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Glossary E
See Equal Credit Opportunity Act.
Equal Credit Opportunity Act
For short, “ECOA.” A Federal law that prohibits lenders from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, or age. People cannot be discriminated against because all or part of their income is from public assistance.
Equifax
One of the three largest Consumer Credit Reporting Agencies.
Equity
The difference between how much is owed on a property and the current market value. There could be no equity in a property, or there could be negative equity. (This is called being “upside down”…owing more than your home is worth.)
Equity Loan
A home loan based upon the borrower’s equity in his home.
Escrow
See Closing Agent
Escrow Account
Every homeowner has to pay property taxes and insurance, even if their home is free and clear. When you have a loan on the property, the lender will sometimes establish an escrow account for the borrower. The funds paid each month by the borrower for property taxes and insurance are held in this account until they become due. Escrow accounts are interest-bearing accounts. Also called an impound account. I prefer that over escrow account to eliminate the confusion between this account held by the lender and the closing agent, its fees and services.
Escrow Fee
The fee paid to the escrow company (closing agent) for services performed in order to close the loan.
Escrow Officer
See Closing Agent. Also, the person who works for the closing agent.
Escrow Payment
Also called Impounds. That portion of the monthly payment earmarked for property taxes and property insurance. The escrow payment goes into the Escrow account or the Impound Account. See where it gets confusing?
Escrow Balance
The balance in a borrower’s Escrow Account, held by the lender. This usually is shown on the monthly statements.
Estimated Settlement Statement
Also called an Estimated Closing Statement or Estimated HUD-1. An itemized list of all the costs incurred during the transaction. This is prepared by the closing agent and provided to the borrower several days prior to close of escrow. The statement will show how much the borrower will need to bring in or the amount of money the borrower will be receiving at close of escrow.
Expense-To-Income Ratio
See Debt-To-Income Ratio
Experian
One of the three largest Consumer Credit Reporting Agencies.
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Letter A