Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
239 Cards in this Set
- Front
- Back
|
ability-to-repay (ATR) rules
|
A federal standard for determining an applicant’s ability to repay a consumer mortgage.
|
|
|
acceleration
|
A demand for immediate payment of all amounts remaining unpaid on a mortgage or extension of credit by a lender or carryback seller.
|
|
|
active license
|
A license status which allows an individual California Bureau of Real Estate (CalBRE) licensee to perform mortgage loan originator (MLO) services as an employee of a Department of Business Oversight (DBO) MLO.
|
|
|
adjustable rate mortgage (ARM)
|
A variable interest rate note, often starting out with an introductory teaser rate which resets in a few months or years based on a particular index.
|
|
|
advance fee
|
A fee paid in advance of any services rendered.
|
|
|
adverse action notice
|
A disclosure notifying the applicant a negative action has been taken on their consumer mortgage application due to an unfavorable credit history, as required by the Fair Credit Reporting Act (FCRA).
|
|
|
affiliated business arrangement (ABA)
|
A business arrangement in which a broker may lawfully profit from referring a client to a service provider the broker owns; requires the broker to make a disclosure of their ownership interest to the client.
|
|
|
all-inclusive trust deed (AITD)
|
A note entered into by a buyer in favor of the seller to evidence the amount remaining due on the purchase price after deducting the down payment, an amount inclusive of any specified mortgage debts remaining of record with the seller retaining responsibility for their payment.
|
|
|
allonge
|
An attachment to a note occurring between preparation of the note and closing the transaction providing information necessary to update entries on the note at the time it becomes effective.
|
|
|
anti-deficiency
|
A limitation placed on a mortgage lender’s ability to recover losses on default when the secured property’s value is insufficient to satisfy the mortgage debt.
|
|
|
appraisal
|
An appraiser’s opinion or estimate of a property’s value on a specific date, reduced to writing in an appraisal report.
|
|
|
appraisal report
|
Documentation of an appraiser’s findings, including the purpose and scope of the appraisal.
|
|
|
appraised value
|
The fair market value (FMV) arrived at by an appraiser.
|
|
|
Articles of Incorporation
|
An instrument setting forth the basic rules and purposes under which a private corporation is formed.
|
|
|
back-end debt-to-income ratio (DTI)
|
The percentage of monthly gross income that goes towards paying non-mortgage debt.
|
|
|
balance sheet
|
An itemized, dollar-value presentation for setting an individual’s net worth by subtracting debt obligations (liabilities) from asset values.
|
|
|
balloon payment
|
Any final payment on a note which is greater than twice the amount of any regularly scheduled payments.
|
|
|
balloon-payment qualified mortgage
|
A type of qualified mortgage which allows small lenders to include a balloon feature.
|
|
|
beneficiary statement
|
A written disclosure made by a mortgage holder regarding the condition of a debt owed to them, usually evidenced by a trust deed note.
|
|
|
blind pool investment program
|
An investment which involves receipt of investor contributions in a group investment program before the syndicator identifies and discloses the real estate interest the investors’ funds will be used to acquire, an activity controlled by securities law.
|
|
|
bona fide purchaser (BFP)
|
A buyer who purchases a property for valuable consideration in good faith without notice or knowledge of pre-existing encumbrances or conditions affecting their right to full ownership.
|
|
|
broker-associate
|
A California Bureau of Real Estate (CalBRE)-licensed broker who works in the employment of another CalBRE broker.
|
|
|
business activity report
|
A report notifying the California Bureau of Real Estate (CalBRE) of an employing broker’s mortgage activities during the fiscal year.
|
|
|
business mortgage
|
A debt incurred primarily for other than personal, family, or household purposes and secured by any type of real estate.
|
|
|
buyer mortgage capacity
|
A buyer’s ability to make mortgage payments based on their debt-to-income ratios (DTI).
|
|
|
call
|
A mortgage holder’s demand for the balance of the loan to be immediately paid in full.
|
|
|
capitalization approach
|
An appraisal method used by an appraiser to arrive at a property’s value based on the present worth of a property’s future net operating income.
|
|
|
carryback mortgage
|
A note and trust deed executed by a buyer of real estate in favor of the seller for the unpaid portion of the sales price on closing, also known as an installment sale, credit sale or seller financing.
|
|
|
certificate of sale
|
A certificate issued to the successful bidder on the completion of a judicial sale of a property.
