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Mortgage Dictionary

"S"

Sale Holdback


A percentage of the principal amount of the mortgage held back by the lender until the property in question has been sold to a party satisfactory to the lender and until this party has assumed the responsibility of the mortgage by the appropriate legal document.

Sale Leaseback


A technique in which a seller deeds property to a buyer and the buyer simultaneously leases the property back to the seller, usually on a long-term basis.

Sales


Earnings from day-to-day operations of the business.

Sales Data Report


A quick, no-inspection based appraisal that estimates a value for good quality real estate in low risk neighbourhoods. It is important information but lacks in-depth details that other appraisals provide. The value estimate is based on MLS sales and listing data.

Schedule I, II and III Banks


Schedule I banks, as defined by the Bank Act, have shares that are widely held. Schedule II banks are more closely held. Schedule III banks are foreign bank branches of foreign institutions.

Seasonal Deficiencies


Work necessary to finish a property that cannot be completed immediately because of seasonal or climatic conditions.

Seal


A device used to produce an official stamp as a symbol of authority.

Secondary Financing


Financing real estate with a loan, or loans, subordinate to a first mortgage.

Secondary Mortgage Market


A market where existing mortgages are bought and sold.

Second Mortgage


A mortgage placed on real property which is already encumbered with one mortgage. Determination of first, second, third mortgage, etc. is determined by priority of registration (time and date).

Servient Tenement


The parcel of land over, or through which, an easement runs.

Servitude


The term for easement in Quebec.

Severance (Real Estate)


The subdivision of a parcel of land.

Shareholder


A shareholder, also referred to as a stockholder, is someone who legally owns one or more shares of stock in a company. The shareholders are the owners of the company.

Shareholder's Equity


The difference between the assets and liabilities of a corporation, sometimes called net worth.

Sheriff's Certificate


A signed statement from the sheriff's office certifying that there are no judgements against the specific land.

Simple Interest


The cost of borrowing money, calculated by applying the interest rate to the original principal amount only. In contrast to compound interest, interest is not charged on interest.

Skip Payment Option


This is an example of a mortgage clause that may be added to an open mortgage. If this clause is part of the mortgage agreement, the borrower has the ability to skip a monthly payment without the mortgage going into default.

Sole Proprietorship


A business owned by a single person and not registered as a corporation. The sole proprietorship has unlimited liability.

Specific Performance


An equitable remedy to compel performance of a real estate or mortgage contract according to the specific terms of the contract.

Standby Commitment


An agreement by a lender to provide a certain amount of takeout mortgage financing on specific terms in the future. This commitment enables the borrower to arrange construction financing from other sources. The commitment is issued for a fee and the lender is willing to disburse the committed funds in the event that a permanent loan on more favourable terms is not obtained.

Standby Fee


A sum of money given by the borrower to the lender to hold a mortgage commitment for a certain period of time. The fee is normally non-refundable.

Standing Mortgage


A mortgage that provides for equal, regular lump-sum payments of principal, usually quarterly, plus accrued interest.

Standing Offers


Proposals which are made to the general public and can be accepted by anyone. Once one person has accepted a standing offer, no one else can accept it unless more than one acceptance was contemplated in the offer.

Starter Home


A small, inexpensive home generally bought by singles or newlyweds, with the intent to sell in a few years.

Statement of Changes in Financial Position


A financial statement that shows how a company obtains and uses its cash.

Statement of Retained Earnings


A financial statement that indicates the amount of earnings that have been kept in the business, either in the form of cash equity or invested in new assets for the company.

Statute Law


Law that has been passed by an Act of Parliament or by a provincial legislature.

Statutory Right of Way


A special type of easement granted by provincial legislation that permits a land owner, crown corporations or municipalities, to use another's land. One example of such a right of way is the right of a water authority to lay water pipe under an individual's land.

Step Mortgage


A mortgage product that attaches a mortgage loan to a line of creditin one package.

Subject Property


The property that is being appraised.

Subordinate


Subject to, or junior to.

Subordination


The act of one party acknowledging by written recorded instrument that a debt due is inferior to the interest of another in the same property. Subordination may apply not only to mortgages but also to leases, real estate rights, and any other type of debt instrument.

Subprime Transactions


Classification of lending based on the payment risk that the lender faces. Subprime deals (also known as B and C deals) face a higher risk that the amount of money lent will not be repaid, compared to prime deals (also known as A deals).

Subrogation


Replacing one person with another in regard to a legal right, interest, or obligation. An example of this would be a mortgage holder's selling his rights and interest to another.

Submortgage Broker


The term used in British Columbia to describe a licensed individual employed by a broker and working as a mortgage originator.

Subscription Policy (Insurance)


A single insurance policy that states that two or more insurance companies are sharing the risk.

Surety


The guarantee given for the performance of someone else.

Survey


A survey sets out the legal description of a mortgaged property, allowing confirmation that any building sits within the described boundaries of the land. Land boundaries, areas and improvements are determined and plotted on the survey. Surveys are also used for identifying easements.

Surveyor's Certificate


A formal statement signed, certified, and dated by a surveyor giving the pertinent facts about a particular property and any easements or encroachments affecting it. Such certificates are no longer available in Ontario.

Syndication


A group of lenders that share in the principal disbursement of a large loan to spread risk or to comply with statutory restrictions on loan size.

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