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acceleration clause
A clause stated in the loan documents which allows the lender to demand payment of the entire principal balance if a monthly payment is missed or title of the property has been transferred without the lender's knowledge.

additional principal payment
Extra payment made by a borrower of more than the scheduled payment due in order to reduce the remaining balance of the principal.

adjustable-rate mortgage (ARM)
A loan program with a rate which adjusts periodically on the basis of changes in a scheduled payment plan or specified index.

adjustment date
The scheduled date in which the interest rate change takes place.

adjustment period
The period between the scheduled adjustments.

affidavit
A sworn written statement made before an authorized officer.

amenity
Special and attractive features which improve the value and the desirability of a real property. For example, tennis courts and swimming pools will be considered amenities in a condominium project.

amortization
Repayment of mortgage debt with equal periodic payments of both principal and interest, calculated to retire the obligation at the end of a fixed period of time.

amortization schedule
A break down of payment of a mortgage loan indicating the principal and interest portions during the term of the loan.

annual percentage rate (APR)
The charges imposed on the borrower to obtain a loan presented as a yearly rate.

application
The form which is completed by a borrower in connection with a mortgage loan.

appraisal
An analysis, opinion and estimate of the value of the property prepared in writing by an appraiser.

appraised value
Final value of the property after completion of the appraisal report.

appraiser
The person who does the analysis in estimating the value of a property.

appreciation
Increase in value.

assessed value
Property value determined by a tax assessor for the purpose of annual tax amount.

assessor
The person who determines the value of a property for government.

asset
Items with value.

assignment
The process in which the mortgage changes hands from one person to another.

assumable mortgage
A mortgage that can be taken over by another party.

assumption
The formal transfer of a mortgage between seller and buyer.

assumption clause
A clause found in the loan documents which details the requirements for assumption of a mortgage.

assumption fee
The cost established by the lender for assumption of a mortgage.

attorney-in-fact
The person who has been selected by another party to hold a power of attorney.

balloon mortgage
A mortgage whose remaining balance after a specified term is due and payable in a lump sum payment.

balloon payment
The final payment of the remaining balance of a balloon mortgage.

before-tax income
Gross earnings before taxes are deducted.

beneficiary
The entity or person who is designated to receive income from a mortgage.

bill of sale
The document which transfers title to personal property. Equivalent to a deed in real property transfers.

bi-weekly payment mortgage
A mortgage with payments due every two weeks, for a total of 26 payments a year which results in a reduction of the term of the mortgage.

blanket mortgage
A mortgage which covers an entire project, rather than an individual unit.

bona fide
In good faith.

bond
An obligation written under seal.

bridge loan
A short term loan to facilitate a borrower until the completion of a future transaction.

broker
A person who negotiates on behalf of one or more parties and brings them together.

building code
Local regulations that establish and monitor the design, construction, and materials used in construction in order to maintain safety and health standards.

buydown account
An account established to hold funds so that they can be applied as part of the monthly mortgage payment as each payment comes due during the period that an interest rate buydown plan is in effect.

buydown mortgage
A mortgage which starts with a lower rate and payment for the first few years. A lump sum up front payment is made either by lender or borrower in order to obtain the low rate and payment in early years.

callable mortgage
A mortgage which may require the borrower to pay the entire loan balance at the request of the lender.

cap
A maximum percentage which a rate cannot exceed.

capital expenditure
Cost of improving a property for the purpose of increasing its useful life and value.

capital improvement
Permanent improvement to a property to increase the useful life and the value.

cash-out refinance
A refinance transaction in which a borrower receives more than the existing balance of the present mortgage.

certificate of deposit
A document issued by a bank evidencing a deposit for a specified term and interest rate.

