negative amort gloss

Mortgage Loan - A loan for which real estate serves as collateral to provide for repayment in case of default.

Mortgage Note - Legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time. The agreement is secured by a mortgage.

Mortgagor - The borrower in a mortgage loan transaction.

Negative Amortization - Increase in principal balance that occurs when monthly payments are not large enough to pay all interest due on a loan, usually caused when payment caps prevent sufficient payment increases. Unpaid deferred interest is added to the loan balance, resulting in the borrower owing more than the original amount of the loan.

Net - After taxes.

Net Effective Income - Gross income minus federal income tax.

Non Assumption Clause - A statement in a mortgage contract forbidding the assumption of the mortgage by another borrower without the prior approval of the lender.

Nondischargeable Debt - Debt, such as taxes, that cannot be forgiven in a bankruptcy liquidation.

Note - Legal document stating the terms of a debt and a promise to repay it.

Notice of Default - Written notice to a borrower that a default has occurred and that legal action may be taken.