Abstract of Judgment
A summary of the essential provisions of a court judgment which, when recorded in the county recorder's office, creates a lien upon the propertyof the debtor in that county, both presently owned or after acquired.

Abstract of Title
A history of a property's title record used in some states to prepare the Preliminary or Title Commitment report. An Abstract of Title lists anyone who has ever had a claim to the property, past and present. Some states require mortgage lenders to obtain a complete Abstract of Title. However, most states condense the abstract into a document called either the Preliminary or Title Commitment, which lists only current claims to the property.

Acceleration Clause
A provision in a mortgage that allows the holder to demand the entire outstanding mortgage balance due and payable in the event of a breach of the mortgage contract.

Accrued Interest
The interest earned for the period of time that has elapsed since interest was last paid.

Addendum
An attachment to a contract, deed or other document that incorporates additional Glossarys of information to the original.

Adjustable-Rate Mortgage (ARM)
A mortgage loan where the interest rate is not fixed for the entire Glossary of the loan. The interest rate can change over time, based on movements of an index.

Adjustable-Rate Rider
A rider is an addition to a security instrument. The adjustable-rate rider outlines Glossarys and conditions specific to an adjustable-rate loan. It must be recorded along with the security instrument at the county recorder's office. See also Security Instrument.

Adjustment Cap
A provision of an ARM limiting how much the interest rate or mortgage payments may increase.

Agent
A legal representative for another, usually called a Principal.

Alimony
Periodic payments made under a divorce decree or a written separation agreement toward the support of a former spouse. Alimony may be taken as a deduction from adjusted gross income by the person who pays it, while the person who receivesit must claim it as a taxable income.

Amenity
Any feature that enhances property value. Examples are off-street parking within a condominium community, the proximity of public transportation, tennis courts or a swimming pool.

American Land Title Association (ALTA)
An organization composed of title insurance companies, which has adopted certain insurance policy forms to standardize title insurance coverage on a national basis. See also Title Insurance.

Amortization
The gradual repayment of a mortgage by installments over the life of the loan.

Amortization Schedule
A timetable for repayment of a mortgage showing the amount of each payment applied to the interest and principal and the remaining balance.

Annual Percentage Rate (APR)
The total yearly cost of a mortgage stated as a percentage of the loan amount. It includes the base interest rate, primary mortgage insurance and loan origination fee (points), commitment fees, prepaid interest, and other credit costs that may be paid by the borrower. Under the Truth In Lending Law, the APR must be disclosed and labeled.

Annuity
Fixed payments an individual receives for a lifetime or specified number of years at consistent intervals. For example, a customer may receive an annuity from a pension plan or from an investment.

Applicant
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.

Application
A form used to record pertinent information about a prospective borrower and the proposed security. Standard application forms include FNMA /FHLMC 1003, HUD Form 92900-A and VA Form 26-1802a.

Appraisal
An opinion or estimate of value. Also refers to the process by which a value estimate is obtained.

Appraised Value
An opinion reached by a licensed appraiser based upon knowledge, experience and the study of pertinent value.

Appraiser
One licensed and qualified by education, training and experience to estimate the value of real and personal property.

Appreciation
An increase in value of a house due to changes in market conditions or other causes.

"As Is" Condition
Premises accepted by a buyer or tenant in the condition existing at the time of the sale or lease, including all physical defects.

Assessed Value
The valuation placed upon property by a public tax assessor for purposes of property taxation.

Assignment of Lease
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 that, in case of mortgage default, any continuing income from the property goes directly to the lender.

Assumption of Mortgage
The transfer of the seller's existing mortgage to the buyer.

Attachment
A legal process whereby the judgment creditor may obtain a lien against the debtor's property. See also Lien.

Attorney Closings
This practice is prevalent in states where attorneys' opinions are used in place of title reports. Closings by attorneys follow much the same procedures as escrow closings. The lender delivers to the attorney the settlement statement and the net loan proceeds, as well as instructions for their use.

Attorney In Fact
A person given the legal authority to act on behalf of another under a signed Power of Attorney (POA).

Attorney's Opinion of Title (In Absence of a Title Co.)
A statement issued by an attorney in states that don't use a Preliminary Title Report or Title Commitment. All liens recorded against the property are disclosed in this statement. The attorney also advises on items that require completion to gain a clear title insurance policy before recording our security instrument.

