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Mortgage Dictionary

"M"

Marketable Title


A title that may not be completely clear but has only minor objections that a well-informed and prudent buyer of real estate would accept.

Market Data Approach


One type of appraisal. See direct comparisonandmethods of appraisal.

Market Value Appraiser (MVA)


A designation awarded to practicing realtors who meet specific experience and education requirements by the Canadian Real Estate Association, the MVA demonstrates an acute sense of local markets and values that enables them to provide realistic residential appraisals to lenders.

Marketing


The process of planning, promoting, and distributing ideas to encourage consumers to purchase a product and/or service

Marketing Environment


The marketing environment includes economic, demographic, sociological, competitive, political and regulatory forces in the target market.

Marketing Strategy


An organized, detailed plan to meet a specific set of goals. It involves a combination of product concepts, a pricing scheme, promotion ideas, and a distribution plan.

Maturity


The end of the mortgage's term.

Maturity Date


The final day of the term of the mortgage, on which the balance of the mortgage owing becomes due.

Maximum Loan Amount


The maximum dollar that a lender is willing to fund. It is expressed as a percentage of the value of the property to be purchased when using the loan to value ratio.

Metes and Bounds


A system of land description whereby all boundary lines are set out using terminating points and angles. Metes refers to a limit or limiting mark and bounds refers to the boundary lines.

Methods of Appraisal


There are three methods of appraisal:

  1. Direct Comparison
    Also known as market data approach. Direct comparison generates a property value based on the current selling prices of similar properties.
  2. Cost Approach
    An estimation of land value and the cost of replacing the building less the depreciation of the property in question.
  3. Income Method
    This method is used for valuating income-producing properties such as apartment complexes, plazas and commercial units.

Migration


The movement of people to or from one country or area to another.

Mill Rate


A rate which, when multiplied by each one thousand dollars of property assessment, gives the annual real estate taxes.

Misrepresentation


A statement of false facts, generally occurring during negotiations prior to contract creation. Misrepresentation typically induces the other party to enter the agreement.

Mistake


An error in the terms of a contract or agreement. There are three types of mistake:

  1. Common Mistake
    Both parties make the same mistake in a contract.
  2. Mutual Mistake
    Each party makes a different mistake on the same contract.
  3. Unilateral Mistake
    One party is mistaken while the other party is aware of it and makes no attempts to rectify it.

Moratorium (Mortgage)


A period during which a borrower is granted the right to delay fulfillment of an obligation.

Mortgage


A legal method by which a borrower can pledge property to a lender as security for a debt. In Quebec, this is referred to as a hypothec.

Mortgage Agent


An individual authorized to deal in mortgages on behalf of a mortgage broker.

Mortgage Averaging


A method of determining a weighted mortgage rate. Mortgage averaging is used when calculating an "average" rate for a first and second mortgage, each of which has a different mortgage rate.

Mortgage Banker


One who originates mortgages with the intent to sell them to permanent investors. The mortgage banker does so under the understanding that it will service these loans for the investor.

Mortgage-Backed Securities (MBS)


An MBS represents an undivided interest in a pool of insured residential first mortgages. As mortgages, these financial instruments are secured by the value of the underlying real estate. NHA MBS carry the CMHC Timely Payment Guarantee and represent an obligation of the Government of Canada.

Mortgage Bond


In recent years, there has been an increased activity in mortgage bonds, mainly for larger loans. When a very large loan is required, the number of potential lenders is limited. A loan in the category of $50,000,000 for instance, is usually made by the mortgage bond method that is really a device for dividing up the loan. A bond could be issued for an amount as low as $100,000 and sold to various pension funds through investment dealers on a public issue, or more commonly sold as a private placement issue.

Mortgage Broker


An individual authorized to deal in mortgage and lend money using real estate as a security.

Mortgage Brokers Act


A piece of legislation that regulates the activities of mortgage brokers across Canada. In Ontario, for example, the Mortgage Brokers Act regulates the activities of mortgage brokers in that province.

Mortgage Consultant


Seemortgage agent.

Mortgage Creditor Insurance


This type of insurance protects the borrower, by relieving the borrower of the need to make mortgage payments should unforeseen circumstances make it impossible for them to do so (e.g. serious illness or death).

Mortgage Default Insurance


A type of insurance which protects the mortgage lender in case the borrower defaults on the mortgage payments.

Mortgage Fraud


Any material misstatement, misrepresentation or omission relied upon by a lender or insurer to underwrite, approve, fund or insure a mortgage loan.

Mortgage Impairment Insurance


A master insurance policy carried by mortgage lenders that provides them with insurance proceeds in the event of an otherwise uninsured loss of a property securing their debt. Some policies also insure losses resulting from the borrower's failure to pay real estate taxes.

Mortgage Originator


A mortgage professional engaged in the acceptance, completion and/or submission of the mortgage loan applications to an underwriting lender.

Mortgage Portfolio


The aggregate of mortgage loans held by an investor.

Mortgage Refinancing


The replacement of current mortgage financing with new financing, usually to take advantage of different interest rate or financial conditions or the existing equity in the property.

Mortgage Representative


Employees of a financial institution who originate mortgages. Unlike originators operating outside of lending institutions and are regulated provincially, institutional originators, if working for federally incorporated lenders, are governed under the Office of the Superintendant of Financial Institutions (OSFI).

Mortgage Servicing


The process of managing the administrative duties resulting from the mortgage contract.

Mortgage Specialist


See mortgage agent.

Mortgage Term


The length of time the interest rate is guaranteed for a mortgage. Mortgage terms normally range from 6 months to 5 years or more, after which time the borrower can either repay the balance of the principal owing or re-negotiate the mortgage at current rates.

Mortgaged Out


The situation existing when the total mortgage debt equals or exceeds the market value or cost of the property.

Mortgagee


The lender or creditor.

Mortgagor


The borrower or debtor.

MorWEB


The electronic mortgage application system available through Marlborough Stirling.

Movable Property


The term used for personal property (as opposed to real property) in civil law.

Municipal Property Assessment Corporation (MPAC)


MPAC is responsible for administering a consistent, Ontario-wide property valuation to property owners, municipalities, and the Province of Ontario. It operates using an automated valuation model (AVM).

Mutual Mistake


Each party makes a different mistake on the same contract.

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