building. Often the
mortgagor is a party to this agreement
on the theory that the mortgagor
should have a contractual right to
insist that the permanent lender buy
Mac’s up-front payment to a loan
seller in exchange for a higher
Economic conditions in
which the supply of housing exceeds
demand. Sellers may be forced to make
substantial price concessions.