Glossary of Debt Related Terms

Made Land

Artificially formed land, either by filling or dredging.

Market Value

The highest price a willing buyer would pay and a willing seller accept, both being fully informed, and the property exposed for a reasonable period of time. The market value may be different from the price a property can actually be sold for at a given time (market price),

Market Value Approach

Appraising the value of a property by comparing the price of similar properties (comparables) recently sold. The degree of simiality of the properties and circumstances of the sale are the important characteristics to consider,

Marketable Title

Title which can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.

Maturity

(1) Termination period of a note. For example: A 30 year mortgage has maturity of 30 years. (2) In sales law, the date a note becomes due.

Mechanic's Lien

A lien created by statute for the purpose ofsecuring priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.

Merger Of Title

A lesser interest in real property being merged (absorbed) into a greater interest. For example: A lessee purchases the property being leased. The interest as a lessee is merged into the interest as an owner, thus ending the leasehold interest.

Metes and Bounds

A form of land description in which boundaries are described by courses, directions, distances and monuments.

Mile

A linear measurement equal to 5280 feet on land and 6076 feet across water (nautical mile).

Money Market Mutual

Funds which invest in the "Money Market," a variety of interest bearing securities such as treasury bills and bank certificates of deposit. None is invested directly into real property or real property securities.

Month To Month Tenancy

A tenancy where no written lease is involved, rent being paid monthly. Some obligations as to notice of moving or eviction may exist by statute.

Mortgage

(1) To hypothecate as security, real property for the payment of a debt. The borrower (mortgagor) retains possession and use of the property. (2) The instrument by which real estate is hypothecated as security for the repayment of a loan.

Mortgage Banker

A company providing mortgage financing with its own funds rather than simply bringing together lender and borrower, as does a mortgage broker. Although the mortgage banker used its own funds, these funds are generally borrowed and the financing is either short term or, it long term, the mortgages are sold to investors (many times insurance companies) within a short time.

Mortgage Bonds

Bonds issued by corporations, which offer first mortgages on real property of the corporation as security for the payment of the bonds.

Mortgage Broker

One who, for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security. Also called a loan broker.

Mortgage Company

A company authorized to service real estate loans, charging a fee for this service.

Mortgage Insurance

Insurance written by a private mortgage insurance company (referred to as an 'PIC') protecting the mortgage lender against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sale price. The Federal Government writes this form of insurance through the FHA and the VA.

Mortgage Life Insurance

A term life insurance policy for theamount of the declining balance of a loan secured by a mortgage or deed of trust. The beneficiary under the policy is the mortgagee. In the event of death (some policies also cover disability) of the insured (mortgagor), the mortgage is paid in full.

Mortgage Servicing

Controlling the necessary duties of a mortgagee, such as collecting payments, releasing the lien upon payment in full, foreclosing if in default, and making sure the taxes are paid, insurance is in force, etc. Servicing may be done by the lender or a company acting for the lender, for a servicing fee.

Mortgagee

The party lending the money and receiving the mortgage. Some states treat the mortgagee as the "legal" owner, entitled to rents from the property. Other states treat the mortgagee as a secured creditor, the mortgagor being the owner. The latter is the more modern and accepted view.

Mutual Savings Bank

An institution owned by its depositors, as evidenced by certificates of deposit rather than stock. These institutions are active in long term real estate financing, as opposed to commercial banks, which concentrates more on short term loans.