Earnest Money

80/10/10, 80/15/5, and 80/20/0 loan plans
Combination first mortgages equating to 80% of sale price or value coupled with second mortgages for 10%, 15%, or 20%. The concept is behind this is to negate the need for mortgage insurance as required on first mortgages in excess of 80% of value.

Equal Credit Opportunity Act (ECOA)

In connection with a home, the difference between the fair market value of the home and current indebtedness or the balance of outstanding mortgage loans. Also referred to as the owner’s interest, the value an owner has amassed in the real estate that is over and above the obligation against the property.

An agreement whereby money or valuables are placed with a third party for safe keeping pending the performance of a promise to act by one of the parties to the agreement. Home mortgage transactions commonly include an escrow agreement with the homebuyer adding a specified amount for taxes and hazard insurance to the regular monthly mortgage payment. The money is deposited into an escrow account from which the lender pays the taxes and insurance when they become due. Also, earnest deposits held pending loan closing.

Escrow Abuse
Inappropriately using escrow accounts as a practice to generate more income from hapless borrowers.