Certificate of Eligibility
A document issued by the federal government evidencing the borrower's eligibility for a Department of Veterans Affairs (VA) mortgage.

chain of title
The document which reveals the history of all ownership transfers in a property.

clear title
A title free of any liens.

closing
A meeting in which the final documents are signed, the funds are provided and transfer of title takes place.

closing costs
Expenses associated with transfer of title or refinance of a property.

closing statement
See HUD-1 statement.

cloud on title
A condition which impacts the title to real estate.

collateral
An asset used in a transaction to insure repayment of a loan.

co-maker
A co-signer on a note along with the original borrower who guarantees repayment.

commission
The compensation paid to a broker, typically, a percentage for services provided.

commitment letter
A letter provided by the lender agreeing to provide financing to a borrower under certain terms and conditions.

common area assessments
Additional dues required by the homeowners association for additional improvements or repairs in a project.

common areas
The areas and portions of a property which are shared by all homeowners in a project. Parking areas and swimming pools are considered common areas.

community property
A form of ownership which states that any property acquired during a marriage to be owned jointly, unless acquired as separate property of either spouse.

comparables
Properties considered in a market analysis for evaluation of a property in an appraisal report.

condominium
A real estate project with multiple units owned separately by each individual. Unit owners have an undivided interest in common areas.

construction loan
A short term loan to fund the construction of a building.

contingency
A condition that must be satisfied in a contract. A real estate purchase contract may contain many contingencies such as various inspections.

contract of sale
An written agreement which contains certain items such as purchase price, terms and condition of sale.

conventional mortgage
A mortgage which is not insured or guaranteed by the federal government.

conversion clause
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to convert the existing adjustable rate to a fixed rate.

convertible ARM
An adjustable-rate mortgage with an option to convert to a fixed- rate under certain terms and conditions.

cooperative (co-op)
A type of ownership in a project in which a corporation holds title and each individual unit owner owns various number of shares in the corporation which owns the property.

cost of funds index (COFI)
A common index used in adjustable rate loans which represents the weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco.

covenant, conditions & restrictions (CC&Rs)
A document which defines the use and the restrictions of a property.

credit approval
The process in which the lender issues a loan commitment based on the borrower's income, assets and credit qualification only without considering any information on the subject property.

creditor
A person to whom money is owed.

credit report
A report of an individual's credit history used to help creditworthiness.

credit repository
A company which specializes in gathering many types of records of an individual.

debt
An amount owed to another person or organization.

deed
A legal document transferring title of a property.

deed of trust
The document and agreement used in some states instead of a mortgage to pledge the property as security for a loan. The title is conveyed to a trustee.

default
Failure to meet obligations in a contract including failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

delinquency
Failure to make mortgage payments on time.

deposit
A sum of money paid to the seller when a purchase contract is signed to bind the sale of real estate.

depreciation
Decrease in value.

discount points
Pre-paid interest to lower an interest rate.

dower
The rights of a widow in the property of her husband at his death.

down payment
The portion of the purchase price of the property which is paid from the borrower's funds not financed with a mortgage.

due-on-sale provision
A clause in a mortgage that allows the lender to demand repayment in full in the event of default.

earnest money deposit
A deposit made by the home buyer as evidence of good faith to show that he or she is serious about buying the house.

easement
A right of way giving persons other than the owner access to or over a property.

eminent domain
The right of a government to take private property for public use upon payment of its fair market value.

encroachment
An improvement that intrudes illegally on another’s property.

encumbrance
Legal right or interest in a property which may affect or limit the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

equity
The percentage of the property value which is held by the owner. The difference between the value and the mortgage balance.

escrow
A neutral third party selected by the parties involved in a transaction to represent the buyer and the seller during the transfer of the property or in the course of a refinance transaction.

escrow account
The account in which a mortgage servicer holds the borrower’s escrow payments for taxes, insurance and mortgage insurance.

estate
The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.

eviction
The lawful process of removing an occupant from real property.

executor
The person who is named in a will to administer an estate. The court will appoint an administrator if no executor is named. "executrix" is the feminine form.

Fair Credit Reporting Act
A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

fair market value
The price at which property is transferred between a buyer and seller who have reasonable knowledge of all facts.

Fannie Mae
A financial service company which buys residential loans from financial institutions in the secondary market.

Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.

fee simple
The greatest possible interest a person can have in real estate.

