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 ZR
A radioactive gas found in some homes that, if occurring in strong enough concentrations, can cause health problems.
RAM (Reverse Annuity Mortgage)
A mortgage wherein the lender makes payments to the purchaser, not vice versa. This allows older home owners to convert their home equity into cash. This contrasts with traditional home equity loans, where a borrower must qualify on the basis of income; instead, one qualifies on the basis of the value of his or her home. The loan need not be repaid until the property is sold.
Rate Lock
A specified interest rate, guaranteed to the borrower throughout a given period.
Ratings
Designations used by investors' services to give relative indications of credit quality.
Raw Land
Land in its natural state, with no man-made improvements such as grading, sewers, roads or buildings.
Real Estate
Land and all physical property on, below or attached to the land. Houses, sewers, trees and fences are all real estate.
Real Estate Agent
An individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker.
Real Estate Investment Trust (REIT)
A primarily real estate and mortgage trust that passes losses and income to its investors.
Real Estate Mortgage Investment Conduit (REMIC)
An entity through which an issuer can sell multiple class securities with call protection to investors. A REMIC may be a corporation, trust, association, or partnership, but in order to qualify, it must confine its investments to mortgages, cash, government securities, foreclosure property acquired in connection with imminent default of a mortgage, or other REMICs. Typically, a REMIC invests in a pool of mortgages, and sells interests in those mortgages through securities with one or more senior classes and a subordinated class that assumes the credit risk of defaults and delinquencies. This creates a form of self-insurance that increases the investment ratings for the senior securities. A REMIC does not keep its mortgage assets on its books, but sells them to investors through its securities.
Real Estate Owned (REO)
Real estate owned by a savings institution as the result of default by borrowers and subsequent foreclosure by the institution.
Real Estate Settlement Procedures Act (RESPA)
A law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships.
Real Property
All immovable property such as land and the buildings or other objects permanently affixed to the land.
Realtor
A real estate agent or broker who is a member of the National Association of Realtors, and its local and state associations.
Recast
To extend an existing loan for at least its previous period, in order to reduce a borrower's payments.
Recision
The replacing of a contract by mutual consent or by either party for reasonable cause.
Reconveyance
The transfer of the title of property from the current owner to the most recent previous owner.
Record Date
The date for determining the owner entitled to the next scheduled payment of principal or interest on a mortgage security.
Recorder
A public official, sometimes known as ‘Registrar of Deeds' or ‘County Clerk,' who maintains all records of real estate transactions within a certain area.
Recording
The details of a properly executed legal document, such as a mortgage note, which are made available to the public.
Recording Fees
Money paid to a lender to record a home sale with local government, thus making it public record.
Recourse
(a) The right of a holder in due course to demand payment from the maker or endorser of a negotiable instrument, or from prior endorsers, if the instrument is dishonored by the maker. (b) The acceptance, assumption or retention of some or all of the risk of loss associated with an asset owned by another party. (c) In the secondary mortgage market, recourse refers to a provision in a sales contract by which a mortgage seller agrees to buy back the loan if default and foreclosure occur. See with full recourse, without recourse, with partial recourse.
Recourse Servicing
Mortgage servicing in which the company servicing a mortgage has assumed the financial risk in the event the borrower defaults on the loan.
Redeem
To buy back, as in an issuer redeeming bonds at maturity, or a property owner redeeming his or her property after a foreclosure sale.
Redlining
The refusal of a savings institution or other business to extend credit to, lend to, insure, or otherwise assume some financial risk involving property or a business located in a high-risk geographical area, usually a declining inner-city neighborhood. Redlining also refers to setting prohibitively high fees for financial services in a high-risk area.
Refinancing
Paying off one loan by obtaining another; generally done to secure better loan terms (such as a lower interest rate).
Registered Owner
The name in which a security is registered, as stated on the certificate or on the books of the paying agent. Principal and interest payments are made to the registered owner on the record date.
Rehabilitation Mortgage
A mortgage that covers the costs of rehabilitating (repairing or Improving) a property; some rehabilitation mortgages - like the FHA's 203(k) - allow a borrower to roll the costs of rehabilitation and home purchase into one mortgage loan.
REIT (Real Estate Investment Trust)
An investment vehicle established for the benefit of a group of real estate investors. A REIT is an unincorporated trust or association, managed by one or more trustees who hold title to the assets of the trust and control its acquisitions and investments. Real estate investments commonly include office buildings, apartment houses and shopping centers.
Release
(a) The discharge of property from a mortgage lien. (b) A written statement that an obligation has been satisfied.
Remaining Balance (Principal Balance)
The portion of a loan not yet repaid, exclusive of interest or other charges.
