Chapter 17 Key Terms & Definitions Flashcards
Administered mortgage
When a third party is handling the collection of payments and/or other duties related to the administration of the mortgage
Commitment letter
A document illustrating an offer by a lender to a borrower, including the terms and conditions of that offer
Conditions
Terms of a lender’s commitment that must be fulfilled before the mortgage will be funded
Cooling off period
A waiting period in which a potential investor cannot provide a commitment letter nor advance funds to a borrower
Face value
The original amount of the mortgage repayable by the borrower
Funding ratio (also referred to as a Pull-Through Ratio)
The ratio of applications submitted to a lender compared to the number of fundings. For example, if a mortgage agent submitted 10 applications to a lender and 5 got funded, he or she would have a funding ratio of 50%
Insulbrick
An inexpensive type of exterior siding designed to provide insulation that is most often found on older homes. Inferior types of insulbrick can pose a fire hazard and typically grounds for declining a mortgage application.
Investor/ Lender Disclosure (Form 1)
A disclosure document required under the MBLAA to be provided to a potential private lender
Schedule (in relation to a Commitment Letter)
An addendum to a mortgage commitment that outlines additional terms and conditions of a mortgage approval
UFFI (Urea formaldehyde foam insulation)
Urea formaldehyde foam insulation is a type of insulation that is injected as a mixture of urea formaldehyde resin, an acidic foaming agent, and a propellant such as air. It was commonly used in pre-existing houses by injecting the foam into walls, where it was impractical to provide conventional insulation
Underwriter
An individual employed by a lender who reviews mortgage applications to determine if they meet the lender’s lending guidelines, and who commonly provides a commitment letter when they are deemed to meet those guidelines
