We hope this Glossary of Mortgage and Real Estate Terms helps you understand the home buying and financing process. Should you have any further questions, please do not hesitate to contact your Loan Officer for answers.

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M Terms

Management Fee: The money paid to the insurer by a re-insurer for servicing the business (that is, renewal billings, claim management, etc.).

 

Margin: Under the terms of an adjustable-rate mortgage (ARM), the margin is a premium that a lender charges which is added to the index. This premium is typically two or three percentage points. Once the lender specifies the margin, it remains fixed.

 

Market Data Approach: A method of establishing market value by comparing the subject property to properties of similar physical composition, location and value that have sold recently.

 

Market Value: An estimate of the highest price a property would sell for within a reasonable period of time, on the open market under normal conditions, and between a willing, ready and able buyer and seller.

 

MBS: See Mortgage-Backed Securities.

 

Mechanic's Lien: A claim created by law for the purpose of securing priority payment for work performed and material furnished by a mechanic or other person who has done construction or repair of a building. Such a claim attaches to the land as well as buildings and improvements erected on land.

 

MGIC: Mortgage Guaranty Insurance Corporation.

 

Misrepresentation: Information that is provided to and is relied upon by a third party as fact, but that is untrue and material to the risk assumed. The information may be provided with the knowledge that it is untrue and with the intent to deceive, or provided as the truth without knowing for a fact that it is not true.

 

Mitigation: Alleviation, abatement or diminution of a loss.

 

Modification Agreement: Any agreement between the lender and the borrower that permanently alters any of the terms of the original mortgage or note.

 

Mortgage: A pledge or security for the payment of a debt.

 

Mortgage-Backed Securities: Bond-type investment securities representing an undivided interest in a pool of mortgages or trust deeds. Security guaranteed by the Government National Mortgage Association (GNMA), issued to savings and loan associations, mortgage bankers, commercial banks and other institutions. The GNMA security holder is backed by the “full faith and credit of the United States.”

 

Mortgage Banker: An entity or individual active in the field of mortgage banking. Mortgage bankers, as local representatives of regional or national institutional lenders, act as correspondents between lenders and borrowers.

 

Mortgage Banking: 1) The origination, sale and servicing of mortgage loans by a firm or individual. 2) The packaging of mortgage loans secured by real property to be sold to a permanent investor with servicing usually retained by the originator for the life of the loan for a fee.

 

Mortgage Broker: An individual or firm that acts as an agent for both the borrower and the lender of a mortgage loan. The broker places the borrower and lender in contact with each other, and receives a commission from the borrower if a loan results. Unlike a mortgage banker, a mortgage broker does not negotiate the terms of the loan, issue a loan commitment, prepare the loan documents or service the loan.

 

Mortgage Commitment: An agreement between the borrower and the lender to disburse a mortgage loan at a future date if specified terms and conditions are satisfied.

 

Mortgagee: The institution, group or individual that lends money on the security of pledged real estate; the association, the lender.

 

Mortgage Guaranty Insurance (Private Mortgage Insurance): Insurance written by an independent mortgage guaranty insurance company that protects the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sales price. The federal government writes this form of insurance through the Federal Housing Administration (FHA) and the Veterans Administration (VA).

 

Mortgage Guaranty Insurance Premium: The amount paid by a mortgagor for mortgage guaranty insurance either to the FHA or a private mortgage guaranty insurance company.

 

Mortgage Lender: A classification used to describe those institutions or organizations at least partially engaged in the primary mortgage market - that is, extending funds directly to the borrower.

 

Mortgage Loan Correspondent: A mortgage banker who services mortgage loans as an agent for either the owner of the mortgage or an investor, Also applies to the mortgage banker in the role of originator of mortgage loans for an investor.

 

Mortgage Note: A written promise to pay a sum of money at a stated interest rate during a specified term. It is secured by a mortgage.

 

Mortgage Portfolio: The aggregate of mortgage loans held by an investor or serviced by a mortgage banker.

 

Mortgagor: The owner of real estate who pledges his property as security for the repayment of a debt; the borrower.

 

Multiple Borrowers : Two or more borrowers who are not husband and wife.