Fine Homes ● Exceptional Agents ● Luxury Properties

Mortgage Glossary

Below are some terms and their meaning, these terms are commonly used in the mortgage process.
Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate and payment that change periodically over the life of the loan based on changes in a specified index

Callable Debt

A debt security whose issuer has the right to redeem the security at a specified price on or after a specified date, but prior to its stated final maturity.

Charge-Off

The portion of principal and interest due on a loan that is written off when deemed to be uncollectible.

Common Stock

A security that represents ownership in a company but gives no legal claim to a definite dividend or to a return of capital.

Conventional Mortgage

A mortgage loan that is not insured or guaranteed by the federal government.

Credit Enhancement

A method to reduce credit risk by requiring collateral, letters of credit, mortgage insurance, corporate guarantees, or other agreements to provide an entity with some assurance that it will be recompensed to some degree in the event of a financial loss.

Credit Loss Ratio

The ratio of credit-related losses to the dollar amount of MBS outstanding and total mortgages owned by the corporation.

Credit-Related Expenses

The sum of foreclosed property expenses plus the provision for losses.

Credit-Related Losses

The sum of foreclosed property expenses plus charge-offs.

Credit Scoring

A process that uses recorded information about individuals and their loan requests to assess—in a quantifiable, objective, and consistent manner - their future performance regarding debt repayment.

Debt Security

A security in which the issuing company generally agrees to repay the principal (typically, the original amount borrowed) and make interest payments according to an agreed schedule.

Default

The failure of a borrower to comply with the terms of a note or the provisions of a mortgage.

Delinquency

A mortgage loan on which a payment has not been made by the due date.

Derivative

A financial instrument which derives its value from an underlying security or notional amount.

Duration

The weighted-average life of the present value of all future cash flows, both principal and interest, of a security. It is used as a measure of the sensitivity of the value of a security to changes in interest rates.

Earnings per Share (EPS)

The net earnings of a corporation divided by the average number of shares of its common stock outstanding during a period. A common method of expressing a corporation's profitability.

Fixed-Rate Mortgage

A mortgage loan in which the interest rate does not change during the entire term of the loan.

Forbearance

The lender's postponement of legal action when a borrower is delinquent. It is usually granted when a borrower makes satisfactory arrangements to bring the overdue mortgage payments up to date.

Foreclosure

The legal process by which property that is mortgaged as security for a loan may be sold to pay a defaulting borrower's loan.

Global Debt Facility

A debt issuance facility through which U.S. dollar and foreign currency debt securities may be offered to investors worldwide with the feature of clearing and settlement through a variety of clearing systems.

Guaranty Fee

Compensation paid by a lender to Fannie Mae for the guarantee of timely payments of principal and interest to MBS security holders.

Interest Rate Swap

A transaction between two parties in which each agrees to exchange payments tied to different interest rates or indices for a specified period of time, generally based on a notional principal amount.

Intermediate-Term Mortgage

A mortgage loan with a contractual maturity at time of purchase equal to or less than 20 years.

Lender Option Commitments

An agreement giving a lender the option to deliver loans or securities by a certain date at agreed-upon terms.

Loan Servicing

The tasks a lender performs to protect a mortgage investment, including collecting monthly payments from borrowers and dealing with delinquencies.

Loan-to-Value (LTV) Ratio

The relationship between the dollar amount of a borrower's mortgage loan and the value of the property.

Loss Mitigation

Activities designed to reduce either the likelihood of the corporation suffering financial losses on a loan or the final dollar value of those losses in the event of a borrower default.

Mandatory Delivery Commitment

An agreement that a lender will deliver loans or securities by a certain date at agreed-upon terms.

Medium-Term Notes

Unsecured general obligations of Fannie Mae with maturities of one day or more and with principal and interest payable in U.S. dollars.

Modification

Any change to the original terms of a mortgage.

Mortgage

A legal document that pledges property to a lender as security for the repayment of the loan. The term also is used to refer to the loan itself.

Mortgage-Backed Security (MBS)

A Fannie Mae security that represents an undivided interest in a group of mortgages. Principal and interest payments from the individual mortgage loans are grouped and paid out to the MBS holders.

Multifamily Housing

A building with more than four residential rental units.

NOD

Abbreviation for Notice Of Default.

Notice of Default

An official notice filed and recorded by a designated trustee at the request of a lender indicating lender has commenced foreclosure action.

Nonperforming Asset

An asset such as a mortgage that is not currently accruing interest or on which interest is not being paid.

Notional Principal Amount

The hypothetical amount on which interest rate swap payments are based. The notional principal amount in an interest rate swap generally is not paid or received by either party.

