Land Contract — An agreement designed for the sale of property that transfers ownership of the property, but without the title until most or the entire purchase price is paid in full.
Landlord — An owner or agent of the owner who leased a property to another person.
Last Reported – The date the creditor has last provided information about an account on a credit report.
Late Fee- A fee that a creditor charges a debtor who does not pay a bill by its due date.
Lease — An agreement to rent a property for a specific period of time.
Lender – A person or entity that loans money.
Lessee – The person or entity that leases a vehicle.
Lessor – The company or entity that provides a vehicle for lease.
Liability Amount – Amount of money that owed or legally obligated to a creditor.
Lien – Legal document that is issued to establish a security interest on a property. A lien is often issued as a security for the payment of a debt, often on a property. A lien may also be issued on a property due to a consumer’s failure to pay city, county, state, or federal government taxes. Liens use property as collateral during the extended repayment process.
Lien Holder – A person or entity that has placed a lien on someone’s property or assets.
Lifetime Adjustment Cap – A limit on variable interest rate increases over the life of a loan.
Line of Credit – A lender’s agreement with a borrower to allow the borrower a certain amount of time to borrow a certain amount of money
Liquidate – To sell assets for the purpose of raising cash.
Liquidation — The settlement of the debts of an individual or business through the sale of the assets.
Listing Price – The advertised asking price of a piece of property
Loan – Money borrowed, usually repaid over time with interest.
Loan Application – To apply for a loan, provide financial and employment history, etc.
Loan Term – The length of time a borrower has to repay a loan.
Loan-to-Value Ratio – A percentage based the unpaid principal amount of your loan, your credit limit in the case of a line of credit, and the value of collateral.
Lock-In – The amount of time prior to closing that you can secure, or “lock-in,” an interest rate for your loan. Ranges from 30 to 90 days, with longer periods requiring borrowers to pay more in points or interest.
Manufactured Housing – A home built off-site (partially or entirely) and assembled elsewhere. Can be a mobile home or any other type of residence.
Manufacturer’s Suggested Retail Price (MSRP) – The manufacturer’s recommended selling price for a vehicle. Your final price may vary, based on options added or removed.
Margin – Percentage points lenders add or subtract from an index rate to determine an interest rate.
Market Value – The likely selling price of a home, usually determined by a professional appraisal.
Marketable Title — A title that is not obscured with claims or other irregularities that could prevent a property from being sold.
Maturity Date – The final day to pay off the entire balance of a loan.
Means Test — Added to the Code in 2005, the means test is intended to screen out those filing Chapter 7 who are supposedly able to repay some part of their debts.
Meeting of Creditors — During bankruptcy filing, a debtor must appear at a meeting (also called a 341 hearing) with their trustee to give testimony under oath about their assets and liabilities. Though it rarely happens, creditors can attend to ask debtors specific questions.
Minimum Payment – The least amount of money a borrower can pay to a creditor by a due date to keep an account current.
Modular Home – A “pre-fabricated” home that’s assembled on-site.
Monthly Payment – The overall payment made each month to the principal and/or interest on a loan.
Monthly Periodic Rate — The interest rate on a monthly basis. Calculated by dividing the Annual Percentage Rate (APR) by 12.
Mortgage – A legal document held by a lender for a period of time (10 to 30 years, commonly) as security against a home loan. Also called deed of trust and/or security deed.
Mortgage Banker – A person or entity that originates, sells and services mortgage loans and resells them to secondary lenders such as Fannie Mae or Freddie Mac.
Mortgage Broker – A go-between who helps to locate funding sources, or someone who negotiates a contract, but does not actually lend money.
Mortgage Insurance (Private Mortgage Insurance, or PMI) – An insurance policy designed to benefit the lender in the event a borrower defaults on a loan. If your down payment is less than 20%, chances are your lender will require you to obtain this insurance.
Mortgage Points – 1% of the principal amount of your loan. Also called points.