|
|
|
changed circumstances
|
Extraordinary events defined by federal mortgage law which may be the basis for the costs provided in the Loan Estimate.
|
|
|
closed-end mortgage
|
A mortgage in which the funds are disbursed once and paid off over time.
|
|
|
Closing Disclosure
|
A disclosure of the buyer’s final settlement charges and mortgage terms handed to the buyer on a standard form within three business days before mortgage closing.
|
|
|
collateral assignment
|
An agreement providing additional, cumulative and concurrent security for a debt, in the form of personal property, to secure the property owner’s performance under the debt.
|
|
|
commercial communication
|
Anything written or spoken used to attract homeowners to a service.
|
|
|
commingling
|
The mixing of personal funds with client or third-party funds held in trust.
|
|
|
comparable property
|
A recently sold or listed property which has characteristics similar to the subject property being evaluated.
|
|
|
comparative market analysis (CMA)
|
An appraisal method used by an appraiser to arrive at a property’s value based on the current selling prices of similar properties.
|
|
|
compensating factors
|
Positive factors which compensate for a high debt load.
|
|
|
computation period
|
For impound account analysis, the 12-month period beginning on the date of the initial impound deposit during which monthly deposits, disbursements and any applicable interest occur.
|
|
|
conforming mortgage
|
A conventional mortgage with terms, conditions and a maximum principal amount set by Fannie Mae and Freddie Mac.
|
|
|
consumer mortgage
|
A debt incurred primarily for personal, family, or household purposes and secured by a parcel of real estate containing one-to-four residential units.
|
|
|
consumer mortgage application
|
A consumer mortgage application is a request for an offer of consumer mortgage terms.
|
|
|
consumer purpose
|
A primarily personal, family or household use.
|
|
|
consumer reporting agency
|
Companies that compile debt information from credit bureaus and other credit sources and sell credit reports to consumers or lenders.
|
|
|
contract collection
|
The collection and accounting for payments on a promissory note for a fee.
|
|
|
conventional mortgage
|
A mortgage that is not made, insured or guaranteed by the federal government.
|
|
|
conversion
|
The unlawful appropriation of another’s property, as in the conversion of trust funds.
|
|
|
conversion adjustable rate mortgage (ARM)
|
An adjustable rate mortgage (ARM) which may be converted to a fixed rate mortgage (FRM) during the mortgage term.
|
|
|
cost approach
|
An appraisal method used by an appraiser to arrive at a property’s value based on the present cost of constructing the present improvements and acquisition of the land.
|
|
|
credit repair
|
A service purporting to raise credit scores and remove bad credit.
|
|
|
credit repair organization
|
A person or company that offers to improve a buyer’s credit history, record or rating in exchange for a fee.
|
|
|
Credit Repair Organization Act (CROA)
|
A federal law protecting credit repair consumers from fraud perpetrated by credit repair organizations.
|
|
|
credit report
|
A compilation of a buyer’s collected credit history.
|
|
|
credit score
|
A numerical representation of a borrower’s creditworthiness, based on credit information obtained by a credit bureau.
|
|
|
credit score disclosure
|
A disclosure of a consumer’s credit score information as required by the Fair Credit Reporting Act (FCRA).
|
|
|
credit score exception notice
|
A risk-based pricing notice disclosure provided to the consumer to fulfill the credit score disclosure and the Notice to Home Loan Applicant under the Fair Credit Reporting Act (FCRA).
|
|
|
creditworthiness
|
An individual’s likelihood of repaying a mortgage, determined by their present income, wealth and previous debt payment history.
|
|
|
debt-to-income ratio (DTI)
|
The percentage of monthly gross income that goes towards paying debt.
|
|
|
declaration of default and demand for sale
|
A document delivered to the trustee under a power of sale provision by the mortgage holder instructing the trustee to initiate foreclosure on the secured real estate by recording a notice of default (NOD).
|
|
|
deficiency
|
Losses experienced by a mortgage holder at a foreclosure sale due to insufficient value of the mortgaged property to satisfy the mortgage debt.
|
|
|
desk review
|
A second appraiser’s review of an appraisal report to verify and evaluate the findings.
|
|
|
Desktop Underwriter (DU)
|
Fannie Mae’s automated underwriting (AU) system.
|
|
|
discount points
|
The amount of money the borrower or seller must pay the lender to get a mortgage at a stated interest rate.
