Genesis Associates Mortgage Definitions "C" (866) 410.4410

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Definitions of Mortgage Terms

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Canada Housing Trust - A special purpose vehicle (SPV) created to issue Canada Mortgage Bonds (CMB) and utilize the proceeds to purchase mortgages packaged in newly issued NHA Mortgage Backed Securities.

Canada Mortgage Bonds - A bullet pay type of bond investment. Issued by Canada Housing Trust and guaranteed as to full and timely payment by CMHC, these bonds feature semi-annual interest payments and principal at maturity.

Capital Cost Allowance - A deduction from rental income of such part of the capital cost of property as is allowed by regulation under the Income Tax Act.

Capitalization
1. In the appraisal process, the conversion of earnings anticipated from the typical operation of
a property into a sum of present worth (capital value).
2. In mortgaging, the addition of interest owed and/or other charges onto a principal balance and
and the subsequent amortization of that sum with interest.

Capped Variable Rate Mortgage - A variable (floating) rate mortgage in which interest decreases/increases are capped during the term.

Caution - A notice registered on title by a person claiming to have a proprietary interest (i.e. a right to call for or receive a transfer of charge) in land or in a charge of which he or she is not the registered owner to protect their interest. The registered owner of the land or charge cannot deal with the land or charge without consent of the cautioner.

Caveat Emptor - "Let the buyer beware". The buyer must examine the goods or property he or she is buying and he or she, therefore, buys at their own risk

Central Bank - A body established by a national government to regulate currency and monetary policy on a national/international level. In Canada, it is the Bank of Canada; in the United States, the Federal Reserve Board; in the U.K., the Bank of England.

Certificate of Charge - A mortgage document in the Land Titles System.

Certificate of Occupancy (Permit) - A certificate provided by the municipality that a property has been constructed under the authority of the issued building permit and may be occupied.

Cessation of Charge - A discharge of a mortgage registered under the Land Titles Act.

Chain of Title - Chain of title is uncovered through the lawyer's search, revealing any factors affecting ownership of land.

Charge - The name given to a mortgage document when title is registered under the Land Titles System.

Charge/Mortgage of Land - A standard form (Form 2) for registering a charge/mortgage under either registry or land titles.

Chattels - Movable possessions, personal property (generally items that may be removed without injury to the freehold estate).

Chattel Mortgage - A mortgage given on chattels. Usually given as collateral security to a mortgage on real estate. As an example, a chattel mortgage on refrigerators and stoves in an apartment building.

Closing Date - The date on which the sale becomes final, the new owner takes possession of the property, and funds are transferred from the purchaser to the vendor.

Cloud on Title - Any encumbrance or claim that affects title to real property.

Co-Applicant - A person applying with another for a loan.

Co-Insurance - A sharing of risk between insurer and insured which depends on the relationship of the amount of the insurance carried versus the amount of insurance required at the time of the loan.

Collateral Mortgage - A mortgage backed by additional security, such as a second property which is pledged to further secure the mortgage.

Collateral Security - In mortgaging, security given in addition to the direct security and subordinate to it.

Collection Agency - Means a person other than a collector who obtains or arranges for payment of money owing to another person, or who holds out to the public as providing such a service or any person who sells or offers to sell forms or letters represented to be a collection system or scheme; (“agence de recouvrement”)
Commitment - A letter/document issued by a lender reciting the basic terms of a loan which when accepted by the borrower forms a binding contract.

Completion Loan - The single disbursement of the total loan following satisfactory completion of the property.

Compound Interest - Interest charged not only on the principal sum but also on interest amounts charged but not paid in preceding periods that accumulate as new principal.

Condition Precedent - A condition in an agreement calling for the happening of some event, or performance of some act, before the agreement becomes binding on the parties.

Condition Subsequent - A condition referring to a future event upon the happening of which the contract becomes no longer binding on the parties.

Conditional Sales Agreement - An agreement by which it is provided that the title to the goods being sold remain in the name of the seller until payment in full of the purchase price, possession being given forthwith and the price usually being payable in installments.

Condominium - Ownership of property whereby the owners hold negotiable title to their own unit and, at the same time, share with fellow owners the title and cost of operation of the balance of the property (common elements) constituting the condominium.

Consideration - Consideration means "some right, benefit or profit accruing to the promissor or some forbearance, detriment, loss or responsibility suffered by the promissee." In other words, the party trying to enforce the contract must have paid something in return for the promise.

Construction Loan - A claim against the estate or interest of the owner in a property for labour, services, or material supplied to it and not paid for and it must be registered on title to the property in question to be perfected.

Consumer Proposal -A legal process to assist a borrower in resolving indebtedness problems pursuant to the Bankruptcy and Insolvency Act.

Contract - A contract is a legally binding agreement between two or more capable persons for consideration or value, to do or not to do some lawful and genuinely intended act.

Contractual Power of Sale -Power of Sale proveedings based on contractual provisions containde within the mortgage document and generally governed by Part III of the Mortgages Act.

Conventional Mortgage -A mortgage that does not exceed a 75% loan-to-value ratio.

Convertible Mortgage -A mortgage, usually short-term (i.e. less than one year), allowing the mortgagor to lock in for a longer fixed term without penalty.

Conveyance - The transfer of an interest in property from one person to another.

Co-Operative - A form of multiple ownership of real estate in which a corporation or business trust entity holds title to a property. Individual unit holders have the exclusive right to occupy their unit by lease but their investment in the corporation is by way of shares.

Co-Ownership - The idea that an estate (present or future) can be simultaneously held by several persons. The most common types of co-ownership are joint tenancy and tenants-in-common.

Correspondents - A company that originates, possesses, and administers mortgage loans or other real estate investments on a continuing basis for investors.

Cost of Borrowing - A direct link to what can be a rather complicated disclosure requirement for Mortgage Brokers.

Covenant - An agreement in writing (in Common Law must be under seal) contained in a deed and creating an obligation. It may be positive, stipulating the performance of some action. It may be negative or restrictive, forbidding the commission of some act.

Creditor - One to whom a debt is owing.

Cross Default Clause - Mutual clauses in two or more mortgages which state that a default under one mortgage constitutes a default under the other(s).

Current Value Assessment (CVA) - Refers to the amount of money a property would realize if sold at arm's length by a willing seller to a willing buyer.

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