FHA mortgage
A mortgage made through an approved lender that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

first mortgage
A mortgage that is the primary lien against a property.

fixed-rate mortgage (FRM)
A mortgage in which the interest rate and the payments remain the same for the term of the loan.

fixture
Personal property that becomes real property upon being attached in a permanent manner to real estate.

flood insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

foreclosure
The legal procedure in which a mortgaged property is sold to pay the outstanding debt.

funding
Payment of money by lenders for a mortgage loan settlement.

hazard insurance
Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards.

home equity line
Mortgage financing that consists of a revolving line of credit secured by the value of the home for purpose of any use by the borrower.

home inspection
An inspection of the entire property that evaluates the structural and mechanical condition of a property. A home inspection is often conducted by a licensed contractor or an engineer and is included as a contingency by the purchaser. Contrast with appraisal.

homeowners' association
A nonprofit corporation or association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common areas. In a PUD project, it holds title to the common areas.

homeowner's insurance
An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

homeowner's warranty (HOW)
An insurance program that covers repairs to specified parts of a house for a specific period of time. It is provided by the builder or property seller as a condition of the sale.

housing expense ratio
The housing expenses divided by gross income.

HUD-1 statement
A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized numbering system. The totals at the bottom of the HUD-1 statement define the seller's net proceeds and the buyer's net payment at closing. The blank form for the statement is published by the Department of Housing and Urban Development (HUD). The HUD-1 statement is also known as the "closing statement" or "settlement sheet."

income property
Real estate which produces income.

index
A benchmark number used to compute the interest rate for an adjustable-rate mortgage (ARM). The index is generally a published number or percentage, such as the average interest rate or yield on Treasury bills.

in-file credit report
An objective account, normally computer-generated, of credit and legal information obtained from a credit repository.

inflation
A general price increase in goods and services. Over time, inflation reduces the purchasing power of a dollar, making it worth less.

initial interest rate
The start rate of an adjustable mortgage at the time of closing. This rate changes for an adjustable-rate mortgage (ARM).

installment
The regular periodic payment that a borrower agrees to make to a lender.

insurable title
A property title that a title insurance company agrees to insure against defects and disputes.

insurance
A contract which guarantees compensation for specific losses in exchange for a lump sum or periodic payment.

insurance binder
A document that states that insurance is temporarily in effect. Because the coverage will expire by a specified date, a permanent policy must be obtained before the expiration date.

insured loan
A loan insured by a government agency or a private mortgage insurance company.

interest
Consideration in the form of money paid for the use of money typically expressed in an annual percentage.

interest rate
The rate of interest in effect for the monthly payment due.

interest rate buydown plan
An arrangement wherein the property seller (or any other party) deposits money to an account so that it can be released each month to reduce the borrower's monthly payments during the early years of a mortgage. During the specified period, the borrower's effective interest rate is "bought down" below the actual interest rate.

interest rate ceiling
For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.

interest rate floor
For an adjustable-rate mortgage (ARM), the minimum interest rate, as specified in the mortgage note.

investor
Any person or institution that invests in mortgages or mortgage-backed securities.

IRA (Individual Retirement Account)
A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund. Individuals can place IRA funds in bank accounts or in other forms of investment such as stocks, bonds, or mutual funds.

late charge
An additional charge that a borrower must pay when a payment is made a stated number of days (usually 15) after the due date.

lease
A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may possess the real estate for a specified period of time and rent.

lease-purchase
A method of acquiring title to a property through gradual payments under which a lease is substituted for a mortgage obligation. Also known as a lease with option to buy.

legal description
A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

liabilities
A person's financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.

liability insurance
Insurance covering the risk related to the property and personal liability claims of other parties against the insured party.

lien
A legal hold or claim against a property by a creditor that must be paid off when the property is sold.

lifetime payment cap
For an adjustable-rate mortgage (ARM), a maximum limit on the amount that payments can increase over the life of the mortgage. See cap.

lifetime rate cap
For an adjustable-rate mortgage (ARM), a maximum limit on the amount that the interest rate can increase over the life of the loan. See cap.

line of credit
An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower.

liquid asset
A cash asset or an asset that is easily converted into cash.

loan
Borrowed money (principal) that is generally repaid with interest.

loan commitment
A formal agreement by a lender to provide funds to a borrower.
See commitment letter.

loan origination
The process by which a mortgage lender brings into existence a mortgage secured by real property.

loan-to-value (LTV) percentage
The ratio of mortgage amount to appraised value or sales price of real property. For example, a $100,000 home with an $80,000 mortgage has an LTV percentage of 80 percent.

