Term
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Definition
| The voluntary surrende of property, whether owned or leased. Abandoment doe not relieve obligations associated with ownership orr lease |
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Term
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Definition
| A reduction in amount or intensity. Usually relates to a decrease in taxes or to a decrease in continuing payments such as rent |
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Term
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Definition
| A potential borrower's ability to afford the purchase of a home. Consideration of a borrower's ability to repay involves the review of income, assets, liabilities, the type of product, and other factors. The federal Ability to Repay Rule sets forth the specific underwriting factors that mortgage professionals must examine when determining a borrower's ability to repay. |
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Term
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Definition
| A title that is clear of any liens, judgments, or other encumbrances |
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Term
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Definition
| Making current an existing Title Abstract |
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Term
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Definition
| A professional in the title industry (sometimes an attorney) who conducts a title search and produces an abstract |
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Term
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Definition
| A clause in the mortgage or deed of trust that allows the lender to demand immediate payment of the balance of a loan under certain conditions, such as default by the borrower |
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Term
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Definition
| A declaration by a person signing a document that such signature is a voluntary act, made before a duly-authorized person |
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Term
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Definition
| A term used in FHA loans meaning the total cost to close the loan |
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Term
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Definition
| An unpreventable destructive occurrence of the natural world |
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Term
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Definition
| An addition or supplement to a contract |
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Term
| ADJUSTABLE-RATE MORTGAGE (ARM) |
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Definition
A mortgage in which the interest rate is adjusted periodically based on a pre-determined margin, index, and adjustment interval
a.k.a. - Variable-rate mortgage |
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Term
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Definition
| The cost of a property, plus the value of any capital expenditures or improvements to the property and minus any depreciation |
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Term
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Definition
| The date on which the interest rate for an ARM may change |
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Term
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Definition
The period elapsing between adjustment dates for an ARM. The interal can apply to interest or payment adjustments and is typically one, three, or five years
a.k.a Adjustment Period, change frequency |
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Term
| ADJUSTMENTS (IN APPRAISALS) |
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Definition
| The dollar value that is added to or subtracted from the sale price of a comparable property used to provide an indication of value of the subject property |
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Term
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Definition
| A partial disbursement of funds under a note, usually made as part of a construction loan or a reverse mortgage |
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Term
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Definition
| A refusal to grant credit as requested; a termination of an account or an unfavorable change in the terms of an account; or a refusal to increase the amount of credit available to a person who has applied for an increase |
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Term
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Definition
A legal relationship created by law or contract in which the agent performs certain acts on behalf of the principal.
See also Principal |
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Term
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Definition
| An instance where a fictiious borrower obtains a mortgage loan "secured" by fictitious property |
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Term
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Definition
| Scheduling the periodic payments on a loan so that each installment requires enough principal and interest to ensure complete repayment of the loan by the end of its term |
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Term
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Definition
| A table showing the potion of each payment that will be applied to interest and to principal, and the balance remaining after each payment has been applied |
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Term
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Definition
| The length of time required to amortize a mortgage loan, expressed as a number of months |
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Term
| ANNUAL MORTGAGE INURANCE PREMIUM (ANNUAL MIP) |
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Definition
A fee paid for mortgage insurance on an FHA-insured loan. Annual MIP is paid on a monthly basis
See also Mortgage Insurance Premium |
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Term
| ANNUAL PERCENTAGE RATE (APR) |
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Definition
| A uniform measurement of the cost of a loan, including interest and financed costs of closing, expressed as a yearly percentage rate |
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Term
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Definition
| Payments made at specified intervals, such as with insurance contracts or certain types of investments |
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Term
| ANTI-MONEY LAUNDERING PROGRAM (AML PROGRAM) |
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Definition
| A program established in an effort to detect and guard against money laundering. These programs involve safeguards including interal procedures and controls, designated compliance officers, ongoing employee training, and independent audits. Anti-money laundering programs are required for certain institutions under the Bank Secrecy Act (BSA) |
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Term
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Definition
| The method by which a consumer formally applies to obtain a mortgage loan. The application form is known as the Uniform Residential Loan Application (URLA) or Form 1003 |
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Term
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Definition
| A fee charged for processing a mortgage loan application. An application fee may be a flat fee or a percentage of the loan amount |
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Term
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Definition
An opinion of the fair market value of a property, based on the appraiser's knowledge and experience and on an analysis of the property utilizing recent comparable sales and market conditions
a.k.a. Valuation |
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Term
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Definition
| An estimate of the fair market value of real or personal property |
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Term
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Definition
| A person qualified through state licensing procedures to estimate the value of real property |
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Term
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Definition
| An increase in the value of property that occurs over time |
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Term
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Definition
| One of several standards used to identify high-cost mortgage loans. If the APR of a loan meets or exceeds the threshold established under the law, the loan qualifies as a high-cost mortgage and must comply with corresponding regulations and requirements |
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Term
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Definition
| A transaction in which the buyer(s) and seller(s) each act in their own best interest and do not have a relationship to one another |
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Term
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Definition
| A local tax levied against a property for a specific purpose, such as for sewage or street lights |
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Term
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Definition
| Things that a person owns and that can be converted to cash, such as property, investments, savings, etc |
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Term
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Definition
| The transfer of the rights and obligations under a mortgage loan from one person to another |
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Term
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Definition
| A provision in a mortgage loan that allows for the transfer of the mortgage from one party to another |
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Term
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Definition
| A mortgage that a seller can transfer to a new buyer, with the buyer taking over the payments on the seller's existing mortgage. Leners may require a credit review of the new borrower and paymet of a fee for the assumption. If a mortgage contains a due-on-sale clause, the mortgage is not assumable by a new buyer |
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Term
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Definition
| The fee paid to a lender (usually by the purchaser of real property) when an assumption takes place |
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Term
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Definition
| A legal seizure of property to force repayment of a debt. An attachment creates a lien on real property |
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Term
