Mortgage — page 2 of 2

Mortgage terms

101. Housing expense the sum of a homeowner’s mortgage payment, hazard insurance, property taxes, and homeowner association fees.
102. HUD-1 Uniform Settlement Statement Standard form used to disclose costs at closing. All charges imposed in the transaction, including mortgage broker fees, must be disclosed separately.
103. Implied Guarantee The assumption, prevalent in the financial markets, that the federal government will cover GSE debt obligations.
104. Inspector General Act Enacted in 1978, this Act authorized establishment of Offices of Inspectors General, “independent and objective units” within federal agencies that…
105. Inspector General Reform Act Enacted in 2008, this Act amended the Inspector General Act to enhance the independence of inspectors general and to create a Council of the Inspectors…
106. Interest The term interest is used to describe the cost of using money, a right, share, or title in property.
107. Interest rate The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time.
108. Interest Rate Risk Interest-rate risk describes the impact that a change in current interest rates is likely to have on the value of your investment portfolio.
109. Interest-Only Mortgage With an interest-only mortgage loan, you pay only the interest portion of each scheduled payment for a fixed term, often five to seven years.
110. Investment Property a property not considered to be a primary residence that is purchased in order to generate income, profit from appreciation, or to take advantage of…
111. Lender-Placed Insurance insurance placed on a home or property by a lender to protect their interest in the collateral which secures the loan.
112. Lien Legal claim against a property. Once the property is sold, the lien holder is then paid the amount that is owed.
113. Lien Status For HMDA reporting purposes, lenders are required to report lien status for loans they originate and applications that do not result in originations…
114. Loan Application Number A unique identifier (up to 25 characters long) that can be used to retrieve the particular loan application to which the entry relates.
115. Loan Application Register (LAR) (LAR) also known as the HMDA-LAR, the LAR, or the Register. The term LAR refers to the loan application register format that has been prescribed for reporting…
116. Loan flip The lender encourages you to get additional cash by refinancing your mortgage again and again.
117. Loan modification An adjustment or compromise of an existing residential mortgage loan. (Excludes a refinancing transaction.)
118. Loan modification activities For compensation or gain, or in the expectation of compensation or gain, engaging in or offering to engage in effecting loan modifications in Idaho.
119. Loan Origination Fees Fees charged by the lender for processing the loan and which are often expressed as a percentage of the loan amount.
120. Loan Purpose Indicates whether the purpose of the loan or application was for home purchase, home improvement, or refinancing.
121. Loan to Value (LTV) Ratio (LTV) in real estate lending, the outstanding principal amount of the loan divided by the appraised value of the property underlying the loan.
122. Loan Type Indicates whether the loan granted, applied for, or purchased was conventional, government-guaranteed, or government-insured.
123. Lock-In The process by which a lender commits to lend at a particular rate as long as the mortgage transaction closes within a specified time period.
124. Lock-in agreement A written agreement guaranteeing a homebuyer a specific interest rate on a home loan provided that the loan is closed within a certain period, such as 60…
125. Loss Mitigation The full range of solutions that may avert either the loss of a debtor’s property to foreclosure, increased costs to the lender or both.
126. Metropolitan Division (MD) (MD) A metropolitan division is a subset of an MSA having a single core with a population of 2.5 million or more.
127. Metropolitan Statistical Area (MSA) (MSA) For purposes of HMDA, the term is interchangeable with "metropolitan area." The underlying concept of an MSA is that of a core area containing a large…
128. Metropolitan Statistical Area (MSA) / Metropolitan Division (MD) (MSA) An area that has at least one urbanized area of 50,000 or more population, plus adjacent territory that has a high degree of social and economic…
129. Monthly Gross Income (MGI) (MGI) the total income of all homeowners who sign a mortgage before any taxes or other deductions are made.
130. Mortgage A debt instrument used in a real estate transaction where the property is the collateral for the loan.
131. Mortgage Insurance (MI) (MI) insurance that protects lenders against losses caused by a rhomeowner's default on a mortgage loan.
