The HSH Mortgage Glossary

Definitions are provided for informational purposes only.

Debt
An obligation, Specifically, the amount owed.

Debt To Income Ratio (DTI)
Total outstanding debt as a portion of total income. Used by lenders as a measure of credit worthiness.

Deed
The legal document which certifies title to a property.

Deed-In-Lieu
A means of avoiding foreclosure by conveying title to the lender. The lender has the option of whether to accept a deed-in-lieu, to proceed with the foreclosure, or both.

Deed Of Trust
Used in place of a mortgage in some states. The deed to a property is held by a trustee (title company or other third party) with the condition that it will be conveyed to the borrower when the mortgage is paid off.

Default
Failure to make payments within a specified period of time. A finding made by a lender prior to beginning foreclosure proceedings.

Delinquency
Failure to make mortgage payments when they are due. Policies vary from lender to lender but a borrower is generally reported delinquent if a payment is more than 30 days late.

Depreciation
A decline in the value of property; the opposite of appreciation.

Discount Point
A prepayment of interest equal to 1% of the mortgage amount. See Point, Origination Fee

Down Payment
A part of the purchase price, paid in cash, to cover the difference between the purchase price and the loan amount. Typically between 5% and 20% but can be more or less.

Due-On-Sale
A provision which requires that the remaining balance due be paid if the borrower sells the property or transfers title to another party.

Earnest Money
A deposit made by the potential home buyer which restrains the seller from offering the property to another party for a specified period.

Easement
A right of way allowing access to or over a property for a specific purpose, such as for a power line, or a road for access to another property.

Eminent Domain
The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation proceedings.

Encroachment
An illegal intrusion on another property by a fence, structure, etc.

Encumbrance
Anything that affects or limits the title to a property, such as a lien or mortgage, easement, or a lease or other restriction.

Equity
The difference between the fair market value of a property and any lien or mortgage. The net amount the owner would realize if the property were sold.

Escrow
Funds deposited with a third party to be delivered upon the fulfillment of a condition. A special account created to hold money for taxes and insurance, or to hold deposit money prior to closing.

Escrow Account
An account created for a specific purpose, such as to hold money for taxes and insurance, or to hold deposit money prior to closing.

Estate
The total of all the real property and personal property owned by an individual at time of death.

Eviction
A legal proceeding to expel an occupant from a property.

Examination Of Title
An abstract of report on the title of a property, taken from public records.