|
|
|
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)
|
A 2010 enactment of significant changes to U.S. financial regulation in response to the 2007 financial crisis.
|
|
|
draw period
|
The time period during which the homeowner may draw on the funds in a home equity line of credit (HELOC).
|
|
|
due-on clause
|
A trust deed provision used by lenders to call the loan immediately due and payable, a right triggered by the owner’s transfer of any interest in the real estate, with exceptions for intra-family transfers of their home.
|
|
|
dwelling
|
AA building or personal property occupied or designed to be occupied as a residence by one or more families.
|
|
|
eligible non-borrowing spouse
|
A non-borrowing spouse eligible to defer repayment of a home equity conversion mortgage (HECM) and remain on the property after the borrower’s death.
|
|
|
end of draw (EOD) period
|
The time period following the draw period during which the home equity line of credit (HELOC) resets and the homeowner begins making monthly payments of principal and interest.
|
|
|
Energy-Efficient Mortgage (EEM)
|
A Federal Housing Administration (FHA) mortgage which finances energy-efficient improvements.
|
|
|
entitled person
|
The original borrower on a note and trust deed, their successor-in-interest or an authorized agent of either who may request, in writing, a beneficiary statement or payoff demand statement.
|
|
|
Equal Credit Opportunity Act (ECOA)
|
A federal law which prohibits discriminatory and unfair lending practices.
|
|
|
errors and omissions (E&O) insurance
|
An insurance policy protecting brokers and agents from negligent conduct when acting as a licensee.
|
|
|
exculpatory clause
|
A provision in a note secured by a trust deed which converts a recourse debt into nonrecourse debt to bar recovery by a money judgment against the borrower.
|
|
|
Fair Credit Reporting Act (FCRA)
|
A federal law controlling the collection and use of consumer credit reports, including the delivery of disclosures to credit consumers.
|
|
|
fair market value (FMV)
|
The price a reasonable, unpressured buyer would pay for property on the open market.
|
|
|
fair value hearing
|
The court proceeding at which a money judgment is awarded for any deficiency in the secured property’s fair market value (FMV) at the time of the judicial foreclosure sale to fully satisfy all debt obligations owed the mortgage holder.
|
|
|
federally registered mortgage loan originator (MLO)
|
A mortgage loan originator (MLO) employed by a federally regulated bank, credit union or financial company.
|
|
|
federally related mortgage
|
A consumer mortgage made, insured, guaranteed, assisted or otherwise connected to the federal government, controlled by the Real Estate Settlement Procedures Act (RESPA).
|
|
|
field review
|
A second appraiser’s independent visual inspection of the property to verify and evaluate the findings of the original appraisal report.
|
|
|
first-point-of-contact materials
|
Materials used to solicit or create a client relationship with prospective mortgage borrowers.
|
|
|
foreclosure consultant
|
An individual offering services which claim to aid homeowners with mortgage-related issues, for a fee.
|
|
|
foreclosure decree
|
Decree by a court ordering the sale of mortgaged property and the payment of the debt owing to the lender out of the proceeds.
|
|
|
fractionalizing
|
Selling a share of interest in one note to multiple investors.
|
|
|
freeze
|
A prohibition against additional extensions of credit under a home equity line of credit (HELOC).
|
|
|
front-end debt-to-income ratio (DTI)
|
The percentage of monthly gross income that goes towards paying mortgage debt.
|
|
|
full credit bid
|
The maximum amount the foreclosing mortgage holder may bid at a trustee’s sale without adding cash, equal to the debt secured by the property being sold, plus trustee’s fees and foreclosure expenses.
|
|
|
fully-indexed rate
|
The highest rate possible on the adjustable rate mortgage (ARM) during the first five years of its term.
|
|
|
future advances clause
|
A trust deed provision authorizing a mortgage holder to advance funds for payment of conditions impairing the mortgage holder’s security interest in the mortgaged property, such as delinquent property taxes, assessments, improvement bonds, mortgage insurance premiums or elimination of waste.
|
|
|
Garn-St. Germain Federal Depository Institutions Act of 1982
|
A federal law which preempts state-level limitations on a mortgage holder’s enforcement of the due-on clause contained in mortgages.
|
|
|
general qualified mortgage
|
A consumer mortgage conforming to safe harbor status under the federal ability-to-repay (ATR) rules.
|
|
|
good faith deposit
|
A money deposit made by a buyer to evidence their good faith intent to buy when making an offer to acquire property. Also known as earnest money.