Back-End Debt Ratio
This refers to the borrower's debt ratio and is calculated using a borrower's total of monthly payments due on credit obligations divided by the borrower's gross monthly income. It's expressed as a percentage. See also Debt Ratio.

Balloon Mortgage
A mortgage with regular Principal and Interest Payments, that at the end of the Glossary, do not fully pay off the balance due on the note. The remaining balance is then due in a lump sum payment.

Balloon Payment
A large payment due at the end of a loan contract. Equal to the remaining principal balance plus any interest and charges due.

Balloon/Reset Mortgage
A fixed rate mortgage with a reset option at the balloon maturity date.

Bankruptcy(BK)
A person, firm or corporation who, through a court proceeding, is relieved from the payment of debt after the surrender of assets to a court appointed trustee, for the protection of creditors. See also Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.

Basis Point
One one-hundredth of one percent. Used to describe changes in yield on debt instruments, including mortgages. For example, 10 basis points equals 0.001.

Beneficiary
The entity or lender that funds the loan and to which the loan is owed.

Beneficiary's Demand
Written instructions by a beneficiary under a deed of trust or mortgage stating and demanding the amount necessary for payoff of a lien in full.

Borrower
One who borrows money and is responsible for repaying it to the lender. Also known as obligor. If the loan is secured by a mortgage, the borrower is known as a Mortgagor.

BorrowerSavings
The monthly savings a customer will experience by consolidating/paying off debt with a debt consolidation loan. Monthly savings equals current monthly payments less new monthly payments.

Broker
One who acts as an inGlossaryediary between parties to a transaction in exchange for a fee or commission.

BusinessFor Self (BFS)
Customers who own their own business. Another word for Self-Employed.

Business License
A license that authorizes a business to operate and is typically required and issued by the city in which the business is located.

Buy-down
The reduction of monthly mortgage payments for a specified amount of time due to monies advanced up front by the seller, buyer or by another third party.

Cap
A provision of an ARM limiting how much the interest rate or mortgage payments may increase or decrease.

Capacity
A borrowers financial ability to repay debt. See the 3 C's of Credit for more detailed information.

Capital
The accumulated wealth of a business or person; the actual net worth of a business or person represented by the amount that the assets exceed the liabilities.

Capital Asset
Permanent property used to produce income, such as land , building machinery equipment.

Capital Gain
The taxable profit derived from the sale of a capital asset. Equals the sales price minus the total of sale costs and the adjusted basis (original cost plus capital additions minus accumulated depreciation.

Capital Loss
The loss derived from the sale of a capital asset. May be short Glossary or long Glossary.

Cash Equivalent Value
A method of calculating the appraised value of a property that considers sales and financing concessions when evaluating comparable property. There is no standard in the appraisal industry for measuring cash equivalent value, but investors and mortgage insurers sometimes insist that cash equivalency be incorporated in the appraised values.

Cash Market
A market where mortgage and/or mortgage-backed securities are bought and sold for immediate delivery and cash payment. Also called Spot Market.

Cash Reserve
A requirement of some lenders that buyers have sufficient cash remaining after closing to make the first two mortgage payments.

Cash-Out Explanation Letter
A handwritten, signed and dated letter provided by borrowers who are receiving cash from the refinanced loan transaction. The letter explains how they intend to use that cash. Generally used to verify that borrowers do not intend to use the cash to incur additional debt that will add to their monthly obligations and decrease disposable monthly income.

Cash-Out Refinance
A refinance transaction in which the borrower receives additional cash that can be used for any purpose.

Ceiling
The highest interest rate that may be assessed or an adjustable-rate loan during the life of the loan based on the start rate and lifetime cap.

Certificate of Eligibility
A document issued by the Veterans' Administration, which verifies a veteran's eligibility for a VA Loan guarantee.

Certificate Of Occupancy (C/O)
A certificate issued by a local city government to the property owner stating the building is in proper condition to be occupied.

Certificate Of Reasonable Value (CVR)
A document issued by the Veterans' Administration, which establishes the maximum value and loan amount for a VA guarantee mortgage.

Certified Copy
A copy of an original attested to be a true and exact duplicate of the original.

