Washington State Department of Financial Institutions

Glossary of Terms

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S

Secondary Market - The general name given to marketplaces where stocks, bonds, mortgages and other investments are sold after they have been issued and sold initially.

Secured Debt - This type of debt is the result of money loaned on collateral, which might come in the form of the home or other valuable possessions. If the borrower neglects to pay off according to the terms agreed, the lender can acquire that collateral from the borrower.

Secured Loan - A loan containing a provision that, upon default, certain pledged property may be claimed by the lender as payment of a debt.

Securities - A financial form that shows the holder owns a share or shares of a company (stock) or has loaned money to a company or government organization (bond).

Selling Agent - The real estate agent obtaining the buyer rather than listing the property.  The listing and selling agent may be the same person or company.

Service Charge - A fee for service. In financial institutions, this is usually the charge applied against a members' account for maintaining a particular service.

Settlement Statement ("The HUD-1") - The Real Estate Settlement Procedures Act requires lenders to give this disclosure at closing, or one day in advance of closing if the consumer requests it. It should be the final statement of settlement costs. The RESPA disclosure focuses on closing costs as a dollar amount.

Settlement - Another name for closing.

Share Savings Account - This main savings account establishes membership in SECU and must be opened for each individual before he/she may use any other credit union service. The account must be opened with a $10.00 initial deposit.

Shareholder's Equity - The difference between the company’s assets and its liabilities.

Simple Interest - A method of calculating interest on outstanding balances that produces a declining finance charge with each payment of the installment loan.

Single Premium Life Insurance - A life insurance policy requiring one premium payment. Money for the premium is usually borrowed as part of a larger loan with the borrower paying interest on that amount over the term of the loan. This type of insurance is often high-cost insurance that could be obtained elsewhere for a lower cost.

Special Forbearance - A loss mitigation option where the lender arranges a revised repayment plan for the borrower that may include a temporary reduction or suspension of monthly loan payments.

Split Deposit - A deposit in which a portion is credited to the depositor's account and the balance is taken in cash.

Stop Payment - A member's order not to pay a specific check or draft that has been issued. The order may be oral or written.

Street Name - The term used to describe securities that are held in the name of your brokerage firm but that still belong to you.

Subordinate - To place in a rank of lesser importance or to make one claim secondary to another.

Subprime Lender - A lender that charges a finance rate that is higher than the "prime" rate offered by conventional lenders. Typically, it is a lender who approves loans for individuals who may have poor credit history or no credit history, or who have other characteristics (e.g. high LTV, property type, job) that justify a higher rate.

Survey - A property diagram that indicates legal boundaries, easements, encroachments, rights of way, improvement locations, etc.

Sweat Equity - Using labor to build or improve a property as part of the down payment.

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