Oscar Castillo
"Residential" Real Estate


    - Glossary





Maker   the maker of a check is known as the drawer.

Maintenance charges   monthly or annual charges assessed in a condominium, planned united development, or cooperative development to cover operational costs.

Management   refers to the amount of personal or hired time, it takes to run the investment.

Management agreement   a contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager's authority.

Manufactured home   a structure (transportable in one or more sections) when in the traveling mode, is eight body feet or more in width, or 40 body feet or more in length, or, when erected on site, is 320 or more square feet. It is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained therein.

Margin   in an adjustable-rate loan, the amount added to the index rate that represents the lender's cost of doing business (including costs, profits and risk of loss of the loan). Generally the margin stays constant during the life of the loan.

Market analysis   a regional and neighborhood study of economic, demographic and other factors made to determine supply and demand, market trends, and other factors important to leasing and operating a specific property.

Market approach   a method of pricing single-family rental homes and condos using comparable market data. When pricing multiple unit rental properties, the income approach is probably better

Market-data approach    estimating a property's value based on a comparison of the property with similar properties in the same locale that have sold recently. Also known as the direct sales comparison approach. (see appraisal)

Marketable title   good or clear title, reasonably free from the risk of litigation over possible defects.

Market value   the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale. Such such conditions include the assumption that the buyer and seller acted prudently and knowledgeably and that the price is not affected by undue stimulus.

Mastic - (also known as "pool mastic") is a self leveling joint compound (Deck-o-Seal or Sika Flex) that helps prevent water damage.  It is flexible and grout-like in appearance.  It is a necessary step in maintaining your pool and concrete joints.  Pool mastic, caulking or sealant as it is commonly referred to is the "waterproof expansion barrier" between your pool and your deck. It's purpose is to allow movement between your pool and your concrete or paver deck surface without damaging the deck or your coping stones. Pool caulking or mastic also waterproofs to stop water from penetrating underneath your "coping stones" then down behind your pool tiles. If you allow water to penetrate through this opening or expansion joint the tiles will lose their bond to the pool wall, loosen, and eventually fall off.  You may be having this effect already or not, but the pool mastic serves a very important duty and should be kept in proper condition.  Mastic can also be used to seal expansion joints in the concrete decking, patios, driveways, sidewalks or any concrete joint.  Also know that unsightly plastic dividers around a pool can be removed and apply mastic in its place.

Material fact   any fact that is relevant to a person making a decision. Agents must also disclose to buyers material facts about the condition of the property, such as known structural defects, building code violations and hidden dangerous conditions. Brokers are often placed in a no-win situation of trying to evaluate whether a certain fact is material enough that it needs to be disclosed to a prospective buyer, such as the fact that a murder or the fact that the neighbors throw loud parties. It is sometimes difficult to distinguish between "fact" and "opinion."  Even though brokers act in good faith, they may still be liable for failure to exercise reasonable care or competence in ascertaining and communicating pertinent facts that the broker knew or "should have known." Many state laws provide that the fact that an occupant of property has AIDS is not deemed to be a material fact. A broker who fails to disclose this fact is not liable for concealment of a material fact.

Mechanics' lien   a statutory lien in favor of a building contractor (includes architects and designers in some states) to secure payment for materials supplied and services rendered in the improvement, repair or maintenance of real property. The claim of the Mechanics Lien starts when the work has started/commenced or when goods or services  are delivered.

Mello-Roos Bonds   based on passage of the Mello-Roos Community Facilities Act of 1982, certain housing tracts may be within what are called "Community Facilities Districts (CFD)" where special taxes are assessed to finance designated public facilities and/or services. Mello-Roos liens are usually municipal bonds issued to fund streets, sewers and other infrastructure needs before a housing development is built. These special assessments are paid by the seller and will be assumed by the buyer.

MERS - is a privately held company. Founded in 1995 by Fannie Mae, Freddie Mac, and big banks, MERS essentially replaced the nation's centuries-old "handwritten system" of land records. A process created by the mortgage banking industry that simplifies the mortgage process by using electronic commerce. The Mortgage Electronic Registration System (MERS) tracks ownership and servicing rights that are originated in the United States.  It is used by the real estate finance industry residential and commercial mortgage loan trading. No matter how many times the loans are transferred, MERS remains the owner of record, despite not having invested a dollar in a single loan.

