Second Mortgage
An additional mortgage on property. In case of a default the first mortgage must be paid before the second mortgage. Second loans are more risky for the lender and usually carry a higher interest rate.
Servicer
A business that collects mortgage payments from borrowers and manages the borrower’s escrow accounts.
Servicing
The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.
Settlement
Another name for closing.
Settlement Statement
A document required by the Real Estate Settlement Procedures Act (RESPA). It is an itemized statement of services and charges relating to the closing of a property transfer. The buyer has the right to examine the settlement statement 1 day before the closing. This is called the HUD 1 Settlement Statement.
Short Sale
The process in which a mortgage company works with a delinquent homeowner to sell the house by a real estate agent prior to the foreclosure sale. The sale price is less than what is owed on the mortgage.
Special Forbearance
A loss mitigation option where the lender arranges a revised repayment plan for the borrower that may include a temporary reduction or suspension of monthly loan payments.
Subordinate amount
Total amount of subordinate financing. This is the total amount of financing by a type of debt inferior to this loan, including current balances from home equity loans.
Subordination Agreement
The document used to move a prior or senior mortgage lien into a secondary position, or to prohibit a junior lien from becoming a senior lien when a modification to the existing senior lien is recorded.
Suspense Account
Account used to temporarily store funds until servicer determines proper permanent application. Often used to hold less than full contractual payments or insufficient reinstatement payments received while account is in default.
