Heidi M Tourangeau
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E
 
 
Earnest Money            A sum of the money given to bind a sale of real estate, or to assure payment or an advance of funds in the processing of a loan; a deposit.
 
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.
 
Economic Life             The estimated period of time during which a property can be used by its owner to produce income.
 
Eminent Domain          The right of government bodies, public utilities, and public service corporations to take private property for public use (e.g. schools and roads) upon payment of its fair market value.
 
Encroachment             An improvement that extends onto the property of another or violates another’s right to use their property.
 
Encumbrance              Any interest in or right to land held by a third party, which affects or limits the fee simple title to the property such as liens, mortgages, leases, easements, or restrictions.
 
Equal Credit               A federal law making it illegal for creditors to discriminate
Opportunity Act          against any applicant on the basis of age, sex, marital status,
(ECOA)                      race, color, religion, national origin, receipt of public assistance benefits, or the customer’s good faith exercise of rights under the Consumer Credit Protection Act.
 
Equity                       The interest or value an owner has in real estate in excess of mortgages and other liens.
 
Escrow                       A deposit of money and/or documents with a disinterested third party (escrow company, title company, attorney, etc.) to be held until the satisfaction of the terms and conditions of the escrow instructions.
 
Escrow Account           A trust-type account established by a lender, into which a customer makes monthly installment payments for property taxes, insurance, and special assessments. The lender disburses these sums from the account as they become due. Also called reserve, impound, or trust account.
 
Escrow Agent              The person or organization having a fiduciary responsibility to both the buyer and seller (or lender and customer) to see that the terms of the purchase/sale (or loan) are carried out.
 
Escrow Fee                 Fee charged by the escrow company for handling escrow activities, including paying off prior liens and clearing title and other debts.
 
Estimated Value          In a refinance transaction, the estimated value is the value offered by the customer until the bank conducts its own appraisal of the subject property.
 
Executor                     A person designated in a will as the representative of a decedent’s estate.
 
Extension Agreement    A grant of additional time within which to meet an obligation.
 
   
F
 
 
Fair Credit                  A federal law designed to ensure the fair, timely, and accurate
Reporting Act              reporting of credit information by placing disclosure obligations upon the users of consumer credit reports.
 
Fair Market Value        The estimated amount of money that would be paid for a property offered on the open market for a reasonable period of time with both buyer and seller knowing all the uses to which the property could be put, with neither party being under pressure to buy or sell. Also referred to simply as market value.
 
Federal Deposit           Agency of the federal government, which insures deposits at
Insurance Corporation  commercial banks and savings banks to protect depositors from  
(FDIC)                        loss.
 
Federal Home Loan       Commonly known as “Freddie Mac,” a major secondary market
Mortgage Corporation    investor.
(FHLMC)
 
Federal Housing           A division of the Department of Housing and Urban Development
Administration (FHA)    (HUD). FHA insures loans made by approved lenders in accordance  
                                 with FHA regulations.
 
Federal National          Commonly known as “Fannie Mae.” A government sponsored but
Mortgage Association   privately owned corporation whose primary function is to buy and
(FNMA)                       sell conventional, FHA, and VA mortgages in the secondary market.
 
Federal Reserve Bank   One of 12 regional banks in the Federal Reserve System. The role of each bank and its branches is to provide central bank services, such as check collection, access to the Federal Reserve Wire Network (Fed Wire), and credit advances at the Fed Discount Window. In addition, the Federal Reserve Banks establish monetary policy along with the Federal Reserve Board of Governors, and monitors commercial and savings banks to ensure that financial institutions follow Federal Reserve regulations. Reserve banks act as depositories for member banks in their region.
 
Fee Simple                 The greatest possible interest a person can have in real estate, including the right to dispose of the property or pass it on to one’s heirs.
 
Finance Charge           The charges that include all of the interest expected to be paid over the life of a loan, in addition to the service charges, mortgage insurance premiums, and certain other charges related to a loan.
 
First Mortgage             A secured loan agreement that represents a “first” claim on the property if the loan is not paid.
 
Fixed Amortization       Amortization is the payment of a debt in regular, periodic installments of principal and interest. Fixed amortization occurs when the interest rate and payment never change. The same payment is made each month over the life of the loan. Since interest is charged against the remaining amount of principal, as the principal is paid down each month the amount charged for interest decreases.
 
Fixed Rate Mortgage    A type of mortgage loan program in which the interest rate and
(FRM)                        monthly payments remain the same over the term of the loan.
 
Flood Determination    Document indicating whether a given property is in a flood hazard area, determines whether the loan will require flood insurance and whether federal flood insurance is available.
 
Flood Insurance           Insurance indemnifying against loss by flood damage. Required by mortgage lenders (usually banks) in areas federally designated as potential flood areas. The insurance is private, but federally subsidized.
 
Foreclosure                 The legal act of obtaining title to property held as security for a loan when the account becomes delinquent or when any of the terms are violated and repayment is questionable.
 
Forfeiture                   The loss or surrender of money, property, a right, or a privilege due to failure to perform.
 
Fully Indexed Rate      The interest rate on an ARM loan is calculated by adding the margin to the most recently published index rate.
 
Funding                      Payment of money by a lender for the consummation of a mortgage loan. The disbursement of funds after closing.
 
G
 
 
Garnishments             Funds deducted from a paycheck or other asset to be applied to a specific debt or creditor.
 
General Lien               A lien on all the property of a debtor.
 
General Partner           A co-owner(s) of a venture who is liable for all debts and other obligations of the venture as well as the management and operation of the partnership. The general partner can have control of the business and can take actions that are binding on the other participants.
 
Good Faith Estimate    A disclosure that must be given to all mortgage loan applicants
(GFE)                         within three business days of receipt of an application, as established by the Real Estate Settlement Procedures Act. The disclosure is an estimate of all settlement charges (to be paid by the customer) likely to be incurred at closing.
 
Government National   Commonly known as “Ginnie Mae.” A government corporation
Mortgage Association   in the secondary market within the Department of Housing and
(GNMA)                      Urban Development that provides special assistance for the purchase of certain FHA and VA mortgages and guarantees securities based on pools of mortgage loans.
 
Grace Period               A specified period after the regular due date of a loan payment during which no late charge or other penalty is assessed.
 
Grant                         A transfer of real property.
 
Grant Deed                 Legal instrument that transfers real property and includes an assurance that certain defects do not exist.
 
Grantee                     The person to whom an interest in real property is conveyed.
 
Grantor                      The person conveying an interest in real property.
 
Gross Income              Total income before deduction of any expenses.