lock-in
A written agreement in which the lender guarantees a borrower a specific interest rate and points on a mortgage for a specific time.

lock-in period
The period of time during which the lender guarantees a borrower an interest and points on a mortgage..

margin
For an adjustable-rate mortgage (ARM), the percentage which is added to the index to establish the actual interest rate. o

maturity
The date on which an agreement expires.

maximum financing
A maximum dollar amount allowed to be borrowed for a specific property, loan program or borrower.

merged credit report
A credit report which contains information from several credit repositories.

money market fund
A mutual fund that allows individuals to participate in managed investments in short-term debt securities, such as certificates of deposit and Treasury bills.

monthly payment mortgage
A mortgage that requires payments to reduce the debt once a month.

mortgage
A legal document that pledges a property to the lender as security for payment of a debt.

mortgage banker
A company that originates mortgages, sells and/or services loans secured by mortgages on real property.

mortgage broker
An individual or company that brings borrowers and lenders together for the purpose of loan origination. A mortgage brokers typically does not retain servicing.

mortgagee
The lender in a mortgage agreement.

mortgage insurance
Insurance which protects the lender against loss caused by a mortgagor's default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan.

mortgage insurance premium (MIP)
The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

mortgage life insurance
Term life insurance paid by borrower. The coverage decreases as the principal balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds.

mortgagor
The borrower in a mortgage agreement who pledges property as a security for a debt.

multidwelling units
Properties that provide separate housing units for more than one family, although they secure only a single mortgage.

multifamily mortgage
A mortgage on a dwelling that is designed to house more than four families, such as a high-rise apartment complex.

negative amortization
A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the entire principal and interest payment. The amount of the shortfall is then added to the remaining balance.

net cash flow
The income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense, which includes principal, interest, taxes, and insurance (PITI) for the mortgage, homeowners' association dues, leasehold payments, and subordinate financing payments.

net income
The amount remaining after operating expenses are deducted from gross income. Net income is used to qualify the self employed borrowers.

no cash-out refinance
A refinance transaction in which the new mortgage amount is only covering the remaining balance of the existing mortgage and sometimes closing costs. No additional funds are paid to the borrower.

nonliquid asset
An asset that cannot easily be converted into cash.

note
A general term for any kind of paper which obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

note rate
The interest rate stated on a mortgage note.

notice of default
A notice recorded after a default under a deed of trust or mortgage.

package loan
A loan offered by a lender for construction of a project along with permanent financing after the completion.

partial payment
A payment less than the scheduled monthly payment on a mortgage loan.

payment change date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate mortgage (GPARM). Generally, the payment change date occurs in the month immediately after the adjustment date.

payment shock
A scenario in which monthly mortgage payments may be so high compared to the present housing expenses of the borrower which may result in financial hardship for a borrower.

periodic payment cap
For an adjustable-rate mortgage (ARM), a maximum limit on the amount that payments can increase during any one adjustment period.

periodic rate cap
For an adjustable-rate mortgage (ARM), a maximum limit on the amount that the interest rate can increase during any one adjustment period, regardless of how high or low the index might be. See cap.

personal property
Any property that is not real property.

PITI
Principal, Interest, Taxes, and Insurance.

PITI reserves
A cash amount that a borrower must have available after making a down payment and paying all closing costs after the purchase of a home or refinance transaction.. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

planned unit development
See PUD.

point
An amount equal to one percent of the principal amount of a mortgage.

power of attorney
A legal document authorizing one person to act on behalf of another.

pre-foreclosure sale
A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the amount that is owed to the investor.

prepayment
A payment of all or part of a mortgage debt before the due date.

prepayment penalty
A fee charged to a borrower who pays off a loan before it is due.

pre-qualification
The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan.

prime rate
The interest rate commercial banks charge their most creditworthy customers, such as large corporations. Changes in the prime rate influence changes in other rates, including mortgage interest rates.

principal
The original amount borrowed or remaining unpaid balance excluding interest.

principal balance
The balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

private mortgage insurance (MI)
Mortgage insurance that is provided by a private mortgage insurance company to protect mortgage lenders against financial 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.

processing
Verification and packaging of all documents submitted by the borrower and all the parties involved in a mortgage transaction for the purpose of review and final loan decision.

promissory note
A written promise to repay a specified amount over a specified period of time.

public auction
A meeting open to public in an announced public location to sell property to repay a mortgage that is in default.