Change Date
This is a date established with an adjustable rate loan contract when a new interest rate will be assessed. Also known as Adjustment Date.

Chapter 7 Bankruptcy
A Chapter 7 BK is a straight liquidation bankruptcy where the debtor submits all of their non-exempt assets to a trustee for liquidation; proceeds are disbursed to creditors.

Chapter 13 Bankruptcy
Chapter 13 BK is a debt reorganization plan where debts are repaid under a court-supervised repayment plan. Debtors submit part of their income for distribution among creditors. Also known as the Wage-earner Plan.

Charge-Off
A delinquent credit account with a balance owed that was never fully satisfied and the creditor removed it from the books for accounting purposes even though the debtor still owes payment in full.

Child Support
Periodic court ordered payments made under a Divorce Decree or a written Separation Agreement for the support of the children.

Civil Proceeding
A lawsuit or legal action between two or more parties, as apposed to a criminal proceeding.

Clear Title
A title that is clear of liens and legal questions as to ownership of the property.

Closing
A meeting between a lender and borrower or a buyer, seller and lender or their agents when the loan documents are signed and the funds legally change hands. Also known as Settlement.

Closing Agent
The party designated to conduct the loan closing, and to ensure the mortgage or deed is recorded and the funds disbursed on time.

Closing Costs
Expenses (over and above the Sale Price of the property) incurred by buyers and sellers to effect the closing of a mortgage loan. Also known as Settlement Costs.

Closing Statement
A statement required by Federal law (the Real Estate Settlement Procedures Act) that itemizes all changes imposed on the borrower and seller (if any) in connection with a mortgage secured loan transaction. Also known as a Settlement Statement, HUD-1 or HUD-1A.

Co-Borrower
A second borrower on a loan that shares equal responsibility for re-payment of the loan..

Co-Mortgagor
A second borrower who signs a mortgage loan with a mortgagor. The co-mortgagors income, assets and debts are combined with the mortgagors for underwriting and ratio analysis purposes.

Co-Signer
One who agrees to assume a debt obligation if the principal borrower defaults on mortgage payments. A co-signer assumes only personal liability and has no ownership interest in the property; his or her income and obligations are used in the underwriting process to reinforce the credit of the primary borrower.

Collateral
Property pledged by the borrower to secure the repayment of the loan. The lender's claim or lien appears on the title report for the property. See the 3 Cs of Credit definition for additional information.

Collection
The servicing procedure followed to bring a delinquent mortgage current and to file the required notices to begin foreclosure when necessary.

Combined Loan to Value (CLTV)
The total of all liens tied to the subject property divided by the lower of the appraised value or sales price of the property.

Combined Monthly Housing Expense
Monthly expenses for the customer's primary residence, which include rent or mortgage payments, other financing, hazard and flood insurance, mortgage insurance, real estate taxes, utilities and homeowner association dues.

Commercial Property
A property used for business purposes.

Commitment Fee
Any fee paid up front (usually by an individual Builder or Developer) to the lender for the purpose of holding mortgage funds for a specified date.

Commitment Letter
A written agreement between the lender and the borrower stating the Glossarys under which the lender agrees to loan money to the borrower.

Comparables (Comps)
Properties used to deGlossaryine the value of a specific property for comparative purposes in the preparation of an appraisal.

Compensating Factors
Positive characteristics about an applicant's credit, employment history, etc. that contribute to a loan being a sound risk or investment.

Concession
Special or unusual Glossarys offered by the seller that may warrant the buyer paying a higher price for the property.

Condominium (Condo)
A form of property ownership in which the homeowner holds title to an individual dwelling unit plus an interest in common areas of the project.

Condominium Association
An association of owners of condominium units.

Consumer Credit
Credit owed by an individual that is not secured by real estate.

Contingency
A condition that must be satisfied prior to a contract being legally binding.

Contract Rent
The actual rental payment specified in a lease agreement.

Conventional Loan
Any mortgage that is not insured or guaranteed by the federal government.

Conversion Clause
A provision in some Adjustable Rate Mortgages (ARM) that allows the borrower to change their adjustable rate to a fixed rate at some point during the Glossary.

Conveyance
The document, such as a deed, lease or mortgage used to affect a transfer of title to real property.

