Adjuster

Adjuster

An insurance claims agent. A claims adjuster is charged with evaluating an insurance claim to determine the insurance company's liability under the terms of an owner's policy. There are different types of adjusters. They may represent the insurance company, they may be hired by the claimant (public adjusters) or they may be independent. The two types of claims most frequently investigated are property claims and liability claims.

Quitclaim Deed

Quitclaim Deed

A deed releasing a person's interest in a property without stating the nature of the person's interest or rights, and with no warranties of ownership. While a quitclaim deed neither warrants nor professes that the grantor's claim is valid, it does prevent the grantor from later claiming they have an interest in the property.

Cloud On Title

Cloud On Title

Any document, claim, unreleased lien or encumbrance that might invalidate or impair the title to real property or make the title doubtful. Clouds on title are usually discovered during a title search. Clouds on title are resolved through initiating a quitclaim deed or a commencement of action to quiet title. A title search and title insurance are generally required by lenders as protection from any third-party claims, or clouds on title, to property that is used as collateral. Title searches and title insurance are required in the mortgage origination process.

Deed Of Release

Deed Of Release

A legal document that removes a previous claim or lien on an asset. A deed of release is usually issued once a mortgage or other type of debt, previously secured against the asset, has been paid in full. After the deed of release is written, the asset is owned free and clear by the owner, and any previous claims against the asset that the lender may have had are dissolved. AFor example, when most individuals purchase a home, they do so with the help of a mortgage offered by a financial institution. When a home buyer obtains a mortgage to finance the purchase of real estate, the bank providing the funds for the mortgage doesn't just lend them the money in good faith - the bank takes a legal claim against the house as collateral. Once the home owner pays off all the money the bank lent them for the mortgage, the bank would write a deed of release, ending their claim against the house.

Due-On-Sale Clause

Due-On-Sale Clause

A provision in a mortgage contract that requires that the mortgage be repaid in full upon a sale or conveyance of interest in the property that secures the mortgage. Mortgages with a due-on-sale clause are not assumable. A due-on-sale clause helps to protect the lender, or the ultimate holder of the mortgage, from the risk that the mortgage may be transferred to the new owner of a property when the rate on the mortgage is below current market interest rates. This would extend the life of the mortgage; the holders of a below-market-interest-rate mortgage - or a mortgage-backed security, asset-backed security, or collateralized debt obligation backed by a below-market-interest-rate mortgage - generally favor the early retirement of that mortgage.

ETF Wrap

ETF Wrap

A type of special investment portfolio where an investor, with or without the aid of an investment advisor, invests solely in exchange traded funds (ETFs). The composition of each ETF class is initially based on a preselected asset allocation model, and will periodically need to be rebalanced in response to changes in market values.

Wrap-Around Loan

Wrap-Around Loan

A loan that is most commonly used with property with an outstanding loan. The seller lends the buyer the difference between the existing loan and the purchase price. The buyer's periodic loan payments are sufficient to repay the existing loan as well as the seller's loan to the buyer. When the loan involves mortgage loans, it is also referred to as a wrap-around mortgage.

Wrap Account

Wrap Account

An account in which a brokerage manages an investor's portfolio for a flat quarterly or annual fee. This fee covers all administrative, commission, and management expenses. The advantage of a wrap is that it protects you from overtrading. This is when your broker trades your account excessively to make more commission. Furthermore, because the broker gets a flat annual fee, then he or she only trades when it is advantageous to you. A traditional wrap typically requires an initial investment of at least $50,000 to $100,000.

Card Not Present (CNP)

Card Not Present (CNP)

That class of payment card transactions where the physical card's magnetic stripe (or chip) is not read at the point of acceptance. Mail Order / Telephone Order (MO/TO) and eCommerce merchants are typically CNP merchants.

Wrap Fee

Wrap Fee

A comprehensive charge levied by an investment manager or investment advisor to a client for providing a bundle of services, such as investment advice, investment research and brokerage services. Wrap fees allow an investment advisor to charge one straightforward fee to their clients, simplifying the process for both the advisor and the customer.

