The Internet Real Estate Glossary

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Management Agreement - a contract between the owner of property and someone who agrees to manage it. 

Margin - (See Market index) The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.  A constant (fixed) amount over an index that determines a lender's yield on an adjustable rate loan. The interest rate of an adjustable rate loan is determined by adding a margin to an index. The size of the margin is typically a function of the index used and the credit worthiness of the borrower. Typical margins on a Prime Rate based loan would be 0.0 to 5.0 so that if the Prime Rate were 8.25% and the margin were 2.0 (typical for an "average" borrower), the interest rate would be 10.25% (8.25 + 2.0). (See definition of "index" above).

Market Data Approach - A means of estimating value by comparing similar properties. Used when there is an active market and where comparables can be identified. Also called comparable sales approach.

Market index - Common indices in the US include the Prime Rate, the LIBOR, and the Treasury Index (“T-Bill”). Other indexes like COFI, COSI, and MTA, are also available but are less popular.

Market value - The highest price a buyer would pay and the lowest price a seller would accept on a property. Market value is not an objective measure of value; it is subject to market forces.

Market Value - The highest price that a buyer, willing but not compelled, would pay, and the lowest price a seller, willing but not compelled to sell, would accept.

Marketability - The condition of title that's clear enough that a buyer wouldn't object to it.

Marketable Title - a title free from defect. Title that is free of liens, clouds and other legal defects that may be sold without encumbrance.

Master Plan - A program for the future development of a community which serves as the guideline for capital expenditures.

Maturity - The date and life of a loan when all payments have been made.

Maximum Financing - A loan amount within 5 percent of the highest loan-to-value ratio allowed for a property.

MBS - Mortgage Backed Security.

Mechanic’s lien - An unpaid contractor or subcontractor can file this claim against property to recover an amount due for work performed and materials furnished in construction, repair or improvements to land. A non-voluntary, statutory lien recorded against a specific property in favor of contractors/materialmen for unpaid improvements made to the property. A mechanic's lien priority is established when the improvements were begun (visible to the eye test) rather than when it was recorded. The lien must be coupled with a court action to be perfected.

Meeting of Creditors - Often referred to as the “341 meeting” that is conducted under Bankruptcy Code Section 341. In this meeting, the trustee and creditors question the debtor under oath about assets, liabilities, intentions regarding secured property and related bankruptcy issues.

Memorandum of Agreement - A writing meant to memorialize the essentials of a transaction or act as an actual contract.

Merged Credit Report - A report that draws information from the Big Three credit-reporting companies - Equifax, Experian, and Trans Union Corp.

Metes and Bounds - A term used in describing land by setting forth all the boundary lines together with their uncompensated improvement.

MIC - Mortgage Insurance Certificate issued by HUD to evidence its insurance of the loan.

MTDANET - Freddie Mac’s Mortgage Information Direct Access Network.

Military Indulgence - The protection enacted and provided by the Servicemembers Civil Relief Act (formerly Soldiers and Sailors Civil Relief Act) to a mortgagor whose ability to make payment is impaired by his service in the armed services.

Mill - A mill is equal to one-tenth of one cent and is used to state the property tax rate. (.001)

Minimum Payment - the minimum amount that must be paid monthly on an account. On the HELOC product, the minimum payment is interest only during the draw period. On the Fixed Rate Second products, the minimum payment is principal and interest.

Misrepresentation - Making false statements in the course of a business transaction.

Modification - The act of changing the terms of a note or security instrument. Common forms of modification are the reduction of the interest rate, extension of the term of the loan or allowing a transfer of ownership where a due-on-sale clause exists. A mutual agreement between the parties to a deed of trust and promissory note to change one or more of the terms in the promissory note.

Month-to-Month Tenancy - A lease which has a term of one month but renewable for successive months at the option of both parties.

Monthly Mortgage Insurance (MI) Payment - portion of monthly payment that covers the cost of Private Mortgage Insurance.