Corporation
An artificial person or legal entity created by or under the authority of the law of a state. May have limited liability, perpetual life, freely transferable shares and centralized management.

Cosmetic Repair
Repairs that improve the appearance of the property, and are considered aesthetically pleasing to the eye.

Cost Approach To Value
A valuation approach in which the value of a property is deGlossaryined by computing the replacement value of improvements, depreciation and the value of the land.

Coupon Book
A book of pre-printed coupons furnished to the borrower. One coupon is returned each month with a check or money order, enabling the mortgage servicer to identify the payment by name, loan number and type of loan.

Covenant
A clause in a mortgage that obligates or restricts the borrower and which, if violated, can result in foreclosure.

Covenants, Conditions And Restrictions (CC&Rs)
Limitations placed on the use and enjoyment of real property. Usually intended to maintain a certain look within a neighborhood and common in subdivisions, PUDs or condominium communities.

Credit Authorization Letter
A letter signed by the borrower that authorizes a lender, to conduct a credit investigation.

Credit Bureau
A company that collects and organizes information about an individual's credit and payment habits. The 3 national credit bureaus are Experian, TransUnion and Equifax.

Credit Denial Letter
A letter that is sent to a credit applicant advising him or her that the application has been denied and the reason for the denial.

Credit Depth
The number of years a borrower has established credit. This information shows up on the borrower's report.

Credit History
The history of whether the borrower has met financial obligations on time in the past.

Credit Length
The length of time a customer has had established credit.

Credit Report
A report prepared by a Credit Bureau that provides a detailed account of a borrower's Credit History.

Credit Score/Rating
A numerical assessment assigned to the customer by credit bureaus that represents a measurement of the customer's overall credit rating. The scores are weighted and range from approximately 365 to 840. Low scores reflect a "high risk", while higher scores reflect a "lower risk". Each credit bureau has its own credit score system.

Creditor
An individual or entity to whom money is owed.

Date Down Addendum
An update to the Preliminary Title Report/Title Commitment that reflects any changes to title since the original title report was prepared. Same as Update Addendum.

Debt Consolidation Loan
A loan that combines debt obligations into one debt.

Debt Load
The total amount of debt a customer currently owes.

Debt Ratio (DR)
The percentage of the customers' gross monthly income allocated to pay the monthly installments on their debt owing. See also Back-End Debt Ratio and Front-End Debt Ratio.

Debtor
One who is obligated to pay any liabilities.

Deed
A legal document by which a property owner (grantor) conveys an ownership interest in real property to a grantee.

Deed in Lieu
A deed given by a mortgagor to a mortgagee to satisfy a debt and avoid foreclosure.

Deed of Reconveyance
A document used to transfer legal title from the trustee back to the borrower after a debt secured by a deed of trust has been paid in full.

Deed of Trust
A type of security instrument used in some states in place of a mortgage by which legal title is conveyed to one or more trustees to secure the repayment of a debt. Same as Trust Deed.

Default
A breach or nonperformance of the Glossarys of a note or the covenants of a mortgage.

Deferred Maintenance
Repairs necessary to restore a property to good condition.

Deficiency Judgment
A court order to pay the balance owed on a loan if the proceeds from the sale of the security are insufficient to pay off the loan.

Delinquency
Failure to make payment when due.

Demand
A letter from a lender showing the total amount due to pay off a mortgage or trust deed, inclusive of unpaid principal, interest, impound amounts, prepayment penalty, etc. Also, known as a Demand for Payoff Request or Beneficiaries Demand Letter.

Demand Feature
A feature that defines circumstances under which the remaining principal and interest amount of the loan is due and payable on demand.

Depreciation
A decrease in value to real property improvements caused by age, deterioration or functional obsolescence.

Derogatory Explanation Letter
A borrower's written explanation to the lender explaining any derogatory information reported on the credit report.

Disbursements
Payments made on behalf of the borrower pursuant to the instructions on the HUD Settlement Statement.

Discharge
Following a completed bankruptcy proceeding, discharged debts are no longer enforceable. The customer has successfully completed the process and debtors are either paid in full or eliminated based on the plan.

Discount Point
Amount payable to the lending institution by the borrower or seller to increase the lenders effective yield. One point is equal to 1% of the loan.

