Mortgage Acronyms Flashcards
AARMR
America Association of Residential Mortgage Regulators.
Mortgage Insurance Premium – FHA loan premium for mortgage insurance on all FHA loans
AFBA
Affiliated Business Arrangement
this is an arrangement between two different companies involved in providing services in the closing of a real estate transaction. There can be no ownership interest. Requires disclosure under RESPA.
AMCs
Appraisal Management Company
The middleman between appraisers and mortgage companies.
AML
Anti-Money Laundering
Law in place to require financial institutions to prevent, detect and report money laundering activities.
APOR
Average Prime Offer Rate
Rate used to determine whether a loan is high-cost or higher priced.
APR
Annual Percentage Rate
The APR calculates the annual percentage rate you would pay on the loan once the costs of getting the loan are factored in.
ARM
Adjustable Rate Mortgage
An adjustable rate mortgage is a mortgage that will have a fixed rate for a set period of time and then the rate is adjusted. The rate will normally be adjusted once or twice a year.
ATR
Ability to Repay
Rule that requires lenders to determine whether a borrower has the ability to repay their loan and requires verification of the information provided to prove the ability to repay (under QM)
AUS
Automated Underwriting System
Example: LP and DU. Used to automatically underwrite conforming loans.
BSA
Bank Secrecy Act
Requires suspicious activity reports (SARS) regarding suspicious activities.
CAIVRS
Credit Alert Verification Reporting System
Is a federal database of people who have delinquencies on any kind of federal debt.
CFPB
Consumer Financial Protection Bureau
Federal regulator that regulates the mortgage industry. (The Boss)
CHARM
Consumer Handbook on Adjustable Rate Mortgages
Required disclosure on ARM loans to educate the consumer about the type of loan they are on.
CLTV
Combined Loan to Value
Calculated by dividing the amount of a 1st lien loan and the total line of the credit on a HELOC or total amount of a 2nd lien loan by the purchase price or the appraised value of the property whichever is less.
COE
Certificate of Eligibility
Required document on VA loans to determine the amount of eligibility that veteran borrower has.
COFI
Cost of Funds Index
Index used on ARM loan (margin + index)
DTI
Debt to Income
Two ratios, front end and back end DTI.
Front end DTI (housing expense) is determined by dividing the amount of housing divided by the borrower’s gross income, Back end DTI is all debts divided by the borrower’s gross income. (Examples of debts: credits cards, car loans, student loans> No included = cell phone bills and utilities)
DU
Desktop Underwriter
The AUS used by Fannie Mae
ECOA
Equal Credit Opportunity Act. A law in the U.S. that makes it illegal for any creditor to discriminate against any applicant on the basis of race, religion, national origin, sex, etc.
FACTA
Fair and Accurate Credit Transactions Act
Prevent identity theft, puts limits on information sharing. Amendment to FCRA.
FDIC
Federal Deposit Insurance Corporation
Regulates depository institutions.
FFIEC
Federal Financial Institutions Examination Council
Collects and distributes HMDA information
FHA
Federal Housing Administration
The Federal Government Agency that oversees the US Housing Market.
FHLMC
Federal Home Loan Mortgage Corporation
A corporation authorized by Congress to provide a secondary market for residential mortgages.
FICO
Fair Isaac Corporation
The company that created the industry standard credit scores used by almost all lenders. The FICO score is a numeric summary of the information in your credit reports that represents your potential credit risk.
FinCEN
Financial Crimes Enforcement Network
The entity that a SAR would be reported to.
FNMA
Federal National Mortgage Association (Fannie Mae)
A government sponsored entity created by Congress to increase access to mortgages Mortgages offered under Fannie Mae guidelines are called “conforming”
FTC
Federal Trade Commission
GFE
Good Faith Estimate
A GFE is a document that the lender is required to give a protective borrower when they apply for a loan. The GFE is an estimate of all cost and fees required for the proposed mortgage loan.
GLB
Ginnie Mae, Government National Mortgage Association
The Fannie and Freddie of government lending
GPM
Graduated Payment Mortgage
This is a type of mortgage on which the payment starts low and rises over time.
GSE
Government Sponsored Enterprise
Is a financial services corporation created by the US Congress (Fannie ad Freddie Mac)
HARP
Home Affordable Refinance Program
HARP is a refinance program that allows eligible borrowers, with little to no equity in their homes, to take advantage of low interest rates and other refinancing benefits.
HECM
Home Equity Conversion Mortgage
Loan for borrowers 62 years and older. Uses the equity in their home to create cash disbursement to the borrower.
HELOC
Home Equity Line of Credit
HELOC is a loan in which the lender agrees to lend a maximum amount within an agreed loan term, where the collateral is the borrower’s equity in his or her house.