Mortgagee – The lender.
Mortgagor – The borrower.
Most Recent Date – The date of the most recent change to an account condition or payment status on your credit report. This date also functions as the balance date.
Multi-Family Residence (Two to Four Units) – A residential property with two to four individual housing units (duplex, triplex, quadplex).
Negative Amortization – This can occur when a borrower’s payments are not sufficient to cover the interest on a loan. The unpaid interest is added into the loan, compounds, and causes the borrower to be “upside down,” and owe more then the original amount of the loan.
Net Effective Income – The overall income of a borrower, less federal and/or state income taxes.
Non-Conforming Loan – A mortgage not eligible for sale to Fannie Mae and Freddie Mac. These loans are often sold to private investors or held in the lender’s portfolio as an asset.
Non-Dischargeable Debt – Debt that a person or business cannot eliminate in bankruptcy.
Non-Owner Occupied – A home in which the owner does not live, i.e., a rental property.
Notarize – Service performed by a notary public involving being a witness to the signing of documents, and authenticating the identity of the signers.
Notice of Default (NOD) — A notice that is sent out by a lender when a mortgage payment is late in an attempt to spur the debtor to bring their account up to date.
Notice of Rescission — A legal document used officially rescinds a default.
Notice of Sale — A notice of an impending foreclosure sale is required by the state to be posted in a public place, including information about the pending sale’s time, date, and place.
Obsolescence – A term describing the length of time negative information should remain on a credit report before it is expunged. FCRA has set the obsolescence period as 10 years for bankruptcy and seven years for all other instances. Unpaid tax liens may show up on your report indefinitely on the reports for some credit bureaus.
Offer to Purchase — A notice that communicates of a buyer’s willingness to purchase a certain property on terms outlined in the offer.
Opt In – A choice for a consumer to give his or her name to credit reporting agencies, direct marketers, and list compilers so that he or she may receive credit offers from these groups Consumers can add their names to these lists by calling 888 /567-8688.
Opt Out – The option for a consumer who has chosen not to have their name added to a list of pre-screened credit and insurance offers, direct marketing offers, and individual reference services. Consumers may notify credit reporting agencies, direct marketers and list compilers by calling (888) 567-8688.
Origination – Preparing, submitting, and evaluating loan applications, usually including a credit check, employment verification, and appraisal.
Origination Date – A scheduled date, time and place for all of your loan documents to be signed, dated and notarized. This is also sometimes called a settlement.
Origination Fee – A lender’s fee for loan processing expenses, often a percentage of the amount loaned.
Outstanding Balance – The overall amount owed on a debt.
Over-the-Limit Fee – A fee a creditor charges to a debtor for exceeding the limit set by the creditor.
Owner Financing (Seller Financing) — A method that a seller of a property uses in order to finance all or some of the property’s sale, thereby serving as seller and lender.
Owner-Occupied – A home in which the owner lives.
P & I – Principal and interest.
Par Rate – The rate of interest on a loan for which the lender does not charge (nor pay) points. If your interest rate is lower than the par rate the broker would lose money; if it’s higher the broker would makes a commission.
Past Due Fee – A fee that a creditor charges a debtor who does not pay a bill by its due date.
Payment – The amount of money paid by the borrower, usually monthly, to reduce the balance of a loan. AKA principal and interest, or P& I.
Payment Cap – A contractual limit on how much a variable interest rate can go up. This cap can be for semi-annual, annual and/or lifetime increases.
Past Due – A bill that remains unpaid after its due date.
Payment Status – This item shows past history of an account, including any delinquencies or irregularities, during the previous seven years.
Personal Information – Information about a borrower listed on his/her credit report that has been reported the borrower, his/her creditors, and other sources, including name variations, date of birth, Social Security number, driver’s license number, spouse’s name, a list of employers, current telephone numbers, and residential (address) information.
Personal Property — Assets that are not considered real estate or part of a property.
