Term
| Mortgage Industry Circle of Life |
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Definition
| 1. Capital "Secondary" Markets 2. Originations 3. Processing 4. Underwriting 5. Closing 6. Warehousing 7. Shipping and Delivery 8. Loan Administration |
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| Responsibilities: Originate, Process, Underwrite, Close, Fund, Service |
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| Responsibilities: Process, Underwrite, Close, Fund, Service |
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| Responsibilities: Underwrite, Close, Fund, Service |
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| Responsibilities: MA (employee out in the field) originates, Process, Underwrite, Close, Fund, Service |
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| Responsibilities: Re-Underwrite Closed Loan, Purchase, Service; no established relationship |
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| Responsibilities: Purchase and Service; established relationships |
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| Any mortgage that is not guaranteed or insured by the federal government; follows the guidelines of government sponsored enterprises; either "conforming" or "non-conforming" |
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| Federal Housing Administration; created to help stabilize the mortgage market; insured by the federal government; popular with first time buyers |
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| Available to veterans of the United States Armed Forces and guaranteed by the Veterans Administration |
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| FNMA; Nation's largest private investor for mortgages; a government sponsored enterprise |
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| FHLMC; Primary purchase is to buy laons from Savings and Loans investors |
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| GNMA; VA mortgage; guaranteed by VA |
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| Government sponsored enterprise: Ginnie Mae, Freddie Mac, Fannie Mae |
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| Insurance companies, pension funds, and private investors |
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| PLS; private label clients (Merrill Lynch, E*Trade, etc.) largest source of business (65%) |
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| Private Label Solutions (PLS), Real Estate Sales- Franchise, Real Estate Sales- NRT, Corporate Clients |
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| Franchise (Brands)- Ex. Century 21, Coldwell Banker; NRT- |
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| Deals with customers being relocated by their employer. |
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| Percentage paid for the use of money, usually expressed as annual % free charged for using money. |
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| Money paid up front in exchange for a lower interest rate 1 pt=1% of loan amount |
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| The market value of the subject property with regard to it's location. Determined by how much similar homes in the same neighborhood have sold for in the last year. The appraiser picks the 3 most recent sales which are comparable to the subject property. |
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Term
| Conventional Conforming Loan Limit |
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Definition
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| Conventional Conforming Plus Limit |
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Definition
| For high cost areas; $938,250 |
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| Conventional Non-Conforming (Jumbo) |
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Definition
| Anything over conforming limits in non-high cost areas and anything over Jumbo limits in high cost areas |
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| *Varies by county; $271,050-$729,750 |
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| The customer is pre-approved for a mortgage amount prior to signing a sales contract |
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| The payoff of an existing loan with a new loan; used to either change rate and term or cash out |
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| Customer refinances to get a lower rate and/or different term |
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| Customer refinances and borrows more than the outstanding balance of the existing mortgage to obtain extra cash. |
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Definition
| A period of 3 full business days after the closing on their primary residence in which customers can cancel a refinance transaction. Saturday is considered a business day but Sundays and Federal holidays are not. Loan proceeds are only distributed after the recission expires. |
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Definition
| LTV; the ratio of the loan amount in comparison to the appraised value or sales price of a property. Risk determining factor; |
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| Dollar Amount Down Calculation |
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| CLTV; the principal balance of all mortgages on the subject property (including second and third loans) divided by the sales price or the appraised value. Used when customers are refinancing. *Actual |
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| Home Equity Combined Loan-to-Value |
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Definition
| HCLTV; Considered when customers are refinancing a property and have a HELOC on that property which they wish to keep. *Potential |
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| "Secondary markets" establishes market prices and values |
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| collects supporting documents to verity information |
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| evaluates loan documentation to approve/deny loan |
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| signs and records loan documentation and disburses funds |
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| Finances loans from closing until sale to investor |
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| Packages loan documentation according to investor guidelines |
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| Loan Administration/Servicing |
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Definition
| Collects and monitors mortgage payments, manages escrows, and delinquencies |
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| What tiers are part of PHH retail lending platform? |
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| Private Mortgage Insurance; allows customers to purchase a home and secure conventional financing without putting 20% down; Applied if LTV is 80.01% and above |
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| Government loans do not have PM. FHA loans have something similar called Mortgage Insurance Premiums; VA has a VA Funding Fee |
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Definition
| Principal, Interest, Taxes, and Insurance (HOI, HOA, Flood, and PMI) Used to qualify a customer for a mortgage. |
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| Part of the customer's monthly mortgage payment; (Loan amount x P&I factor)/1000 |
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| Qualifying Ratio's: Conventional LTV>90% |
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| Qualifying Ratio's: Conventional LTV</= 90% |
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Definition
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| Qualifying Ratio's: Government: FHA |
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| Qualifying Ratio's: Government: VA |
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Definition
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| Primary Housing Ratio/Front ratio |
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Definition
| PITI/Total gross monthly income |
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| Total Obligation Ratio: Back Ratio |
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Definition
| (PITI+Debts)/Monthly income |
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| Costs incurred in order to purchase real estate; paid 1 time |
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| cost paid at closing for taxes, interest, and insurance; reoccuring |
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| payment of some or all of the purchases closing costs |
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| Owner physically occupies the home |
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| Vacation home usually located in resort area; owner occupied |
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| rental property or income generating; a non-owner uses the home |
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| Free standing home, not attached to another unit, no common wall shared. Owners own the dwelling and the lot |
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| Customers share a common wall or walls with another homeowner. Customers own the dwelling and the lot |
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| Two, three, or four unit home in which all units are owned by one customer. All units are considered 1 property. Max we lend is on 4 units |
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| Free standing home where customers own the dwelling and the lot but pay mandatory dues for maintenance of common grounds. |
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| Customers share a common wall; They own the dwelling and the lot but pay mandatory dues for maintenance of common areas. |
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| Customers own the air space between the interior walls and have an undivided interest in the common areas for which mandatory dues are paid |
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| PUD detached; condo in name only to get around zoning laws. AKA site condo |
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| A project that has one rental or registration desk, short term occupancy, food, telephone, and cleaning services. Operated by a single management company. PHH does NOT lend |
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| Condo project with only 2 units located directly next to each other. |
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| Set up like a corporation; customers purchase shares in the corporation instead of an actual unit. |
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| Single family detached; Customers own a mobile home (dwelling and lot) that must have the wheels removed and affixed to a permanent foundation. Only finances purchase transactions |
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| Interest rate remains fixed for the life of the loan; stabile and predictable |
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| Adjustable Rate Mortgage; Interest rate remains fixed for a predetermined amount of time, and then begins to adjust continually for the remainder of the time. |
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Definition
| financial indicator of inflation; the specific ARM program will dictate the index used to determine the interest rate. PHH uses LIBOR index |
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| the constant amount added to the index to determine the new interest rate at each adjustment. |
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| the highest % added to the state rate (at the initial adjustment after the fixed period) |
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| the highest % above the current rate at a set interval of time. |
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| the highest % above the start rate for the life of the loan |
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