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Definition
| To witness by observation and signature |
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Term
| ATTORNEY'S OPINION OF TITLE |
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Definition
| A written statement by an attorney, made after examining public records and/or abstracts of title, that in his or her judgment, the title to a particular property is free of unsettled claims and liens |
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Term
| AVERAGE PRIME OFFER RATE (APOR) |
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Definition
| An annual percentage rate that is based on average interest rates, fees, and other terms on mortgages that are offered to qualified borrowers. The APOR is used as a benchmark rate in identifying high-cost home loans and higher-priced morgage loans under federal law |
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Term
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Definition
Comparison of a person's total monthly obligations to his or her gross monthly income
a.k.a. Total Debt Ratio |
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Term
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Definition
A condition where complete real estate ownership is impaired by unsettled claims and liens
a.k.a Cloud on title |
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Term
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Definition
| The amount due, includin principal, interest, and any fees or penalties owed |
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Term
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Definition
| A mortgage with periodic payments including a final payment that is considerably larger than preceding payments |
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Term
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Definition
| The final lump sum paid on the maturity date of a balloon mortgage |
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Term
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Definition
| The financial inability to pay one's debts when due, resulting in application to the courts for relief through the restructuring or easing of the debt |
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Term
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Definition
| One 100th of 1% of the loan amount (0.0001 x loan amount = 1 basis point) |
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Term
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Definition
| The person who receives or is to receive the benefits from a specific act or action |
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Term
| BI-WEEKLY PAYMENT MORTGAGE |
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Definition
| A plan to reduce debt by making payments every two weeks instead of every month. This is equivalent to making one additional monthly payment each year |
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Term
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Definition
| A written instrument given to pass title of personal property from the seller to the buyer |
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Term
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Definition
| In good faith and without fraud |
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Term
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Definition
| One who applies for and receives a loa in the form of a mortgage |
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Term
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Definition
| Credits at closing that are subtracted from the final closing costs. These might include fees or points paid by the seller, a yield spread premium, or fees paid by the borrower prior to closing, such as the appraisal fee. |
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Term
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Definition
A short-term loan collateralized by the borrower's present home and used to close on a new house before the present home is sold
a.k.a. Swing Loan |
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Term
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Definition
| Limitations on the amount by which the interest rate or payment on an ARM may change |
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Term
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Definition
| A limit on the amount by which the interest rate can increase during the first adjustment period for an ARM |
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Term
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Definition
| A limit on the amount by which the interest rate can change during any adjustment periods |
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Term
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Definition
A limit on the amount by which an interest rate can change over the life of an ARM
a.k.a. Rate Ceiling |
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Term
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Definition
| A limit on the amount by which the payment can change during an adjustment period on an ARM. Payment caps can result in negative amortization |
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Term
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Definition
| The amount of cash derived from an income-producing property over a period of time |
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Term
| CERTIFICATE OF ELIGIBILITY |
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Definition
| The document that qualified veterans must obtain from the VA in order to apply for a VA guaranteed hom loan |
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Term
| CERTIFICATE OF REASONABLE VALUE (CRV) |
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Definition
| A statement issued by the VA showing the property's current market value based on a VA-approved appraisal |
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Term
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Definition
| A statement provided by an abstract company, title company, or attorney, stating that the title of real estate is legally held by the current owner |
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Term
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Definition
| Acts of God, war, disaster, or other emergency; information particular to the borrower or transaction relied on in providing a GFE/Loan Estimate and subsequently found to be inaccurate; new information particular to the borrower or transaction that was not relied on in providing the GFE/Loan Estimate; or other circumstances particular to the borrower or transaction |
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Term
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Definition
| A disclosure booklet used to educate consumers on the risks associated with adjustable-rate mortgages |
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Term
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Definition
| Anything owned that is not real property - i.e. personal property |
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Term
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Definition
| Generally, a title that is clear of liens, judgments, and other encumbrances. This term is defined with some differences under the marketable record title laws of various individual states |
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Term
| CLERICAL OR SUPPORT DUTIES |
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Definition
| The receipt, collection, distribution, and analysis of information for the processing or underwriting of a residential mortgage loan. Also includes communicating with a consumer to obtain information necessary for loan processing or underwriting, as long as that communication does not include offering or negotiating loan rates or terms, or counseling consumers about residential mortgage loan rates or terms |
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Term
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Definition
| A transaction in which the creditor disburses all funds at closing and demands repayment within a specified period of time. During the repayment period, the borrower cannot request an increase in the principal amount of the loan. An example of a closed-end loan world be a traditional mortgage loan |
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Term
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Definition
A meeting between the buyer, seller, and lender, or their agents, where funds for the purchase of real estate legally change hands
a.k.a. Settlement |
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Term
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Definition
| Expenses, over and above the price of the property, incurred by buyers and sellers when transferring ownership of a property. Closing costs normally include an origination fee, property taxes, charges for title insurance an escrow cots, appraisal fees, etc. Closing costs will vary according to the area of the country and the lenders used. |
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Term
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Definition
| A federal disclosure that must be provided to loan applicants no later than 3 business days prior to consummation. This disclosure provides a statement of the costs of a mortgage lending transaction. Effective October 3, 2015, the Closing Disclosure replaces the HUD-1 Settlement Statment and the Final TIL Disclosure previously required under RESPA and TILA |
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Term
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Definition
| An outstanding claim or encumbrance on the title |
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Term
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Definition
| A statement of principles concerning the behavior of those who subscribe to the code |
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Term
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Definition
| Property pledged as security for a debt |
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Term
| COMBINED LOAN-TO-VALUE RATIO |
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Definition
| A comparison, expressed as a percentage, of the combined cost of all mortgages on a home and the value of the home used to secure the loans |
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Term
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Definition
| A pledge or promise; a firm agreement |
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Term
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Definition
A non-judicial determination that a property is unfit to occupy, made by a municipal building or health inspector
OR
An exercise of eminent domain to take ownership of a private property for public use |
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Term
|
Definition
