Mortgage

Mortgage terms

1. "Bait-and-switch" schemes The lender may promise one type of loan or interest rate but, without good reason, gives you a different one.
2. Action Taken Date The settlement or closing date for originations. For applications that did not result in an origination, the date when the action was taken or when the…
3. Action Taken Type The disposition of the loan/application.
4. Activity Year The year for which the HMDA data are being collected.
5. Adjustable-Rate Mortgage (ARM) (ARM) A mortgage that does not have a fixed interest rate. The rate changes during the life of the loan based on movements in an index rate, such as the rate…
6. Agency Code Code to identify the supervisory/regulatory agency of the HMDA reporting institution.
7. Agent Agent means any individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales…
8. Alt-A Mortgages A classification of mortgages in which the risk profile falls between prime and subprime.
9. American Recovery and Reinvestment Act of 2009 Enacted in 2009, this Act authorized a series of measures intended to create jobs and promote investment and consumer spending.
10. Amortization The process of reducing debt through regular installment payments of principal and interest that will result in the payoff of a loan at its maturity.
11. Annual Percentage Rate (APR) (APR) The cost of credit on a yearly basis, expressed as a percentage.
12. Applicant Ethnicity Ethnicity of the applicant. This is reported for originated loans and for loan applications that do not result in an origination.
13. Applicant Race Race of the applicant. This is reported for originated loans and for loan applications that do not result in an origination.
14. Applicant Sex Sex of the applicant. This is reported for originated loans and for loan applications that do not result in an origination.
15. Application Fee A fee charged when you apply for a credit card.
16. Application Received Date The date the application was received or the date shown on the application form. For purchased loans, "NA" for not applicable is reported.
17. Appraisal The act of evaluating and setting the value of a specific piece of personal or real property.
18. Appraisal Fee The charge for estimating the value of property offered as security.
19. Appraiser The person who evaluates the damage caused by an accident or other covered loss and determines the amount to be paid under the policy terms.
20. Balloon Mortgage With a balloon mortgage, you make monthly payments over the mortgage term, which is typically five, seven, or ten years, and a final installment, or…
21. Balloon Payment A mortgage with periodic installments of principal and interest that do not fully amortize the loan.
22. Beneficiary A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract.
23. Branch Office For banks and thrifts, a branch office is an office approved as a branch by a supervisory agency.
24. Capitalization In the context of bank supervision, capitalization refers to the funds a bank holds as a buffer against unexpected losses.
25. Cash-out refinancing When refinancing, taking a loan for more than you owe on your existing mortgage.
26. Census Tract A census tract is a small geographic area. Census 2000 assigned census tract numbers to all areas of the U.S. and some U.S. territories and possessions.
27. Chapter 13 Bankruptcy this type of bankruptcy sets a payment plan between the homeowner and the creditor monitored by the bankruptcy court.
28. Chapter 7 Bankruptcy a bankruptcy that requires assets be liquidated in exchange for the cancellation of debt.
29. Closing when selling a house, the process of transferring ownership from the seller to the buyer, the disbursement of funds from the buyer and the lender to the…
30. Closing (or settlement) costs Fees paid when you close (or settle) on a loan. These fees may include application fees; title examination, abstract of title, title insurance, and…
31. Co-applicant Ethnicity Ethnicity of the co-applicant. This is reported for originated loans and for loan applications that do not result in an origination.
32. Co-applicant Race Race of the co-applicant. This is reported for originated loans and for loan applications that do not result in an origination.
33. Co-applicant Sex Sex of the co-applicant. This is reported for originated loans and for loan applications that do not result in an origination.
34. Co-Homeowners one or more persons who have signed a loan note, and are equally responsible for repaying the loan.
35. Collateral Assets that are offered to secure a loan or other credit. For example, if you get a real estate mortgage, the bank's collateral is typically your house.
36. Collections the efforts a lender takes to collect past due payments.
37. Conservatorship Conservatorship is a legal procedure for the management of financial institutions for an interim period during which the institution’s conservator…
38. Conventional Conforming Mortgage Loans Conventional mortgage loans are those mortgages that are not insured or guaranteed by the Federal Housing Administration, the U.S.
39. Convertible ARM is an Adjustable Rate Mortgage loan that can be converted into a fixed-rate mortgage during a certain time period.