Disposition
See Final Disposition.

Divorce Decree
A document issued by the court that dissolves the marriage relation.

Docs (Documents)
Abbreviation for mortgage loan documents.

Dower Rights
A common law interest that a wife acquires in her husband's property at the time of his death. Dower Rights have been abolished in most states.

Down Payment
The difference between the purchase price and the mortgage amount for home purchase transactions.

Due-on-Sale Clause
A provision in a mortgage allowing the lender to demand repayment in full if the borrower sells the property securing the mortgage.

Duplex
A property that consists of a structure that provides living space for 2 families, although a single mortgage or deed of trust evidences ownership of the structure.

Earnest Money
The cash deposit paid by the prospective buyer of real property, as evidence of good faith intentions, to complete the purchase transaction.

Easement
A right to the limited use or enjoyment of land held by another. Also, an interest in land to enable sewer or other utility lines to be laid, or to allow access to a property.

Effective Age
Age of a structure based upon its present condition rather than actual age. Takes into account rehabilitation and maintenance.

Effective Date
This is the date a new mortgage payment is effective-the month following the rate change date.

Encroachment
Generally, an improvement, such as a wall, fence or building, that extends onto the property of another.

Encumbrance
A claim, lien, charge or liability attached to and binding real property. Any right to, or interest in, land which may exist in one other than the owner, but which will not prevent the transfer of fee title subject to such encumbrances.

Endorse
The act of a payee or holder of a note, bill, check or other negotiable instrument, of assigning and transferring said instrument to another by signing the back of the instrument, with or without qualifications.

Endorsement
An addition to a title insurance policy that adds or subtracts coverage.

Engineer's Report
A report given by an engineer on the physical condition of the property and including any recommendations.

Entitlement
An amount of entitlement each veteran receives which represents the amount the VA guarantees the lender if the veteran defaults.

Equal Credit Opportunity Act (ECOA)
A federal law that prohibits lenders from discriminating on the basis of race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs. Also called Regulation B.

Equitable Interest
An ownership interest in a property that is demonstrated by actions such as the payment of the current mortgage, property taxes or property insurance rather than by legal ownership.

Equity
Net ownership, the difference between fair market value and current indebtedness, sometimes called ownership interest.

Equity Line of Credit
A combination of a line of credit and equity loan secured by real property. A maximum loan amount is established based on credit and equity. A mortgage is recorded against the potential borrower's property for said maximum loan amount. The potential borrower has the right to borrow, as needed, up to the amount of the credit line.

Escrow
The holding of documents and money by a neutral third party prior to closing; also, an account held by the lender (or servicer) into which a homeowner pays money for taxes and insurance.

Escrow Analysis
The periodic examination of escrow accounts to deGlossaryine if current monthly deposits will provide sufficient funds to pay taxes, insurance and other bills when due.

Escrow Instructions
For purchase transactions, instructions signed by both buyer and seller, which enable the escrow agent to carry out the procedures necessary to transfer real property, a business or other assignable interest.

Escrow Payment
The portion of the monthly mortgage payment reserved by the lender (or servicer) to pay taxes and insurance items when they come due.

Estate (Real Property)
Describes the extent and character of a person's rights and interest in real property. Two types of estates frequently financed by mortgage lenders are the fee simple and the leasehold estate. See also Fee Simple Estate and Leasehold Estate.

Exceptions To Guidelines
The consideration of approving a loan having characteristics that do not fit into a mortgage companies guidelines when it makes sense to do so.

Exceptions To Title
Claims against the property as of the date of the title report.

Experian (EXP)
A national credit bureau which lenders use to order credit reports from.

Explanation of Cash-Out Letter
See Cash-Out Explanation Letter.

External Obsolescence
Any influence negatively affecting a property's value that falls outside of the specific property site. An example of this would be a property located under an airport flight pattern.

Fair Market Value
The price deGlossaryined to convey title by the Seller to the Buyer where neither party are under any obligation to buy or sell and both parties have a reasonable knowledge of pertinent data.

Fair, Isaac Company (FICO)
Mr. Fair and Mr. Isaac spent approximately 10 years studying millions of loans to create a computerized model that assesses the risk factor for a potential borrower. Credit bureaus assign numerical scores in order to measure a borrower's credit characteristics. See Credit Score Rating.

