Real Estate Glossary

Sale of trust property by public auction:

Alternate reference to a foreclosure under a deed of trust that occurs through power of sale. Procedurally, such foreclosures require public advertisement before sale.



Sale-leaseback:

A technique in which a seller sells a property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller at a pre-arranged rate.



Scire facias:

A legal theory which upon action initiated by the lender, requires a defaulting borrower to prove the loan is not in default as opposed to the lender being required to prove the loan is in default, which would occur in a standard mortgage foreclosure action.



Second mortgage:

A mortgage that has a lien position subordinate to that of the first mortgage. Referred to as a junior lien.



Secondary mortgage market:

The buying and selling of existing mortgages after they are originated and closed.



Secured loan:

A loan that is backed or secured by collateral.



Security:

The property or other asset that will be pledged as collateral for a loan.



Security agreement:

An ancillary loan document that typically provides for a security interest or lien on personal property or fixtures located upon a parcel of real property that is subject to an underlying mortgage. Sometimes, security agreements are combined in the same document as the mortgage.



Security deed:

In a title theory state, the document that transfers legal title to the property to the lender pending full repayment of the loan obligation. The document gives a lender the right to foreclose on the property if the borrower defaults on the loan.



Seller take-back:

An agreement in which the owner of a property provides financing or "takes back" a mortgage on property being sold, often in combination with an assumable mortgage. See owner financing.



Selling agent:

The real estate agent who represents the property seller in a real estate transaction. Unless otherwise stated by a written agreement, all listing real estate agents are required to represent the interests of the seller.



Servicer:

A third-party organization that collects principal and interest payments from borrowers and their manages their escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.



Servicing:

The process of collecting mortgage payments and dealing with customer service issues and related responsibilities of a loan servicer.



Settlement:

The act of conducting and closing a real estate transaction. See closing.



Settlement agent:

An agent who effectuates a closing and disburses closing proceeds to various parties in a real estate transaction. See closing agent.



Settlement costs:

Costs associated with a real estate transaction. See closing costs.



Settlement statement:

A closing statement.  See HUD-1 statement.



Sheriff:

A law enforcement or administrative agent responsible in some jurisdictions for the execution, levy and foreclosure of real and personal property or the enforcement of judgments. Sheriffs often manage, conduct and hold foreclosure sales in various jurisdictions.



Small Tract Financing Act of Montana:

The Montana statute that provides for various tiers of property, which can be subject to different types of mortgage or trust indentures.



Special deposit account:

An account that is established for rehabilitation mortgages to hold the funds required for the rehabilitation work so they can be disbursed or drawn from time to time as particular portions of the work are completed.



Standard payment calculation:

The method used to determine the monthly payment required to repay the remaining unamortized balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current interest rate.



Statutory right of redemption:

A legal right afforded to foreclosed borrowers that gives them the post-foreclosure right to reclaim foreclosed property after the foreclosure sale upon the payment of all defaulted amounts, costs and fees.



Step-rate mortgage:

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



Strict foreclosure:

A summary legal proceeding available in a few states in which the lending institution brings court action against the borrower and obtains title directly without the requirement for holding a foreclosure sale.



Subdivision:

A housing development that is created by dividing a tract or plot of land into individual lots for sale or lease.



Subordinate financing:

Any mortgage or other lien that has a lesser priority than that of the first mortgage.



Subprime lending:

A type of loan made to borrowers with previous credit problems by charging slightly higher fees.



Subsidized second mortgage:

An alternative financing option for low-and moderate-income borrowers. A lender purchases a first mortgage that has a subsidized second mortgage behind it. A state, county, or local housing agency, foundation, or nonprofit corporation may issue the second mortgage. Payment on the second mortgage is often deferred and carries a very low interest rate (or no interest rate at all). Part of the debt may be forgiven incrementally for each year the buyer remains in the home.



Superior Court:

A court equivalent to Circuit Court in which foreclosure actions are filed and heard. In New Jersey, the foreclosure unit of the Superior Court, Chancery Division, handles all foreclosures.



Supreme Court:

The highest court in the judicial branch of the United States government, and the only court specifically mentioned in the Constitution. It comprises a Chief Justice and eight other Associate Justices.



Survey:

A drawing or map showing the precise legal boundaries of a parcel, including the location of improvements, easements, rights of way, encroachments, and other physical features.



Sweat equity:

The value contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.


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