Metes-and-bounds description   a legal description of a parcel of land that begins at a well marked point and follows the boundaries, using directions and distances around the tract, back to the place of beginning

Military ordinance location   certain military bases contain live ammunition for various reasons. A seller of residential property located within one mile of such a hazard must give the buyer written notice as soon as practicable before transfer of title.

Mills Act - The Mills Act is the single most important economic incentive program in California for the "restoration and preservation" of qualified historic buildings & homes by private property owners. The Mills Act Program is administered and implemented by local governments. Mills Act contracts are between the property owner and the local government granting the tax abatement. Each local government and/or municipality establishes their own criteria and determines how many contracts they will allow in their jurisdiction. For answers to specific questions such as local eligibility criteria, application procedures, and contract terms, contact your local city or county official for your jurisdiction.

Mills Act  (ESCONDIDO) - Mills Act and owner obligations as defined by the City of Escondido. If you plan on buying or if you are a current owner within the Old Escondido Historic District, you as the owner need to know what is acceptable and what are your obligations in regards to any exterior home improvement. Make sure you contact the Escondido City’s Planning Division before you start any exterior home improvement project. If you are the owner and/or current buyer of a older home that you feel should be considered and registered/designated as a "Historic home", then you need to apply to the City of Escondido's (Mills Act) Historic Property Preservation in order for it to be considered as such. The Historic Preservation Commission develops and implements the City Historic Preservation Program under the direction of the City Council.

Mineral rights   rights to subsurface land and profits. Nornally, when real property is conveyed, it includes everything above and below the surface of the land, except where specified by the grantor. However,  the Federal Deposit Insurance Corp. (FDIC) has launched a new national program to retain mineral rights on lands it has taken back as a result of "foreclosures and bank failures". The Federal Deposit Insurance Corporation (FDIC) recently announced a change in the manner in which it sells real property. As of April 1, 2013, most properties owned by the FDIC will be sold with a reservation of mineral rights retained by FDIC unless the buyer specifically negotiates a higher price for the mineral rights to be included.  If the buyer elects to purchase the mineral rights, mineral contractors will provide a valuation of those rights and the buyer will be responsible for all associated expenses in obtaining the valuation..... In addition, buying the property subject to the FDIC mineral rights reservation may impair the ability to sell or develop the property.  Any buyer who considers such a purchase from the FDIC must analyze both the risk of the FDIC exercising its rights and the chilling effect on future sales and development.

MIP    Acronym for Mortgage Insurance Premium.  Most FHA loans require the borrower to pay  two mortgage insurance premiums:.. one upfront paid at close of escrow and the second is an annual premium  The fee may be collected as a lump sum at loan closing or as a periodic amount included in the monthly payment, or both.

MIP  (UFMIP)   “Up Front mortgage insurance premium”  up from 1% to 1.75% beginning April 01,2012

Misrepresentation   a false statement or concealment of a material fact made with the intention of inducing some action by another party.

Mistake   an error or misunderstanding. A contract is voidable if there is a mistake that is mutual, material, unintentional and free from negligence, such as both parties honestly contracting for a different lot in a subdivision (mistake of fact). Innocent mistakes seldom serve to void a contract. A party cannot claim "mistake" to get out of a contract on the basis that he or she did not read the contract he or she signed and was therefore mistaken as to its material terms; neither ignorance nor poor judgment is a mistake of fact.

Mixed-use developments (MUDs)    MUDs combine office space, stores, theaters and apartment units in a single community. MUDs usually contain and offer laundry facilities, restaurants, food stores, valet shops, beauty parlors, barbershops, swimming pools and other attractive and convenient features.

MLS    stands for multiple listing service. Every home for sale listed by a real estate agent, unless it is specifically exempted from MLS, will be listed in MLS. However, only real estate agents and other professional affiliates can access MLS, but that doesn't mean a home buyer or home seller can't get the same information.  They can get most all the MLS information via other websites but just not directly from the MLS. .Can also be viewed as an online software that contains all the specifics about a home, from the address, age, square footage, number of bedrooms, baths, upgrades and schools districts to types of financing the seller will consider, and more. There is generally at least one to a dozen photographs of the home, plus a link to a virtual tour if one exists.

