SALE-LEASEBACK
A technique in which a seller deeds property to a
buyer for a consideration, and the buyer simultaneously leases
the property back to the seller.
SECOND MORTGAGE
A mortgage that has a lien position subordinate to the first
mortgage.
SECONDARY MORTGAGE MARKET
The buying and selling of existing mortgages.
SECURED LOAN A
loan that is backed by collateral.
SECURITY The property
that will be pledged as collateral for a loan.
SELLER TAKE-BACK
An agreement in which the owner of a property provides financing,
often in combination with an assumable mortgage. See owner financing.
SERVICER An organization
that collects principal and interest payments from borrowers
and manages borrowers’ escrow accounts. The servicer often
services mortgages that have been purchased by an investor in
the secondary mortgage market.
SERVICING The collection
of mortgage payments from borrowers and related responsibilities
of a loan servicer.
SETTLEMENT See closing.
SETTLEMENT SHEET
See HUD-1 statement.
SPECIAL DEPOSIT ACCOUNT
An account that is established for rehabilitation mortgages
to hold the funds needed for the rehabilitation work so they
can be disbursed from time to time as particular portions of
the work are completed.
STANDARD PAYMENT CALCULATION
The method used to determine the monthly payment required
to repay the remaining balance of a mortgage in substantially
equal installments over the remaining term of the mortgage at
the current interest rate.
STEP-RATE MORTGAGE
A mortgage that allows for the interest rate to increase according
to a specified schedule (i.e., seven years), resulting in increased
payments as well. At the end of the specified period, the rate
and payments will remain constant for the remainder of the loan.
SUBDIVISION A housing
development that is created by dividing a tract of land into
individual lots for sale or lease.
SUBORDINATE FINANCING
Any mortgage or other lien that has a priority that is lower
than that of the first mortgage.
SUBSIDIZED SECOND MORTGAGE
An alternative financing option known as the Community Seconds®
mortgage for low- and moderate-income households. An investor
purchases a first mortgage that has a subsidized second mortgage
behind it. The second mortgage may be issued by a state, county,
or local housing agency, foundation, or nonprofit corporation.
Payment on the second mortgage is often deferred and carries
a very low interest rate (or no interest rate). Part of the
debt may be forgiven incrementally for each year the buyer remains
in the home.
SURVEY A drawing
or map showing the precise legal boundaries of a property, the
location of improvements, easements, rights of way, encroachments,
and other physical features.
SWEAT EQUITY Contribution
to the construction or rehabilitation of a property in the form
of labor or services rather than cash.
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