REAL ESTATE TERMS - M

Mandatory Delivery Commitment: an agreement that a lender will deliver loans or securities by a certain date at agreed-upon terms.

Margin: the number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment. Expressed in percentage points, the amount a lender adds to an index to determine the interest rate on an adjustable rate mortgage.

Marketable Title: Good or clear title, reasonably free from the risk of litigation over possible defects.

Market Value: the amount a willing buyer would pay a willing seller for a home. An appraised value is an estimate of the current fair market value.

Market Value Coverage: Homeowners insurance that covers the amount the home would go for on the market, not the cost to repair, should damage occur.

Maturity: the date when the principal balance of a loan becomes due and payable.

Mechanic's Lein: Also referred to as a construction lien and may be obtained by those who furnish labor, materials or professional services in the improvement of an owner's land or buildings. The contractor must file a lien with the Clerk of Circuit Court within six months after completing the work. A hold against a property, filed in the county recorder’s office by someone who’s done work on a home and not been paid. If the homeowner refuses to pay, the lien allows a foreclosure action.

Median Price: the price of the house that falls in the middle of the total number of homes for sale in that area.

Medium Term Notes: unsecured general obligations of Fannie Mae with maturities of one day or more and with principal and interest payable in U.S. dollars.

Merged Credit Report: raw data pulled from two or more of the major credit-reporting firms.

Metes-and-Bounds Description: A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract back to the place of beginning. Wisconsin statutes now require that the point of beginning be referenced to at least one Public Land Survey System monument.

Modification: when a lender agrees to modify the terms of a mortgage without refinancing the loan.

Mitigation: term usually used to refer to various changes or improvements made in a home; for instance, to reduce the average level of radon.

Monument: A fixed natural or artificial object used to establish real estate boundaries for a metes-and-bounds description.

Mortgage: a lien on the property that secures the Promise to repay a loan. A security agreement between the lender and the buyer in which the property is collateral for the loan. The mortgage gives the lender the right to collect payment on the loan and to foreclose if the loan obligations are not met. A pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien. A lien against real estate given by a buyer or property owner to the lender as security for money borrowed. Essentially, it is a legal agreement that means if the borrower stops making payments, the lender can take possession of the house.

Mortgage Acceleration Clause: a clause allowing a lender, under certain circumstances, demand the entire balance of a loan is repaid in a lump sum. The acceleration clause is usually triggered if the home is sold, title to the property is changed, the loan is refinanced or the borrower defaults on a scheduled payment.

Mortgage-Backed Security (MBS): a Fannie Mae security that represents an undivided interest in a group of mortgages. Principal and interest payments from the individual mortgage loans are grouped and paid out to the MBS holders.

Mortgage Banker: a company that originates loans and resells them to secondary mortgage lenders like Fannie Mae or Freddie Mac. One who originates, sells, and services mortgage loans and resells them to secondary mortgage lenders such as Fannie Mae or Freddie Mac.

Mortgage Broker: a firm that originates and processes loans for a number of lenders. A licensed professional who works on behalf of the buyer to secure financing through a bank or other lending institution.

Mortgage Companies: Lenders who underwrite loans in-house and fund loans from a line of credit before selling them off to a loan buyer.

Mortgagee: A lender in a mortgage loan transaction. The mortgagee receives the mortgage document and keeps it until the loan is satisfied.

Mortgage Insurance: a policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home’s purchase price. Insurance purchased by the buyer to protect the lender in the event of default. Typically purchased for loans with less than 20 percent down payment. The cost of mortgage insurance is usually added to the monthly payment. Mortgage insurance is maintained on conventional loans until the outstanding amount of the loan is less than 80 percent of the value of the house or for a set period of time (7 years is common). Mortgage insurance also is available through a government agency, such as the Federal Housing Administration (FHA) or through companies (Private Mortgage Insurance or PMI). A policy protecting lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home’s purchase price. Also known as PMI (Private Mortgage Insurance).

Mortgage Insurance Premium (MIP): a monthly payment -usually part of the mortgage payment – paid by a borrower for mortgage insurance.

Mortgage Interest Deduction: the interest cost of a mortgage, which is a tax – deductible expense. The interest reduces the taxable income of taxpayers. Mortgage interest paid in a year subtracted from annual gross salary.

Mortgage Interest Rate: The price of borrowing money. The base rate is set by the Federal Reserve and then customized per borrower, based on credit score, down payment, property type and points the buyer pays to lower the rate.

Mortgage Life and Disability Insurance: term life insurance bought by borrowers to pay off a mortgage in the event of death or make monthly payments in the case of disability. The amount of coverage decreases as the principal balance declines. There are many different terms of coverage determining amounts of payments and when payments begin and end.

Mortgage Modification: a loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments.

Mortgage Note: a legal document obligating a borrower to repay a loan at a stated interest rate during a specified period; the agreement is secured by a mortgage that is recorded in the public records along with the deed.

Mortgage Qualifying Ratio: Used to calculate the maximum amount of funds that an individual traditionally may be able to afford. A typical mortgage qualifying ratio is 28: 36.

Mortgage Score: a score based on a combination of information about the borrower that is obtained from the loan application, the credit report, and property value information. The score is a comprehensive analysis of the borrower’s ability to repay a mortgage loan and manage credit.

Mortgagor: the borrower in a mortgage agreement. A borrower who uses his or her property as security for a loan.

Multifamily Housing: a building with more than four residential rental units.

Multiple Listing Service (MLS): within the Metro Columbus area, Realtors submit listings and agree to attempt to sell all properties in the MLS. The MLS is a service of the local Columbus Board of Realtors?. The local MLS has a protocol for updating listings and sharing commissions. The MLS offers the advantage of more timely information, availability, and access to houses and other types of property on the market. A database where real estate agents list properties for sale.

REAL ESTATE TERMS - M

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