Mobile-home   prefabricated trailer-type housing units that are semipermanently attached to land, which is either the owner's fee land or a leasehold, such as in a mobile-home park. Mobile homes are usually affixed to a concrete foundation and connected to utilities. Although they may not be as mobile as the word implies, they may be removed from such attachments and hauled to a new location.

Mobile-home loan   a mortgage loan on a large mobile-home, usually drawn for a shorter term than conventional mortgages and usually with much higher loan rates.

Modification   a change to the original terms of the loan. Loan modifications could include lowering the interest rate, extending the term or maturity date of the loan, moving from an adjustable to a fixed-rate loan, deferring some portion of the unpaid principal balance to the end of the loan, and/or forgiving some portion of the unpaid principal balance.

Mold Addendum   a document required on every transaction (with the exclusion of land) for toxic mold/environmental disclosure release, and indemnification. The Addendum must be signed and initialed by the buyer of the property. No revisions or changes can be made to the Addendum

Molds    are simple, microscopic organisms that are present virtually everywhere both indoors and outdoors. Molds are fungi and are needed to break down dead material and recycle nutrients in the environment. For molds to grow and reproduce they need only a food source such as leaves, wood, paper, or dirt - and moisture.

Money Market Accounts   these are like a savings account usually offered through Securities Brokerage houses and some banks, which usually pay higher interest rates, have checkwriting features, along with a variety of other features. In most cases, a great place to put funds from the closing of a real estate transaction. Check with a Mutual Funds Registered Representative for details.

Month-to-month tenancy   a periodic tenancy under which the tenant rents for one month at a time. In the absence of a rental agreement (oral or written) a tenancy is generally considered to be month to month. This usually happens when a lease has expired and the tenant decides to still occupy, thus the tenancy becomes a month-to-month.

Mortar   Any of various bonding materials used in masonry, surfacing, and plastering.  Realistically it is a "plastic" building material which is comprised of as a mixture of cement, lime, or gypsum plaster with sand and water that hardens once it is dry.

Mortgage   a legal document used to secure the performance of an obligation. In the real estate transaction, the buyer seeks to borrow money to pay the seller the difference between the down payment and the purchase price. When the lender (mortgagee) lends the money, the buyer/borrower (mortgagor) is required to sign a promissory note for the amount borrowed and to execute a mortgage to secure the debt. The purpose of the mortgage note is to create a personal liability for payment on the part of the mortgagor; the purpose of the mortgage is to create a lien on the mortgaged property as security for the debt.

Mortgage-backed security (MBS)  A type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must also be grouped in one of the top two ratings as determined by a accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.  This type of security is also commonly used to redirect the interest and principal payments from the pool of mortgages to shareholders. These payments can be further broken down into different classes of securities, depending on the riskiness in regards to what type of mortgage it is.

Mortgage banker   a person, corporation or firm (not otherwise in banking and finance) that normally provides its own funds for mortgage financing as opposed to savings and loan associations or commercial banks that use other people's money - namely that of their depositors--to originate mortgage loans. Although some mortgage bankers do supply permanent long-term financing, the majority specialize in supplying short-term and interim financing, either through their own resources or by borrowing from commercial sources.

Mortgage broker/company   a person or firm that acts as an intermediary between borrower and lender; one who, for compensation or gain, negotiates, sells or arranges loans and sometimes continues to service the loans; also called a loan broker. Loans originated by the mortgage broker are closed in the lender's name and are usually serviced by the lender. This is in contrast to mortgage bankers, who not only close loans in their own names but continue to service them as well. Many mortgage brokers are also licensed as real estate brokers and provide these financing services as supplements to their realty services.

Mortgage Commitment   a written commitment from the lending institution to provide a mortgage (Home Loan) to the buyer for a specific property.

Mortgage Contingency   a contingency in the offer to purchase and/or the purchase and sale agreement which protects the buyers in case they are unable to get a mortgage commitment by a date specified in the contract. In this case, the buyers would be able to cancel the contract to purchase and receive back all deposits made.

