| P & L
|
An abbreviation for profit and loss statement. See PROFIT AND LOSS
STATEMENT.
|
| PAR |
The principal amount of a mortgage with no premium or discount.
|
| PARTNERSHIP |
An agreement between 2 or more individuals or entities to go into
business or invest together. Either partner may bind the other, within
the scope of the partnership. Each partner is liable for all the
partnership’s debts.
|
| Party Wall |
Wall built on a line between two adjoining properties and
used by both owners.
|
| Payment Shock
|
Happens at the first adjustment of an ARM when the
monthly mortgage payments rise so high that the borrower may not be able
to afford the payments the loan will require in the future.
|
| PAY STUB
|
The portion of the paycheck the employee retains for his/her records.
The pay stub verifies pay-period and year-to-date gross and net
earnings.
|
| PAYMENT CHANGE DATE |
On an adjustable rate mortgage, this is the date the new mortgage
payment is effective after an interest rate change. It is usually the
1st of the month following the interest rate change date.
|
| PAYMENT SCHEDULE |
This schedule outlines the number of payments due, the amount of each
payment and the date payments are due.
|
| PENSION AWARD LETTER
|
Documentation specifying the frequency and amount of pension payments an
individual is eligible to receive.
|
| PERIODIC ADJUSTMENT CAP
|
This cap limits how much the interest rate can change in the future on
an adjustable-rate mortgage.
|
| Permanent Loan Commencement Date
|
The start date of the permanent phase
of an OTC loan. This date is defined in the construction loan documents
executed at the initial closing. It is the date of the Note and the Deed
Of Trust/Mortgage.
|
| Permits |
Ordered by the borrower(s) and/or the builder/contractor,
these represent permission and agreement from local authorities and
municipalities that the proposed project can be constructed on the
assigned lot and will meet all required specifications and rules that
apply to the area.
|
| Personal Liability
|
Borrower's assets are pledged or subject to claim
in addition to a primary security.
|
| Physical Depreciation (Deterioration)
|
Loss of value by real property
resulting from wear and tear, disintegration, or action of the elements
that can be either curable or incurable.
|
| PIGGYBACK LOAN
|
See SECONDARY FINANCING.
|
| PITI |
Principal, interest, taxes, and insurance.
|
| PITI Ratio |
The principal, interest, tax, and insurance payment to
income ratio, used in mortgage lending decisions.
|
| PLAINTIFF |
An individual or entity who files a legal action against another.
|
| Planned Unit Development (PUD)
|
(1) Comprehensive development plan for a large land area. It usually
includes residences, roads, schools, recreational facilities,
commercial, office, and industrial area.
(2) Subdivision having lots or area owned in common and reserved for the
use of some or all of the owners of the separately owned lots.
|
| Plans and Specifications
|
Architectural and engineering drawings and
specifications for construction of a building or project. They include a
description of materials to be used and the manner in which they are to
be applied.
|
| Plat Map
|
Map representing a piece of land subdivided into lots with streets,
boundaries, easements, and dimensions shown thereon.
A map dividing a parcel of land into lots, as in a subdivision. For
example, a Title/Commitment report and an appraisal report will provide
a plat map of the subject property, which shows the location of the
property within the subdivision.
|
| Point |
Amount equal to one (1) 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.
|
| POINT OF REFERENCE |
A starting point used to put a customer’s canceled checks or mortgage
statements in chronological order by establishing either the date and
amount of the last mortgage payment made or the date and amount of the
next mortgage payment due.
|
| Pool Insurance
|
Second layer of mortgage insurance coverage required
when the Lender is selling a pool (group) of jumbo mortgage loans to an
investor. Pool insurance is required on Jumbo, and non-GSE, mortgage
loans and is paid for by the Lender.
|
| Power of Attorney
|
Legal document authorizing one person to act on behalf of another.
