debt
An amount owed to another.
deed
The legal document conveying title to a property.
deed-in-lieu
Short for "deed in lieu of foreclosure," this
conveys title to the lender when the borrower is in default
and wants to avoid foreclosure. The lender may or may
not cease foreclosure activities if a borrower asks to
provide a deed-in-lieu. Regardless of whether the lender
accepts the deed-in-lieu, the avoidance and non-repayment
of debt will most likely show on a credit history. What
a deed-in-lieu may prevent is having the documents preparatory
to a foreclosure being recorded and become a matter of
public record.
deed of trust
Some states, like California, do not record mortgages.
Instead, they record a deed of trust which is essentially
the same thing.
default
Failure to make the mortgage payment within a specified
period of time. For first mortgages or first trust deeds,
if a payment has still not been made within 30 days of
the due date, the loan is considered to be in default.
delinquency
Failure to make mortgage payments when mortgage payments
are due. For most mortgages, payments are due on the first
day of the month. Even though they may not charge a "late
fee" for a number of days, the payment is still considered
to be late and the loan delinquent. When a loan payment
is more than 30 days late, most lenders report the late
payment to one or more credit bureaus.
deposit
A sum of money given in advance of a larger amount being
expected in the future. Often called in real estate as
an "earnest money deposit."
depreciation
A decline in the value of property; the opposite of appreciation.
Depreciation is also an accounting term which shows the
declining monetary value of an asset and is used as an
expense to reduce taxable income. Since this is not a
true expense where money is actually paid, lenders will
add back depreciation expense for self-employed borrowers
and count it as income.
discount points
In the mortgage industry, this term is usually used in
only in reference to government loans, meaning FHA and
VA loans. Discount points refer to any "points"
paid in addition to the one percent loan origination fee.
A "point" is one percent of the loan amount.
down payment
The part of the purchase price of a property that the
buyer pays in cash and does not finance with a mortgage.
due-on-sale provision
A provision in a mortgage that allows the lender to demand
repayment in full if the borrower sells the property that
serves as security for the mortgage.