Federal Deposit Insurance Corporation (FDIC)
Originally established by the Banking Act of 1933 to protect depositors from loss. As a result of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), the FCIC administers the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF).

Federal Home Loan Bank Board
Supervisory and regulatory agency for Federally chartered Savings & Loans; this agency also oversees the FSLIC and FHLMC.

Federal Home Loan Mortgage Corporation - FHLMC (Freddie Mac)
An agency regulated by FHLBB that purchase Conventional Mortgages in the Secondary Market. This agency sells participation sales certificates secured by Conventional Mortgage Loan Pools. It also sells GNMA Bonds to raise funds to finance the purchase of mortgages.

Federal Housing Administration (FHA)
A federal agency within the Department Of Housing and Urban Development (HUD) that provides mortgage insurance for residential mortgages and sets standards for construction and underwriting. The FHA does not lend money, nor does it plan or construct housing.

Federal National Mortgage Association - FNMA (Fannie Mae)
The nation's largest mortgage investor created in 1968 by an amendment to Title III of the National Housing Act. This stockholder-owner corporation, a portion of whose board of directors is appointed by the President of the United States, supports the secondary market in mortgages on residential property.

Federal Tax Lien
A lien attaching to a property for nonpayment of a Federal tax. A Federal tax lien differs from other liens in that it's not automatically eliminated by a senior lien holder foreclosing on a mortgage or trust deed recorded before the tax lien.

Fee Simple Estate
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and under which the property can be left by will or inherited. Commonly, a synonym for ownership. See also Estate (Real Property).

FHA Loan
A mortgage that is insured by the Federal Housing Administration. Also referred to as a "government mortgage."

Final Disposition
The "end" of the loan application process, which may happen via denial, withdrawal, incompleteness or funding.

Finance Charge
This is the amount of interest, prepaid finance charges, loan fees and certain insurance premiums the customer will pay over the life of the loan.

First Mortgage
A mortgage that has first claim to the secured property in the event of default.

First Position Lien
A secured claim against a property that will be the first claim to be repaid should the property owner someday declare bankruptcy or default on the secured loan.

Fiscal Year
The accounting year used by corporations for tax purposes. A fiscal year runs 12 months, but does not necessarily begin in January.

Fixed Income
Income of a specified and consistent value that is received at specified and consistent intervals. Types of fixed income include social security benefits, VA benefits, pension income, permanent disability benefits, welfare/aid income and child support/alimony.

Fixed-Rate Mortgage
A mortgage having a rate of interest that remains the same for the life of the mortgage.

Float
A borrowers decision not to lock an interest rate while a mortgage loan is being processed. A loan is considered to be a float until an interest rate is locked.

Floor
The lowest an adjustable-rate mortgage rate can ever be during the life of the loan.

Floor Rate
The start rate on an adjustable-rate program.

Forbearance
A lender's act of refraining from taking legal action despite the fact a mortgage is in arrears. It's usually granted when a mortgagor makes a satisfactory arrangement by which the arrears will be paid at a future date.

Foreclosure
A legal procedure in which a mortgaged property is sold to pay the outstanding debt in case of default.

Form 1040, 1040A, 1040EZ U.S. Individual Income Tax Return
The Federal tax form used by all U.S. citizens and resident aliens, to report their annual income to the Federal Government. The 1040 tax return must be accompanied by any applicable schedules, which provide line-item detail of various sources of income. Schedule A details itemized deductions. Schedule B details investment income. Schedule C details business income. Schedule D details capital gains/losses. Schedule E details supplemental income, such as rental income. Schedule F details farming profit/loss.

Form 1065 U.S. Partnership Return of Income
This Federal tax information form is used to report annual income, gains, losses and deductions from the operation of a partnership to the Federal government. A partnership does not pay tax on its income, but passes through any profits or losses to its partners. All partners must then include partnership items on their tax returns.

Form 1099
A document that reports to the Federal government gross and net income earned by individuals who receive pension, social security or miscellaneous income, such as income from contract work. 1099s must be mailed to recipients by January 31 of each year for the previous year.

Form 1120 and 1120-A - U.S. Corporation Income Tax Return
The Federal tax form used to report the income, gains, losses, deductions, credits and to figure out the income tax liability of a corporation to the Federal government.