|
| PRELIMINARY TITLE REPORT (PRELIM)
|
A report showing all current claims against a property before a sale or
loan transaction and identifying those items that must be removed to
obtain a 1st lien position. After completion of the transaction, a title
insurance policy is issued. Same as TITLE COMMITMENT.
|
| Preliminary Title Search |
Title search by a title company prior to issuance of a title binder or
commitment to insure.
|
| Premises |
Defined portion of land and the improvements thereon as usually
described in a deed, deed of trust, or mortgage.
|
| PREPAID FINANCE CHARGE
|
The finance charges charged at closing exclusive of interest. Examples
include points, processing and application fees, tax certification, etc.
|
| Prepaid Interest |
Mortgage interest that is paid in advance of when it is due in order to
obtain tax advantages.
|
| PREPAID INTEREST CHARGE |
The portion of interest, added on at loan closing, which covers the time
period between funding and the beginning of the first 30-day period
covered by the first payment. For example, if the loan closed on 2/15,
the first payment due on 4/1 retroactively pays interest from 3/1 to
4/1. The prepaid interest would cover the period from 2/15 to 2/28.
|
| Prepayment Penalty
|
Charge a mortgagor may be required to pay during the early years of a
mortgage if he/she pays it in full or pays large sums to reduce the
unpaid balance.
|
| Present Value
|
Today's worth of moneys to be received in future.
|
| PRIMARY CUSTOMER
|
The primary borrower on the loan.
|
| PRIMARY RESIDENCE |
The property in which the customer resides the majority of the time.
|
| PRIME RATE INDEX
|
A rate index which is the prevailing rate that banks charge to lend
money to corporations.
|
| PRINCIPAL |
The amount of debt on a mortgage, not including interest. The face value
of a note, mortgage, etc.
|
| PRINCIPAL AND INTEREST (P&I) |
This refers to the principal and interest portions of a monthly mortgage
payment.
|
| PRINCIPAL, INTEREST, TAXES & INSURANCE (PITI) |
The total of the monthly mortgage payment due, which includes all
principal, interest, taxes and insurance.
|
| Private Mortgage Insurance (PMI)
|
Insurance written by a private company protecting the mortgage lender
against loss occasioned by a mortgage default.
|
| Pro Forma Statement
|
Latin meaning "according to form." A projection of anticipated income,
expenses, and cash flow from an investment enterprise.
|
| Promissory Note
|
A written promise by the borrower to pay a debt owed, within a specified
time, to the holder of the note under conditions mutually agreed upon.
|
| Proof of Loss |
Affidavit or claim form signed by the insured and
submitted to the insurer as a claim for an insured loss sustained.
|
| Proposed Construction |
Property to be constructed. The construction is
subject to compliance inspections during construction or is warranted as
so constructed.
|
| Pro Rate |
To allocate proportionate shares of income (such as rents) or
an obligation (such as taxes and insurance premiums), paid or due,
between seller and buyer at closing.
|
| PROFIT AND LOSS STATEMENT (P & L) |
A statement documenting business revenues and expenses for a specified
time period to establish whether a business gained a profit or suffered
a loss.
|
| PROPERTY TAXES
|
Generally, a tax levied on both real and personal property. The amount
of the tax is dependent on the value of the property.
|
| PUD |
Planned Unit Development. A real estate project in which each unit
owner has title to a residential lot and building and a non-exclusive
easement on the common areas of the project. The owner may have an
exclusive easement over some parts of the common areas (for example, a
parking space).
|
| Punch List |
List of discrepancies in building plans or other
construction flaws written by the original architect during his final
inspection of the structure.
|
| Purchase Agreement
|
Written proposal by a buyer to purchase real estate
that becomes binding upon the acceptance of the seller.
|
| Purchase-Money Mortgage |
Mortgage given to the seller as all or part of
the purchase consideration in exchange for property, most commonly used
in land purchases, with prior rights over any subsequent lien, unless
made subject to subordination.
|
| Purchase Money Transaction |
| Acquisition of property through the payment
of money or its equivalent. |