Monthly Principal & Interest (P&I) Payment - portion of monthly payment that covers the principal and interest due on the loan.

Monthly Taxes & Insurance (T&I) Payment - portion of monthly payment that funds the escrow or impound account for taxes and insurance.

Monument - Physical evidence of a point- of- beginning established by surveyors for use in locating parcels of land.

Moratorium - A period during which a borrower is granted the right to delay fulfillment of an obligation.

Mornet - Fannie Mae’s telecommunications network.

Mortgage - A written instrument that creates a lien upon real estate as security for the payment of a specified debt. A written pledge of property that is put up as security for the repayment of a loan. The lender is the mortgagee and the property owner is the mortgagor.

Mortgage backed security - A security instrument backed by mortgages. The security is generally insured by Ginnie Mae, Fannie Mae or Freddie Mac. The investor is guaranteed a monthly receipt of principal and interest whether or not the borrower makes the mortgage payment. Payments not collected from the borrower must be “passed through” by the servicer of the loan.

Mortgage Banker - A financial middleman who, in addition to bringing the borrower and the lender together, makes loans, packages them, and sells the packages to both primary and secondary investors. Also services loans.

Mortgage Broker - An independent broker who arranges loan transactions between lenders and borrowers by facilitating the application and approval process and by securing favorable terms. Mortgage brokers are paid a fee by the borrower or the lender when a loan closes.

Mortgage Balance - see Principal Balance.

Mortgage insurance - Insurance coverage designed to fully or partially insure and thereby protect the lender by lowering their risk exposure on conventional loans. Normally required on loans above an 80% loan-to value (LTV) ratio. Protects the lender against borrower default and property value declines. (See PMI private mortgage insurance). The borrower generally pays mortgage insurance premiums. (See directly below).

Mortgage insurance premium (MIP) - The payments made for mortgage insurance coverage.

Mortgage Lien - The right of a mortgage lender to force a sale of the mortgaged property if the borrower fails to repay the loan as agreed.

Mortgage Loan - A loan which is secured by a mortgage lien filed against real property.

Mortgage-Interest Deduction - The tax write-off that the Internal Revenue Service allows most owners to claim for annual interest payments made on real estate loans.

Mortgage note - A written agreement to repay a loan. The agreement is secured by a mortgage on the property, serves as proof of debt and states the manner in which it shall be paid. The note states the actual amount of the debt that the mortgage secures and renders the borrower personally responsible for repayment.

Mortgage pool - A fund of mortgage loans that is used as an investment.

Mortgage Reduction Certificate - An instrument executed by the mortgagee, setting forth the status of and the balance due on the mortgage as of the date of the execution of the instrument.

Mortgagee - The entity to whom the mortgage is given; i.e., the lender.

Mortgage satisfaction (also called release) - When a note is paid in full under a regular mortgage, the lender cancels the note and returns it to the borrower together with a mortgage satisfaction or release. The mortgage satisfaction or release records that the mortgage no longer encumbers the property.

Mortgagor - The borrower. (Mortgagee - The lender.)

Motion - An application made to the court for the purpose of obtaining a ruling or order in favor of the applicant.

Motion for Relief - Term typically used in reference to the lender’s efforts to obtain permission from the bankruptcy court to proceed with the foreclosure or collection of the loan despite the existence of an automatic stay.

Motion to Dismiss - A pleading requesting that the case be dismissed prior to a trial or other adjudication of the merits of the case.

Multi-Dwelling Property - A property that contains individual units for several households but carries only one mortgage.

Multiple Listing - Marketing service in which many brokers pool all of their listings and establish procedures for sharing commissions.

Multiple Listing Service - The combined property listings of local real estate agent/members that are pooled together in an MLS book and computer network for the widest marketing exposure to their membership at large.

Mutual Assent - An offer and acceptance which together form the terms of a contract.

This real estate glossary is courtesy of the Internet Real Estate Center - Join the Online Real Estate Revolution.