Commercial Banks
The largest financial intermediaries directly involved in the financing of real estate. Commercial banks act as lenders for a multitude of loans. While they occasionally provide financing for permanent residential purchases, commercial banks primary real estate activity involves short term loans, particularly construction loans ( typically 6 months to 3 years ) and to a lesser extent home improvement loans. Most large commercial banks have a real estate loan department; their involvement in real estate is through this department. Some of the largest commercial banks are also directly involved in real estate financing through their trust departments, mortgage banking operations, and real estate investment trusts (REITs). All commercial banks are either federally (nationally) chartered or state chartered. National banks are chartered and supervised by the U.S. Comptroller of the Currency. The word "national" appears in their title, and they are members of the Federal Reserve System (FRS). However, only 1/3 of all commercial banks are members of the FRS, even though the member banks control the majority of total bank assets. Nationally chartered banks are also required to maintain membership in the Federal Deposit Insurance Corporation (FDIC). Federally chartered banks can make real estate residential loans up to 90% of the appraised value with a maturity of not more than 30 years. However, any government insured or guaranteed loans are exempt from these limitations. State chartered banks are regulated by various agencies in their particular state, and membership in both the FDRC and the FRS is optional. Banks not members of the FDIC are normally required to maintain membership in a state insurance corporation.
Popular Real Estate Terms
Mortgage placed on a property after a previous mortgage. It can be a second, third, etc. mortgage. A junior mortgage is subordinate to the terms of a previous mortgage. Junior mortgages ...
Amount required to payoff the full balance of the mortgage today. The amount equals the principal balance plus any prepayment penalty. ...
Allocating common or central costs to each unit of property. An example is assigning to each owner of an apartment based on the number of rooms occupied the cost incurred by the landlord to ...
A backfill defines the act of replacing a vacant lot. People use a backfill as a replacement for an unoccupied position. Backfill in construction and archaeology! The most common ...
Claim by a real estate broker that his or her actions were the principal cause of the completion of a property sale between two parties. A successful procuring cause claim would entitle a ...
Natural resource, such as oil, coal, and timber, having a limited useful life and subject to depletion. Such assets decrease in worth primarily due to the extraction of the valued commodity ...
The rate at which a market can absorb additional units of supply without causing market saturation and severe price distortions. For example, during a recessionary period, many homeowners ...
A broad definition of termite clause is a provision in a contract for the sale of real property that gives the purchaser the right, at his or her expense, to have the property inspected for ...
The definition of a rambler house is quite simple in nowadays circumstances as any one-story home or ranch is also referred to as a rambler. The typical rambler house, however, has some ...
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