Form 1120S - U.S. Income Tax Return For An S Corporation
The Federal tax form used to report the income, gains, losses, and deductions of a domestic corporation that has elected to be an S corporation by filing form 2553, election by a Small Business Corporation, and whose election is in effect for the tax year.

Foster Care Agreement
A document that designates an individual as the foster parent of a child. These agreements usually state the income the individual will receive for being a foster parent.

Freddie Mac
Another name for the Federal Home Loan Mortgage Corporation (FHLMC).

Free and Clear
Real property against which there are no liens, especially voluntary liens.

Front-End Debt Ratio
This refers to the debt ratio calculation using only principal, interest, tax and insurance divided by gross monthly income. It's expressed as a percentage. See also Debt Ratio.

Full Disclosure
In real estate, revealing all the known facts that may affect the decision of a buyer or tenant.

Fully Adjusted Rate
See Fully Indexed Rate.

Fully Indexed Rate
The fully indexed rate is equal to the rate index plus the loan's margin and is used with adjustable-rate mortgages. Example: If LIBOR is 6.50% and the margin on the loan is 4.00%, the fully indexed rate is 10.50%. Same as Fully Adjusted Rate.

Functional Obsolescence
Anything about the design or construction of a property that negatively affects its value. An example of this would be a property with 5 bedrooms and only 1 bathroom.

Funding
The disbursement of loan funds, either by check or by wire transfer to the title company.

Funding Fee
A fee charged to the veteran on a VA Loan to help recover any foreclosure costs. The veteran may finance the entire funding fee or pay it in cash.

Garnishment
A legal proceeding under which a person's money is in control of another and is taken for payment of a debt. The amount that may be taken is set by statute and, in most states, a judgment is necessary before garnishment.

General Partnership
An organizational form consisting only of general partners in which income, gains, losses, deductions and credits are passed through to individual partners who pay tax on their income.

Gift Letter
A letter to the lender from the donor stating a gift of money has been made to the buyer in order to purchase specific property. The relationship of the donor and buyer is stated, as well as the amount of the gift.

Ginnie Mae
Another name for the Government National Mortgage Association (GNMA), a federal agency within the department of Housing and Urban Development (HUD) that guarantees timely payment of the principal interest and mortgage-backed securities backed by FHA insured and VA guaranteed mortgages.

Grace Period
A period of time past the due date for a payment during which a payment may be made and not considered delinquent and no late penalty will be charged.

Graduated Payment Mortgage (GPM)
A mortgage loan in which the mortgage payments increase for a specified period of time and then level off.

Grandfather Clause
The clause in a law permitting the continuation of a use, business etc., which, when established, was permissible but, because of a change in the law, is now not permissible.

Grant Deed
A written instrument used to transfer or convey real property. A grant deed contains warranties against prior conveyances or encumbrances.

Grantee
One who received property rights when a grant is made. Generally, the buyer or purchaser of real property.

Grantor
One who grants property or property rights to another.

Gross Income (Business)
The total income earned, either actual or estimated, from a business or property.

Gross Monthly Income (Borrower)
The total amount the borrower earns per month, before any expenses are deducted.

Gross Rental Income
The monthly rental income received before mortgage payments, taxes and insurance are deducted.

Hazard Insurance
Insurance protecting real property against loss caused by fire, some natural causes, vandalism, etc., depending upon the Glossarys of the policy.

Holdback
A portion of a mortgage loan held back by the lender from the customer until a contingency is met by the customer. An example of a contingency would be repairs needed for a property's roof. Upon completing the required repairs, the lender releases the held back funds to the borrower. Same as Withhold.

Home Mortgage Disclosure Act (HMDA)
This act requires all mortgage companies to report selected information to the Federal government about each application received. HUD (U.S. Department of Housing and Urban Development) uses HMDA to detect discrimination and identify trends in lending patterns.

Homeowners' Insurance
An insurance policy that combines personal liability coverage and hazard insurance coverage for a dwelling and its content.

Homeowners' Association (HOA)
An association of people who own homes in a given area, formed for the purpose of improving or maintaining the quality of the area. Unpaid HOA dues can become a lien against a property.