| A loan that meets the lending limits and other criteria established by Fannie Mae or Freddie Mac |
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Term
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Definition
| An interim loan used to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he or she progresses |
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Term
| CONSUMER REPORTING AGENCY (CRA) |
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Definition
| An organization that prepares reports used by lenders to determine an applicant's credit history |
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Term
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Definition
| The time at which the consumer becomes contractually obligated by a transaction. Consummation typically occurs at closing, and the two terms are frequently used interchangeable |
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Term
| CONTRACT OF SALE OR CONTRACT FOR DEED |
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Definition
| A contract between a purchaser and a seller of real estate to convey title after certain conditions have been met. |
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Term
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Definition
| A mortgage that is not insured by the FHA or guaranteed by the VA loan |
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Term
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Definition
| A provision in an ARM allowing the loan to converted to a fixed rate at some point during its term |
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Term
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Definition
| The transfer of the title of real estate from one person to another |
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Term
| COST OF FUNDS INDEX (COFI) |
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Definition
| The rate charged to banks for borrowing money from a Federal Reserve Bank. Each district office sets its own rate. The 11th District COFI is the rate most often used as an index for an ARM. |
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Term
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Definition
| A promise that is written into deeds and other instruments, used to agree to the performance or non-performance of certain acts or to prevent certain uses of the property |
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Term
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Definition
| A declining term life insurance policy used to ensure repayment of a loan should the borrower die |
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Term
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Definition
| A report documenting the credit history and current status of a borrower's credit standing |
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Term
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Definition
| An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit |
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Term
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Definition
| A statistical summary of the information contained in a consumer's credit report. With this form of credit scoring, a numerical value is assigned to various pieces of information in the credit report, then a summary score is produced |
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Term
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Definition
| A person or entity to whom an obligation is owed, such as a loan |
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Term
| CURRENCY TRANSACTION REPORT (CTR) |
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Definition
| A report that must be filed for each transaction in currency of more than $10,000 by or through a bank. These reports are required in an effort to detect and prevent instances of fraud and money laundering |
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Term
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Definition
| A hasty, rushed, or otherwise brief and inadequate inspection of property in an attempt to conceal flaes, undisclosed information, inflated appraisals, or other misrepresentations or omisions. Cursory inspections are a common tactic in fraudulent transactions |
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Term
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Definition
| The relationship, expressed as a percentage, between a borrower's monthly obligations on long-term debts and his or her gross monthly income |
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Term
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Definition
| A person who owes a debt to a creditor or lender |
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Term
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Definition
| A written instrument, properly signed and delivered, that conveys title to real property |
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Term
| DEED-IN-LIEU OF FORECLOSURE |
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Definition
| An arrangement in which the mortgagor (borrower) conveys all interest in the property to the mortgagee (lender) in an effort to satisfy a loan that is in default and avoid foreclosure proceedings |
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Term
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Definition
| In many states, a document that is used in place of a mortgage to secure the payment of a note |
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Term
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Definition
| Failure to meet legal obligations in a contract; specifically, failure to make the monthly payments on a mortgage |
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Term
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Definition
| When a mortgage is writte with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance |
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Term
| DEFERRED PAYMENT LOAN (DPL) |
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Definition
| A reverse mortgage loan that provides a lump sum used to repair or improve a house |
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Term
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Definition
| The state of having failed to make payments on time. This can lead to foreclosure |
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Term
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Definition
|
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Term
| DEPARTMENT OF HOUSING & URBAN DEVELOPMENT (HUD) |
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Definition
| The federal agency responsible for housing programs in the United States. Also has regulatory authority for a number of housing-related federal statutes |
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Term
| DEPARTMENT OF VETERANS AFFAIR (VA) |
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Definition
| An independent agency of the federal government which oversees programs and services for veterans. The VA guarantees long-term, low-, or no-down payment mortgages to eligible veterans |
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Term
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Definition
| Funds that are given in advance to show committed interest in the purchase of a property |
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Term
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Definition
| A decrease in the value of a property over time |
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Term
|
Definition
| A fee paid to a lender at closing and usued to prepay a portion of the interest on a loan. Discount points are charged so that the note rate can be lowr than the prevailing market rate |
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Term
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Definition
| An oral or written statement in advertising or communicated by any other means that discourages an individual from applying for credit on a prohibited basis |
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Term
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Definition
| In mortgage lending, treating an applicant less favorably than other applicants on a prohibited basis |
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Term
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Definition
| A list of consumers who have placed their names on the Registry to avoid receiving telemarketing or similar unwanted commercial communications |
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Term
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Definition
| In mortgage lending, the term refers to those who make gifts of money for use in the purchase of a home, with no expectation of reimbursement |
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Term
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Definition
| Money that is paid towards the purchase price of a home and that is not financed |
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Term
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Definition
| A loan settement in which loan funds are not made available on the same day as closing. In many states, dry settlement is prohibited, unless the loan is subject to the right of rescission |
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Term
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Definition
| The prohibited practice of receiving direct compensation from a consumer and additional indirect compensation from a creditor that funds mortgage loans |
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Term
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Definition
| A provision of a mortgage or deed of trust that allows a lender to demand immediate payment of the balance of the loan if specific criteria relating to fraud and misrepresentation are met |
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Term
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Definition
| A provision in a mortgage or deed of trust that allows the lender to demand immediate payment of the balance of the mortgage if the mortgage holder sells the home |
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Term
|
Definition
| Money paid by a buyer to a seller at the time of entering a contract to indicate the buyer's intent and ability to carry out the contract |
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Term
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Definition
| The right to use part of another person's property. A common example woul be a right of way (the right of one person to access their own property by traveling through someone else's property) |
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Term
|
Definition
| The right of a government or municipality to acquire private property for public use, even if the property owner objects |
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Term
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Definition
