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GLOSSARY
Regulation T
Regulation T is legislation pertaining to cash and margin accounts offered to consumers by brokerages. This Federal Reserve Board regulation limits margin loans to 50 percent of the purchase price of the securities.
Regulation U
Regulation U is the Federal Reserve Board legislation that defines the requirements under which commercial lenders can offer credit secured by margin stock. Regulation U applies to commercial banks and credit unions, but not securities brokers or dealers.
Regulation Z
A federal banking rule that implements the Truth-in-Lending Act. It requires standardized disclosures of credit costs.
Rehabilitation mortgage
A home loan that is used to make improvements and to reconstruct the property. Sometimes this type of mortgage is rolled into the initial mortgage.
Rehabilitation mortgage or rehab mortgage
A rehabilitation mortgage (rehab mortgage) is a real estate loan that finances both the purchase of a home and specified improvements to the property. Usually, the borrower will have to submit a detailed outline and cost estimate for the improvements during the loan approval process. After the purchase amount of the loan funds, the lender will set up an escrow account to hold and distribute the improvement portion.
Rehypothecation
Rehypothecation is a bank's pledge of customer-owned securities held in a margin account for the purposes of securing a loan.
Reinstate
To reinstate is to restore or renew something. A past-due loan, for example, can be reinstated to current status once the necessary repayments are made. Also, insurance coverage can lapse due to non-payment, but the insured usually has a certain period of time to make the necessary premium payments and have the coverage reinstated.
REIT
REIT stands for real estate investment trust. This is an exchange-traded security that invests in real estate holdings such as commercial office buildings or mortgage loans. REITs receive tax benefits in return for passing 90 percent or more of their earnings to shareholders.
Rejection
Rejection is denial of an application, such as for a loan or an insurance policy.
Relationship or member of household test
Relationship of member of household test is one of five checks that confirm whether you can claim another individual as a dependent on your U.S. tax return. According to the relationship test, you can claim the individual as a dependent if that individual is your child, adopted child, stepchild, foster child, parent, stepparent, grandparent, sibling, half-brother, half-sister, step-sibling, child of a sibling, uncle, aunt, or relative by marriage (an in-law). Spouses are not dependents.
Release clause
Release clause is legal language in a mortgage loan agreement that allows a portion of the property to be released from the loan collateral after a certain percentage of the debt has been repaid.
Release of liability
A release of liability is the lender's termination of a debtor's responsibility to repay monies borrowed.
Reliction
Land that is made available when a sea or river permanently recedes.
Relocation benefits
A benefit that a company gives an employee when the company has asked the employee to relocate for the company's benefit. These may include moving, packing, transportation, and storage. It may also encompass trips to look for real estate and temporary housing.
Relocation company
A relocation company is a business that earns fees for helping transferred employees move to a new community.