MAI Member Appraisal Institute. A member of the American Institute of Real Estate Appraisers, which is affiliated with the National Association of Realtors.
main lease syn master lease, head lease, principal
lease, underwriting lease, and original lease See master
lease.
mall A covered pedestrian walking area within a shopping area.
Also, the entire shopping center that is characterized by retail establishments
with entrances into the covered pedestrian mall.
management fee A fee paid for supervision and day-to-day business decision-making that occurs in the management of income producing real estate. These fees vary widely, from three to five percent of the property's gross income, as a general rule. Fees vary widely because of money factors, such as the percentage of leases that are triple net requiring little administration or that encompass large square foot areas.
management survey A complete analysis of any income producing property. The physical condition of the subject, its economic “fit” to the neighborhood and community, its income and expense history, and so forth, comprising the study.
manufactured home A home that is mostly constructed in a factory and then transported to a permanent lot or site. A manufactured home is not a mobile home, which is entirely completed in a factory and transported to a site on its own wheels.
manufacturing zone A land use zone that allows both heavy and light industrial business activities, including manufacturing, processing, fabrication, and warehousing. These areas are likely separated from residential areas by some type of buffer zoning, such as commercial.
marginal buyer A prospective buyer who does not qualify for a new institutional mortgage loan. Marginal buyers often seek carryback financing, lease-options, land contracts and no-money-down deals.
marketable title The condition of record title that a seller legally must convey to a buyer. If the title is defective (perhaps because there is a deed within the chain of title that contains an incorrect description), there is a cloud on title, and the title is not marketable. The seller must clear the title so that a marketable title is conveyed to the buyer. Title insurance does not insure against loss from defective title; rather the defect is listed as an exception from coverage. Generally, a marketable title is a good title with nothing showing that might effect the buyer’s use, enjoyment, and possession of the property. Thus, it is often referred to as good title. Basically, a marketable title is free from doubt, and enables the owner to enjoy the land free from the hazard of litigation.
market data approach A method to estimate a property's market value by analyzing market data, that is, the sales prices of comparable properties. (Such sales prices of comparable properties are called comparables, or comps.) Since perfect comparables are rare, adjustments must be made to account for differences in size, shape, the time and the terms of sales, and so forth.
marketing contract syn contract for sale, deposit receipt, and purchase contract See contract for sale.
marketing plan A plan to sell real estate, usually proposed by
a sales agent, which includes such matters as targeting the best class
of buyers, setting advertising budgets, arranging for open houses, using
multiple-listing services, and arranging for agent tours.
market rate interest The current interest rate thrifts are charging
for lending money in specified real estate transactions. Different
market rates exist for all the many varieties of loans.
market rent The amount that a property should command as rent if exposed to the market for a reasonable time. See also negative rent.
market value In appraisal, an estimate of the worth of real estate at a particular time. There are at least two concepts in appraisal, the highest price definition (HPD), and the most probable selling price definition (PSD). Loosely, many owners think of market value as the gross price they can obtain for their properties.
master lease syn head lease, underwriting lease, principal lease, main lease, and original lease The basic lease between the owner of real estate and his tenant, which has priority over other leases and subleases that arise subsequently.
master-planned community A community designed to provide an intelligent and orderly development process with a blend of housing styles, shopping areas, recreational facilities, and so forth. CC&R’s are used extensively to maintain community standards and property values.
maturity The length of time during which a loan will be repaid. Also, a loan that has been paid down over several years is said to be "mature" because it has a history of repayment. All other factors being equal, a mature loan is more marketable than a new loan because the reliability of the debtor has been demonstrated.
maximum mortgage amount The maximum real estate loan that can be insured under a specific government program.
maximum rate The highest rate of interest that can be charged during any period in a variable-rate mortgage.
MBA Mortgage Bankers Association. Also, Master's degree in Business Administration.
MCC mortgage credit certificate See mortgage credit certificate.
mechanic’s lien A lien to guarantee the payment of wages and prices to laborers and suppliers. Unpaid laborers or suppliers can secure their unpaid debts (wages and prices) with a lien on the land of the owner if certain procedural steps are followed. Like other liens, it is possible to foreclose a mechanic’s lien and cause the property to be sold to satisfy the debt. Mechanic’s liens, like other liens, are subject to rules of priority. See priority of liens.
mediation The use of a neutral third party to assist parties in voluntarily resolving their dispute. The neutral third party is called a mediator.
memorandum of lease syn short-form lease and skeleton lease An abbreviated document that refers to a lease. It is prepared for recording without revealing the pertinent and often private terms of a lease.