| A claim against real property, such as a lien, judgment, security interest, unpaid taxes, or an easement, which may affect the ability to transfer ownership of the property |
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Term
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Definition
| The loan amount that the VA guarantees when extending a loan to a veteran |
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Term
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Definition
The difference between the fair market value of a property and the current balances of any liens against the property
a.k.a. Home Equity |
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Term
|
Definition
| A lending decision that is based on the equity a borrower currently has available in the home, rather than on the borrower's creditworthiness and repayment ability |
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Term
|
Definition
| An account held by the lender into which the homebuyer deposits money for taxes and/or insurance payments. Escrow accounts may also hold other funds related to a real estate purchase, such as earnest money |
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Term
|
Definition
| The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance, and other expenses as they become due |
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Term
|
Definition
| The part of a mortgagor's monthly payment that is held by the loan servicer to pay for taxes, hazard insurance, mortgage insurance, and other expenses related to the loan |
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Term
|
Definition
| A contract for which all terms have been completely fulfilled |
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Term
FEDERAL HOME LOAN MORTGAGE CORPORATION
(FREDDIE MAC) |
|
Definition
| A government-sponsored enterprise created byb Congress that purchases conforming mortgage loans and resells them in the secondary market |
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Term
| FEDERAL HOUSING ADMINISTRATION (FHA) |
|
Definition
| A division of the Department of Housing and Urban Development. Its main activity is insuring residential mortgage loans made by private lenders |
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Term
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FANNIE MAE) |
|
Definition
| A government-sponsored enterprise created by Congress that purchases conforming mortgage loans, as well as those insured by the FHA, and resells them in the secondary market |
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|
Term
| FEDERAL TRADE COMMISSION (FTC) |
|
Definition
| A federal agency with responsibilities that include enforcing compliance with federal lending laws |
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Term
|
Definition
| The most basic form of real estate property rights. Fee simple means that when a buyer acquires a property, it includes the land and all improvements to the land |
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Term
|
Definition
| Any kind of money that is paid in conjunction with a mortgage loan, other than the actual loan amount and interest. Might include 3rd party fees, such as those for credit reports or appraisals, or origination/broker fees. Fees affect the total cost of credit when obtaining a loan |
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Term
|
Definition
| The credit score obtained from the use of software developed by Fair Isaac Corporation. Though each major CRA ultimately developed its own formula for credit scoring, the term "FICO score" is widely used today to refer to any credit score |
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Term
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Definition
| A duty of loyalty, good faith, and the obligation to prioritize the interests of the principal over the interests of the agent. Some state laws provide that mortgage professionals owe a fiduciary duty to borrowers; other states do not |
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Term
|
Definition
| Any kinds of fees or charges associated with obtaining credit, expressed in a dollar amount. Finance charges can include many items, including loan fees, miscellaneous fees, per diem interest, escrow for mortgage insurance, etc |
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Term
|
Definition
A promise by the FHA to insure a mortgage loan for a specified property and borrower
OR
A promise from a lender to make a mortgage loan |
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Term
|
Definition
| The oldest lien against a property, or the lien with first priority |
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Term
|
Definition
| The monthly payment due on a mortgage loan, including payment of both principal and interest |
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Term
|
Definition
| A mortgage with an interest rate that will remain the same for the entire term of the loan |
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Term
|
Definition
| The opposite of locking an interest rate. Following formal application and identification of a loan program, a mortgage loan applicant may elect to wait to lock an interest rate in anicipation of interest rates falling |
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Term
|
Definition
| Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally-designated flood zones |
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Term
|
Definition
| When a lender delays a foreclosure action in order to allow a borrower to make good on overdue payments |
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Term
|
Definition
| A legal process by which a lender forces the sale of a mortgaged property because the borrower has not met the repayment terms of the mortgage |
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Term
|
Definition
| An intentional misrepresentation or concealment of a fact that deceives another and causes him/her to act upon the false representation or concealment, to his/her detriment |
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Term
|
Definition
| An alert placed in a consumer's credit report file at his or her request to notify any user of the information that the consumer is or is believed to be a victim of fraud. A fraud alert must be kept in the consumer's file for 90 days |
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Term
|
Definition
| A type of fraud in which an individual misrepresents his or her employment history, credit history, intention to occupy a property as a primary residence, or income in order to improve his or her chances of securing a mortgage |
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Term
|
Definition
The ocus of most anti-fraud efforts. Fraud for profit typically involves the conspitatorial involvement of individuals throughout the mortgage industry, such as bankers, brokers, loan originators, processors, underwriters, appraisers, and others
a.k.a. Industry Insider Fraud |
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Term
|
Definition
A comparison of person's income to the monthly housing expenses that he or she will be taking on through the mortgage loan
a.k.a. Housing Debt Ratio |
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Term
|
Definition
| A requirement to reveal all information pertinent to a transaction |
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Term
|
Definition
| An ARM with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term |
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Term
|
Definition
| In an ARM, the interest rate indicated by adding the current index value and the margin. For example, if the index were 7% and the margin 2.75%, the fully-indexed rate would be 9.75% |
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Term
|
Definition
| Funds providing by the lender at settlement. The act of disbursing the cash of a loan |
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|
Term
| GOOD FAITH ESTIMATE (GFE) |
|
Definition
| An estimate of closing costs, made in compliance with RESPA requirements, that must be given to mortgage applicants within 3 days after loan application is complete. Effect 10/3/2015, this disclosure is replaced by the Loan Estimate |
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|
Term
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GINNEMAE) |
|
Definition
| An agency within HUD which guarantees securities backed by the FHA, VA, or RHS. Ginne Mae is oftern discussed alongside government-sponsored enterprises Fannie Mae & Freddie Mac, but unlike those entities, it do not issue mortgage-backed securities |
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Term
|
Definition
| The period during which one party may fail to perform without being considered in default |
|
|
Term
| GRADUATED PAYMENT MORTGAGE (GPM) |
|
Definition
| A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off |
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Term
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Definition
| For qualifying purposes, the income of the borrower before taxes and expenses are deducted |
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Term
| GROWING EQUITY MORTGAGE (GEM) |
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Definition
| A fixed-rate mortgage that provides scheduled payment increases over an established period of time. The increased amount of the monthly payment is applied directly toward reducing the remaining balance of the mortgage |
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Term
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Definition
| A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to the contract |
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Term
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Definition
| A mortgage that is guaranteed by a third party |
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Term
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Definition
A form of insurance that indemnifies the insured against fire, burglary, and other specified losses
a.k.a. Homeowners Insurance |
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Term
|
Definition
| A loan that meets or exceeds one or more of severall threshols set forth under the federal Home Ownership and Equity Protection Act (HOEPA). High-cost mortgages are subject to specific borrower education and disclosure requirements, as well as strict restrictions on loan terms that can be used |
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Term
| HIGHER-PRICED MORTGAGE LOAN (HPML) |
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Definition
| A loan that meets or exceeds the threshold set forth under federal law for identifying higher-priced mortgage loans. HPMLs are subject to specific disclosure and appraisal requirements, as well as certain other restrictions |
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Term
| HOME EQUITY CONVERSION MORTGAGE (HECM) |
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Definition
| A reverse mortgage insured by the FHA |
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Term