Mortgage Debt Relief Act of 2007   (Mortgage Debt forgiveness Act) allows borrowers to be excluded from paying taxes on forgiven debt from a foreclosure, short sale, or modification.  Homeowners don’t want to risk facing a tax burden if the act is not extended beyond December 31,2012 ..... Good News and update:   Congress has extended this Act through 12/31/13.  Here is an important item to know - Even if Congress allowed the Mortgage Debt Forgiveness to expire, not all borrowers who lose their home to foreclosure, sell their home in a short sale or have their principal reduced will take a tax hit.  If the debt is discharged in a Bankruptcy, no tax is due. And anyone who is insolvent — meaning they have more debt than assets — at the time the debt was forgiven would not have to pay the tax. And in some states like California, certain borrowers are protected against paying the tax because of the way the state treats Foreclosures.

Mortgage Electronic Registration System (MERS) - is a privately held company. Founded in 1995 by Fannie Mae, Freddie Mac, and big banks, MERS essentially replaced the nation's centuries-old "handwritten system" of land records. A process created by the mortgage banking industry that simplifies the mortgage process by using electronic commerce. The Mortgage Electronic Registration System (MERS) tracks ownership and servicing rights that are originated in the United States.  It is used by the real estate finance industry residential and commercial mortgage loan trading. No matter how many times the loans are transferred, MERS remains the owner of record, despite not having invested a dollar in a single loan.

Mortgage insurance   (MI)   a policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. Mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price. The cost of mortgage insurance is usually added to the monthly payment. Mortgage insurance is maintained on conventional loans until the outstanding amount of the loan is less than 80% of the value of the house or for a set period (seven years is common). Mortgage insurance also is available through a government agency, such as the Federal Housing Administration (FHA) or through companies (private mortgage insurance or PMI). A short sale will often require the mortgage insurer’s approval.   In a nutshell, it is an insurance policy that will pay off the mortgage balance in the event of death, and in some policies and/or a disability. Mortgage insurance premiums are paid with the regular monthly mortgage payment.

Mortgage insurance premiums (MIP)   most FHA loans require the borrower to pay  two mortgage insurance premiums:.. one upfront paid at close of escrow and the second is an annual premium  The fee may be collected as a lump sum at loan closing or as a periodic amount included in the monthly payment, or both.

Mortgage interest deduction  (MID)  lets homeowners reduce their annual "taxable income" by the amount of interest paid on their mortgage.

Mortgage lien   a lien or charge on the property of a mortgagor that secures the underlying debt obligations.

Mortgage loan processors  - are highly involved with their clients, working to complete mortgage loan applications. This involves collecting of employment and financial data, including an applicant's assets, current debts and monthly expenses. Mortgage loan processors must verify all data given to them by clients. Mortgage loan processors may work under a number of different job titles including "loan officer", loan interviewer and loan clerk. They work with individual applicants to complete loan applications. It is the mortgage loan processor's job to ensure that the application is complete and accurate, a task that can require time and attention to detail.

Mortgage Revenue Bonds    issued by communities as a means of providing lower cost mortgage funds to certain qualified borrowers.

Mortgagee   in a mortgage transaction, the party who receives and holds a mortgage as security for a debt, the lender. A lender or creditor who holds a mortgage as security for payment of an obligation.

Mortgagee's title insurance   an insurance policy protecting the lender for the amount of the loan in the event of a future title dispute.

Mortgagor   in a mortgage transaction, the buyer/borrower is the mortgagor. The mortgagor is required to sign a promissory note for the amount borrowed and to execute a mortgage to secure the debt. The mortgage note creates a personal liability for payment on the part of the mortgagor.

Multiple Listing   a listing taken by a member of an organization of brokers, whereby all members have an opportunity to find a buyer.

Multiple-listing clause   a provision in an exclusive listing for the authority and obligation on the part of the listing broker to distribute the listing to other brokers in the multiple-listing organization.

Multiple-listing service (MLS)   a marketing organization composed of member brokers who agree to share their listing agreements with one another in the hope of procuring ready, willing and able buyers for their properties more quickly than they could on their own. Most multiple-listing services accept exclusive-right-to-sell or exclusive agency listings from their member brokers.

Municipal bonds   bonds issued to finance public improvements such as parks, schools and urban renewal projects.

Must-buy buyers   buyers looking for properties that meet specific needs.

Must-sell sellers    highly motivated or desperate seller.

Mutual consent   a meeting of the minds; a mutual assent (expression of approval) of the parties to the formation of the contract.

Mutual mortgage insurance   insurance premiums and other specified FHA revenues are paid into one of four FHA funds. Losses due to foreclosure are met from these funds.



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