An increase in principal balance that occurs when monthly payments are not large enough to pay all interest due on a loan, usually caused when payment caps prevent sufficient payment increases. Unpaid deferred interest is added to the loan balance, causing the borrower to owe more than the loan’s original amount.
Net effective income
Gross income minus estimated federal income tax.
A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.
A conventional loan that can not be sold to Fannie and Freddie Mac. Often, these loans are larger than the conforming loan amount.
Debt, such as taxes, that cannot be forgiven in a bankruptcy liquidation.
Legal document stating the terms of a debt and a promise to repay it.
Notice of default
Written notice to a borrower that a default has occurred and that legal action may be taken.