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Sale-Leaseback – A technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.

Sandwich Lease – The combination of a lease held by a lessee (tenant) who becomes a lessor (landlord) by subletting to another lessee (subtenant), in which the sandwich leaseholder is not the owner nor the user of the property.

Seasoning – A period of time in which a loan has been in force for, thus establishing the borrower’s payment history. Loans are usually considered to be seasoned after either six months or one year.

Second Mortgage – A mortgage that has a lien position subordinate to the first mortgage.

Secondary Mortgage Market – The buying and selling of existing mortgages.

Section 1031 – The Internal Revenue Code section that deals with tax-free exchanges of like-kind property.

Section 8 – Privately owned rental units that participate in the Federal low-income rental assistance program created by 1974 amendments to Section 8 of the 1937 Housing Act.

Secured Loan – A loan that is backed by collateral.

Security – The property that will be pledged as collateral for a loan.

Security Deposit – The cash payment required by landlord to be held for the term of the lease to offset potential damages to the property due to actions of the tenant.

Seller Financing – See Owner Financing.

Seller Take-Back – An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage. See owner financing.

Servicer – An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.

Servicing – The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

Settlement – See closing.

Settlement Sheet – See HUD-1 statement.

Settlement Statement – Known also as a Closing Statement or HUD-1. See Closing Statement.

Short Sale – The sale of a property in which the proceeds of the sale fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and write off the remainder of what is owed on the mortgage if the owner is unable to make the mortgage payments. By accepting a short sale, the bank can avoid a lengthy and costly foreclosure, having to take possession of the property, and the owner is able to pay off the loan for less than what is owed.

Special Deposit Account – An account that is established for rehabilitation mortgages to hold the funds needed for the rehabilitation work so they can be disbursed from time to time as particular portions of the work are completed.

Special Warranty Deed – A deed in which the title warranty given to the grantee by the grantor with the limits of not warranting against title defects arising from conditions that existed before grantor owned the property.

Specific Performance – The legal action in which a court enforces the terms of a contract requiring a party to perform the actions of the contract.

Standard Payment Calculation – The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current interest rate.

Step-Rate Mortgage – A mortgage that allows for the interest rate to increase according to a specified schedule (i.e., seven years), resulting in increased payments as well. At the end of the specified period, the rate and payments will remain constant for the remainder of the loan.

Subdivision – A housing development that is created by dividing a tract of land into individual lots for sale or lease.

Subject To -Â The title to a mortgaged real property is transferred to the buyer but the buyer is not personally liable for the payment of the amount due. However, the buyer must continue to make payments in order to keep the property.

Subordination -Â A clause or document permitting a mortgage recorded at a later date to recieve higher priority over an existing lien.

Subordinate financing – Any mortgage or other lien that has a priority that is lower than that of the first mortgage.

Survey – The process that measures a parcel of land and determines its area exactly.

Subsidized second mortgage – An alternative financing option known as the Community Seconds® mortgage for low- and moderate-income households. An investor purchases a first mortgage that has a subsidized second mortgage behind it. The second mortgage may be issued by a state, county, or local housing agency, foundation, or nonprofit corporation. Payment on the second mortgage is often deferred and carries a very low interest rate (or no interest rate). Part of the debt may be forgiven incrementally for each year the buyer remains in the home.

Survey – A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.

Sweat equity – Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.