HMDA
Home Mortgage Disclosure Act
Requires lenders to report their lending patterns geographically to prevent redlining and reverse redlining.
HOA
Homeowner’s Association
HOEPA
Home Ownership and Equity Protection Act
Regulates high cost home loans
HPA
Homeowners Protection Act
Regulates the cancellation of private mortgage insurance.
HPML
Higher Priced Mortgage Loan
HUD
US Department of Housing and Urban Development.
HUD is the primary hosing and lending regulatory authority in the US
IP
Investment Property
A non-owner occupied property that is rented out by the borrower.
IO
Interest Only.
a payment that only covers the interest on the loan.
IRRRL
VA Interest Rate Reduction Refinance Loan
This refinance loan allows you to lower your interest rate on an existing VA home loan.
LP
Loan Prospector
The AUS used by Freddie Mac
LTV
Loan-to-Value
LTV is a ration used by the lender that divides the amount of money borrowed by the appraised value of the home expressed as a percentage. For example, a borrower may purchase a home appraised at $200,000 with a down payment of $40,000. This means he has a loan-to-value ratio of 80%.
MARS
Mortgage Assistance Relief Services Rule
MBS
Mortgage Backed Security
These are investment instruments that are bundled by Fannie, Freddie and Ginnie Mae for sale on Wall Street
MDIA
Mortgage Disclosure Improvement Act
MERS
Mortgage Electronic Registration System
MLO
Mortgage Loan Originator
MMI
Monthly Mortgage Insurance
Mortgage insurance charged monthly on an FHA loan.
MSA
Marketing Services Agreements
NINA
No income No Asset loan.
A loan that does not require income or assets.
NIV
No income verification
A loan that requires no income verification
NMLS
Nationwide Multi-state Licensing System and Registry
NOO
Non-owner occupied
A loan on a property not occupied by the owner. (investmenet property, vacation/second home)
O/O
Owner-occupied
A loan on a property owned by the owner
OCC
Office of the Comptroller of the Currency
P&I
Principal and Interest
Principal and interest are the two elements that go towards repaying your loan.
PITI
Principle, Interest, Taxes and Insurance. These are the four main components of your monthly mortgage payment. Principle is the loan amount. Interest is the rate at which the finance charge you pay for borrowing is calculated. Taxes are the real estate taxes for which you are responsible, and insurance is the homeowners insurance that your lender requires you to have.
PMI
Private Mortgage Insurance
If you put down less than 20% most lenders or banks require you to have private mortgage insurance. This can be put into your monthly mortgage payment or calculated into your rate.
PPP
Prepayment Penalty
A penalty charged to a borrower if they pay their loan in full before the end of its term
PUD
Planned Urban Development
A type of development is designed real estate usually a combination of housing, recreation, commercial and industrial parks all within one development or subdivision
QM
Qualified Mortgage
A type of loan that requires the lender to make sure that borrower has the ability to repay the loan
SAR
Suspicious Activity Report
Report required to be made to FINCEN under the Bank Secrecy Act (BSA) when there is suspicion of money laundering or fraud.
SISA
Stated income, Stated Asset
The loan only requires the borrower to state their income and assets, does not require verification.
SRP
Service Release Premium
Payment received by a lender on the sale of a closed mortgage loan to the secondary market
SSN
Social Security Number
TIL
Truth in Lending
TIL is an important document you will receive from the lender or bank within three days of your application. Within the document certain disclosures are set forth. Such as, finance charges, annual percentage rate (APR), amount finance, total of payments, and total sales price will be disclosed.
TIN
Tax Identification Number
TLTV
Total Loan to Value
Total loan to value is calculated by dividing the sum of the 1st lien mortgage amount and the disbursed amount of a HELOC or 2nd lien by either the property’s purchase price or appraised vaule (whichever is less)
TRID
TILA-RESPA Integrated Disclosure Rule
New legislation as of October 2015, requires the Loan Estimate and Closing Disclosure, replace the GFE, TIL and HUD-1 disclosures
UFMIP
Upfront Mortgage Insurance Premium
Mortgage insurance premium paid in a lump sum upfront on an FHA loan.
UST
Uniform State Test
25 question additional to the National Test Component that replaced the majority of individual state tests
VA
Department of Veterans Affairs
This federal government agency guarantees mortgages that assist eligible veterans in buying homes.
VOD
Verification of Deposit
Used to verify that a borrower is employed
VOM
Verification of Mortgage
Used to verify that a borrower has X mortgage
VOR
Verification of Rent
Used to verify that a borrower pays rent and pays their rent on time
YSP
Yield Spread Premium
Paid to the broker for giving a borrower a higher interest rate on a loan in exchange for lower upfront costs generally paid in origination fees, broker fees or discount points.
