Title Insurance Dictionary-Glossary

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S

SBA
Small Business Administration.

Second Mortgage
A mortgage recorded after a First mortgage, ranks second in priority.

Secondary Financing
A loan secured by a second mortgage on a property, sometimes used to refer to any financing technique other that equity or first-mortgage debt.

Secondary Market
A market for the purpose of purchase and sale of existing mortgages usually at discounted prices to provide greater liquidity to the mortgagee/lender.

Secondary Mortgage Market
The place where primary mortgage lenders sell the mortgages they make to obtain more funds to originate more new loans. It provides liquidity for the lenders.

Secured Party
The party holding a security interest or lien; may be referred to as a mortgagee, the conditional seller, or the pledge.

Securities and Exchange Commission (SEC)
The federal agency which regulates securities and the securities business. It is involved in real estate and mortgage lending when MBS are issued.

Security
Real or personal property pledged by a borrower, as additional protection for the lender’s interest.

Security Instrument
The mortgage or trust deed evidencing the pledge of real estate security as distinguished from the note or other credit instrument.

Self-Amortizing Loan
A loan that gets paid back through regular monthly installments, each of which is a combination of a pay-backs to the principal of the loan, and its interest charges.

Sensitivity Analysis
A method of valuation of the rate of return on an investment which changes with a single factor.

Service of the Complaint
Hand delivery of a Complaint in Mortgage Foreclosure to all mortgagors of a mortgage being foreclosed. Service is usually perfected (completed) by a Sheriff, Deputy Sheriff, or authorized process server. Foreclosure cannot be continued until such time as the complaint has been served and the mortgagor has had the prescribed time to reply, usually 21 days.

Servicing
All the steps and operations a lender performs to keep a loan in good standing, such as collection of payments, payment of taxes, insurance, property inspections and the like.

Servicing Agreement
A written agreement between an investor and mortgage servicer stipulating the rights and obligations of each party.

Servicing Income
Income derived from servicing.

Servicing Runoff
The dollar amount of principal paid off on a mortgage or mortgage portfolio.

Settlement Statement
A statement prepared by broker, escrow, or lender, giving a complete breakdown of costs involved in a real estate sale.

Settlement/Settlement Costs
See closing/closing costs

Shared Appreciation Mortgage (SAM)
A mortgage in which a borrower receives a below-market interest rate in return for which the lender (or another investor such as a family member or other partner) receives a portion of the future appreciation in the value of the property. May also apply to mortgage where the borrowers shares the monthly principal and interest payments with another party in exchange for part of the appreciation.

Simple Interest
Interest which is computed only on the principle balance.

Sinking Fund
A fund that, with interest, will serve as payment for future replacements required for an income property.

Site Assessment
A mandatory environmental inspection that checks for the existence of hazardous waste on the premises of a home that's being sold.

Soft Dollars
The amount invested in the development of a purchase of a property that is immediately deductible for tax purposes, such as prepaid interest and fees.

Special Assessment
Additional tax imposed by the local government for public improvements such as new streets, etc..

Special Warranty Deed
The seller warrants he has done nothing to impair title but makes no warranty before his ownership. Compare, GENERAL WARRANTY DEED and QUITCLAIM DEED.

Specific Performance
A legal action to complete the performance of a contract.

Standby Commitment
A commitment to purchase a loan or loans with specified terms, both parties understanding that delivery is not likely unless circumstances warrant. The commitment is issued for a fee with willingness to fund in the event that a permanent loan is not obtained. Such commitments are typically used to enable the borrower to obtain construction financing at a lower cost on the assumption that permanent financing of the project will be available on more favorable terms when the improvements are completed and the project is generating income.

Standby Contract
An option to sell a specified amount of mortgages or mortgage-backed securities by or on a specified date at a specified price.

Standby Fee
A nonrefundable fee paid by a borrower to a lender for a standby commitment.

Standing Mortgage
A loan where no amortization payments are required and the entire loan comes due at maturity. Interest is normally paid at periodic intervals while the loan is standing.

Statue of Limitations
The time period to file a law suit to enforce a claim or it is barred by law.

Subdivision
Dividing land into lots and streets. The owner signs a PLAT and Deed of Resubdivision which is recorded among the land records. The state and county have strict requirements for subdivision of land.

Subject to
Taking title to property with a lien but not agreeing to be personally responsible for the lien. If the holder who forecloses the lien can take the property but may not collect any money from the owner who took subject to. Compare, ASSUMPTION.

Survey
A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to know points, its dimensions, and the location and dimensions of any buildings.

Sweat Equity
Equity created by a purchaser performing work on a property being purchased

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