Planned Unit Development (PUD)
A project or subdivision that includes common property that is owned and maintained by a homeowners association for the benefit and use of the individual PUD unit owners.

purchase agreement
A signed written agreement between the buyer and seller stating the terms and conditions under which a property will be sold.

purchase money transaction
The acquisition of property through the payment of money or its equivalent.

rally
A rise in price following a sudden decline.

raw land
Land in its natural state without any physical improvements.

real estate agent
A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.

Real Estate Settlement Procedures Act (RESPA)
A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

real property
Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.

Realtor^®
A licensed real estate broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.

rescission
The cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent. Borrowers usually have the option to cancel a refinance transaction within three business days after signing of loan documents.

recorder
The public official who keeps records of transactions that affect real property in the area. Sometimes known as a "Registrar of Deeds" or "County Clerk."

recording
The noting in the registrar’s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.

refinance transaction
The process of paying off one loan with the proceeds from a new loan using the same property as security.

rehabilitation
Restoration of a property or neighborhood to bring it back to its full potential use.

reinstatement
The process of bringing the balance of a loan to current status.

remaining term
The original amortization term minus the number of payments that have been applied.

rent roll
A detailed list of tenants leasing the property along with information concerning the amount of rent, area leased.

rent with option to buy
See lease-purchase mortgage loan.

repayment plan
An agreement made by borrower and the lender to repay delinquent installments or advances. Lenders' formal repayment plans are called "relief provisions."

revolving liability
A credit arrangement, such as a credit card, that allows a customer to borrow against a pre-approved line of credit when purchasing goods and services. The borrower makes payments for the amount that is actually borrowed plus any interest due.

right of first refusal
A provision in an agreement in which the owner of a property agrees to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.

right of ingress or egress
The right to enter or leave designated premises.

right of survivorship
In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.

rollover
The renewal or change of program of a loan at the maturity of a specified time.

sale-leaseback
A sales arrangement in which a seller sells the 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 market in which the investors are 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. owner financing.

servicer
An organization which collects mortgage 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.

specific performance
A remedy in a court requiring the seller to complete the sale of the property.

step-rate mortgage
A mortgage that allows for the interest rate to increase according to a specified schedule (i.e. five years), resulting in increased payments as well. At the end of the specified period, the rate and payments will remain constant for the remaining term of the loan.

subdivision
A development which is created by dividing a tract of land into individual lots for sale or lease.

subordination
the process in which one lender or party acknowledges that a debt is inferior to the interest or debt of another in the same property.

subrogation
The substitution of one person for another in reference to a debt, right or claim.

survey
A measurement of land or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

takeout loan
A first mortgage which is made upon the completion of a real estate project. Takeout loan pays off the construction loan.

tenancy by the entirety
A form of ownership of property that provides right of survivorship and is available only to a husband and wife. Contrast with tenancy in common.

tenancy in common
A from of undivided ownership interest by two or more persons without right of survivorship. Contrast with tenancy by the entirety and with joint tenancy.

title
A legal document evidencing a person's right to or ownership of a property.

title company
A company that specializes in examining and insuring titles to real estate.

title insurance
Insurance that protects the lender (lender's policy) or the buyer (owner's policy) against loss arising from disputes over ownership of a property.

title search
An examination of public records to ensure that the owner of record is the legal owner of the property and that there are no liens or other claims outstanding.

trade fixtures
Articles of personal property installed and attached to real property for the purpose of conducting business.

transfer tax
Local and state taxes payable when title passes from one owner to another.

Treasury index
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the results of auctions that the U.S. Treasury holds for its Treasury bills and securities or is derived from the U.S. Treasury's daily yield curve, which is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. See adjustable-rate mortgage (ARM).

trustee
One who holds legal title and controls property for the benefit of another.

Truth-in-Lending law
A federal law part of Consumer Credit Protection Act which requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage rate (APR) and other charges.

two-step mortgage
An adjustable-rate mortgage (ARM) that has one interest rate for the first specified mortgage term and a different interest rate for the remainder of the amortization term.

two- to four-family property
A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership of the structure is evidenced by a single deed.