Mortgagee: A lender or creditor who holds a mortgage or trust deed. The mortgagee and the mortgagee generally have the right to transfer their shares in the mortgage. Some States consider that even if the purchaser of a mortgage property does not explicitly assume the mortgage, the transfer is accepted. Mortgages use maturity and debit clauses to prevent the transfer of mortgages. These clauses allow an acceleration (with principal and interest payable immediately) of the mortgage. In 1982, Congress made these clauses nationally enforceable by passing the Garn-St Germain Depository Institutions Act of 1982. Contract and property law governs the transfer of mortgage interest. Title insurance: A policy usually issued by a title insurance company that insures a home buyer and the lender against title search errors. The cost of the homeowner`s policy is usually a percentage of the sale price and the lender`s policy is a percentage of the loan amount.
Note: You will not receive a credit estimate or final disclosure if you applied for a mortgage before October 3, 2015 or if you apply for a reverse mortgage. For these loans, instead of a credit estimate, you will receive two forms: a good faith estimate (GFE) and an initial disclosure of the truth in the loan. Instead of a final disclosure, you will receive a final disclosure of the truth about the loan and a HUD-1 settlement statement. If you apply for a home equity line of credit, a home loan not secured by real estate, or a loan under certain types of home buyers` assistance programs, you will not get a GFE or credit estimate, but you should get a disclosure of the truth in the loan. Tip: Ask your lender to provide a complete set of all documents in advance, along with the final disclosure. This way, you will have more time to check them all. Deferred loan: A loan that allows the borrower to defer all monthly principal and interest payments until the maturity date of the promissory note on which the outstanding principal of the loan and all accrued interest are due and payable. Birthday: Date on which the twelfth payment is due. This is done during the same calendar month and the same day each year thereafter on a MOP promissory note.
Mortgage law is primarily governed by state and common law. Mortgages are regulated by federal or state laws or agencies, depending on the law in which they were chartered or incorporated. The Office of Thrift Supervision, an office of the Treasury Department, regulates federally chartered savings associations. The Comptroller of Currency charters and regulates national banks. Federal credit unions are licensed and regulated by the National Credit Union Administration. If mortgage foreclosure is not the only lien on the property, state law determines the priority of real estate interests. For example, Article 9 of the Uniform Commercial Code governs conflicts between mortgages on real estate and liens on furniture (personal property associated with property). Refinancing: The process of repaying an existing loan and setting up a new loan. Federal agencies that buy loans and mortgages include the Federal National Mortgage Association or Fannie Mae, the Federal Home Loan Mortgage Corporation or Freddie Mac, and the Government National Mortgage Association or Ginnie Mae. The federal government also insures mortgages through the Federal Housing Administration and Veterans Affairs. Loan-to-value ratio (LTV): The ratio between the principal balance of a mortgage loan and the value of the secured property, determined by the purchase price or appraised value, whichever is lower.
Reserves: Liquid or quasi-liquid assets available to a borrower after the mortgage ends. Reserves are measured by the number of months of eligible payment for the mortgage in question (based on principal and interest) that a borrower could pay with their financial assets. Repurposing: Transfer of ownership of land from one person to the previous owner. This transfer tool is commonly used to transfer title from the trustee to the settlor after full payment of a trust indenture. The following terms and definitions are intended to give a simple and informal meaning to the words and phrases you see on our website that you may not be familiar with. The precise meaning of a term depends on where and how it is used, as relevant documents, including signed agreements, client disclosures, internal program policy manuals, and industry usage, determine meaning in a particular context. The following terms and definitions have no binding effect for the purposes of any contract or other transaction with us. Your campus housing representative or Loan Program Office staff will be happy to answer your specific questions. By consolidating mortgages into MBS and ensuring timely payment of principal and interest on underlying mortgages, Fannie Mae and Freddie Mac attract investors to the secondary mortgage market who would not otherwise invest in mortgages, expanding the pool of funds available for housing. This makes the secondary mortgage market more liquid and helps lower interest rates for homeowners and other mortgage borrowers.
Interest-only loan: A non-depreciable loan in which the lender receives interest over the life of the loan and the principal is repaid as a lump sum at maturity. Fannie Mae and Freddie Mac can also help stabilize mortgage markets and protect housing during extraordinary times when stress or turbulence across the financial system threatens the economy. Helping businesses obtain mortgages that finance affordable housing reduces the cost of such borrowing. Fannie Mae and Freddie Mac buy mortgages from lenders and hold those mortgages in their portfolios or bundle them into mortgage-backed securities (MBS) that can be sold. Lenders use the funds raised from the sale of mortgages to businesses to make further loans. Business purchases help ensure that individuals and families who buy homes, as well as investors who buy multi-family homes and other multi-family homes, have a continuous and stable supply of mortgage funds. Fannie Mae and Freddie Mac were created by Congress. They play an important role in the country`s housing finance system – to provide liquidity, stability and affordability to the mortgage market.
They provide liquidity (easy access to funds on reasonable terms) to the thousands of banks, savings and loan banks, as well as mortgage companies that lend to finance residential real estate. If a mortgage is a negotiable instrument, it is subject to Article 3 of the Uniform Commercial Code. See Negotiable Instruments. A mortgage can be used by the mortgage as security.