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Loanfactz DefinitionsGlossary of Legal Terms, Loan Terms and Home Construction, Repair and Maintenance Definitions. Some words have more than one meaning. Only those meanings relating to this site will be used.
Earnest Money A cash deposit or a note given to a seller by a buyer to show that the buyer is committed to buying the property. The deposit will not be refunded to the buyer after the seller accepts the offer, unless one of the sales contract contingencies is not satisfied. Electronic Fund Transfer Act of 1978 Establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services. It covers transactions conducted at automated teller machines - also called ATM, at point of sale terminals in stores, and through telephone bill payment plans and preauthorized transfers to and from a customer's account, such as direct deposit of salary or Social Security payments. Employed Having a job that pays you wages or a salary. Encumbrance Mortgages, taxes, or judgements charged upon a property, which may diminish it's value. Energy Efficient Mortgage (EEM) An FHA program that helps homebuyers save money on utility bills by enabling them to finance the cost of adding energy efficiency features to a new or existing home as part of the home purchase. Equal Credit Opportunity Act (ECOA) of 1974 Prohibits lenders from discriminating against you in a credit transaction on the basis of certain personal characteristics such as race, color, religion, national origin, sex, marital status, age, or because you are receiving public assistance or because you have exercised your rights under the Consumer Credit Protection Act. If a consumer has been denied credit, the law requires notification of the denial in writing. The consumer may request, within 60 days, that the reason for denial be provided in writing. Equity Equity is the difference between the market value of your property and home, and the claims held against it. If you owe $100,000 on your house but it is worth $130,000, you have $30,000 of equity. Escrow A writing, deed, money, document, stock, or other property given to a neutral third party (usually an escrow company) prior to closing to hold until all conditions in a contract are fulfilled. Escrow Account An account held by the lender (or servicer) to which a homeowner pays money for property taxes, homeowners insurance, mortgage insurance, etc. The homeowner pays a portion of the yearly property taxes, homeowners insurance, etc., with each monthly payment, then the lender pays the tax bill and insurance from the accumulated funds. Also called trust account or impound account. The Real Estate Settlement Procedures Act (RESPA), enforced by the Department of Housing and Urban Development, is the major law covering escrow accounts. If your mortgage servicer administers an escrow account for you, the servicer is generally required to make escrow payments for taxes, insurance, and any other charges in a timely manner. Within 45 days of establishing the account, the servicer must give you a statement that clearly itemizes the estimated taxes, insurance premiums, and other anticipated charges to be paid over the next 12 months, and the expected dates and totals of those payments. Under the Real Estate Settlement Procedures Act (RESPA), the mortgage servicer also is required to give you a free annual statement that details the activity of your escrow account. This statement shows your account balance and reflects payments for your property taxes, homeowners insurance, and other charges. Escrow Analysis The accounting that a mortgage servicer performs to determine the appropriate balances for the escrow account, compute the borrower's monthly escrow payments, and determine whether any shortages, surpluses or deficiencies exist in the account. Eviction The legal act of removing someone from real property, such as a home or an apartment. Exclusive Agency Listing A listing agreement under which a real estate broker (known as the listing broker) acts as an exclusive agent to sell the property for the property owner, but may be paid a reduced or no commission when the property is sold if, for example, the property owner rather than the listing broker finds the buyer. This kind of listing agreement can be used to provide the owner a limited range of real estate brokerage services rather than the traditional full range. As with other kinds of listing agreements, if a second real estate broker (known as a selling broker) finds the buyer for the property, then some commission will be paid to the selling broker. Exclusive Right-to-Sell Listing The traditional kind of listing agreement under which the property owner appoints a real estate broker (known as the listing broker) as exclusive agent to sell the property on the owner's stated terms, and agrees to pay the listing broker a commission when the property is sold, regardless of whether the buyer is found by the broker, the owner or another broker. This is the kind of listing agreement that is commonly used by a listing broker to provide the traditional full range of real estate brokerage services. If a second real estate broker (known as a selling broker) finds the buyer for the property, then some commission will be paid to the selling broker. Executor A person named in a will and approved by a probate court to administer the deposition of an estate in accordance with the instructions of the will. Expected Family Contribution Expected Family Contribution (EFC) is the amount a student's family is expected to contribute toward college costs. The U.S. Department of Education calculates a student's EFC based on information provided on the Free Application for Federal Student Aid (FAFSA). Expedited Funds Availability Act (EFA) of 1987 Specifies when depository institutions must make funds deposited by check available to depositors for withdrawal. Requires institutions to disclose to customers their policies on funds availability. Extended Warranty A contract that can be purchased to cover the costs of parts and service on a vehicle beyond the manufacturer's original warranty period. Whether or not you should buy an extended warranty service contract depends on you. If you are going to drive and keep the vehicle for a long time, an extended warranty may be a good idea. Used car extended warranties can be a good idea too. It is best to get the extended warranty service contract that is provided by the manufacture. |
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