| HOME EQUITY LINE OF CREDIT (HELOC) |
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Definition
| A type of mortgage loan that establishes a credit line that can be drawn upon as needed until the borrower reaches the maximum credit amount allowed |
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Term
| HUD-1 SETTLEMENT STATEMENT |
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Definition
A document, due on the day of closing, that provides an itemized listing of all closing costs associated with a real estate transaction including the fees of the lender, mortgage broker, and other settlement service providers. The HUD-1A is another version of this form that is used for refinance transactions. Effective 10/3/2015, this document was replaced by the Closing Disclosure
a.k.a. Settlement Statement |
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Term
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Definition
| The fraudulent use of another individual's personal identifying information without his or her knowledge or consent |
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Term
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Definition
The portion of a borrower's monthly payments that is held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due
a.k.a. Escrows or Reserves |
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Term
|
Definition
| A published interest rate that, when combined with a margin, is used as the basis upon which the note rate of ARM will adjust |
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Term
|
Definition
The interest rate of an ARM at the time of closing. This rate changes for an adjustable-rate mortgage (ARM)
a.k.a. Start Rate or Teaser Rate |
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Term
|
Definition
| The regular periodic payment that a borrower agrees to make to a lender |
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Term
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Definition
| A legal document provided to a lender by a title company, promising to abide by closing instructions. It protects the lender from misuse of funds by the title company |
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Term
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Definition
| A mortgage that is insured by the Federal Housing Administration (FHA) or by private mortgage insurance |
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Term
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Definition
| The fee charged for borrowing money |
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Term
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Definition
| The percentage rate at which interest accrues on the mortgage. In most cases, it is also the rate used to calculate the monthly payments |
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Term
|
Definition
| A loan program in which the borrower's payments are directed only toward the interest due on the loan, and are not used to repay principal |
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Term
| INTEREST RATE BUYDOWN PLAN |
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Definition
| An arrangement that allows a party to deposit money to an account. That money is then released each month to reduce the mortgagor's monthly payments dueing the early years of a mortgage |
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Term
|
Definition
| Short-term financing made to cover costs while waiting for the requirements of a permanent loan to be met. A construction loan is a common example of an interim loan |
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Term
|
Definition
| An arrangement in which two or more people hold equal ownership of a property, and the interest of any deceased tenant(s) is subsequently transferred to the surviving tenant(s) |
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Term
|
Definition
| A foreclosure process that is initiated by the lender filing a suit in a court of law |
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Term
|
Definition
A loan that exceeds the lending limits established by Fannie Mae and Freddie Mac for conforming loans
a.k.a Non-Conforming Loan |
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Term
|
Definition
| A mortgage that is subordinate to the claims or liens positions of other mortgages recorded against a property |
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Term
|
Definition
| The payment of money or a thing of value as compensation or reward for completing certain actions |
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Term
|
Definition
| The penalty that is charged to a borrower when a payment made is overdue by a specified number of days after the due date |
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Term
| LEASE-PURCHASE MORTGAGE LOAN |
|
Definition
| An alternative financing option that allows low- and moderate-income homebuyers to lease a home with an option to buy. Each month's rent payment consists of principal, interest, taxes, and insurance (PITI) payments on the first mortgage, plus an extra amount that accumulates in a savings account for a down payment |
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Term
|
Definition
| A form of real estate property rights. When a buyer acquires leasehold property, they purchase the improvements but lease the land for a certain term. At the end of the term, they may or may not have the opportunity to purchase the land or renew the lease |
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Term
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Definition
| An entity that makes funds available for others to borrow |
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Term
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Definition
| Insurance that protects the lender against loss from title defects or liens that should have been cleared up prior to issuance of a title policy |
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Term
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Definition
| A person's financial obligations. Liabilities include both long- and short-term debt |
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Term
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Definition
| Part of a homeowner's insurance policy that covers bodily injury or property damage occurring on the homeowner's property as a result of negliegence |
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Term
|
Definition
| A fraudulent loan transaction in which the applicant inflates, enhances, or otherwise misrepresents qualifying information |
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Term
| LONDON INTERBANK OFFERED RATE (LIBOR) |
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Definition
| The type of index that is used to determine interest rates for adjustable-rate mortgages |
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Term
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Definition
| A claim upon a piece of property for the payment or satisfaction of a debt or obligation |
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Term
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Definition
| States in which mortgages are secured by a lien. Homeowners hold the title to the home during the loan term. |
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Term
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Definition
| A sum of borrowed money (principal), generally repaid with interest |
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Term
| LOAN APPLICATION REGISTER (LAR) |
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Definition
| The form that is used for reporting data required to be collected under the Home Mortgage Disclosure Act |
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Term
|
Definition
| The repeated refinancing of the same loan within a short period of time |
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Term
|
Definition
| A permanent change in the terms of a loan in response to a borrower's long-term inability to make payments |
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Term
|
Definition
Uniquely defined with specific differences under the mortgage lending laws of each state, a loan originator is generally an individual that arranges funding or negotiates mortgage loans for a potential borrower. The term may also be applied generally to any individual or entity that initiates the process for obtaining a mortgage loan. A loan originator may work under the supervision of a mortgage broker, mortgage banker, or a lender
a.k.a. Loan Officer |
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Term
| LOAN-TO-VALUE RATIO (LTV) |
|
Definition
| The relationship between the amount of the mortgage loan and the lower of the appraised value of the property or the purchase price. Expressed as a percentage |
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Term
|
Definition
| A single disbursement of the total amount due |
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Term
| MANDATORY ARTBITRATION AGREEMENT |
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Definition
| A provision in a contract that requires all parties to submit to arbitration to resolve disputes instead of seeking action in court |
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Term
|
Definition
| The amount that a lender adds to the index on an ARM to establish the adjusted interest rate |
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Term
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Definition
| A service provider increasing the charges of another provider collected from a borrower, then retaining the additional fees |
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Term
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Definition
| The date on which the principal balance of a loan becomes due and payable |
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Term
|
Definition
| A consumer credit report that contains information from two or more of the three credit repositories. A tri-merge report contains all three |
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Term
|
Definition
| The process of using financial transactions to distance illegally-obtained funds from their original, unlawful source |
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Term
| MONTHLY FIXED INSTALLMENT |
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Definition
| That portion of the total monthly payment applied towad principal and interest |
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Term
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Definition
| A legal document that pledges a property to the lender as security for repayment of a debt |
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Term
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Definition
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Term
| MORTGAGE ASSISTANCE RELIEF SERVICE (MARS) |
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Definition
