Glossary 1

Single-Family Properties: One- to

Third-Party Origination: A process by

four-unit properties including detached

which a lender uses another party to

homes, townhouses, condominiums, and

completely or partially originate, pro-

cooperatives, and manufactured homes

cess, underwrite, close, fund, or pack-

attached to a permanent foundation and

age a mortgage loan. See also "Mortgage

classified as real property under appli-

Broker."

cable state law.

Title: The right to, and the ownership

Soft Second Loan: A second mortgage

of, property. A title or deed is sometimes

whose payment is forgiven or is deferred

used as proof of ownership of land.

until resale of the property.

Title Insurance: Insurance that pro-

Servicemembers Civil Relief Act: A

tects lenders and homeowners against

federal law that restricts the enforce-

legal problems with the title.

ment of civilian debts against certain

Title Search: A check of the public re-

military personnel who may not be able

to pay because of active military service.

cords to ensure that the seller is the le-

It also provides other protections to cer-

gal owner of the property and to identify

tain military personel.

any liens or claims against the property.

Subordinate Financing: Any mortgage

Trade Equity: Real estate or assets

or other lien with lower priority than the

given to the seller as part of the down

first mortgage.

payment for the property.

Survey: A precise measurement of a

Transfer Tax: State or local tax payable

property by a licensed surveyor, show-

when title to property passes from one

ing legal boundaries of a property and

owner to another.

the dimensions and location of improve-

Treasury Index: An index that is used

ments.

to determine interest rate changes for

Sweat Equity: A borrower's contribution

certain adjustable-rate mortgage (ARM)

to the down payment for the purchase of

plans. It is based on the results of auc-

a property in the form of labor or ser-

tions by the U.S. Treasury of Treasury

vices rather than cash.

bills and securities.

Truth-In-Lending Act (TILA): A fed-

T

eral law that requires disclosure of a

truth-in-lending statement for consumer

credit. The statement includes a sum-

Taxes and Insurance: Funds collected

mary of the total cost of credit, such as

as part of the borrower's monthly pay-

the annual percentage rate (APR) and

ment and held in escrow for the pay-

other specifics of the credit.

ment of the borrower's, or funds paid by

the borrower for, state and local prop-

Two- to Four- Family Property: A

erty taxes and insurance premiums.

residential property that provides liv-

ing space (dwelling units) for two to

Termite Inspection: An inspection to

four families, although ownership of the

determine whether a property has ter-

structure is evidenced by a single deed;

mite infestation or termite damage. In

a loan secured by such a property is

many parts of the country, a home must

considered to be a single-family mort-

be inspected for termites before it can be

gage.

sold.