Home Loan Glossary – E

Earnest Money (Earnest Money Deposit): Earnest money refers to the deposit made by potential buyers to show that they are serious about buying the house. The prospective buyer may lose this money if he or she withdraws the offer to purchase. However, if the offer is accepted and the sale is closed, this money will contribute toward the purchase of the home.
Easement: Easement refers to an individual's right to use land or property that is owned by another. Easement entitles the holder to use the property for a specific purpose. For example, easements could be granted to public utility companies who may need to run lines under your private property, or to neighbours who may need to make use of a common driveway in order to enter their homes.
Effective Age: This is the estimated age of a home or building, according to an authorized appraisal agent who assesses its physical condition. The real age of a building may differ from its effective age (it may be newer or older), but its effective age depends on how well the building has been maintained.
Eminent Domain: Eminent domain is the government's right to take over a private property for public use, provided that the private owner is paid fair compensation. Eminent domain also forms the basis for condemnation proceedings.
Employer-assisted Housing: Employer-assisted housing is a special Fannie Mae housing initiative. It provides many ways for employers to work with local lenders in order to develop strategies to help their employees purchase their own homes.
Encroachment: An encroachment is a structural improvement to a property that extends into or trespasses on someone else's property.
Encumbrance: Encumbrance refers to anything that limits or clouds the private ownership of residential or commercial properties, such as home loans, liens, leases, deeds or restrictions. An encumbrance may be discovered during a title search and must be cleared to complete a property sale. See Cloud on Title.
Endorser: An endorser is a person who signs and authorizes a promissory note or check over to another party. This differs from being a co-signer.
Equal Credit Opportunity Act (ECOA): This is a federal law stating that creditors should make credit available to all people equally. This means that a person's race, color, religion, sex, age, marital status or the fact that they receive income from public assistance programs may not have any negative effect on their application for credit.
Equity: Equity is a homeowner's financial investment in his or her property. Simply put, equity is the difference between the market value of a property (what it can be sold for) and the amount still owed on the home loan, and/or the liens against it.
Escrow: Escrow is a written agreement put in the care of a third party who ensures that certain conditions are fulfilled before the agreement is put into effect. Funds "in escrow" are funds in the care of a third party until certain conditions are met. An example of this could be as follows: A borrower deposits money in an escrow account with the lender, to be used to pay insurance premiums or taxes as these expenses arise. It could also be the funds or documents given to an attorney or escrow agent for safe-keeping. These documents or funds are then only released (disbursed) upon the closing of the real estate sale.
Escrow (Or Impound) Account: This is the account in which an escrow agent keeps the borrower's escrow payments, until the time these funds are required. They are then used to pay for property taxes, homeowner's insurance or other property related expenses.
Escrow Analysis: Escrow analysis refers to the periodic examination of escrow accounts to determine whether the monthly deposits are still enough to cover property insurance, taxes and similar expenses.
Escrow Collections: This refers to the money collected by a home loan service agent to be safeguarded in an escrow account (also known as an impound account) and used to pay for property expenses incurred by the borrower. These expenses may include property taxes and homeowner's insurance.
Escrow Disbursements: Escrow disbursements are the payments of escrow funds from escrow accounts. These disbursements are used to pay for real estate taxes, homeowner's insurance premiums or other related expenses as they arise.
Escrow Payment: The escrow payment is the portion of the monthly mortgage payment made by the borrower that is held by the home loan servicer in an escrow account. It is used to pay homeowner's insurance premiums, property taxes and other related expenses. In some states, escrow payments are also known as impounds or reserves.
Estate: "Estate" means all the property that someone owns. Legally, it is the total of all real estate and personal property owned by an individual at the time of his or her death.
Eviction: An eviction is a legal action taken by a landlord to force a tenant to leave a property.
Examination Of Title: The examination of a title is the public record report on the title or legal ownership of a property, or a title abstract.
Exclusive Listing: An exclusive listing is a written contract that gives an authorized real estate agent the exclusive rights to advertise and sell your property within a specific time frame. However, the property owner still has the right to sell the property without a commission being paid.