| Any plan, program, or service offered, in exchange for compensation, to assist in stopping, preventing, or postponing foreclosure or repossession of a dewelling. This can include a number of services, such as negotiating or arranging for modification of loan terms or time extensions, obtaining forbearances, obtaining waivers of acceleration clauses or balloon payments, or other services |
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Term
| MORTGAGE-BACKED SECURITY (MBS) |
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Definition
| A group of loans that have been bundled together for sale in the secondary mortgage market |
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Term
|
Definition
| Uniquely defined with specific differences under the mortgage lending laws of each state, a mortgage banker is generally an individual or entity that makes and funds mortgages, services mortgages, and sells mortgages in the secondary market |
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Term
|
Definition
| Uniquely defined with specific differences under the mortgage lending laws of each state, a mortgage broker is generally an individual or entity that arranges funding or negotiates mortgage loans for a potential borrower, and charges a fee for these services |
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Term
|
Definition
| Insurance that indemnifies the lender against default by the borrower. This may be in the form of Mortgage Insurance Premiums (MIP), which is used on FHA-insured loan, or Private Mortgage Insurance (PMI), used for other loan types |
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Term
| MORTGAGE INSURANCE PREMIUM (MIP) |
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Definition
| The fee paid by borrowers or mortgages insurances on an FHA loan |
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Term
|
Definition
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Term
|
Definition
An amortization method in which the monthly payments are not large enough to pay all of the interest due on the loan. This unpaid interest is then added to the balancce of the loan, causing the balance to increase rather than decrease over time
a.k.a. Deferred Interest |
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Term
|
Definition
| The borrower's gross income minus federal income tax |
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Term
| NET PRESENT VALUE TEST (NPV TEST) |
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Definition
| A test that allows lenders and loan servicers to determine if it is more profitable to allow a loan modification or to proceed with foreclosure |
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Term
|
Definition
| A statement in a mortgage contract that forbids the assumption of the mortgage without the lender's approval |
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Term
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Definition
| Foreclosure that occurs outside of the court system. A notice of default is mailed to the delinquent borrower, who is fiven a period of time in which to cure the default. If unable to cure the default, a notice of sale will be issued |
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Term
|
Definition
| A transaction that is covered by the Dodd-Frank Act and that is an ARM with an introductory fixed rate of one year or more; an interest-only loan; or a negative amortization loan |
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Term
| NON-PUBLIC PERSONAL INFORMATION |
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Definition
| Personally-identifiable financial information that is provided by a consumer to a financial institution, results from any transaction with the consumer or any service performed for the consumer, or that is otherwise obtained by the financial institution. Examples include information that a consumer provides to obtain a loan or information from a credit report |
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Term
|
Definition
| Any loan other than a 30-year fixed-rate mortgage loan |
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Term
|
Definition
| A legal document that obligates a borrower to repay a mortgage loan and specifies the terms of repayment |
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Term
|
Definition
| The stated interest rate on a mortgage or loan agreement |
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Term
|
Definition
| An ARM with a rate that adjusts each year |
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|
Term
|
Definition
| A transaction in which the borrower and creditor anticipate repeat transactions. The creditor establishes a limit on the amount of funds that the borrower may withdraw, and the borrower has the ability to request cash advances. Borrowers may also request an increase in available credit |
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Term
|
Definition
| The process of taking and processing an application for a mortgage loan |
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Term
|
Definition
| The fee charged by a lender to make the loan; usually computed as a percentage of the face value of the loan |
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Term
|
Definition
| Voluntary insurance which protects a homeowner from third-party rights affected on the property over the course of its past ownership, such as mechanic's liens, un-released mortgages, etc |
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Term
| PAID OUTSIDE OF CLOSING (P.O.C) |
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Definition
| Used to denote fees paid by the borrower before closing/settlement |
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Term
|
Definition
| The retail interest rate that a borrower may receive without paying discount points |
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Term
|
Definition
| The date on which a new monthly payment amount takes effect on an ARM or a GPM. Generally, the payment change date occurs in the month immediately after the adjustment date |
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Term
|
Definition
| An issue faced by some borrowers of nontraditional mortgages when their payments change as a result of interest rate resets, expration of interest-only payment periods, or negative amortization |
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Term
|
Definition
| The refinancing of a non-standard mortgage to a standard mortgage as a means of shielding consumers from payment shock |
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Term
|
Definition
| The payment of points to permanently lower the interest rate on a loan |
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Term
|
Definition
A long-term mortgage, usually of ten years or more, as opposed to a short-term loan, such as a construction loan
a.k.a End Loan |
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|
Term
|
Definition
| The lawful reason why a person is seeking to obtain a consumer report about an individual. Permissible purpose might include a consumer's request for a credit report required by a mortgage lender, or for a credit transaction with an existing customer |
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Term
|
Definition
| A transaction in which a borrower takes on subordinate financing in order to cover a down payment or to finance closing costs |
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Term
|
Definition
| Principal, interest, taxes, and insurance are the monthly housing expenses that a lender calculates in order to determine a borrower's housing expense ratio |
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Term
| PLANNED URBAN DEVELOPMENT (PUD) |
|
Definition
| A type of residential development or subdivision that features areas owned in common by the residents and reserved for use by some or all of the residents |
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Term
|
Definition
A fee equal of 1% of the loan amount
a.k.a. Discount Point |
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|
Term
| POINTS AND FEES THRESHOLD |
|
Definition
| One of several standards used to identify high-cost mortgage loans. If the points and fees of a loan meet or exceed the threshold established under the law, the loan qualifies as a high-cost mortgage and must comply with corresponding regulations and requirements |
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Term
|
Definition
| A legal document authorizing one person to act on behalf of another |
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Term
|
Definition
| The lender's approval to make a loan based on verification of a loan applicant's income and examination of credit history. It does not include a commitment by the lender to a particular interest rate or lending terms |
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Term
|
Definition
| Examination of information that a loan applicant has provided about his/her income and financial obligations to estimate how much money the loan applicant might be eligible to borrow |
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Term
|
Definition
| The use of illegal and unethical practices to exploit individuals in financial transactions, through deception, discrimination, and/or the use of abusive and oppressive loan terms |
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Term
|
Definition
| Funds collected at closing that are necessary to create an escrow account or to adjust the seller's existing escrow account. Includes taxes, hazard insurance, private mortgage insurance, and special assessments |
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Term
|
Definition
| Any finance charge that is paid before or at consummation |
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Term
|
Definition
| A paynent that the borrower makes in advance of the due date |
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Term
|
Definition
| Fees charged for an early repayment of debt. These are subject to laws that restrict the types of loans for which these penalties can be charged and the amounts that can be collected. Laws also limit the charging of these penalties to the early years of a loan |
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Term
| PREPAYMENT PENALTY THRESHOLD |
|
Definition
| One of several standards used to identify high-cost mortgage loans |
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Term
| PRESUMPTION OF COMPLIANCE |
|
Definition
| The presumption that a person has complied with the requirements of the law if certain conditions are met |
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Term
|
Definition
| Retail lenders, such as banks, savings and loan associations, credit unions, and mortgage companies, who make mortgage loans directly to qualified borrowers |
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Term
|
Definition
| Loans made to borrowers who have good credit scores, stable income histories, down payments, and low debt ratios |
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Term
| PRINCIPAL (AGENCY RELATIONSHIP/FIDUCIARY DUTY) |
|
Definition
