Mortage Network

Glossary

We’ve put together an extensive glossary of terms used in the mortgage lending business. If you’re not sure what a particular term means, click to find the definition in our glossary.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

S

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 Home

A property occupied part-time by a person in addition to his or her primary residence.

Second Mortgage

A mortgage that has a lien position subordinate to the first mortgage.

Secondary Mortgage Market

An informal market where lenders and investors buy and sell existing mortgages. Government-sponsored entities and private investors buy mortgages from lenders who use the proceeds to make additional loans.

Secured Loan

A loan that is backed by collateral. If the borrower defaults, the lender can sell the collateral to satisfy the debt.

Security

The property that will be pledged as collateral for a loan. If the borrower defaults, the lender can sell the collateral to satisfy the debt.

Security Interest

An interest a lender takes in the borrower's property to assure repayment of a debt. If the borrower defaults, the lender can sell the collateral to satisfy the debt.

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' tax and insurance escrow accounts. A mortgage banker is often paid a fee to service mortgages that have been purchased by an investor in the secondary mortgage market.

Servicing

The collection of principal and interest payments from borrowers and management of borrowers' tax and insurance escrow accounts.

Settlement

See closing.

Settlement Sheet

See HUD-1 settlement statement.

Single Family Residence

A residential structure designed to include one dwelling.

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.

Stand Alone

A Home Equity loan originated without obtaining a Countrywide first mortgage at the same time.

Start Rate

See initial interest rate.

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. The subordinate loan has a claim to payment in a foreclosure only after the first mortgage is paid.

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 or all of the second mortgage debt may be forgiven depending on how long 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 performed personally by the owner.