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In This Section
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Glossary of Terms
Abstract of title:
written history on real property.
Acceleration of clause:
clause requiring that entire balance of the mortgage to be paid if the borrower defaults.
Acknowledgement:
legal recognition that execution of an act is voluntary and signature is genuine.
Ad valorem:
according to value.
Adjustable rate mortgage (ARM):
a mortgage in which the lender can adjust the interest rate charge on a loan to reflect economic conditions.
Adjustment cap:
the maximum amount a loan's interest rate can increase.
Adverse action:
occurs when an underwriter denies an individual's loan application.
Amortization:
the payment of a loan and its interest over a specified period of time.
Annual percentage rate (APR):
the true cost of borrowing funds; includes interest, mortgage insurance premiums, origination fees, discount points and other costs.
Anticoercion statement:
a form signed by the borrower at closing stating that the lender did not require the borrower to obtain insurance from a particular insurance company.
Appraisal:
an opinion of a property's value.
Arbitration:
a method of dispute resolution where a third party renders a binding decision.
Assessed value:
value placed on real property for purposes of taxation.
Assignment of mortgage:
transfer of mortgage.
Assumption of mortgage:
agreement to pay mortgage debt incurred by another person.
Associate:
a person who is required to be licensed as a mortgage broker who is employed by or acting as an independent contractor or a mortgage broker business or a person acting as an independent contractor of a mortgage lender or correspondent mortgage lender.
Automated underwriting system:
computer program that compares aspects of an individual's loan application with information that exists in a database of loan portfolios.
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