Preferred Stock

Stock that takes priority over common stock with regard to dividends and liquidation rights. Preferred stockholders typically have no voting rights.

Preforeclosure Sale

A procedure in which the borrower is allowed to sell his or her property for an amount less than what is owed on it to avoid a foreclosure. This sale fully satisfies the borrower's debt.

Real Estate Mortgage Investment Conduit (REMIC)

A security that represents a beneficial interest in a trust having multiple classes of securities. The securities of each class entitle investors to cash flows structured differently from the payments on the underlying mortgages.

Repayment Plan

An agreement between a lender and a borrower who is delinquent on his or her mortgage payments, in which the borrower agrees to make additional payments to pay down past due amounts while still making regularly scheduled payments.

Return on Average Common Equity

Net income available to common stockholders, as a percentage of average common stockholders' equity.

Reverse Mortgage

A financial tool which provides seniors with funds from the equity in their homes. Generally, no payments are made on a reverse mortgage until the borrower moves or the property is sold. The final repayment obligation is designed to not exceed the proceeds from the sale of the home.

Risk-Based Capital

The amount of capital necessary to absorb losses throughout a hypothetical ten-year period marked by severely adverse circumstances.

Secondary Mortgage Market

The market in which residential mortgages or mortgage securities are bought and sold.

Security

A financial instrument showing ownership of equity (such as common stock), indebtedness (such as a debt security), a group of mortgages (such as MBS), or potential ownership (such as an option).

Serious Delinquency

A single-family mortgage that is 90 days or more past due, or a multifamily mortgage that is two months or more past due.

Short Refinance

Short refinance is the replacement of a mortgage, usually with a reduced mortgage, when the borrower is already in default. This is done to transition the borrower to a more affordable payment structure. The lender has to write off the difference between the old mortgage and the new mortgage, but in some cases this may be preferable to foreclosure.

Short Sale

To sell a home through negotiation with the bank or lender, who agrees to accept less than the full amount owed to satisfy the debt allowing the debt to be ‘paid off’, short. Short sales are subject to bank approval and are often used as options in lieu of foreclosure.

Stockholders' Equity

The sum of proceeds from the issuance of stock and retained earnings less amounts paid to repurchase common shares.

Stripped MBS (SMBS)

Securities created by "stripping" or separating the principal and interest payments from the underlying pool of mortgages into two classes of securities, with each receiving a different proportion of the principal and interest payments.

Transfer Agent

A bank or trust company charged with keeping a record of a company's stockholders and canceling and issuing certificates as shares are bought and sold.

Underwriting

The process of evaluating a loan application to determine the risk involved for the lender. It involves an analysis of the borrower's ability and willingness to repay the debt and the value of the property.