Personal Statement – Consumers may ask for a detailed explanation about the information displayed on a credit report. The statement will stay valid for two years and can be viewed by anyone who looks at your credit report.
Petition – If a consumer declares bankruptcy, but it has not yet been cleared to proceed, the bankruptcy is referred to as “petitioned.”
Plaintiff – The term for the party who initiates legal action against another (defendant) and desires a court decision to resolve differences.
Point-of-Sale (POS) – Often used in reference to debit card purchases, an electronic payment using one’s debit card. Also can refer to the physical location where a purchase is made.
Points – A point is equal to 1% of the loan amount.
Potentially Negative Items – Any possibly negative items on your credit report or public records that can affect your credit worthiness.
Power of Attorney – A document a person signs to give someone else legal authority to conduct business on the signer’s behalf.
Power of Sale — A clause commonly inserted in defaulted mortgages and deeds of trust that allows the lender or trustee the ability to sell the said property at public auction to satisfy the debt.
Pre-Approval – A process in which a prospective borrower is pre-approval from a lender up to a certain loan amount, based on his or her creditworthiness, proposed down payment, etc.
Pre-foreclosure — Term used to describe delinquent properties before they are processed as foreclosed.
Pre-petition — Claims or events occurring before the filing of bankruptcy. In most cases, pre-petition debts can be discharged during a bankruptcy proceeding.
Preference — A transfer to a creditor for payment of an existing debt made before the start of a bankruptcy proceeding. Preferences may be recovered by the trustee for the benefit of all creditors.
Prepaid Expenses – Fees usually paid in advance, such as escrow for taxes and insurance.
Prepaid Interest – An interest payment covering the gap in time from closing to the first of the following month.
Preparation Charges – Fees paid to a car dealer for preparing your new car for delivery.
Prepayment Penalty – A fee some lenders assess a borrower if he or she pays off their loan prior to its due date.
Prequalification – A process in which a prospective home buyer gets pre-approval from a lender up to a certain loan amount, based on the borrower’s creditworthiness, proposed down payment, etc.
Previous Balance – The remaining amount owed on a credit card balance after your previous payment was made.
Primary Applicant – The named first on an application.
Primary Residence – The borrower’s home most of the time.
Prime Rate – A bank’s publicly announced interest rate, used as a reference point for determining pricing and fees associated with its loans.
Principal – The amount of money borrowed on a loan.
Principal, Interest, Taxes, and Insurance (PITI) – The four elements that make up a monthly mortgage payment– principal, interest, taxes and insurance.
Priority — The bankruptcy code describes the order in which claims are paid to creditors from the debtor’s estate. Claims are ranked according to priority, with some higher priorities paid in full before other lower-ranking claims receive anything. Claims with the same priority share receive an equal division of payment. Claims are paid out in the following order — (1) administration and court fees, (2) priority claims, and (3) general unsecured claims. Secured claims are paid from the proceeds of liquidating the collateral that secured the claim.
Private Mortgage Insurance (PMI) – An insurance policy designed to benefit the lender in the event a borrower defaults on a loan. If your down payment is less than 20%, chances are your lender will require you to obtain this insurance.
Processing Fee – A fee some lenders charge for administrative costs associated with loan generation.
Promissory Note – A legal contract between lender and borrower that details terms and conditions of the loan.
Proof of Claim — This form established the creditor’s claim against the debtor.
Property Tax – A county tax based on the most recent appraised value of your home. Percentages vary from county-to-county, and the tax can be paid annually, semi-annually, or as part of your monthly mortgage payment.
Property of the Estate — Non-exempt property belongs to creditors is divided up according to bankruptcy estate. Estate property is typically sold by the trustee and used to reimburse the appropriate creditors with secured claims.
Public Record Data – This information is restricted to tax liens, lawsuits, and judgments related to a consumer’s debt obligations and is included on his/her credit report.