joint
tenancy
A form of co-ownership that gives each tenant equal interest and
equal rights in the property, including the right of survivorship.
judgment
A decision made by a court of law. In judgments that require the
repayment of a debt, the court may place a lien against the
debtor's real property as collateral for the judgment's creditor.
judgment lien
A lien on the property of a debtor resulting from the decree of a
court.
judicial foreclosure
A type of foreclosure proceeding used in some states that is
handled as a civil lawsuit and conducted entirely under the
auspices of a court.
jumbo loan
A loan that exceeds Fannie Mae’s legislated mortgage amount
limits. Also called a nonconforming loan.
margin
For an adjustable-rate mortgage (ARM), the amount that is added to
the index to establish the interest rate on each adjustment date,
subject to any limitations on the interest rate change.
master association
A homeowners' association in a large condominium or planned unit
development (PUD) project that is made up of representatives from
associations covering specific areas within the project. In
effect, it is a "second-level" association that handles
matters affecting the entire development, while the
"first-level" associations handle matters affecting
their particular portions of the project.
maturity
The date on which the principal balance of a loan, bond, or other
financial instrument becomes due and payable.
maximum financing
A mortgage amount that is within 5 percent of the highest
loan-to-value (LTV) percentage allowed for a specific product.
Thus, maximum financing on a fixed-rate mortgage would be 90
percent or higher, because 95 percent is the maximum allowable LTV
percentage for that product.
merged credit report
A credit report that contains information from three credit
repositories. When the report is created, the information is
compared for duplicate entries. Any duplicates are combined to
provide a summary of a your credit.
modification
The act of changing any of the terms of the mortgage.
money market account
A savings account that provides bank depositors with many of the
advantages of a money market fund. Certain regulatory restrictions
apply to the withdrawal of funds from a money market account.
money market fund
A mutual fund that allows individuals to participate in managed
investments in short-term debt securities, such as certificates of
deposit and Treasury bills.
monthly fixed
installment
That portion of the total monthly payment that is applied toward
principal and interest. When a mortgage negatively amortizes, the
monthly fixed installment does not include any amount for
principal reduction.
monthly payment
mortgage
A mortgage that requires payments to reduce the debt once a month.
mortgage
A legal document that pledges a property to the lender as security
for payment of a debt.
mortgage banker
A company that originates mortgages exclusively for resale in the
secondary mortgage market.
mortgage broker
An individual or company that brings borrowers and lenders
together for the purpose of loan origination. Mortgage brokers
typically require a fee or a commission for their services.
mortgagee
The lender in a mortgage agreement.
mortgage insurance
A contract that insures the lender against loss caused by a
mortgagor's default on a government mortgage or conventional
mortgage. Mortgage insurance can be issued by a private company or
by a government agency such as the Federal Housing Administration
(FHA). Depending on the type of mortgage insurance, the insurance
may cover a percentage of or virtually all of the mortgage loan.
See private mortgage
insurance (MI).
mortgage insurance
premium (MIP)
The amount paid by a mortgagor for mortgage insurance, either to a
government agency such as the Federal Housing Administration (FHA)
or to a private mortgage insurance (MI) company.
mortgage life insurance
A type of term life insurance often bought by mortgagors. The
amount of coverage decreases as the principal balance declines. In
the event that the borrower dies while the policy is in force, the
debt is automatically satisfied by insurance proceeds.
mortgagor
The borrower in a mortgage agreement.
multi-dwelling units
Properties that provide separate housing units for more than one
family, although they secure only a single mortgage.
multifamily mortgage
A residential mortgage on a dwelling that is designed to house
more than four families, such as a high-rise apartment complex.
negative amortization
A gradual increase in mortgage debt that occurs when the monthly
payment is not large enough to cover the entire principal and
interest due. The amount of the shortfall is added to the
remaining balance to create "negative" amortization.
net cash flow
The income that remains for an investment property after the
monthly operating income is reduced by the monthly housing
expense, which includes principal, interest, taxes, and insurance
(PITI) for the mortgage, homeowners' association dues, leasehold
payments, and subordinate financing payments.
net operating income
net worth
The value of all of a person's assets, including cash, minus all
liabilities.
no cash-out refinance
A refinance transaction in which the new mortgage amount is
limited to the sum of the remaining balance of the existing first
mortgage, closing costs (including prepaid items), points, the
amount required to satisfy any mortgage liens that are more than
one year old (if the borrower chooses to satisfy them), and other
funds for the borrower's use (as long as the amount does not
exceed 1 percent of the principal amount of the new mortgage).
non-liquid asset
An asset that cannot easily be converted into cash.
note
A legal document that obligates a borrower to repay a mortgage
loan at a stated interest rate during a specified period of time.
note rate
The interest rate stated on a mortgage note.
notice of default
A formal written notice to a borrower that a default has occurred
and that legal action may be taken