132. Mortgage life insurance Term life insurance paid by the borrower in which the amount of coverage decreases as the mortgage balance declines.
133. Mortgage Modification a change in the terms of a loan, usually the interest rate and/or term, in response to the homeowner's inability to make the payments under the existing…
134. Mortgage Payment the amount of money paid on a monthly basis for principal, interest, property taxes, hazard insurance and homeowner’s association fees, if applicable.
135. Mortgage Payment Guideline the calculation within HAMP that helps determine a homeowners eligibility. It is calculated as 31% of the homeowner’s current monthly gross income.
136. Mortgage-Backed Securities (MBS) (MBS) MBS are debt securities that represent claims to the cash flows from pools of mortgage loans, most commonly on residential property.
137. Negative amortization When your loan principal increases rather than decreases because your monthly payment isn't enough to cover the loan interest, that's called negative…
138. Negative Equity the condition of owing more on the property than the property is worth.
139. Nondepository Institution For-profit mortgage lending institutions (other than banks, savings associations, and credit unions). These institutions do not take deposits.
140. Occupancy Indicates whether the property to which the loan application relates will be the owner's principal dwelling.
141. Panel - HMDA Reporter Panel Listing The reporter panel listing is the universe of all institutions that reported under HMDA. A separate panel exists for each reporting year.
142. Payment Cap A limit on the amount that your monthly mortgage payment on a loan may change, usually a percentage of the loan.
143. point An amount equal to one percent of the principal amount of a mortgage. Loan discount points are a one-time charge assessed at closing by the lender to…
144. Points (also called discount points) One point is equal to 1 percent of the principal amount of a mortgage loan. For example, if a mortgage is $200,000, one point equals $2,000.
145. Pre-foreclosure sale when the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less…
146. Preferred Stock Some corporations issue preferred as well as common stock. Preferred stock can be an attractive investment because it typically pays a fixed dividend on a…
147. Prepayment Penalty A penalty imposed on a borrower for repaying the loan before its due date. (In the case of a mortgage, this applies when there is not a prepayment clause…
148. Prepayment penalty/prepayment premium A charge the mortgagor pays the mortgagee for the privilege to prepay the loan.
149. Pricipal, interest, taxes, insurance and homeowners association dues (PITIA) (PITIA) Shorthand for principal, interest, taxes and insurance, which are the components of the housing expense.
150. Primary Mortgage Market The market for newly originated mortgages.
151. Primary or Principal Residence the property in which the homeowner will live most of the time, as distinct from a second home or an investor property that will be rented.
152. Prime See Subprime
153. Prime Mortgages A classification of mortgages that are considered to be of high quality.
154. Principal Face value of an obligation, such as a bond or a loan, that must be repaid at maturity.
155. Private-Label Mortgage-Backed Securities (Private-label MBS) MBS derived from mortgage loan pools assembled by entities other than GSEs or federal government agencies, such as private-sector finance companies.
156. Private-Label Mortgages loans that are not owned or guaranteed by Fannie Mae, Freddie Mac, Ginnie Mae, or another Federal agency.
157. Property Type Indicates whether the loan or application was for a one-to-four-family dwelling (other than manufactured housing), manufactured housing, or multifamily…
158. Quality Edits The data in question do not agree with an expected standard (value). Review for correctness and change only if erroneous data has been reported.
159. Rate Spread The price data take the form of a "rate spread." Lenders must report the spread (difference) between the annual percentage rate (APR) on a loan and the…
160. Real property A dwelling or home is often referred to as real property.
161. Reasons for Denial These fields identify why an application was denied. As many as three reasons may be reported.
162. Refinance The repayment of a debt from the proceeds of a new loan using the same property as security.
163. Refinancing A way of obtaining a better interest rate, lower monthly payments, or borrow cash on the equity in a property that has built up on a loan.
164. Repayment Plan a process where a homeowner promises to pay down past due amounts on a mortgage while continuing to make regular monthly payments on a property
165. Respondent Name The name of the HMDA reporting institution.
166. Respondent or Reporter ID (RID) (RID) A ten-digit number used to identify a HMDA reporting institution. RIDs often require leading zeros to meet the length requirement.