|
|
|
government monitoring information (GMI)
|
Demographic information collected from mortgage applications used to monitor lenders’ compliance with anti-discrimination laws.
|
|
|
government-related mortgage
|
A mortgage that is made, insured or guaranteed by the federal government.
|
|
|
guaranty entitlement
|
The portion of a veteran’s mortgage guaranteed by the U.S. Department of Veterans Affairs (VA).
|
|
|
hard money mortgage
|
Real estate mortgages made by private lenders.
|
|
|
holder in due course
|
One who has taken a note, check or bill of exchange in due course.
|
|
|
home equity conversion mortgage (HECM) program
|
The Federal Housing Administration (FHA)’s reverse mortgage program.
|
|
|
home equity line of credit (HELOC)
|
A mortgage giving a homeowner access to draw on their home’s equity.
|
|
|
Home Mortgage Disclosure Act (HMDA)
|
A federal law mandating data collection on mortgage originations and applications of lenders who meet Home Mortgage Disclosure Act (HMDA) threshold requirements.
|
|
|
hybrid adjustable rate mortgage (ARM)
|
A type of adjustable rate mortgage (ARM) which features a fixed rate for an introductory period and thereafter a periodically adjusted interest rate based on a predetermined formula.
|
|
|
hypothecation
|
The pledging of something as security without the necessity of giving up possession to it.
|
|
|
impound account
|
A money reserve funded monthly by the property owner and maintained by the mortgage holder to pay annual recurring ownership obligations.
|
|
|
impound account provision
|
A trust deed provision establishing a reserve of the owner’s funds for the payment of annually recurring ownership expenses.
|
|
|
index
|
A regularly issued composite market interest rate for an investment such as Treasury Securities or inter-bank loans used to set the basis for periodic interest rate adjustments.
|
|
|
individual mortgage loan originator (MLO)
|
A natural person who meets the definition of a mortgage loan originator (MLO) .
|
|
|
initial interest rate cap
|
A limit on the amount the interest rate may change on the first adjustment of an adjustable rate mortgage (ARM).
|
|
|
institutional lender
|
A lender which pools deposits and invests them by making mortgages, e.g. a bank, credit union or insurance company.
|
|
|
inter vivos (living) trust
|
A title holding arrangement used as a vesting by a property owner for probate avoidance on death.
|
|
|
Interest Rate Reduction Refinance Loan (IRRRL)
|
A U.S. Department of Veterans Affairs (VA)-guaranteed refinance that lowers the interest rate of an existing VA-guaranteed mortgage.
|
|
|
interest-only adjustable rate mortgage (ARM)
|
A type of adjustable rate mortgage (ARM) which features an initial period of interest-only payments.
|
|
|
introductory interest rate
|
The initial rate of interest on an adjustable rate mortgage (ARM), typically lower than the fully-indexed note rate and lasting for a set introductory period. Also known as a teaser rate.
|
|
|
judicial foreclosure
|
The court-ordered sale by public auction of the mortgaged property. Also known as a sheriff’s sale.
|
|
|
jumbo mortgage
|
A conventional mortgage with a principal amount exceeding the conforming or super-conforming mortgage limits set by Fannie Mae and Freddie Mac.
|
|
|
kickback
|
A fee improperly paid to a transaction agent (TA) who renders no service beyond the act of referring when the TA is already providing another service in the transaction for a fee.
|
|
|
left expentancy set-aside
|
A lender-mandated portion of a home equity conversion mortgage (HECM) set aside for the payment of property charges.
|
|
|
lender overlay
|
Lender-imposed standards on consumer mortgages to be met by applicants in addition to standards set by mortgage insurers and investors.
|
|
|
lender-paid mortgage insurance (LPMI)
|
Default mortgage insurance provided by private insurers in which the lender pays the mortgage insurance premium and recovers the cost through a higher interest rate.
|
|
|
lifetime interest rate cap
|
A limit on the amount the interest rate can increase over the life of an adjustable rate mortgage (ARM).
|
|
|
line of credit payment
|
A home equity conversion mortgage (HECM) payment option in which the homeowner may choose when and how much money to withdraw from their line of credit until they reach their principal limit.
|
|
|
lis pendens
|
A notice recorded for the purpose of warning all persons that the title or right to possession of the described real property is in litigation.