memorandum of option A memorandum that contains only minimum information, such as the names of the optionor and optionee and the term of the option. It is recorded to protect its priority without revealing sensitive data, such as the option price.
mid-price office buildings High-quality one- and two-story office buildings built in campus-like business parks.
milking syn bleeding To systematically drain a company or project of its assets or profits that ought to be expended on operations, maintenance, etc. An apartment project may be milked, for example, by deferring maintenance.
mingles Single persons who are not romantically involved but who purchase homes together.
minimall A shopping center designed for small boutiques and shops rather than a large anchor tenant, such as a department store.
misrepresentation syn deceit and fraud A false statement made intentionally, knowing it is not true. A negligent misrepresentation is a false statement made carelessly.
mistrial A trial that has failed to conclude properly because of some defect or because of the inability of the proper number of jurors to concur in a verdict. For example, inflammatory remarks by an attorney to a jury may result in a mistrial before the jury returns a verdict. A new trial is usually scheduled to follow a mistrial.
mitigation of damage The legal obligation of a victim to reduce or minimize damages caused by a wrongdoer. For example, a landlord must try to rent leased premises wrongfully abandoned by the tenant.
MLS multiple listing service See multiple listing service.
MMI mortgage insurance See mortgage insurance.
mobile home A manufactured single-family dwelling unit suitable for year-round occupancy and containing the same type of water supply, waste disposal, and electrical conveniences as standard housing does. Mobile homes no longer are as mobile as their name suggests, and usually are permanently placed in a location.
mobile home lot A parcel of land for the placement of a single mobile home and the exclusive use of its occupants.
mobile home park syn mobile home subdivision A parcel of land under single ownership that has been planned and subdivided into lots for the placement of mobile homes for residential use. Such "parks" usually have a density patter of eight or nine mobile home sites to the acre. Each site is occupied by an individual mobile home. See mobile home subdivision.
model home A completed and furnished home used by a subdivider as a sales device. Prospective customers can compare floor plans, develop ideas about decorations, and make decisions on upgrades and options. Model homes often double as sales offices.
moderate-income family A family whose income is near the national average.
modular home A home that is completely manufactured in a factory in two or more sections, or modules. Modular homes are shipped by truck to their permanent sites, where the sections are attached.
moratorium A temporary denial of permission to develop used by local government to create an opportunity to formulate permanent growth policies and plans.
mortgage syn real mortgage and deed of trust
A security agreement. In some states, a “mortgage” is widely used,
in others, a “deed of trust” is used. Even in deed of trust states,
the term mortgage is used interchangeably with deed of trust, or trust
deed. Throughout this Study Guide both mortgage and deed of trust
are used interchangeably.
In a mortgage, the borrower is called the mortgagor, and
the lender is called the mortgagee. (In a deed of trust, the borrower
is called the trustor, the lender is called the beneficiary, and a third
party who holds legal title is called the trustee.) Under both instruments,
the lender has the power to cause a non-judicial foreclosure sale to take
place as a basic remedy to secure repayment of the debt. Or, under
both instruments, the lender may elect to pursue a judicial foreclosure,
which involves court proceedings and a lingering right of redemption, in
an attempt to obtain a deficiency judgment following the foreclosure sale.
See deed of trust.
mortgage banker syn mortgage company An organization engaged in the business of making real estate loans with its own capital, or one that acts for institutional lenders.
Mortgage Banker Association, (MBA) See MBA.
mortgage bond program A financing program that authorizes raising mortgage money through the issuance of tax-exempt bonds. Because of the tax exemption, the mortgage rate is less than the conventional rate. Bond programs are one variety of subsidized financing.
mortgage broker A licensed agent who brings together borrowers and lenders of mortgage funds. Also, a licensee who arranges mortgage loans for lenders. Mortgage brokers usually do not service mortgages (that is, they do not collect the mortgage payments). They receive commissions on the loans they generate.
mortgage company syn mortgage banker See mortgage banker.
mortgage credit certificate, (MCC) A federally authorized tax credit program for first-time home buyers who purchase a home for less than ninety percent of the average area purchase price. For example, prices cannot exceed $257,000 in San Francisco, $223,000 in Oakland, or $193,000 in Sacramento as of fall 1993. Qualified buyers receive a direct tax credit on their federal income tax liability equal to twenty percent of the amount of interest they pay on their mortgages. However, there is an earnings cap to qualify, approximately $43,000. Critics argue the program subsidizes buyers who would have purchased regardless of the program. Some studies have show the contrary. The program is administered on a county-by-county basis and may vary slightly accordingly.
mortgagee The lender in a real estate transaction that involves use of a mortgage. See also mortgage.