Premier Beach Realty
Ph: 609.264.3600Fax:888.691.2700
1018 W. Brigantine Ave.
Brigantine, NJ 08203 US
www.PremierBeachRealty.com
Home Calculators Mortgage Glossary Today's New Listings Pre-Qualify Now Buyers Calculating Your Monthly Mortgage Payment New Listing Alerts How Much Can You Afford? Relocation Provide Your Land As Collateral Sellers Real Estate Glossary Recognizing Predatory Mortgage Lender Shopping For The Best Home Loan Sell Your House Local Schools Step By Step Guide In Obtaining A Home Loan Home Value Request Buying A Home With Bad Credit Daily Cartoon Buyer Reports Seller Reports Investor Reports Local Weather Markting Tips: How to Sell Your Home Pricing Your Home To Sell The Benefits of Home Ownership Brigantine City Info Getting Your Home Ready To Sell Atlantic City Info Ventnor City Info Home Selling Checklist Selling A House With Pets At Home Margate city Info Top Ten Showing Tips What Are Lockboxes? When Is The Right Time To Reduce The Price? Longport Info Are Your Neighbors Affecting Your Home's Value? Ocean City Info Avoid The Most Common Mistakes When Selling Your Home Somers Point Info Creating Curb Appeal Eight Things To Consider Before Listing Absecon Info Pleasantville Info Home Seller Disclosure Obligations Home Staging-Should You Hire A Professional? Galloway Township Info Protecting Your Privacy While Your Home Is Being Listed Repairs To Make Before Selling Your Home Township of Hamilton Info Egg Harbor Township Info Sell Or Remodel-Which Is Right For You? Sell Your Home Fast-Five Tips to Get A Fast Sale! Send Link to a Friend Atlantic County Info Selling Your Home-Why You Need Premier Beach Realty Selling Your Home During The Holidays How Sell In A Buyer's Market - Maximizing Your Profit Staging An Open House That Won't Cost You A Fortune Ocean County Info Ten Tips To Successfully Sell Your Home Instant Home Value Search Rentals When Should You Accept A Low Bid? Five Things You Should Put Into Storage While Selling Cape May County Info Rental Request Form How Long Should You Keep Your Home On the Market? Negotiating With A Buyer Quick Clutter Fixes For The Unexpected Showing Selling A Home When You Have Kids Should You Show An Empty Home? Simple Ideas To Make Your Home More Welcoming To Buyers The Downside To A Sale By Owner Home Remodels To Most Increase Your Selling Price What Season Is Best To Sell? Agents Commission Plans Search Commercial Listings Buying Versus Renting What Is An Ernest Money Deposit? Finding Your Perfect Home Home Buying Checklist Home Buying Negotiating Tips What Is A Home Warranty Plan? Things Needed After Purchasing a Home A Single Womans Guide To Home Ownership Buying A Fixer-Upper: Are You Ready For The Work? Buying A Forclosed Property-What You Should Know: Buying A Home Long Distance Buying A Home That Can Grow With Your Family Getting To Know The Neighborhood Before Buying A Home Hiring A Home Inspector How Much Do You Need? How To Handle A Bidding War How To Handle A Motivated Seller Is An Income Property Right For You? Negotiating Contract Contingencies From The Seller Understanding Buyer Closing Costs What A Premier Beach Realty Agent Can Do For You? What Is A Property Survey? What To Consider When Buying An Older Property A Nice Home Or Nice Neighborhood: Which Matters More? Choosing Realtor You Can Trust Examining A Home Objectively: What Matters? Findng A Neighborhood With Great Schools Homeowners Association: What You Need To Know How Much Yard Do You Need? Making An Offer: Negotiating Your Buying Price Selecting Homeowners Insurance Should You Consider A Condo Or Townhome? When To Consider Raising Your Home Buying Budget Things You Need When Applying For A Home Loan Types Of Home Loans Understanding The Closing Process A Reverse Mortgage: Is It Right For You? Avoiding Mortgage Fraud Finding A Mortgage Broker Finding The Best Fit For Your Mortgage Search Homes Contact Finding Your Credit Rating Fixed Mortgage Vs. Variable Rates Getting A Second Mortgage Negotiating An Owner Financing Purchase Paying Off Your Mortgage Faster Protecting Yourself From Unexpected Loan Adjustments Taking Advantage Of Low Interest Rates The Advantages Of Pre Approval Tips For Getting Your Down Payment Faster! Understanding Interest Rates Why You Should Avoid Subprime Lenders Will You Qualify? All About Home Equity Loans Applying For A Joint Mortgage With Your Spouse Balloon Payments: Whay They Mean For You? Can You Buy A Home With No Down Payment? FHA Loans First Time Buyer Loan Tips How Much Cash Will You Need To Close? Insurance and Property Taxes Interest Only Loans: What You Should Know Tips For Qualifying For A Better Interest Rate Christmas Decorating Ideas Creative Ways To Say, Father's Day Gift Ideas He'll Love Halloween Safety Tips Have Some Fun With Easter Eggs How To Make The Fourth Of July Fun For Kids New Year's Eve Decorating Ideas St. Patrick's Day Ideas For Family Fun Thanksgiving Day Menu Ideas Ways To Thrill Mom On Valentine's A St. Patrick's Day Menu That Your Guests Will Enjoy! Create A Romantic Valentine's Day In Your Dining Room Create A Spooky Yard For Halloween Create Kid-Safe Jack-O'-Lanterns Decorating For Christmas In The Green Living Way Decorating For Thanksgiving Decorating For The Fourth Of July Easy Easter Decorating Ideas Hanukkuh Decorating Ideas Host A Chinese New Year's Party! How To Host A Fun And Safe New Years Eve Party Memorial Day Picnic Menu Ideas! Mother's Day Brunch: Decorating And Menu Ideas Planning A Fun Fourth Of July Block Party The Right Christmas Tree For Your Front Door Tips For The Perfect Turkey A Mother's Day Menu Your Kids Can Prepare Celebrating New Year's Eve With Children Fabulous Homemade Halloween Costumes Holiday Meal Ideas You Can Prepare Ahead Of Time Is A Real Christmas Tree Right For You? Planning The Perfect Easter Egg Hunt Planning The Perfect Memorial Day Barbeque Preparing Your Home For Holiday Guests Safety Tips For Fourth Of July Fireworks Valentine's Day Crafts For Kids Agent Login Our Agents Sign Our Guest Book About Us Rental Application Feedback
Powered by LinkURealty - Real Estate Web Design & Websites