|
|
|
litigation guarantee
|
A title insurance policy which lists all parties with a recorded interest in a property and their addresses of record, ensuring that all persons with a recorded interest in a property are named and served in litigation.
|
|
|
Loan Estimate
|
An estimate of a buyer’s settlement charges and mortgage terms handed to the buyer on a standard form within three business days following the lender’s receipt of the mortgage application.
|
|
|
loan level price adjustment
|
Adjusted interest rates or fees based on the risk of default a mortgage poses.
|
|
|
Loan Prospector (LP)
|
Freddie Mac’s automated underwriting (AU) system.
|
|
|
Loan/Application Register (LAR)
|
The electronic form used to collect Home Mortgage Disclosure Act (HMDA) data.
|
|
|
loan-to-value ratio (LTV)
|
A ratio stating the outstanding mortgage balance as a percentage of the mortgaged property’s fair market value (FMV).
|
|
|
long-term rate
|
An interest rate fixed for the duration of the loan.
|
|
|
lump sum option
|
A home equity conversion mortgage (HECM) payment option in which the homeowner receives one payment after closing.
|
|
|
mandatory obligation
|
The costs associated with originating and closing a home equity conversion mortgage (HECM).
|
|
|
margin
|
The interest points added to an index by a lender as profit on the adjustment of an adjustable rate mortgage (ARM).
|
|
|
maximum claim amount
|
The ceiling amount for how much the homeowner is responsible for repaying once a home equity conversion mortgage (HECM) becomes due.
|
|
|
metropolitan statistical area (MSA)
|
A large region connected by common economic ties, considered as a unit for statistical purposes.
|
|
|
money judgment (on foreclosure)
|
An award for any unpaid balance remaining after a judicial foreclosure sale due to the secured property’s insufficient fair market value (FMV) on the date of the sale to satisfy the debt owed, also called a deficiency.
|
|
|
Mortgage Acts and Practices — Advertising
|
A federal law governing consumer mortgage advertisements.
|
|
|
Mortgage Assistance Relief Services (MARS) rule
|
A federal regulation protecting homeowners by controlling the activities of mortgage assistance relief providers.
|
|
|
mortgage call report
|
A quarterly report on consumer mortgage data provided to the Nationwide Mortgage Licensing System (NMLS), used to enhance regulatory oversight.
|
|
|
mortgage insurance premium (MIP)
|
Default insurance premiums required on a Federal Housing Administration (FHA)-insured mortgage, paid both up-front and annually.
|
|
|
mortgage loan activity notification
|
A report notifying the California Bureau of Real Estate (CalBRE) when a licensee commences offering mortgage loan originator (MLO) services.
|
|
|
Mortgage Loan Disclosure Statement (MLDS)
|
A California disclosure provided to a borrower by a mortgage broker who negotiates a mortgage on the borrower’s behalf.
|
|
|
mortgage loan originator (MLO)
|
An individual who receives fees to arrange a consumer mortgage.
|
|
|
mortgage loan originator (MLO) broker
|
A mortgage loan originator (MLO) who is other than a natural person, such as a corporate broker.
|
|
|
mortgage processing
|
The receipt of a mortgage application and the organization, preparation and confirmation of supporting documentation by the lender’s mortgage processor for submission to the lender.
|
|
|
mortgage steering
|
A mortgage loan originator (MLO) practice of directing a homebuyer to a consumer mortgage with less favorable terms in order to obtain greater compensation.
|
|
|
mortgage-backed loan (MBL)
|
A loan secured by the assignment of an existing note and trust deed.
|
|
|
Nationwide Mortgage Licensing System (NMLS)
|
The national registry of consumer mortgage loan originators (MLOs).
|
|
|
Nationwide Mortgage Licensing System (NMLS) identification number (ID)
|
A unique number identifying a consumer mortgage loan originator (MLO) in the Nationwide Mortgage Licensing System (NMLS).
|
|
|
negative amortization
|
The addition of unpaid interest to the principal balance of a mortgage due to insufficient monthly interest payments.
|
|
|
nonjudicial foreclosure
|
When property is sold at a public auction by a trustee as authorized under the power-of-sale provision in a trust deed.
|
|
|
nonrecourse debt
|
A debt recoverable on default solely through the value of the security interest in the secured property.
|
|
|
nontraditional credit
|
Accounts other than traditional mortgage, loan, credit card and bank accounts, used to analyze a consumer’s ability to repay debt.
