A

ACCRUED INTEREST - The interest earned for the period of time that has elapsed since interest was last paid.

ACH - Automatic Clearing House - Term used when electronic transfers, payments or deposits are made to financial institutions or companies other than Parsons Federal Credit Union.

ADMINISTRATOR - A person appointed by a probate court to administer the estate of a person who died intestate (without a will).

ADJUSTABLE RATE MORTGAGE LOAN (ARM) - A type of alternative mortgage instrument in which the interest rate adjusts periodically according to a predetermined index and margin. This adjustment results in the mortgage payment either increasing or decreasing. In some situations, the adjustment is made to the outstanding principal.

ALTA - American Land Title Association. A national association of title insurance companies, abstractors, and attorneys, specializing in real property law. The association speaks for the title insurance and abstracting industry and establishes standard procedures and title policy forms.

AMORTIZATION - Repayment of a debt in equal installments of principal and interest, rather then interest-only payments.

ANNUAL PERCENTAGE RATE (APR) - A rate which represents the relationship of the total finance charge (interest, loan fees, points) to the amount of the loan.

APPRAISAL - A report by a qualified person siting forth an opinion or estimate of value. Also, the process by which this estimate is obtained.

APPRAISER - A person qualified by education, training, and experience to estimate the value of real and personal property.

ATM - Automated Teller Machine

B

BANKRUPT - A person, firm, or corporation who, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.

BASIS POINTS - A basis point is 1/100 or 1% interest; thus, 50 basis points equal .50%.

BENEFICIARY - The person designated to receive the income from a trust, estate, or trust deed.

BILL OF SALE - A document in writing that transfers title to personal property.

BINDER, INSURANCE - A written evidence of temporary hazard or title coverage that only runs for a limited time and must be replaced by a permanent policy.

BORROWER - One who receives funds with the expressed or implied intention of repaying the loan in full.

C

CAPS - A limitation on the interest rate increase of either the periodic or lifetime rate or both for an adjustable rate mortgage.

CLOSING COSTS - Expenses incidental to a sale or real estate, such as loan fees, title fees, appraisal fees, and others.

COLLATERAL - Any property pledges as security for a debt.

COMMUNITY PROPERTY - In some states (California, Nevada, Louisiana, Wisconsin, Texas, Arizona, Washington, Idaho and New Mexico) a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired in such manner as to legally be considered as separate property of either spouse.

COSIGNER - A person who signs a legal instrument and therefore becomes individually and jointly liable for repayment or performance of an obligation.

CREDIT REPORT - A report to a prospective lender on the credit standing of prospective borrower or tenant. Used to help determine credit worthiness.

D

DEED - A written legal document which purports to transfer ownership of land from one party to another.

DEED IN LIEU - A deed given by a mortgagor to a mortgagee to satisfy a debt and avoid foreclosure.

DEED IN RECONVEYANCE - The transfer of legal title from the trustee to the trustor (the borrower) after the trust deed debt is paid in full.

DEED OF TRUST - In some states it is the document used in place of a mortgage; a type of security instrument conveying title in trust to a third party covering a particular piece of property; used to secure the payment of a note; a conveyance of the title land to a trustee as collateral security for the payment of a debt with the condition that the trustee shall reconvey the title upon the payment of the debt, and with the power of the trustee to sell the land and pay the debt in the event of a default on the part of the debtor.

E

ECOA - Equal Credit Opportunity Act. ECOA is federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income fro public assistance programs. Also known as Regulation "B".

EQUITY - In real estate, equity is the difference between fair market value and current indebtedness, usually referring to the owner's interest.

ESCROW - A transaction in which a third party, acting as the agent for the buyer, and the seller, carries out instructions of both and assumes the responsibilities of handling all the paperwork and disbursement of funds.

EXECUTOR - A person named in a will to administer an estate. The court will appoint an administrator if no executor is named. Executrix is the feminine form.

F

FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) - A private corporation authorized by Congress to provide secondary mortgage market support for conventional mortgages. It also sells participation certificates secured by pools of conventional mortgage loans, their principal and interest guaranteed by the federal government through the FHLBB. Popularly known as Freddie Mac.

FEDERAL HOUSING ADMINISTRATION (FHA) - A division of HUD. Its main activity is the insuring of residential mortgage loans made by private lenders. It sets standards for construction and underwriting. FHA does not lend money, or plan or construct housing.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) - A privately owned corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by FHA or guaranteed by VA, as well as conventional home mortgage. Popularly known as Fannie Mae.

FEE SIMPLE - An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited; commonly, the greatest interest a person can have in real estate.

FIRST MORTGAGE - A mortgage having priority over all other voluntary liens against certain property.

FORECLOSURE - An authorized procedure taken by a mortgagee or lender under the terms of a mortgage or deed of trust for the propose of having the property sold and the proceeds applied to the payment of a defaulted debt.

G

GARNISHMENT - A proceeding that applies specified monies, wages, or property to a debt or creditor by proper statutory process against a debtor.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) - On Sept.1, 1968, Congress enacted legislation to partition GNMA into two continuing corporate entities. GNMA has assumed responsibility for the special assistance loan program and the management and liquidation function of the older FNMA. Also, GNMA administers the mortgage-backed securities program which channels new sources of funds into residential financing through the sale of privately issued securities carrying a GNMA guaranty. Popularly known as Ginnie Mae.

