Glossary of Industry Terms

Amortization Schedule -A month-by-month breakdown of principle and
interest to be paid on a note, as well as the balance after payment is made.

Annuitant -The person receiving payments from an annuity.

Annuity -Income stream paid over time by an insurance company.

Balloon Payment -A lump sum payment that pays off a note in full.

Beneficiary - A person who is designated to receive a payment or payments.

Credit Score - A number that is assigned to an individual's credit report
that rates their likelihood of repaying a debt.

Collateral - Something that is used to secure a loan or note.

Debt Ratio - An individual's total debt in relation to their income.

Discount - Purchasing a note for less than the face value.

Equity - The difference between what a property is worth and how much
is owed on it.

First Position Note - Refers to a note that takes precedence over all
other liens and notes. TYS Variety Investments only purchases first lien
position notes.

Hypothecate -The process of buying a property with borrowed funds,
using that very property to secure (collateralize) the loan.

Income Stream - Any kind of note that is paid out over time: same as
"payment stream."

Loan To Value - Also referred to as LTV. This is the ratio of the loan
amount to the value of the property.

Mortgagee - The person or investor who receives the payments from a mortgage.

Mortgager - The person who owes (makes the payments) on a mortgage.

Owner Financing (Seller Financing) - When the seller of a property or
business finances the sale of that home or business.

Paper - A slang term for notes.

Partial - The purchase of a portion of an income stream's remaining
payments, or the purchase of a portion of a specific payment, or
any combination thereof.

Seasoning - Refers to the length of time a mortgage note or business
note has been in place and paid on.

Second Position Note - Refers to a mortgage note that is "behind"
another note on the same property.

Sole Propriertorship - An individual operating a business as a business entity.

Time Value of Money - A financial concept that addresses the way the
value of money changes over a period of time. It determines how
much a future payment is worth in today's dollars.

Title Insurance - Insures that a piece of property is free and clear of any liens.

UCC-1 - Uniform Commercial Code Form One. This document
is filed at the county courthouse and list items that secure a business
loan. For example: On a restaurant note, you would find items such
as tables, chairs, dish machines, etc. This filing places a lien on
those items so that the buyer of the business cannot sell them. This
lien is released when the note is paid in full.

Underlying Note Balance - This occurs when a note holder of a mortgage
is still making payments on another note (the underlying note). For
example: If a person sells a property for $100,000 and takes back a
note but still owes a mortgage of $20,000, then this balance is the
"underlying balance".

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