mortgagee in possession A mortgage lender who is obtaining the income (rent) from a property following default pending foreclosure. Mortgages and deeds of trust contain an assignment-of-rents clause that authorizes the taking of possession (rent) upon default by the debtor. The purpose is to protect the stream of income (rent) for the lender pending foreclosure.
mortgage information service A computer based system that brings buyers together with appropriate lenders through a mortgage money search system. A prospective borrower may quickly scan most of the available mortgage money available, with complete details as to the terms, rates, caps, and so forth. Not all lenders necessarily sign up as participants in such programs, but those that do participate provide their full array of loan types, rates, indexes, payment plans and fees. The service is available through real estate brokers or private companies in larger metropolitan areas.
mortgage insurance, (MMI) syn mutual insurance Insurance provided by the Federal Housing Authority (FHGA) as part of its mortgage loan programs. The premium is one-half percent of the loan balance. Private mortgage insurance is available for non-FHA loans. All mortgage insurance premiums and other specified revenue of the FHA are paid into a fund from which losses are met. Either mutual or private mortgage insurance is required to assure the marketability of mortgages in the secondary mortgage market. See secondary mortgage market.
mortgage insurance premium The annual charge made by the Federal Housing Authority (FHA) as a premium for the insurance it provides against default on insured mortgages. It generally is at a rate half of a percent. Non-governmental, or private mortgage insurance (PMI) is also available for conventional loans.
mortgage interest deduction Pursuant to the Tax Reform Act of 1986, income tax deductions are allocated for interest paid on loans secured by taxpayers’ homes. Interest payments on mortgage loans in excess of the cost of the home plus the cost of improvements are not deductible, unless the loan proceeds are used for home improvements, education or medical expenses. See home equity loan.
mortgage loan servicing Collection of loan and impounded payments, bookkeeping, payment of ad valorem taxes and casualty insurance premiums, and other related administrative and clerical services.
mortgage loan underwriting The process of reviewing loan applications. The underwriter accepts or rejects loan applications depending upon their proposed terms, real estate securities and the characteristics of the proposed borrowers.
mortgage note syn promissory note A promissory note secured by a mortgage on specific real estate. The note contains all the terms of the loan, for example, the interest rate, term, monthly payment, and delinquency charge. See promissory note.
mortgage out To obtain financing in a project that exceeds market value of the security. All equity is “mortgaged out” of the deal, which provides favorable tax treatment because borrowed money is tax free. Debt in excess of the value of the property may create tax consequences.
mortgage participation certificate, (PC) A security issued by the Federal Home Loan Corporation, Freddie Mac, which is backed by conventional mortgage loans. Proceeds from issuance of PCs are used to purchase loans from mortgage lenders, giving them the cash to make new loans. See secondary mortgage market.
mortgage redemption insurance A form of life insurance that provides for the payoff of a home mortgage on the death of the debtor. The amount of the insurance coverage decreases just as the mortgage decreases over the term of the loan. This variety of life insurance typically is among the most costly and least desirable.
mortgage revenue bonds Tax-exempt bonds issued to finance development of residences for certain classes of purchasers within specified income limits. The California Housing Finance Agency has issued bonds in support of various financing programs.
mortgagor syn debtor Also called trustor under a deed of trust, and is maker of the underlying promissory note.
mother hubbard clause syn anaconda mortgage and dragnet clause See dragnet clause.
motion to court A request to the court for a decision on some issue. Motions before trial almost always are in written form--during trial many are in verbal form (e.g., objections to preferred evidence). Attorneys can make many written motions at all stages before trial for a variety of reasons that may or may not be important. The preparation of any motions fattens the attorney’s hourly billings (except in fully contingent arrangements, of course). Understanding the tasks performed by attorneys, such as making pretrial motions, is valuable to the manager in participating in the management of the case and of the attorney.
motion to produce Request to a judge by counsel to compel the
opposing party to provide specified evidence to the court. This is
a type of discovery procedure.
move-up buyer syn trade-up buyer A homeowner who
desires to purchase a larger and more expensive home with greater amenities.
multi-family A structure housing a number of family units. An apartment house is a multi-family structure.
multi-plex theatre Theater complexes of perhaps twelve or more screens. These buildings typically feature showcase entryways.
multiple listing service, (MLS) A service, often computerized, which provides information to its membership about residential properties listed by the members. A prospective buyer is able to review in one agent's office all available properties listed for sale. In larger cities, a “book” of listings no longer is printed because agents rely upon computers for instant data retrieval.
mutual insurance syn mortgage insurance, (MMI) See mortgage insurance.