| The individual to whom a fiduciary duty or other duty of loyalty is owed in an agency relationship |
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Term
|
Definition
| The amount borrowed, and the portion of each monthly payment that reduces the remaining balance of a mortgage |
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|
Term
| PRIVATE MORTGAGE INSURANCE (PMI) |
|
Definition
| Mortgage insurance purchased from a private (non-governmental) insurance company. It is often required by a lender when the LTV on a conventional loan exceeds 80% |
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Term
|
Definition
| Any of a number of factors which may not be considered in making a lending decision. Includes race, color, religion, national origin, sex, marital status, age (provided that the applicant is of legal age to enter into a contract), the fact that all or part of the applicant's incom derives from public assistance, or the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act or a state law granted exemption by the CFPB |
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Term
|
Definition
| A legal agreement for a borrower to repay a loan |
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Term
|
Definition
| The purchase and resale of a piece of property within a short period of time |
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Term
|
Definition
| The forced sale of a property for less than it is worth, followed by resale of the property at its true value |
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Term
|
Definition
| A mortgage loan obtained by a borrower for the purchase of a residential property, in which the property serves as collateral for the loan |
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|
Term
|
Definition
| A mortgage loan obtained by a borrower for the purchase of a residential property, in which the property serves as collateral for the loan |
|
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Term
|
Definition
| A closed-end mortgage loan secured by a dwelling that meets certain specific underwriting requirements set forth by law under the Qualified Mortgage Rule (QM Rule). There are several different categories under the rules, and each category has specific eligibility requirements for creditors and borrowers |
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Term
|
Definition
| Investor-specific calculations used to determine if a borrower is qualified to obtain a mortgage loan |
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Term
|
Definition
| A deed that transfers ownership without any guarantees or warranties. It is used to remove any clouds on a title (for instance, due to unreleased mortgages). These are commonly used in cases of mortgage fraud, such as property flipping |
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Term
|
Definition
| Safeguards which limit the amount by which the interest rate on an ARM may change in each adjustment period or over the life of the loan |
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Term
|
Definition
| A lender's guarantee that the interest rate quoted will be good for a specific number of days from the date on which the lock is applied |
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Term
|
Definition
| A person licensed to negotiate and transact the sale of real estate on behalf of the property owner |
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Term
|
Definition
| Land and any property directly attached to the land |
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|
Term
| REBUTTABLE PRESUMPTION OF COMPLIANCE |
|
Definition
| A presumption of compliance which may be rebutted or challenged by the consumer |
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Term
|
Definition
| A process used by lenders to adjust mortgage payments. Usually used in the case of option ARMs and other nontraditional mortgage products where negative amortization has occured |
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Term
|
Definition
| A clause in a deed of trust that conveys title to a borrower once the loan is paid in full. This concept also applies to contracts where homeowners have the option to repurchase their home pursuant to foreclosure assistance |
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Term
|
Definition
| Fees charged by a local recorder's office for recording a mortgage or deed of trust, thereby making it part of the public record |
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Term
|
Definition
| The practice of refusing to extend credit in certain geographical areas based on disciminatory factors |
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Term
|
Definition
| Obtaining a new mortgage loan on a property that the borrower already owns |
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Term
|
Definition
| The cancellation of a contract. With respect to mortgage refinancing, the Truth-in-Lending Act gives some homeowners three days after closing to exercise their right to rescind a refinance contract |
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|
Term
|
Definition
| A form of mortgage in which the lender makes scheduled periodic payments to the borrower using the borrower's equity in the home as security for the loan. Repayment is deferred until the occurrence of certain specified events, such as the death of the last surviving borrower or the sale of the home |
|
|
Term
|
Definition
| The predatory lending practice of targeting certain areas populated by subprime borrowers, or other borrowers with inadequate experience or ability to understand loan terms and conditions, and engaging those orrowers in unlawful loan transactions |
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Term
|
Definition
| A type of credit arrangement in which a consumer is pre-approved for a line of credit and may make purchases against that credit. Credit cards are a common form of this |
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Term
|
Definition
| A clause in a property lease giving the tenant the opportunity, before anyone else, to purchase the property in the event of a sale |
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Term
|
Definition
| A method of determining an interest rate refund in the event that a borrower pays off a fixed-rate loan prior to its date of maturity |
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Term
|
Definition
| A legal method of lowering or eliminating liability as long as the person has met certain conditions and demonstrated a good faith effort to comply with the law |
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Term
|
Definition
| A legally-binding agreement between a buyer and seller, detailing the terms and conditions of the sale of real estate |
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Term
|
Definition
The document issued by the lender when the borrower pays the mortgage loan in full
a.k.a Release of Mortgage |
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|
Term
|
Definition
| A mortgage recorded after and subordinate to the first mortgage |
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|
Term
| SECONDARY MORTGAGE MARKET |
|
Definition
| The financial market in which private investors and government-sponsored enterprises, such as Fannie Mae and Freddie Mac, buy and securitize mortgages made by primary morgage lenders. It provides primary lenders with a source of cash for making new loans |
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Term
|
Definition
| A loan that is secured by collateral, such as property. The loan agreement contains a provision stating that the lender has a claim against the property if the debt is not paid according to the terms of the agreement |
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Term
|
Definition
| The real or personal property pledged as collateral for a loan |
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Term
|
Definition
| The process of pooling similar types of loans to create mortgage-backed securities for sale in the financial markets |
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Term
|
Definition
A public transaction, often involving an assumable mortgage, in which the party selling the property providers all or part of the financing
a.k.a. Owner Financin |
|
|
Term
|
Definition
| An individual or entity that services a loan by performing responsibilities such as sending statements to borrowers, accepting payments, issuing late payment notices, and managing escrow accounts |
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Term
|
Definition
An occurrenece in which the lender agrees to a reduced payoff of a loan through the sale of a subject property. The borrower is allowed to sell the property for less than the principal amount due on the mortgage, and the lender releases its lien
a.k.a. Pre-Foreclosure Sale |
|
|
Term
|
Definition
| A creditor that meets all of the specific criteria set forth under law to qualify for exemptions from certain provisions. Criteria typically depend on factors such as the dollar amount of transactions, the number of loans held in the entity's portfolio, or the geographicial area(s) served. TILA is an example of a law that creates exemptions from certain requirements for entities that meet its specific criteria |
|
|
Term
|
Definition
| A means of interaction and exchange between people in which they create and/or share information an ideas via the Internet |
|
|
Term
|
Definition
| A transaction covered by the Dodd-Frank Act that requires regular periodic payment; and does not provide for negative amortization, deferment of principal, or balloon payments; has points and fees that do not exceed 3% of the total loan amount (with some exceptions); has a term that does not exceed 40 years; has an interest rate that is fixed for at least the first five years of the loan term' and that uses the proceeds of the loan solely to pay off the outstanding balance on a non-standard mortgage and payoff settlement charges required to be disclosed under RESPA |
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|
Term
| STANDARD PAYMENT CALCULATION |
|
Definition
| The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current interest rate |
|
|
Term
|
Definition
| A law enacted by a legislative body. May include a law established byb an act or the rues or regulations which are used to promulgate the law |
|
|
Term
|
Definition
| Directing or influencing a consumer to consummate a transaction that would provide greater compensation for the loan originator than in other transactions that the originator offered or should have offered to the individual |
|
|
Term
|
Definition
| An individual who accepts a fee to provide his or her name, Social Security Number, and other personal information for use on a mortgage loan application, with no intention of actually owning or possessing the property used to secure the loan. This practice is a fraudulent practice |
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|
Term
|
Definition
| An individual who accepts a fee to falsely claim ownership to a property. Transaction involving a this person may include the use of falsified or fabricated title documents in order to support the support the fraudulent claim of ownership |