Remaining Term
The amortization term minus payments already applied.
REMIC (Real Estate Mortgage Investment Conduit)
An entity through which an issuer can sell multiple class securities with call protection to investors. A REMIC may be a corporation, trust, association, or partnership, but in order to qualify, it must confine its investments to mortgages, cash, government securities, foreclosure property acquired in connection with imminent default of a mortgage, or other REMICs. Typically, a REMIC invests in a pool of mortgages, and sells interests in those mortgages through securities with one or more senior classes and a subordinated class that assumes the credit risk of defaults and delinquencies. This creates a form of self-insurance that increases the investment ratings for the senior securities. A REMIC does not keep its mortgage assets on its books, but sells them to investors through its securities.
Renegotiable Rate Mortgage
An alternative mortgage loan in which the interest rate is renegotiated periodically. The loan may be either a long-term loan with periodic interest rate adjustments, or a short-term loan that is renewed periodically at new interest rates, but based on a long-term mortgage.
Rent Loss Insurance
Insures a landlord against loss of rent, as a result of fire or other circumstances that prevents the property from being rented.
REO (Real Estate Owned)
Real estate owned by a savings institution as the result of default by borrowers and subsequent foreclosure by the institution.
Repayment Plan
A plan to repay delinquent installments.
Replacement Reserve Fund
A special fund designated to replace common property, including furniture, for example, in a condominium or PUD.
Repossession
The process of a lender or his agent taking back items that were bought on credit or were pledged as collateral for a loan from a borrower who has fallen behind on loan payments.
Residual Qualifying
Using housing expenses in order to qualify for a VA loan.
RESPA (Real Estate Settlement Procedures Act)
A law protecting consumers from abuses during the residential real estate purchase and loan process by requiring lenders to disclose all settlement costs, practices, and relationships.
Restrictions
Generally refers to certain rules designed to preserve property values.
Restrictive Covenant
A clause in a deed limiting the use of the property.
Reverse Annuity Mortgage (RAM)
A mortgage wherein the lender makes payments to the purchaser, not vice versa. This allows older home owners to convert their home equity into cash. This contrasts with traditional home equity loans, where a borrower must qualify on the basis of income; instead, one qualifies on the basis of the value of his or her home. The loan need not be repaid until the property is sold.
Revocable Trust
A trust in which the grantor retains the right to revoke, and reclaim property that had been placed in the trust.
Revolving Credit
A line of credit extended to customers who may use it as often as desired up to a certain dollar limit. Items purchased using this line of credit, may be paid in full upon receipt of a monthly statement, or they may be paid for in several installments, for which an interest charge is added.
Revolving Debt
Credit that enables a someone to borrow against a preapproved line of credit to purchase goods and services, for which he or she is billed, plus interest.
RHS (Rural Housing Service)
U.S. federal government agency, formerly known as the Farmers Home Administration (FmHA), established to provide mortgage credit to qualified borrowers in rural communities. RHS guarantees loans for rural housing.
Right of First Refusal
A provision in an agreement stating that a specified party must be given an opportunity -- before any others -- to either accept or reject an offer. The right of first refusal may extend, for example, to the act of selling property. In this case, if and when the owner decides to sell, the property must first be offered to the specified party. Upon refusal by the specified party, the property may then be offered under the same terms and conditions to others.
Right of Foreclosure
The right of a lending institution to take over mortgaged property and close out the mortgagor's interest in it if the mortgagor violates the terms of the mortgage or loan note.
Right of Ingress or Egress
The right to enter or leave the premises.
Right of Recission
The borrower's statutory right under the Truth-in-Lending law to change his or her mind and cancel a loan within three business days from the date of the loan application.
Right of Redemption
A right provided by law in some states permitting a mortgagor to reclaim foreclosed property by making full payment of the mortgage debt, including interest and fees, or the foreclosure sales price. The redemption period is for a specified period of time.
Right of Survivorship
A right when property is co-owned and one owner dies. In that case, the entire, undivided property passes to the ownership of the surviving owner(s).
Right of Way
Authority granted to others by the owner of land to pass across the land, sometimes in the form of an access easement. Streets and sidewalks are normally part of the public right of way.
Rollover Loan
A loan with a call date that is earlier than the usual amortization period.
Rule of 78
Enables one to calculate the amount of interest a borrower must pay when he or she repays a loan, in full, before it matures.
Rural Housing Service (RHS)
U.S. federal government agency, formerly known as the Farmers Home Administration (FmHA), established to provide mortgage credit to qualified borrowers in rural communities. RHS guarantees loans for rural housing.
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