Homeowners' Association Dues
A monthly payment paid to the association for the maintenance and care of the common areas.

Homestead
Status provided to a homeowner's principal residence by some state statutes; protects a home against judgments up to specified amounts.

HUD-1 (or HUD-1A)
Final statement of the actual settlement costs of the loan and all other disbursements of a loan's proceeds. A Federal requirement under RESPA. Same as Settlement Statement.

Impound Account
Account held by the lender for the payment of taxes, insurance or other periodic debts against real property.

Income
Cash flows or other benefits received. Examples are: salary, wages, overtime, commissions, child support, social security income, retirement benefits, interests and dividends.

Index
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable-rate mortgage and that earned by other investments, which is then used to adjust the interest rate on an adjustable-rate mortgage. Examples include LIBOR, the Prime Rate and Treasury indices. The Wall Street Journal publishes index information.

Initial Adjustment Cap
This is the 1st rate adjustment on an adjustable rate mortgage loan.

Inquiries
An indication of credit investigations made by companies that are considering granting credit to a person who appears on the credit report.

Instructions to Title
A form that instructs the title company how to record a lien against a property and issue a title insurance policy. Same as Title Instructions.

Interest
Money charged over time for the use of money.

Interest Bearing
A form of interest calculation in which the loan is charged at a daily or monthly rate on the current outstanding balance.

Interest Rate
Percentage paid for the use of money, usually expressed as an annual percentage.

Investment Income
Money earned from investments of money, such as stock dividends and annuity payments.

Investment Property
A real estate property used for investment purposes. This property is typically rented.

Involuntary Lien
A lien imposed against property by law or legal action without the consent of an owner. Examples include taxes, special assessments, federal income tax liens, judgment liens, mechanics liens and materials liens. See also Lien.

Joint Ownership
Legal title shared by 2 or more persons or entities. Such as joint tenancy, tenancy in common and community property.

Joint Tenancy
A form of co-ownership giving each tenant equal interest and equal rights in the property, including the right of survivorship.

Judgment
The decision of a court of law; debts resulting from a court order for payment. Money judgments, when recorded, become a lien against the defendant's property.

Judicial Foreclosure
A court supervised foreclosure process used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of the court.

Jumbo Loan
A loan amount above the conforming loan limits.

Junior Liens
Liens or claims against a property that are secondary or inferior to the lien of the first mortgage. Also known as a Second Mortgage.

Jurat
A certificate attached to a document stating where, when, before whom and by whom the document was signed.

K-1 Schedule
Tax schedule that must be distributed to each member of a Partnership that reports the member's distribution of a profit or loss.

Land
Undeveloped land.

Land Contract
An installment contract for sale with the buyer receiving equitable title and the seller retaining legal title.

Late Charge
An additional charge that a borrower is required to pay as a penalty for failure to pay a regular installment when due.

Lease with Option To Purchase
A lease containing a clause that allows the tenant the right to purchase the property under specified conditions.

Leasehold
A tenant's right to occupy real estate during the Glossary of the lease. This is a personal property interest.

Leasehold Estate
A kind of real estate ownership through which the property owner doesn't hold title to the property, but instead has use of the property subject to the Glossarys of the lease. See also Estate (Real Property).

Legal Description
A method of geographically identifying a parcel of land that is acceptable in a court of law.

Legal Title
The manner in which property ownership is recorded with the county in which the property is located. See also Vesting.

Liabilities
The debts of a person or business.

LIBOR Index
An acronym for London Interbank Offered Rate, one of several published indices. It's the average rate of interest that major London banks charge as they lend to one another.

Lien
A secured financial interest or legal encumbrance on a property. For example, a secured loan appears as a lien on the property's title report. See also Voluntary Lien and Involuntary Lien.

Lien Position
The order in which liens will be repaid when the property is transferred to a new owner.

Lien Waiver
A waiver of mechanics lien rights; a document signed by a supplier or subcontractor stating that the firm has been compensated for its work, there by giving up its right to file a claim against the property.

Lifetime Cap
This is the cap that limits how high an interest rate can increase over the life of an adjustable-rate mortgage loan . Example: Start rate + 6% = lifetime Cap.

Limited Liability Company (LLC)
An entity formed under state law by filing articles of organization as