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|
Term
|
Definition
A lien on property that is junior, or subsequent, to another lien or liens. In the event of foreclosure, this type of lien does not receive priority until prior liens are paid
a.k.a. Junior Lien or Junior Financing |
|
|
Term
|
Definition
| Below the qualifications set for prime borrowers. This type of loan are made available for borrowers with poor credit, an unstable income history, or high debt ratios. Many of these loans products are no longer available thanks to recent federal legislation |
|
|
Term
|
Definition
| A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions, and the location and dimensions of any structures or easements on the property |
|
|
Term
| SUSPICIOUS ACTIVITY REPORT (SAR) |
|
Definition
| A document that must be filed when there is evidence that funds involved in a transaction were derived from or intended to disguise an illegal activity, that the transaction was designed to evade the Bank Secrecy Act, or was otherwise suspicious or indicative or criminal activity |
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|
Term
|
Definition
| Equity created by a purchaser performing work on a property being purchased |
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|
Term
|
Definition
| A typeof involuntary lien placed on a property title due to a homeowner's failure to pay property taxes |
|
|
Term
|
Definition
| A type of wholesale lending agreement in which mortgage brokers are permitted to originate, close, and fund a loan using funds provided by a lender. The loan is then immediately assigned to the lender that provided the funds. This may also be used to describe the practice of funding a loan on the same day that it is settled |
|
|
Term
|
Definition
| A financing tool used to temporarily reduce the interest rate and monthly payments on a mortgage |
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|
Term
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Definition
| An estate that exists between spouses who have an equal right of possession and enjoyment during their lives, with the surviving spouse taking complete possession of the estate upon the death of the other |
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Term
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Definition
| Ownership of property by two or more persons, each of whom have an undivided interest. If an interest holder dies, their interest is pased on to her or her heir(s) |
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Term
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Definition
| An individual who poses as a loan applicant to test a creditor's fair lending policies and procedures |
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Term
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Definition
| Any payment, advance, loan, or service given. "Thing of value" can include money as well as non-monetary items, such as discounts, special rates, special services, meals, tickets to events or entertainment, office equipment, expense reimbursements, or similar |
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Term
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Definition
| When a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages that it plans to deliver to the secondary mortgage market |
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Term
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Definition
| A method of expressing the cost of financing, it is the difference between the loan amount and the sum of the payments made over time |
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Term
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Definition
| A document that gives evidence of an individual's ownership of property |
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Term
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Definition
| A report containing the history of the title associated with a particular property |
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Term
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Definition
| Temporary title insurance expected to soon be replaced by a title insurance policy |
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Term
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Definition
| A policy, usually issued by a title insurance company, which insures against errors in the title search. A Buyer's Title Policy protects the homebuyer, and a Lender's Title Policy protects the lender |
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Term
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Definition
| An examination of county and/or municipal records to determine the legal status of real property. Usually performed by a title company or an attorney |
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Term
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Definition
| States in which the lender's interest in a home is secured by a deed of trust. The lender is the beneficiary of the deed of trust, and a third party (trustee) holds the title to the property during the loan term |
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Term
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Definition
| The current rate that the U.S. Treasury is paying on securities it issues |
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Term
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Definition
| A term used in advertising that triggers the requirement to provide additional specific information required under the federal Truth-in-Lending Act |
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Term
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Definition
| The process of evaluating a loan applicant's financial information and facts about the real estate used to secure a loan to determine whether a potential loan is an acceptable risk for a lender |
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Term
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Definition
| Real estate with free and clear title |
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Term
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Definition
| An exam component set forth by the NMLS as part of testing requirements or individuals to obtain licensure as mortgage loan originators |
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Term
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Definition
| An instrument that transfers title from one party (grantor) to another party (grantee), without providing public notice of a change in ownership |
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Term
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Definition
| A debt that has no collateral or security |
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Term
| UPFRONT MORTGAGE INSURANCE PREMIUM (UFMIP) |
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Definition
| Mortgage insurance for an FHA loan that is paid at closing |
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Term
| UNIFORM RESIDENTIAL APPRAISAL REPORT (URAR) |
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Definition
| This is the document used to convey information resulting from an appraisal |
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Term
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Definition
| Interest charged in excess of the legal limit as established by state law |
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Term
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Definition
| A long-term, low- or no-down payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service |
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Term
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Definition
| A premium of up to 1.875% (depending on the size of the down payment) paid to the VA on a VA-backed loan |
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Term
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Definition
| An estimate of the value of the consumer's principal dwelling. Commonly used interchangeably with the term "appraisal" |
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Term
| VERIFICATION OF DEPOSIT (VOD) |
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Definition
| A document signed by the borrower's financial institution, verifying that status and balance of his/her financial accounts |
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Term
| VERIFICATION OF EMPLOYMENT (VOE) |
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Definition
| A document signed by the borrower's employer verifying his/her position and salary |
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Term
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Definition
| Having no legal force or effect; unenforceable |
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Term
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Definition
| The voluntary renunciation, abandonment, or surrender of some claim, right, or privilege. In mortgage refinance transactions, a borrower with the right of rescission can waive it in certain circumstances |
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Term
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Definition
| A fee charged by a lender and used to offset the cost associated with holding a mortgage until it can be sold on the secondary market |
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Term
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Definition
| A revolving line of credit used by mortgage brokers in order to fund loans |
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Term
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Definition
| A deed in which the grantor warrants that the title is clear and free of any encumbrances |
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Term
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Definition
| A loan settlement in which the funds or the loan are disbursed on the same day as closing. Wet settlement is generally required in most states for loan transactions not subject to the right of rescission |
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Term
| YIELD SPREAD PREMIUM (YSP) |
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Definition
The fee that a lender pays for a loan with an interest rate higher than the par rate on the day the loan was locked or closed. Previously, this fee was used as a common form of compensation for the broker. This practice has since been declared unlawful, and this must now be paid to the borrower as a credit to reduce closing charges
a.k.a Borrower Credit |
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Term
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Definition
| A legal mechanism for local governments to regulate the use of privately owned real estate property in order to prevent conflicting land use and promote orderly development |
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