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MLO first > Mortgage Acronyms > Flashcards

Mortgage Acronyms Flashcards

1
Q

AARMR

A

America Association of Residential Mortgage Regulators.

Mortgage Insurance Premium – FHA loan premium for mortgage insurance on all FHA loans

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2
Q

AFBA

A

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.

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3
Q

AMCs

A

Appraisal Management Company

The middleman between appraisers and mortgage companies.

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4
Q

AML

A

Anti-Money Laundering

Law in place to require financial institutions to prevent, detect and report money laundering activities.

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4
Q

APOR

A

Average Prime Offer Rate

Rate used to determine whether a loan is high-cost or higher priced.

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4
Q

APR

A

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.

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5
Q

ARM

A

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.

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6
Q

ATR

A

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)

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7
Q

AUS

A

Automated Underwriting System

Example: LP and DU. Used to automatically underwrite conforming loans.

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8
Q

BSA

A

Bank Secrecy Act

Requires suspicious activity reports (SARS) regarding suspicious activities.

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9
Q

CAIVRS

A

Credit Alert Verification Reporting System

Is a federal database of people who have delinquencies on any kind of federal debt.

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10
Q

CFPB

A

Consumer Financial Protection Bureau

Federal regulator that regulates the mortgage industry. (The Boss)

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11
Q

CHARM

A

Consumer Handbook on Adjustable Rate Mortgages

Required disclosure on ARM loans to educate the consumer about the type of loan they are on.

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12
Q

CLTV

A

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.

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13
Q

COE

A

Certificate of Eligibility

Required document on VA loans to determine the amount of eligibility that veteran borrower has.

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14
Q

COFI

A

Cost of Funds Index

Index used on ARM loan (margin + index)

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15
Q

DTI

A

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)

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16
Q

DU

A

Desktop Underwriter

The AUS used by Fannie Mae

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17
Q

ECOA

A

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.

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18
Q

FACTA

A

Fair and Accurate Credit Transactions Act

Prevent identity theft, puts limits on information sharing. Amendment to FCRA.

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19
Q

FDIC

A

Federal Deposit Insurance Corporation

Regulates depository institutions.

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20
Q

FFIEC

A

Federal Financial Institutions Examination Council

Collects and distributes HMDA information

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21
Q

FHA

A

Federal Housing Administration

The Federal Government Agency that oversees the US Housing Market.

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22
Q

FHLMC

A

Federal Home Loan Mortgage Corporation

A corporation authorized by Congress to provide a secondary market for residential mortgages.

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23
Q

FICO

A

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.

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24
Q

FinCEN

A

Financial Crimes Enforcement Network

The entity that a SAR would be reported to.

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25
Q

FNMA

A

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”

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26
Q

FTC

A

Federal Trade Commission

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27
Q

GFE

A

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.

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28
Q

GLB

A

Ginnie Mae, Government National Mortgage Association

The Fannie and Freddie of government lending

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29
Q

GPM

A

Graduated Payment Mortgage

This is a type of mortgage on which the payment starts low and rises over time.

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30
Q

GSE

A

Government Sponsored Enterprise

Is a financial services corporation created by the US Congress (Fannie ad Freddie Mac)

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31
Q

HARP

A

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.

32
Q

HECM

A

Home Equity Conversion Mortgage

Loan for borrowers 62 years and older. Uses the equity in their home to create cash disbursement to the borrower.

33
Q

HELOC

A

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.

34
Q

HMDA

A

Home Mortgage Disclosure Act

Requires lenders to report their lending patterns geographically to prevent redlining and reverse redlining.

35
Q

HOA

A

Homeowner’s Association

36
Q

HOEPA

A

Home Ownership and Equity Protection Act

Regulates high cost home loans

37
Q

HPA

A

Homeowners Protection Act

Regulates the cancellation of private mortgage insurance.

38
Q

HPML

A

Higher Priced Mortgage Loan

39
Q

HUD

A

US Department of Housing and Urban Development.

HUD is the primary hosing and lending regulatory authority in the US

40
Q

IP

A

Investment Property

A non-owner occupied property that is rented out by the borrower.

40
Q

IO

A

Interest Only.

a payment that only covers the interest on the loan.

41
Q

IRRRL

A

VA Interest Rate Reduction Refinance Loan

This refinance loan allows you to lower your interest rate on an existing VA home loan.

42
Q

LP

A

Loan Prospector

The AUS used by Freddie Mac

43
Q

LTV

A

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%.

44
Q

MARS

A

Mortgage Assistance Relief Services Rule

45
Q

MBS

A

Mortgage Backed Security

These are investment instruments that are bundled by Fannie, Freddie and Ginnie Mae for sale on Wall Street

46
Q

MDIA

A

Mortgage Disclosure Improvement Act

47
Q

MERS

A

Mortgage Electronic Registration System

48
Q

MLO

A

Mortgage Loan Originator

49
Q

MMI

A

Monthly Mortgage Insurance

Mortgage insurance charged monthly on an FHA loan.

50
Q

MSA

A

Marketing Services Agreements

51
Q

NINA

A

No income No Asset loan.

A loan that does not require income or assets.

52
Q

NIV

A

No income verification

A loan that requires no income verification

53
Q

NMLS

A

Nationwide Multi-state Licensing System and Registry

54
Q

NOO

A

Non-owner occupied

A loan on a property not occupied by the owner. (investmenet property, vacation/second home)

55
Q

O/O

A

Owner-occupied

A loan on a property owned by the owner

56
Q

OCC

A

Office of the Comptroller of the Currency

57
Q

P&I

A

Principal and Interest

Principal and interest are the two elements that go towards repaying your loan.

58
Q

PITI

A

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.

59
Q

PMI

A

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.

60
Q

PPP

A

Prepayment Penalty

A penalty charged to a borrower if they pay their loan in full before the end of its term

61
Q

PUD

A

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

62
Q

QM

A

Qualified Mortgage

A type of loan that requires the lender to make sure that borrower has the ability to repay the loan

63
Q

SAR

A

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.

64
Q

SISA

A

Stated income, Stated Asset

The loan only requires the borrower to state their income and assets, does not require verification.

65
Q

SRP

A

Service Release Premium

Payment received by a lender on the sale of a closed mortgage loan to the secondary market

66
Q

SSN

A

Social Security Number

67
Q

TIL

A

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.

68
Q

TIN

A

Tax Identification Number

69
Q

TLTV

A

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)

70
Q

TRID

A

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

71
Q

UFMIP

A

Upfront Mortgage Insurance Premium

Mortgage insurance premium paid in a lump sum upfront on an FHA loan.

72
Q

UST

A

Uniform State Test

25 question additional to the National Test Component that replaced the majority of individual state tests

73
Q

VA

A

Department of Veterans Affairs

This federal government agency guarantees mortgages that assist eligible veterans in buying homes.

74
Q

VOD

A

Verification of Deposit

Used to verify that a borrower is employed

75
Q

VOM

A

Verification of Mortgage

Used to verify that a borrower has X mortgage

76
Q

VOR

A

Verification of Rent

Used to verify that a borrower pays rent and pays their rent on time

77
Q

YSP

A

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.

78
Q
A

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