Earnest Money: Deposit made by a buyer toward the down payment as evidence of good faith when the purchase agreement is signed.
ECOA: See Equal Credit Opportunity Act
Effective Interest Rate: The cost of a mortgage expressed as a yearly rate, usually higher than the interest rate on the mortgage since this figure factors in the up-front costs of acquiring the loan.
Eminent Domain: The right of a government to take private property for public use upon payment of fair compensation to the owner. Eminent domain is the basis for condemnation proceedings.
Encumbrance: A legal right or interest in a property that affects title and may lessen the property value.
Equal Credit Opportunity Act (ECOA): Federal law requiring creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equity: The difference between the current market value of a property and the outstanding mortgage balance.
Equity Loan: loan based on the borrower's equity in his or her home.
Errors and Omissions: Legal document whereas you agree to cooperate with clerical error corrections in the future with respect to your loan documents.
Escrow – 1: Neutral third party appointed to act as a custodian for documents and funds during the transfer of property from seller to buyer or in the course of refinancing property.
Escrow – 2: Account held by lender containing funds collected in conjunction with monthly mortgage payments. The funds in the escrow account are used by the lender to pay annual expenses such as taxes and insurance on behalf of the borrower.
Escrow Account: Account held by lender containing funds collected in conjunction with monthly mortgage payments. Also known as impounds, the funds in this account are held in trust by the lender on behalf of the borrower, and are used to pay expenses such as property taxes and homeowner’s insurance.
Escrow Disbursements: The use of escrow funds to pay real estate taxes, homeowners insurance, mortgage insurance, and other property expenses as they become due.
Escrow Fee: This is the fee paid to the escrow agent, title agent, or attorney to execute the closing of your loan. This party completes tasks including coordinating document signing, obtaining payoff information for existing liens, obtain evidence of homeowners insurance, coordinate with the title insurer to obtain clear title, and disburse loan proceeds.
Escrow Officer: See Closing Agent
Escrow Payment: The portion of a borrower's monthly payment that is held by the loan servicer to pay for taxes, hazard homeowners insurance, mortgage insurance, lease payments, and other items as they become due. Known as "impounds" or "reserves" in some states
Estimated Settlement (or Closing) Statement: A document provided by the closing agent a few days before closing, detailing all costs and indicating the final sum the buyer will be required to bring to the closing.
Expense-to-Income Ratio: Also known as Back-End Ratio and Debt-to-Income Ratio. The figure derived by dividing a borrower’s monthly financial obligations by his/her gross monthly income.
