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Glossary |
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Private Mortgage Insurance (MI) |
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Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent. |
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Rate Lock |
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A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost. |
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Second Mortgage |
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A mortgage that has a lien position subordinate to the first mortgage. |
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Short Sale |
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In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. |
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Title |
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A legal document evidencing a person's right to or ownership of a property. |
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Title insurance |
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Insurance that protects the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property. |
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Title search |
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A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding. |
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