Gross Margin Return On Investment - GMROI

Gross Margin Return On Investment - GMROI

An inventory profitability evaluation ratio that analyzes a firm's ability to turn inventory into cash above the cost of the inventory. It is calculated by dividing the gross margin by the average inventory cost and is used often in the retail industry. This is a useful measure as it helps the investor, or management, see the average amount that the inventory returns above its cost. A ratio higher than 1 means the firm is selling the merchandise for more than what it costs the firm to acquire it. The opposite is true for a ratio below 1.

Check Guarantee

Check Guarantee

A service that guarantees the checkwriter's payment and assumes the collections risk of check payments for a merchant.

Gross Invested Capital - ROGIC

Gross Invested Capital - ROGIC

The amount that a company earns on the total investment it has made in its business. Total gross invested capital is equal to all of the shareholders' equity (both common and preferred shares) plus the total gross debt that the company has accumulated before making any payments on the debt.

Return On New Invested Capital - RONIC

Return On New Invested Capital - RONIC

A calculation used, either by a firm or investors, to determine the amount of return that a firm could earn on additional contributed capital. The calculation measures the return generated when a company converts its capital into capital expenditures, which generate revenues from core operations. A higher RONIC equates to a relatively efficient firm.

Weighted Average Cost Of Capital - WACC

Weighted Average Cost Of Capital - WACC

A calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All capital sources - common stock, preferred stock, bonds and any other long-term debt - are included in a WACC calculation. All else help equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC notes a decrease in valuation and a higher risk.

Daylight Overdraft

Daylight Overdraft

A negative position in an institution's Federal Reserve account.

Weighted Average Cost of Equity - WACE

Weighted Average Cost of Equity - WACE

A way to calculate the cost of a company's equity that gives different weight to different aspects of the equities. Instead of lumping retained earnings, common stock, and preferred stock together, WACE provides a more accurate idea of a companies total cost of equity. Determining an accurate cost of equity for a firm is integral for the firm to be able to calculate its cost of capital. In turn, an accurate measure of the cost of capital is essential when a firm is trying to decide if a future project will be profitable or not.

No-Cost Mortgage

No-Cost Mortgage

A mortgage refinancing situation in which the lender pays the borrower's loan settlement costs and then extends a new mortgage loan. A lender does this in exchange for charging the borrower a higher interest rate. When the lender then sells this mortgage into the secondary mortgage market, the price it will receive for the mortgage is based on the interest rate on the mortgage. A mortgage broker would do the same based on the size of the rebate they might receive from a lender.

Piggyback Mortgage

Piggyback Mortgage

A type of mortgage where a second mortgage or home equity loan is taken out by a borrower at the same time the first mortgage is started or refinanced. Piggyback mortgages are frequently used to lower the loan-to-value ratio (LTV) of a first position mortgage to under 80%, thereby eliminating the need for private mortgage insurance (PMI). "80-10-10" is a common form of piggyback mortgage: where 80% of the property is covered by the first mortgage, 10% of the property's value is derived from the second loan and the final 10% is covered by the borrower's down payment.

Hybrid Settlement System

Hybrid Settlement System

A combination of a real-time gross settlement system and a multilateral net settlement system. Some deferred net settlement systems have incorporated mechanisms for making irrevocable and unconditional funds transfers during the day rather than only at the end of the day. In some cases this has resulted in hybrid systems which combine features, including risk control measures, of gross and net settlement systems.

Private Mortgage Insurance - PMI

Private Mortgage Insurance - PMI

A policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults. Most lenders require PMI for loans with loan-to-value (LTV) percentages in excess of 80%. This allows the borrower to make a smaller down payment of as low as 3%, instead of about 20%, and usually requires an initial premium payment and possibly an additional monthly fee depending on the loan's structure.