|
|
|
note rate
|
The interest rate agreed to between the homebuyer and the lender on the promissory note. Contrast with real interest rate.
|
|
|
notice of action taken
|
A notice disclosing to the applicant the specific reasons for a denial of credit, as required by the Equal Credit Opportunity Act (ECOA).
|
|
|
Notice of Default (NOD)
|
The notice filed to begin the nonjudicial foreclosure process. Generally, it is filed following three or more months of delinquent mortgage payments.
|
|
|
notice of incompleteness
|
A notice requesting additional information to complete a mortgage application, as required by the Equal Credit Opportunity Act (ECOA).
|
|
|
notice of right to rescind
|
A disclosure notifying a homeowner of their right to cancel a non-purchase money consumer mortgage secured by their principal residence, the circumstances allowing the homeowner to cancel and the effects of the rescission.
|
|
|
notice of trustee's sale (NOTS)
|
The notice recorded, posted and mailed to evidence an impending trustee’s sale to the property owner and potential bidders.
|
|
|
Notice to Home Loan Applicant
|
A disclosure of the consumer’s right to credit score disclosures and how consumer credit scores are used, as required by the Fair Credit Reporting Act (FCRA).
|
|
|
novation
|
An agreement entered into by a mortgage holder, buyer and seller to shift responsibility for a mortgage obligation to the buyer by an assumption and release the seller of liability.
|
|
|
novation agreement
|
An agreement entered into by a mortgage holder, buyer and seller to shift responsibility for a mortgage obligation to the buyer by an assumption and release the seller of liability.
|
|
|
open-end mortgage
|
A mortgage which gives the borrower the ability to withdraw funds in a line of credit.
|
|
|
option adjustable rate mortgage (ARM)
|
An adjustable rate mortgage (ARM) giving the borrower the choice of a full monthly payment, an interest-only payment, and a minimum payment typically less than the interest due.
|
|
|
overage
|
A surplus amount in a trust account exceeding the amount of trust funds held in all the subaccounts for individuals.
|
|
|
payment cap
|
A limit on the amount of increase in the borrower’s monthly principal and interest at the payment adjustment date on an adjustable rate mortgage (ARM).
|
|
|
payoff demand
|
A written demand, prepared by a mortgage lender, for the total dollar amount required on the date of preparation to pay off the mortgage as a requisite for recording a reconveyance of their trust deed lien on a property.
|
|
|
periodic interest rate cap
|
A limit on the amount the interest rate can increase with each future adjustment of an adjustable rate mortgage (ARM).
|
|
|
portfolio category income
|
Unearned income from interest on investments in bonds, savings, income property, stocks and trust deed notes.
|
|
|
portfolio lender
|
A lender who both funds and holds a mortgage to collect the interest income.
|
|
|
power-of-sale provision
|
A trust deed provision authorizing the trustee to initiate a non-judicial foreclosure sale of the described property on instructions from the beneficiary.
|
|
|
pre-foreclosure workout
|
Negotiations between a mortgage holder and defaulting property owner with the purpose of exploring options to avoid foreclosure.
|
|
|
preliminary title report (prelim)
|
A report constituting a revocable offer by a title insurer to issue a policy of title insurance, used by a buyer and escrow for an initial review of the vesting and encumbrances recorded and affecting title to a property.
|
|
|
prepayment penalty
|
A levy charged by a mortgage holder to a borrower who pays off the outstanding principal balance on a mortgage prior to its maturity.
|
|
|
principal, interest, taxes and insurance (PITI)
|
The four components of monthly mortgage debt.
|
|
|
principal limit
|
The maximum mortgage amount available to the homeowner on a home equity conversion mortgage (HECM).
|
|
|
private lender
|
An individual or non-government organization that lends money.
|
|
|
private mortgage insurance (PMI)
|
Default mortgage insurance coverage provided by private insurers for conventional loans with loan-to-value ratios (LTVs) higher than 80%.
|
|
|
probate referee (on foreclosure)
|
An appraiser appointed by the court in a judicial foreclosure action to advise the court on a property’s fair market value (FMV) on the date of the judicial foreclosure sale.
|
|
|
promissory note
|
A document given as evidence of a debt owed by one person to another.
|
|
|
property charges
|
On a home equity conversion mortgage (HECM), a collective term for property taxes, insurance, ground rents, fees and special assessments.
|
|
|
property profile
|
A report from a title company providing information about a property’s ownership, encumbrances, use restrictions and comparable sales data.
