Legally binding document between buyer and seller of a home that should address all terms and conditions of the transaction.
Second mortgage lien
When a homeowner takes out a mortgage loan, he generally borrows from one lender. In exchange for the loan, that lender requires the homeowner to grant him a first mortgage lien. If a homeowner takes out a home equity loan, or is offered a combination loan to eliminate the need for private mortgage insurance (PMI), a second lien may be granted. A second mortgage lien is junior, or subordinate, to the first mortgage lien, and is second in line to be repaid in case of default.
Selling costs are comprised of the commission and ancillary fees that you pay when you sell your home. Commission is paid to the broker or agent that sells your home. It is usually stated as a percentage of the sale price of your home. Commissions are often in the range of 3% to 6% of the sale price. Homes that are being sold by sellers who seek to sell directly in order to avoid paying a commission are called For Sale By Owner (FSBO) homes.
This describes the tasks of administering a loan after closing. Loan servicing departments maintain loan records, deliver statements to borrowers, and remit funds to borrowers as necessary.
Servicing fee set-aside
See Set aside.
An amount of funds that are reserved for a specific use. They are reserved, or set aside, from a reverse mortgage borrower's principal limit. The two most common fund reservations are for repairs to the property, and for covering the costs of servicing the mortgage account.
Soldiers and Sailors Act
The Soldiers' and Sailors' Civil Relief Act of 1940 was passed by Congress to provide protection for individuals called to active military duty by postponing or suspending certain civil obligations. This postponement enables service members to devote their full attention to military duty. The Act enables military persons who qualify to pay a lower interest rate for their home loan during the period of time for which they are called to active duty. If prior to entering service, a member incurs a loan or obligation with an interest rate in excess of 6%, the member will, upon application/approval from the lender, not be obligated to pay interest in excess of 6%. The Soldiers and Sailors Act applies to all branches of the Military (Army, Navy, Marines, Air Force, National Guard, Coast Guard, Reserve personnel, officers of the Public Health Service, National Oceanic and Atmospheric Administration). The Act applies to all service members who are called to active duty. The protection begins on the date of entering active duty and generally terminates within 30 to 90 days after the date of discharge from active duty.
Spread is the difference between two interest rates, usually stated in basis points. One percentage point consists of 100 basis points. For example, a spread on a card that charges 14% and one that charges 12.5% is 150 basis points.
Supplemental Security Income (SSI)
A federal monthly income program for low-income persons who are aged 65 or over, blind, or disabled. SSI is designed to assist people who cannot meet their basic financial needs because of their age or a disability.