Home Loan Glossary – S

Sale-Leaseback: This is an agreement where a property is simultaneously sold, and then leased back to the seller, normally for continued use over a long period of time.
Second Home: A second home is a property occupied by an individual on a temporary basis, compared to a primary residence, where the owner lives most of the time.
Second Mortgage: A second mortgage is a home loan on a property that already has a first mortgage. It has a lien position subordinate to a first mortgage, meaning that in a property sale the first mortgage must be repaid first.
Secondary Mortgage Market: This is the financial market where existing mortgages are bought and sold by investors and lenders. Private investors and government-sponsored groups buy mortgages from lenders, who then use the money to originate more home loans.
Secured Loan: A secured loan is guaranteed by collateral, such as a house, car or other asset. If the borrower defaults on the loan, the collateral will be sold and the proceeds used to pay the debt.
Security: Security is the property pledged as collateral for a home loan. The collateral can be sold to pay for the debt if the borrower defaults.
Security Interest: Security interest is the lender's right to sell the collateral if the borrower defaults.
Seller Take-Back: This is an agreement whereby a property owner organizes the buyer's financing for the property they are selling. See Owner Financing.
Servicer: A servicer is an organization that collects loan payments, issues monthly statements and manages borrowers' tax and insurance escrow accounts after a home loan closes. Loan servicing frequently is sold or transferred from one company to another, and a borrower's loan is often serviced by a different organization than the one that made it.
Servicing: Servicing refers to the collection of loan payments, issuance of monthly statements and management of borrowers' tax and insurance escrow accounts after the closing of a home loan.
Settlement: See Closing.
Settlement Sheet: See HUD-1 settlement statement.
Single Family Residence: This is a residential structure designed to house one family.
Special Deposit Account: This is a bank account used for money acquired through a rehabilitation mortgage. As portions of the rehabilitation work on the property are completed, money is paid from this account to cover the cost.
Start Rate: See Initial Interest Rate.
Subdivision: A subdivision is a housing project created by dividing one piece of land into separate properties. Typically a single builder or developer builds the homes in a subdivision and designs complementary styles. Each property is then sold or leased individually.
Subordinate Financing: This term means any mortgage or other lien that is lower in priority to the first mortgage. In the case of foreclosure, the subordinate home loan or lien can only be paid once the first mortgage has been paid. The most common example is a second mortgage.
Subsidized Second Mortgage: This is an alternative financing option, offered to low- and moderate-income households, known as the Community Seconds^® mortgage. The second mortgage is issued by a county, state, local housing agency or foundation, or a not-for-profit organization, and is used to supplement the first mortgage to purchase a home. The interest rate of the second mortgage is very low (or, in some cases, there is no interest rate) and payment is usually extended. Depending on the length of time the buyer remains in the home, a portion or all of the second mortgage debt may be forgiven.
Survey: A map or drawing showing the exact legal boundaries of a property, as well as the location of home improvements, points of entry and exit, encroachments, easements, and various other physical features.
Sweat Equity: Sweat equity is the owner's physical contribution to the renovation or construction of a property, meaning services or labor performed personally by the owner.