|
|
|
purchase money paper
|
A nonrecourse note evidencing a debt for the purchase of a one-to-four unit residential property the buyer is going to occupy, or a seller carryback note and trust deed as an extension of credit to a buyer of any type of real estate which is secured solely by the property sold.
|
|
|
Real Estate Settlement Procedures Act (RESPA)
|
A federal law governing the behavior of service providers on a federally related mortgage which prohibits them from giving or receiving unlawful kickbacks.
|
|
|
recast
|
A mortgage holder’s demand to modify the note terms and receive payment of additional fees in exchange for waiving the due-on clause in their mortgage.
|
|
|
reconveyance
|
A document executed by a trustee named in a trust deed to release the trust deed lien from title to real estate, used when the secured debt is fully paid.
|
|
|
recourse debt
|
A debt for which a debtor may be personally liable if a sale of the secured property does not fully satisfy the debt on a default.
|
|
|
redemption
|
A property owner or junior lienholder’s right to clear title to property of a mortgage lien prior to the completion of a trustee’s sale or following a judicial foreclosure sale by paying all amounts due on the mortgage debt, including foreclosure charges.
|
|
|
redlining
|
Failure to provide financing in certain communities based on the demographics of that community.
|
|
|
regular financier
|
A lender subject to Truth in Lending Act restrictions by making more than a set threshold of consumer purpose loans or mortgage in a calendar year.
|
|
|
Regulation Z (Reg Z)
|
A federal regulation implementing the Truth in Lending Act (TILA).
|
|
|
reinstatement
|
A property owner or junior lienholder’s right to reinstate a mortgage and cure any default prior to five business days before the trustee’s sale by paying delinquent amounts due on the note and trust deed, plus foreclosure charges.
|
|
|
rescission
|
The homeowner’s termination of a non-purchase money consumer mortgage, restoring the lender and homeowner to their original positions.
|
|
|
reserve requirement
|
A requirement to hold cash in reserve as a buffer against default in case of a life-changing event.
|
|
|
residential mortgage credit report (RMCR)
|
A detailed account of a buyer’s credit, employment and residence history.
|
|
|
residential mortgage loan report
|
A report filed by California Bureau of Real Estate (CalBRE)-licensed mortgage brokers who act as direct lenders.
|
|
|
residual income
|
On a U.S. Department of Veterans Affairs (VA)-guaranteed mortgage, an analysis of a veteran’s monthly debt obligations from their gross income to ensure the veteran is able to meet minimum living expenses.
|
|
|
reverse mortgage
|
A mortgage which allows senior homeowners to use their home equity as a stream of income.
|
|
|
risk layering
|
The increased risk of default posed by cumulative smaller risks.
|
|
|
Section 32 mortgage
|
A consumer mortgage subject to additional disclosures and restrictions due to its high points and fees or an annual percentage rate (APR) or prepayment penalty duration which exceeds thresholds set by the federal Truth in Lending Act (TILA).
|
|
|
Section 35 mortgage
|
A closed-end consumer mortgage secured by a principal residence and subject to mandatory impounds, appraisal requirements and restrictions due to an annual percentage rate (APR) which exceeds thresholds set by the federal Truth in Lending Act (TILA).
|
|
|
Section 609 credit dispute
|
A credit repair tactic which disputes outdated and unverifiable derogatory information.
|
|
|
Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
|
A federal consumer protection law which created a uniform national licensing and registration scheme for mortgage loan originators (MLOs).
|
|
|
service provider
|
An individual or company which offers services connected with a prospective or actual consumer mortgage origination.
|
|
|
servicer
|
An individual responsible for receiving scheduled payments from a homeowner by arrangement with the mortgage holder.
|
|
|
settlement service
|
Any service provided in connection with a prospective or actual consumer mortgage origination.
|
|
|
short-term rate
|
A variable interest rate which changes often, driven by Federal Reserve actions to keep inflation and deflation in check.
|
|
|
small lender
|
A lender with assets of $2.052 billion or less which made 2,000 or fewer first-lien consumer mortgages in the preceding calendar year (two years, for applications received before April 1).
|
|
|
small lender qualified mortgage
|
A type of qualified mortgage which allows small lenders to include features otherwise prohibited in consumer mortgages.
|
|
|
small mortgage
|
A first trust deed debt not exceeding $30,000 or a junior trust deed debt not exceeding $20,000.
