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Houston Mortgage > Glossary >
Debt Management > D 1-10
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Debit bureau
A service used by banks that will eventually track account opening and closing information, check order history, check writing history, any history of collection activity on unpaid accounts, frequency of debit and ATM card use and household demographics. Under the system, when a consumer presents a check to a participating retailer, the individual''s account is identified by punching a code into a computer or swiping a card containing a magnetic strip or microchip through an electronic reader, which tells the retailer whether to accept or reject the transaction.
Debit card
A payment card that is linked directly to a customer's bank account. Some cards require a personal identification number. Others require a customer's signature. A PIN-based or direct debit card removes a purchase price from a customer's checking account almost immediately. A signature-based or deferred debit card has a Visa or MasterCard logo and removes the purchase price from a customer''s bank account in two or three days.
Debt
Money one person or firm owes to another person or firm.
Debt consolidation
The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan.
Debt-to-available-credit ratio
The amount of money a person has in outstanding debt, compared to the amount of credit available on all of the individual''s credit cards and credit lines. The higher a person''s debt to available credit, the more risky the individual appears to potential lenders.
Debt-to-income ratio
The percentage of before-tax earnings that are spent to pay off loans for obligations such as auto loans, student loans and credit card balances. Lenders look at two ratios. The front-end ratio is the percentage of monthly before-tax earnings that are spent on house payments (including principal, interest, taxes and insurance). In the back-end ratio, the borrower''s other debts are factored in.
Debtor
Technically, a person who has filed a petition for relief under the bankruptcy laws. More generally, anyone who owes.
Deed in lieu of foreclosure
A deed in lieu of foreclosure is a real estate transaction in which the owner is behind on the payments, and relinquishes all ownership rights to the mortgage lender. The lender, in many cases, forgives the outstanding debt. In essence, the owner hands the keys to the lender and walks away.
Default
1. The condition that occurs when a consumer fails to fulfill the obligations set out in a loan or lease. 2. A designation on a credit report that indicates a person has not paid a debt that was owed. Accounts usually are listed as being in default after several reports of delinquency. Defaults are a serious negative item on a credit report.
Delinquent
A designation on a credit report that a person hasn''t made the minimum payment on a loan or a credit card on time. On credit reports, delinquencies are usually shown as being 30, 60, 90 or 120 days delinquent. Delinquencies are a serious negative item on a credit report.
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