167. Right of Rescission Right to cancel, within three business days, a contract that uses the home of a person as collateral, except in the case of a first mortgage loan.
168. Second Lien Modification Program (2MP) (2MP) program that provides homeowners a way to modify their second mortgages to make them more affordable when their first mortgage is modified under the HAMP.
169. Second Mortgage a loan with a second-priority claim against a property in the event that the homeowner defaults.
170. Secondary Mortgage Market The market for buying and selling existing mortgages; this could be in the form of whole mortgage or MBS sales.
171. Securitization Securitization is the process of pooling various types of debt - mortgages, car loans, or credit card debt, for example - and packaging that debt as…
172. Self-Amortizing Loans Loans in which periodic payments of principal and interest are scheduled over the life of the loan.
173. Senior Preferred Stock Purchase Agreement (PSPA) (PSPA) Entered into at the time the conservatorships were created, the PSPAs authorize the Enterprises to request and obtain funds from Treasury, which in turn…
174. Servicemen’s Readjustment Act Enacted in 1944 and also known as the GI Bill, this Act offered veterans of the Second World War educational and financial benefits, including long-term…
175. Servicer A business, often a bank or mortgage company, that accepts and records mortgage payments from borrowers, negotiates workout plans and supervises the…
176. Servicing transfer when one servicer is replaced by another.
177. Short Sale when the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than…
178. State Code A two-digit FIPS (Federal Information Processing Standards) code that identifies the state where the property is located.
179. Subprime “Prime” and “Subprime” refers to the interest rate and terms of the loan based on the borrower’s credit history.
180. Subprime Mortgages A classification of mortgages with a higher perceived risk of default than prime and Alt-A loans.
181. Suspension The temporary disqualification of a firm or individual from contracting with the government or participating in government programs, pending the outcome…
182. Swap When you swap or exchange securities, you sell one security and buy a comparable one almost simultaneously.
183. Syntactical Edits The loan applications will not be loaded to the FFIEC database. If they should be included on the FFIEC database, the data must be corrected.
184. Term A term is the length of time between when a fixed-income security, such as a bond or note, is offered for sale and its maturity date.
185. Thrift An organization that primarily accepts savings account deposits and invests most of the proceeds in mortgages.
186. Title A title is a legal document proving ownership of a piece of property. If you are buying real estate you authorize a title search, or examination of…
187. Transmittal Sheet (TS) (TS) The transmittal sheet is submitted with a reporter's data. The transmittal sheet includes the following information: reporter's HMDA ID number, regulatory…
188. Trial Period or Trial Period Plan HAMP requires homeowners to enter into a trial period plan before receiving a permanent HAMP modification.
189. Trust A fiduciary relationship in which a person, called a trustee, holds title to property for the benefit of another person, called a beneficiary.
190. Trust deed A deed executed in conformity with title 45, chapter 15, Idaho Code, and conveying real property to a trustee in trust to secure the performance of an…
191. Trustee A trustee is a person or institution appointed to manage assets for someone else's benefit.
192. Truth in Lending Act (TILA) (TILA) The Truth in Lending Act is a Federal law that requires lenders to provide standardized information so that borrowers can compare loan terms.
193. Type of Purchaser If you sell a loan in the same calendar year in which it was originated or purchased, you must identify the type of purchaser to whom it was sold.
194. Underwriting The purchase for resale of a new issue of securities by an investment dealer or group of dealers.
195. Unpaid Principal Balance (UPB) (UPB) amount of a loan that is due to the lender. This does not include additional charges, such as interest.
196. Validity Edits The specified data are reported incorrectly and must be corrected. The most common example is incorrect census tracts.
197. Weighted Average Life (WAL) (WAL) average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding.
198. Work Out a way to resolve or restructure a loan to prevent a homeowner from going into foreclosure through a loan modification, forbearance or short sale.