|
|
|
sole proprietor
|
A broker who conducts business as an individual rather than through a licensed corporate entity.
|
|
|
Special Information Booklet
|
A required Truth in Lending Act (TILA) disclosure containing information about the consumer mortgage process, mortgage features and costs.
|
|
|
stacking order
|
The order of mortgage application documents requested by a lender.
|
|
|
state-licensed mortgage loan originator (MLO)
|
A mortgage loan originator (MLO) licensed and regulated by a state agency.
|
|
|
subaccount ledger
|
An accounting document or file identifying the owner of trust funds and the amount held for the owner.
|
|
|
subordination
|
An agreement entered into by a mortgage holder to permit their security interest in title to the mortgaged property to take a junior position to another encumbrance.
|
|
|
super-conforming mortgage
|
A conforming mortgage with a maximum principal amount adjusted for a high-cost area.
|
|
|
surplus funds
|
The price paid for property by the successful bidder at a trustee’s sale in excess of the amount of debt and costs due under the foreclosed trust deed.
|
|
|
temporary qualified mortgage
|
A transitional qualified mortgage for lenders originating mortgages insured or guaranteed by the federal government or sold to Fannie Mae or Freddie Mac.
|
|
|
tenure payment
|
A home equity conversion mortgage (HECM) payment option in which the homeowner receives equal monthly payments until they die or sell the property.
|
|
|
term payment
|
A home equity conversion mortgage (HECM) payment option in which the homeowner receives equal monthly payments for a fixed period of time.
|
|
|
three Cs of underwriting
|
The three major components of a mortgage applicant reviewed by an underwriter: credit, capacity and collateral.
|
|
|
threshold broker
|
A private lender in the business of making mortgages, or a mortgage broker who annually negotiates services an aggregate dollar amount of mortgages above a statutory threshold.
|
|
|
tolerance
|
Acceptable ranges of deviation for changes to fees and amounts disclosed on a Loan Estimate, set by type of charge.
|
|
|
transaction agent (TA)
|
The term lenders use to identify the buyer’s agent in a sales transaction.
|
|
|
transitional license
|
A provisional mortgage loan originator (MLO) license which allows an MLO moving to another state to perform MLO services for a short period of time while they fulfill requirements to obtain an MLO license in the new state.
|
|
|
triggering terms
|
Words and phrases in consumer mortgage advertisements which trigger the need for additional disclosures.
|
|
|
trust funds
|
Items which have or evidence monetary value held by a broker for a client when acting in a real estate transaction.
|
|
|
trustee (on a mortgage)
|
A party to a mortgage who, as a legal fiction, holds title to property as security for the performance of an obligation with the authority to sell the property or reconvey the trust deed on instructions from the mortgage holder.
|
|
|
trustee's sale guarantee
|
A policy issued by a title insurance company to a trustee before or at the time the notice of default is recorded providing coverage for the trustee should they fail to serve notices on any party of record due to an omission in the guarantee.
|
|
|
trustor's offset statement
|
Statement by owner of property or owner of lien against property setting forth the present status of liens against said property.
|
|
|
Truth in Lending Act (TILA)
|
A federal consumer mortgage law which controls the terms of a consumer mortgage and requires lenders to disclose mortgage rates and charges.
|
|
|
U.S. Department of Veterans Affairs (VA) automatic
|
A lender authorized to certify a mortgage conforms to U.S. Department of Veterans Affairs (VA) regulations.
|
|
|
underwriting
|
The analysis of the risk of default posed by the information in a complete mortgage application and documentation.
|
|
|
Uniform State Test (UST)
|
A standardized test fulfilling both national and state components of the mortgage loan originator (MLO) exam.
|
|
|
unusable credit
|
Freddie Mac’s designation of credit other than usable credit, e.g., nontraditional debt.
|
|
|
upcharging
|
The practice of marking up the price of a third-party service and keeping the difference.
|
|
|
usable credit
|
Freddie Mac’s designation that an applicant has enough accurate traditional credit history to generate a valid credit score.
|
|
|
usury
|
A limit on the lender’s interest rate yield on nonexempt real estate mortgages.
|
|
|
warehouse lender
|
A lender who fund a mortgage under an agreement to immediately resell the mortgage in the secondary mortgage market.
|
|
|
yield
|
The interest earned by an investor on an investment (or by a bank on the money it has loaned). Also, called return.
|
