Chapter 16 Key Terms & Definitions Flashcards
BDM/BDO
Business Development Manager / Business Development Officer. These are two titles held by representatives of lenders who are tasked with obtaining business from mortgage agents.
BFS
Business For Self. This term applies to those clients who are self-employed.
O/O
Owner occupied property
Prime lending
Refers to mortgage lending to borrowers who are considered very good risks
Private lender
A private lender is typically an individual investor with funds who would like to invest in mortgages. This individual will usually invest through his or her lawyer who may have clients requiring mortgage financing or a mortgage agent. His or her purpose may vary but normally an investor will invest in 2nd mortgages due to their higher rate of return when compared with 1st mortgages and other potential types of investments.
Product sheet
A document provided by a lender that outlines the terms and conditions of its products
Rate drop
Typically refers to the practice of decreasing a client’s mortgage rate after he or she has been approved but before the mortgage transaction has closed, when the lender’s interest rate on the product has decreased
Rate hold
Typically refers to the practice of maintaining a rate for a specific period of time, whereby the lender will keep the client’s mortgage rate at the approved amount after he or she has been approved but before the mortgage transaction has closed, when the lender’s interest rate on the product has increased
Rate sheet
A document provided by a lender that lists the interest rates for specific products, based on specific terms
Self-insured lender
A term used to describe a sup-prime lender that charges a lender’s fee. This fee is often comparable in amount to the fees charged by default insurers. This fee is used by the lender to offset amounts lost by borrowers who default on their mortgages but is not an actual insurance premium since these lenders do not use default insurance.
SFD
Single Family Dwelling
Sub-prime lending
Refers to mortgage lending to borrowers who are considered poor risks or who do not qualify for prime lending
