Glossary - U

Umbrella mortgage
In real estate, the term umbrella mortgage, also called as wraparound, refers to a special arrangement in which a number of existing mortgages on one real estate asset are paid down making use of a new mortgage on the same property. In this instance, the lender pays different credit amounts to the borrower on the basis of each realty security, but the mortgagor will be making only one payment to the mortgagee. Although an umbrella mortgage covers a number of securities, is still considered one mortgage against which one repayment is made by the borrower. In the case of a umbrella mortgage, the lender or mortgage is accountable for reduction of payments to the borrower.
In general, the expression underage denotes an amount, such as cash or merchandise possessed really, that falls short of the listed amount in registers or accounting books. In terms of real estate, underage refers to the charges collected by a loan officer from a borrower that is deficient of the objective fees stipulated either by a lender or mortgage broker who hires the loan officer.
Underpayment penalty
The term underpayment penalty refers to a tax fine imposed on a person for failing to pay a sufficient amount of his or her entire projected tax and withholding. In the event an individual has made an underpayment of the projected tax, he or she may be required to pay a fine. In order to evade underpayment penalties, an individual is able to pay a proportion of the previous year's tax outstanding or the present year's anticipated tax outstanding. It is possible to pay the taxes in the manner of combined projected and withholding tax imbursements.
An underwriter is an intermediary between an individual who issues a security and the investing people, generally an investment bank. In other words, an underwriter refers to an individual who offers indemnity to another person or takes specific hazards. An underwriter works in tandem with the issuing organization to decide on the offering price of the securities, purchases them from the issuer and then sells them to investors through his or her distribution channels. In the context of mortgage money lending, an underwriter is a person who grants or rejects a loan on the basis of the property as well as the applicant.
In general, the word underwriting means to endorse or agree to a decision. The term also denotes the method used by an underwriter to bring a new security issue to the investors in an offering. In such instances, the underwriter pledges a specific price for a fixed number of securities to the party issuing the security in return for a charge. Hence, the issuer will make safe that they will raise a specific least amount from the issue, whereas the underwriter covers the risk of the issue.
In the context of real estate, underwriting denotes the scrutiny of the hazards concerned for a lender in granting a mortgage loan and whether or not he or she should accept the risk. In this case, underwriting includes property assessment as delineated in the evaluation report. It also involves an assessment of the borrower or mortgagor's capability as well as compliance to pay back the loan.
Undivided interest
In matters pertaining to real estate, the term undivided interest refers to claim of ownership of commonly-owned property, such as in a corporation, tenancy-in-common or partnership, where every co-owner enjoys unlimited claim to all real estate assets or the entire property, but none of them have any exclusive claim to any individual asset or part of a property. In other words, the term denotes the privilege to own and use real estate asset in union with other co-owners where each possessor has the right to possess the whole property undivided. In the instance of an income property, the earnings obtained from the asset is divided according to the proportion of the entire interest held by each owner.
Unearned income
Commonly, unearned income is defined as any income earned from investments and other sources, but not from any employment - salary, hourly pay or perquisites. In fact, such earnings are made from dividends, interests or capital gain. Often unearned income also denotes any earning obtained before any merchandise is sold or service is provided. It is categorized as a current liability on balance sheet till it is identified as an earned income during an accounting period.
Unsecured claim
In real estate matters, unsecured claims denote a right or debit that the lender has not surety of being paid back as no security is needed from the borrower while securing the loan. In such cases, the loan is given merely on the basis of the evaluation of lender's future aptitude to reimburse the claim or arrears. In fact, majority of the consumer loans are unsecured. It may be noted that an unsecured claim is permitted to get precedence over other claims in a bankruptcy case.
Unsecured debt
An unsecured debt denotes a loan that is not covered by any collateral or security, but backed by the reputation and creditworthiness of the issuer. Such debts are regarded as unsecure as there is no guarantee of reimbursement. Majority of the credit cards are unsecured debt and this is one of the reasons why the interest rates on charges on credit cards are higher than any other type of lending, including mortgages where the real estate asset is used as collateral.
Unsecured loan
An unsecured loan is one that is given to a borrower without any security or collateral, such as a property. An unsecured loan is simply is issued and backed by the borrower's creditworthiness, credit history, financial status or general reputation. Such loans are also referred to as character loan, signature loan or good faith loan.
Upfront Mortgage Broker (UMB)
In the context of real estate, an upfront mortgage broker (UMB) refers to a mortgage broker who charges a fixed fee for the services provided by him or her. In such cases, the fee is fixed in writing at the very beginning of the business and the mortgage broker functions as the borrower's agent or representative in getting the best deal available. The main difference between upfront mortgage brokers and the traditional brokers is that the former disclose the cost of their service to their clients in advance and this cost does not change at any later period, while the latter often have their own secret considerations. In addition, upfront mortgage brokers show their clients the actual wholesale prices.
Plainly speaking, upgrades denote the move to exchange something for another or better quality. Usually, when an individual purchases a newly constructed building, such as a house or condominium, the builder offers the buyer the choice to get better quality floor coverings, windows, cabinets, fixtures and so on at an extra cost. In the event of the buyer deciding against the builder's offer, he or she may just choose the standard selection available.
In matters pertaining to real estate, upzoning refers to a change in the zoning classification of a real estate asset from one of an inferior utility to one that is of better use, such as a change from residential to an enhanced commercial utility. Generally, this is viewed as a contentious practice as upzoning gives rise to more population density and overcrowding in the neighborhood and this affects the existing population or occupants in that particular area. On the other hand, the term upzoning is also applicable when changing zoning to restrict development and population density in a particular region.
Usurious rate
In the lending business, usurious rate refers to an interest fee that is exorbitant and very much above the authorized rates. For instance, occasionally indefinable property taxes are related to earnings from usurious rates.
In the lending business, usury denotes the practice of lending money at an excessive or illegally high rate of interest. It may be noted that though laws pertaining to usury have been revoked and substituted by the interest rated fixed by the competitive authorities in the open market, majority of the jurisdiction courts may restrict the interest charged by a lender taking legal action for recovering the amount lent or may even penalize the interest in cases of unfair business.
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