Mortgage 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 ZE
Money put down by a potential buyer to show that he or she is serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal.
Easement
A right of way, which grants access to a property to those who are not the property's owner.
ECOA (Equal Credit Opportunity Act)
A U.S. federal law preventing creditors and lenders from discriminating based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
EEM (Energy Efficient Mortgage)
A U.S. 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.
Effective Age
An appraiser's estimate of the a building's age, based on its current condition.
Eminent Domain
The government's right to use private property upon payment of its market value; also the basis for condemnation proceedings.
Empowerment Zone
One of several urban areas in which properties are eligible for Ginnie Mae's Targeted Lending Initiative.
Encroachment
The act of intruding gradually and without permission upon the rights, land or other possessions of another. Encroachment is often used to describe the spread of one type of neighborhood into an adjoining but different type of neighborhood. A change made to one property may encroach upon the rights or value of a second property.
Encumbrance
Any kind of claim against property, such as mortgages, leases, easements, or restrictions.
Energy Efficient Mortgage (EEM)
A U.S. federal law preventing creditors and lenders from discriminating based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
Entitlement
The U.S. Veterans Administration home loan benefit.
Equal Credit Opportunity Act (ECOA)
A U.S. federal law preventing creditors and lenders from discriminating based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.
Equity
An owner's financial interest in a property; calculated by subtracting the amount still owed on the mortgage loon(s) from the fair market value of the property.
Equity Investment
Investment in the ownership of property, in which the investor shares in gains or losses on the property.
Escalator Clause
A loan clause that provides payment or interest increases, according to a schedule or economic index (such as the consumer price index).
Escrow
The holding of money or documents by a neutral third party prior to closing. It can also be an account held by the lender (or servicer) to whom a homeowner pays money for taxes and insurance.
Escrow Account
A separate account into which the lender puts a portion of each monthly mortgage payment; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.
Escrow Agent
The person or organization having a fiduciary responsibility to both the buyer and seller (or lender and borrower) and who performs the duties to complete the transaction and ensure that the terms of the purchase/sale (or loan) are carried out.
Escrow Analysis
Performed by lenders each year to ensure that they are collecting the proper amount of money necessary to cover their expenditures.
Escrow Closing
A type of loan closing in which an escrow agent accepts the loan funds and mortgage from the lender, the downpayment from the buyer and the deed from the seller, and completes the actions required by the transaction.
Escrow Company
An organization that performs the functions of an escrow agent.
Escrow Disbursements
Using escrow funds to pay real estate taxes, insurance, and other property expenses.
Estate
The total real and personal property owned by an individual at the time of his or her death.
Eviction
The removal of an occupant from real property, in accordance with the law.
Examination of Title
An abstract or report on the title of a property.
Exclusive Listing
A written contract giving a specific real estate agent the right to sell a property for a given period.
Exclusive Right to Sell
Same as exclusive listing, except that the owner agrees in writing to pay the full commission to the agent even if the owner himself sells or rents the property.
Exculpatory Clause
That part of a written agreement that relieves one party to the agreement of liability as a result of actions (or lack of actions) performed in the course of executing the terms of the contract. In a trust agreement, an exculpatory clause relieves the trustee of liability resulting from any act performed in good faith under the trust agreement. In a lease, the exculpatory clause relieves the landlord of liability for personal injury to tenants or damage to tenants' property.
Executor
A person named in a will to administer an estate. If no executor is named, the court will appoint one (feminine form: executrix).
Expropriation
The act of confiscating private property for a public use by a legally constituted governing body. For example, property taken under eminent domain is expropriated.
Extension Risk
Risk that prepayments will be slower than the assumed rate causing later-than-expected return of principal.
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