40. County Code A three-digit FIPS (Federal Information Processing Standards) code that identifies the county where the property is located.
41. Creditor A person or company who provides credit to another person or company functions as a creditor.
42. Debarment Disqualification of a firm or individual from contracting with the government or participating in government non-procurement transactions for a specific…
43. Debt-to-income (DTI) (DTI) a comparison or ratio of gross income to housing and other expenses or debts the homeowner owes.
44. Deed A deed is a written document that transfers ownership of land or other real estate from the owner, also known as the grantor, to the buyer, or grantee.
45. Deed-in-Lieu of Foreclosure the process by which a homeowner may voluntarily transfer the deed to a home to the servicer when payments cannot be made.
46. Default Default occurs when a debtor is unable to meet the legal obligation of debt repayment, one form of which is the failure to promptly pay interest or…
47. Deferred Payments loan payments that are authorized to be postponed as part of a workout process to avoid foreclosure.
48. Delinquency A debt that was not paid when due.
49. Depository Institution A financial institution that makes loans and obtains its funds mainly through accepting deposits from the public; includes commercial banks, savings and…
50. Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) Legislation intended to promote the financial stability of the United States by improving accountability and transparency in the financial system, end…
51. Dwelling An insured's home.
52. Emergency Economic Stabilization Act (EESA) (EESA) A 2008 statute that authorized the U.S. Department of the Treasury to undertake specific measures to provide stability and prevent disruption in the…
53. Emergency Home Finance Act of 1970 The Emergency Home Finance Act of 1970 created Freddie Mac and authorized it to create a secondary market for conventional mortgages.
54. Equity Another word for "stock." It represents an ownership interest by shareholders in a corporation.
55. Equity stripping The lender encourages you to borrow heavily from the equity in your home (the amount you own free and clear of your mortgage) as an easy way to get…
56. Escrow A financial instrument held by a third party on behalf of the other two parties in a transaction.
57. Escrow Account An account that serves a specific purpose, which ends when a certain condition is met or a certain event occurs.
58. Escrow Analysis The periodic examination of escrow accounts by a mortgage company to verify that monthly deposits are sufficient to pay taxes, insurance, and other…
59. Federal Financial Institutions Examination Council (FFIEC) (FFIEC) also known as the Council. The Council is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal…
60. Federal Home Loan Bank Act of 1932 This Act established the Federal Home Loan Bank Board (“FHLBank Board”), which charters and supervises Federal Savings and Loans Institutions…
61. Federal Home Loan Bank Board (“FHLBank Board”) A five-member board established in 1932 by the Federal Home Loan Bank Act. The FHLBank Board provided the FHLBanks with the authority to regulate and…
62. Federal Home Loan Banks (FHLBanks) (FHLBanks) The Federal Home Loan Banks are 12 regional cooperative banks that U.S. lending institutions use to finance housing and economic development in their…
63. Federal Home Loan Mortgage Corporation (Freddie Mac) (Freddie Mac) A federally chartered corporation that purchases residential mortgages, securitizes them, and sells them to investors; this provides lenders with funds…
64. Federal Housing Administration (FHA) (FHA) The Federal Housing Administration (FHA) was established by the federal government in 1937 to make home ownership possible for more people and to…
65. Federal Housing Enterprises Financial Safety and Soundness Act of 1992 The Act modernized the regulatory oversight of Fannie Mae and Freddie Mac. It created the Office of Federal Housing Enterprise Oversight (“OFHEO”) as…
66. Federal National Mortgage Association (Fannie Mae) (Fannie Mae) A federally chartered corporation that purchases residential mortgages and converts them into securities for sale to investors; by purchasing mortgages…
67. Federal National Mortgage Association Charter Act of 1954 (Charter Act) The Charter Act transformed Fannie Mae from a government agency into a public-private, mixed ownership corporation.
68. Federal Savings and Loan Insurance Corporation (FSLIC) (FSLIC) Created by the National Housing Act of 1934, the FSLIC, which was administered by the FHLBank Board, insured savings and loan deposits until 1989.
69. Fee A charge or payment for products and services, a sum paid or charged for a privilege, for example, some financial institutions charge a monthly fee to…
70. FHA Approved Lenders Financial institutions that have been approved by FHA for the origination and servicing of FHA-insured mortgages.
71. Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) (FIRREA) Enacted by Congress in 1989 in response to the savings and loan crisis of the 1980s, FIRREA abolished FSLIC, transferred its assets, liabilities, and…
72. Financial Models Financial models are computer simulations designed to forecast the financial performance of a company or project or estimate the impact of key parameters…
73. First Mortgage A real estate loan which is in a first lien position, taking priority over all other liens.
74. Fixed-Rate Mortgage (FRM) (FRM) a mortgage loan with a fixed interest rate that remains the same for the life of the loan.
75. Forbearance A temporary period of time during which a regular monthly mortgage payment is reduced or suspended.
76. Foreclosure A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default.
77. Foreclosure Prevention steps by which the servicer works with the homeowner to find a permanent solution to resolve an existing or impending loan delinquency.
78. Garn-St. Germain Depository Institutions Act Legislation enacted in 1982 that provided the thrift industry more flexibility in managing assets and liabilities.
79. geocode Geocode refers to the combination of applicable codes for the metropolitan area, state, county and census tract.
80. Good faith estimate A good faith estimate is a written summary provided by your mortgage lender. It shows the amount you can expect to pay at your real estate closing to…
81. Good Faith Estimate (GFE) (GFE) A document which tells borrowers the approximate costs they will pay at or before settlement, based on common practice in the locality.
82. Government National Mortgage Association (Ginnie Mae) (Ginnie Mae) The Government National Mortgage Association, known as Ginnie Mae, guarantees mortgage-backed securities issued by approved private institutions and…
83. Government-Sponsored Enterprise (GSE) (GSE) Business organizations chartered and sponsored by the federal government, which include Fannie Mae, Freddie Mac, and the FHLBanks.
84. Grantor The person conveying real property by a trust deed as security for the performance of an obligation.
85. Gross Annual Income The income reported is the total gross annual income an institution relied upon in making the credit decision.
86. Guarantee A pledge to investors that the issuing company will bear the default risk on the collateral pool of loans, thereby ensuring the timely payment of…
87. HAFA Short Sale when the homeowner sells the property for less than the full amount due on the mortgage.
88. Hazard Insurance insurance that is generally required under mortgage contracts to pay for loss or damage to a person’s home or property.
89. Home Affordable Foreclosure Alternatives Program (HAFA) (HAFA) a program that provides opportunities for homeowners who can no longer afford to stay in their home but want to avoid foreclosure to transition to more…
90. Home Affordable Modification Program (HAMP) (HAMP) A program that provides eligible homeowners the opportunity to modify their mortgages to make them more affordable. See www.MakingHomeAffordable.gov.
91. Home Affordable Refinance Program (HARP) (HARP) A program that provides homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly…
92. Home Affordable Unemployment Program (UP) (UP) a program that provides homeowners a temporary forbearance, which is a temporary period of time during which a regular monthly mortgage payment is reduced…
93. Home Equity Line of Credit (HELOC) (HELOC) A line of credit secured by the equity in a consumer's home. It can be used for home improvements, debt consolidation, and other major purchases.
94. Home Improvement Loan A home improvement loan is (a) any dwelling-secured loan to be used, at least in part, for repairing, rehabilitating, remodeling, or improving a dwelling…
95. Home improvement scams A contractor talks you into costly or unnecessary repairs, steers you to a high-cost mortgage lender to finance the job, and arranges for the loan…
96. Home Ownership and Equity Protection Act (HOEPA) (HOEPA) Lenders are required to report whether a loan is subject to the provisions of the HOEPA.
97. Home Owners’ Loan Act Enacted in 1933, this Act established the Home Owners’ Loan Corporation and authorized steps to: provide emergency relief with respect to home mortgage…
98. Home Purchase Loan A home purchase loan is any loan secured by and made for the purpose of purchasing a dwelling. See the definition of "dwelling."
99. Housing and Economic Recovery Act (HERA) (HERA) HERA was enacted in 2008, and it established FHFA-OIG and FHFA, which oversees the GSEs’ operations.
100. Housing and Urban Development Act Enacted in 1968, this Act partitioned Fannie Mae into two separate organizations, a government-sponsored corporation (Fannie Mae) and a wholly-owned…