H

HOMEOWNERS POLICY - A multiple-peril policy commonly called a "package policy." It is available to owners of private dwellings and covers the dwelling and contents in the case of fire or wind damage, theft, liability for property damage, and personal liability.

HUD - The Department of Housing and Urban Development, established by the Housing and Urban Development Act of 1965 to supersede the Housing and Home Finance Agency. It is responsible for the implementation and administration of government housing and urban development programs. The broad range of programs includes community planning and development, housing production and mortgage credit (FHA), equal opportunity in housing, and research and technology.

I

INDEX - An economic measurement that is used to measure periodic interest rate adjustments for an adjustable rate mortgage.

INDIVIDUAL RETIREMENT ACCOUNT (IRA) - A tax-deferred, trusteed account into which certain eligible individuals contribute funds for retirement up to annual contribution limits. Approved vehicles for IRAs include Share Accounts and certificates at financial institutions, insurance annuities, mutual fund offerings and certain self-managed securities accounts at stock brokerage firms.

INSURANCE - A contract for indemnification against loss.

INTEREST - Consideration in the form of money paid for the use of money, usually expressed as an annual percentage. Also, a right, share, or title in property.

INTEREST RATE - The percentage of an amount of money which is paid for its use for a specified time. Usually expressed as an annual percentage.

INTESTATE - To die leaving no valid will.

J

JOINT TENANCY - An equal undivided ownership of property by two or more persons, whose survivors take the interest upon the death of any one of them.

L

LATE CHARGE - An additional charge a borrower is required to pay as penalty for failure to pay a regular installment when due.

LEGAL DESCRIPTION - A property description recognized by law which is sufficient to locate and identify the property without oral testimony.

LIEN - A legal hold or claim of one person on the property of another as security for a debt or charge. The right given by law to satisfy a debt.

LINE OF CREDIT - An agreement by a financial institution to extend credit up to a certain amount for a certain time to a specific borrower.

LIVING TRUST - A property interest held by one person or persons as trustees for the beneficiaries until the death or disability of the trust creator, the property in the trust is treated normally. If the trustor becomes incompetent, the named alternate trustor (such as spouse or adult child) take over management of the trust assets. When the trustor dies, the assets are distributed according to the trust's terms, avoiding probate.

LOAN - A sum of money loaned at interest to be repaid.

M

MARGIN -The number of basis points a lender adds to an index to determine the interest rate of an adjustable rate mortgage.

MORTGAGE - A conveyance of an interest in real property given as security for the payment of a debt.

MORTGAGEE - A person or firm to whom property is conveyed as security for a loan made by such a person or firm (a creditor).

MORTGAGOR - One who borrows money, giving a mortgage or deed of trust on real property as security (a debtor).

N

NATIONAL ASSOCIATION OF FEDERAL CREDIT UNIONS (NAFCU) - A trade association for federally chartered credit unions.

NATIONAL CREDIT UNION ASSOCIATION (NCUA) - Regulator and examiner for federal credit unions.

NATIONAL CREDIT UNION SHARE INSURANCE FUND (NCUSIF) - The main source of share insurance for credit unions, administered by NCUA. Coverage protects member's savings from loss if the credit union becomes insolvent. It protects a member's savings up to $100,000.

NET INCOME - The difference between effective gross income and the expenses including taxes and insurance. The term is qualified as income before depreciation and debt service.

NSF - Non-sufficient funds.

P

POINT - An amount equal to one percent of the principal amount of an investment or note. Loan discount points are a one-time charge assessed at closing by the lender to increase the yield on the mortgage loan to a competitive position with other types of investments.

PRINCIPAL - Amount of debt, not including interest. The face value of a note, mortgage, etc.

PRIVATE MORTGAGE INSURANCE (PMI) - Insurance written by a private company protecting the mortgage lender against loss occasioned by a mortgage default.

Q

QUITCLAIM DEED - A deed that transfers (with no warranty) only such interest, title, or right a grantor may have at the time the conveyance is executed.

R

RESPA - Real Estate Settlement Procedures Act.

S

SHARE DRAFT ACCOUNT - A demand deposit account.

SIMPLE INTEREST - A method of calculating interest in which the amount of the interest is computed on the outstanding principal balance of a loan for each given period.

SOLE OWNERSHIP - Title to property held by a single person also called ownership in severalty. When the sole owner dies, any property held this way is subject to probate court costs and delays.

T

TENANCY IN COMMON - In law, the type of tenancy or estate created when real or personal property is granted, devised, or bequeathed to two or more persons, in the absence of expressed words creating a joint tenancy. There is no right of survivorship.

TITLE INSURANCE POLICY - A contract by which the insurer, usually a title insurance company, agrees to pay the insured a specified amount for any loss caused by defects of tile to teal estate, wherein the insured has an interest as purchaser, mortgagee, or otherwise.

TRUST DEED - The instrument given by a borrower (trustor) to a trustee vesting title to a property in the trustee as security for the borrower's fulfillment of an obligation.

TRUSTEE - One who holds title to a real property under the terms of a deed of trust.

	This credit union is federally insured by the National Credit Union Administration
	Excess Insurance Coverage Equal Housing Lender