Rate-Improvement Mortgage

Rate-Improvement Mortgage

A type of fixed-rate mortgage, which contains a clause that entitles the borrower to reduce the fixed-interest-rate charge on the mortgage once, and early in the mortgage. The option will be exercised when interest rates fall lower than the borrowers initial mortgage rate. There is typically a fee associated with exercising this option, and the initial mortgage might have a higher-than market-interest rate and/or high costs. However, the rate reduction option could save the borrower the costs of refinancing which might be more than the cost of using their rate improvement option.

Fixed-Rate Mortgage

Fixed-Rate Mortgage

A mortgage that has a fixed interest rate for the entire term of the loan. The distinguishing factor of a fixed-rate mortgage is that the interest rate over every time period of the mortgage is known at the time the mortgage is originated. The benefit of a fixed-rate mortgage is that the homeowner will not have to contend with varying loan payment amounts that fluctuate with interest rate movements.

Junior Mortgage

Junior Mortgage

A mortgage which is subordinate to a first or prior (senior) mortgage. Frequently called a second mortgage, this could also be a third or fourth mortgage, etc. In the case of foreclosure, the senior mortgage will be paid down first. Common uses of junior mortgages include piggy-back mortgages (80-10-10 mortgages) and home equity loans. Piggy-back mortgages provide a way for borrowers with less than a 20% down payment to avoid costly private mortgage insurance. Home equity loans are frequently used to extract equity for a home to pay down other debts or make additional purchases. Every borrowing scenario should be carefully and thoroughly analyzed.

MasterCard SecureCode

MasterCard SecureCode

MasterCard payer authentication technology that runs on a Web-browser and verifies that a MasterCard cardholder is authorized to use the card. SecureCode qualifies the transaction for a guaranteed payment that protects against cardholder unauthorized chargebacks. PPI BuyerAuth is an optional product feature that implements MasterCard SecureCode, as well as Verified by Visa and JCB J/Secure.

Junior Security

Junior Security

A security that ranks lower than other securities in regards to the owner's claims on assets and income in the event of the issuer becoming insolvent. When bankruptcy occurs, holders of both preferred shares and debt securities have first claim on the remaining assets. Only after preferred shareholders have been paid back, remaining assets (if any) are divided among common shareholders.

Senior Issue

Senior Issue

An issue of bonds, preferred stock or other securities that represents the first priority lien on the issuer's assets or earnings. Senior issues have a higher priority claim on a firm's dividends, interest payments, or in case of a bankruptcy, the value salvaged from a liquidation.

Tap Issue

Tap Issue

A procedure that allows borrowers to sell bonds or other short-term debt instruments from past issues. The bonds are issued at their original face value, maturity and coupon rate, but sold at the current market price.

Original Face

Original Face

The par value of a mortgage-backed security at the time it is issued. Unlike most other types of bonds, mortgage-backed securities return both principal and interest to the holder in periodic payments (usually monthly). Over time, the outstanding principal balance of a mortgage-backed security will be reduced. The original face remains an important and distinguishing piece of information associated with a mortgage-backed security.

Memo Posting

Memo Posting

A notation posted to an account which indicates a credit has been received, but has not yet been posted to the account.

Current Face

Current Face

The current par value of a mortgage-backed security (MBS). Current face is determined by multiplying the current pool factor by the mortgage-backed security's original face value. A mortgage-backed security's current face represents the outstanding principal balance (or its outstanding face value) of the mortgage's underlying the security. If the MBS pays interest and principal on payment dates, the current face will decline after each payment is made.

MBS Pool Number

MBS Pool Number

A number or alphanumeric character assigned to a mortgage-backed security (MBS) by the issuer as an identifier of that security. Pool numbers are typically six digits in length. Different issuers such as Freddie Mac , Fannie Mae and Ginnie Mae use different alpha characters as the initial digit in their pool numbers to identify the pool as their issue. RFor example, a Freddie Mac 30-year pool number might be D54321 while a Fannie Mae 30-year pool number might be F54321.