ACH: Automated Clearing House

ALTA: American Land Title Association

AMC: Appraisal management companies

AMI: Area median incomes

ASAP Plus: As Soon As Pooled Plus

ASAP Sale: As Soon As Pooled Sale

ASF: American Securitization Forum

ATR: Ability to repay

AVM: automated valuation model

API: Annual Percentage Interest is the interest rate the borrower pays for the mortgage. This is the rate that the monthly payments are based on.

APR: Annual Percentage Rate calculates the cost to the applicant for the mortgage by taking the total amount borrowed and subtracting certain fees from that amount and then figuring what the interest rate then calculates out to without changing the payment amount. APR is an easily manipulated number which makes it difficult if not impossible to compare different programs and products.

ARM: 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 fixed period can be as short as 1 month or as long as 10 years. The rate will normally be adjusted either once a year or twice a year. There is one type of mortgage where the adjustment period is monthly. All ARM's are based on an index.

AUS: Automated Underwriting System: Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Prospector are this type of technology.

ADS: Automated Drafting System: The system used to process principal and interest payments for loans in Fannie Mae mortgage-backed securities pools.

ARC: Accelerated Remittance Cycle: Freddie Mac seller/servicers can choose this alternative for sending the agency its portion of the monthly payment.


BPO: Broker price opinion

BPS: Basis points

BWR: Borrower is the primary applicant on a mortgage application.

BTSA: Bonus to Selling Agent: This is a payment made to a real estate agent that brings a buyer to a transaction that closes. It is technically offered by the agent that listed the property.

BPO: Broker Price Opinion: After a property goes into default, the servicer needs to report to the investor how much it is worth by using this valuation product.


CMT: Constant Maturity Treasury

Condo: Unit in a condominium project

Co-op: Unit in a cooperative project

CPI: Consumer Price Index

CPIRT: Construction-to-Permanent Investor Reporting

CPM: Condo Project Manager

C-to-P: construction-to-permanent mortgage loan

CU: Collateral Underwriter

CUSIP: Committee on Uniform Security Identification Procedures

CBWR: Co-Borrower is the secondary applicant on a mortgage application.

CLTV: Combined-Loan-to-Value is the total percentage of all mortgages to the value of the property.

COFI: Cost of Funds Index : This is not your morning beverage but a reference index for some adjustable rate mortgages

CMA: Comparative Market Analysis: The real estate agent performs this type of study using a recent home sale to establish a listing price for a seller or the amount a buyer should offer.

CPR: Conditional Prepayment Rate: This measure is used by servicers and securitizes to estimate how many loans in their portfolio will pay off in any given time period.

COE: Close of Escrow: This is the last step in the home sales process, when the deed transfer is recorded with the local government, the seller gets his or her money and the buyer take possession.


DDC: Designated document custodian

DO: Desktop Originator

DTI: Debt to Income is the ratio of the borrower's gross monthly income to their consumer and/or housing debt.

DU: Desktop Underwriter is the automated underwriting engine developed by Fannie Mae for underwriting Fannie Mae eligible mortgages. DU is also used for underwriting FHA mortgages.


EDI: Electronic Data Interface

EMD: Earnest Money Deposit: This is payment a buyer includes with an accepted offer that will be applied to the down payment and closing costs if the sale closes.


FAIR: Fair Access to Insurance Requirement

FCC: Full-service certification custodian

FDIC: Federal Deposit Insurance Corporation

FEMA: Federal Emergency Management Agency

FHLBB: Federal Home Loan Bank Board

FHLMC: Federal Home Loan Mortgage Corporation

FRM: Fixed-rate mortgage

Fannie Mae: Federal National Mortgage Association, one of two GSE's (Government Sponsored Enterprises) created by Congress to increase access to mortgages. Mortgages offered under Fannie Mae guidelines are called “conforming” mortgages since they conform to Fannie Mae guidelines.

Freddie Mac: Federal Home Loan Mortgage Corporation, the second of two GSE's created by Congress to increase access to mortgages. Mortgages offered under Freddie Mac guidelines are also called “conforming” mortgages since they conform to Freddie Mac guidelines.

FIRREA: Financial Institutions Reform Recovery and Enforcement Act : This response to the thrift crisis of the 1980s instituted rules that still govern residential property appraisals.

FDCPA: Fair Debt Collections Practices Act This law lists abusive and deceptive actions that are prohibited when trying to collect a debt.

FHFA: Federal Housing Finance Agency : On Sept. 7, 2008, this regulator placed Fannie Mae and Freddie Mac into conservatorship.

FSBO: For Sale by Owner: In these transactions, there isn't a seller's real estate agent for the buyer or the mortgage originator to communicate with.

FMV: Fair Market Value: This is the price a property would change hands between a willing buyer and a willing seller, free of any compulsion and both having reasonable knowledge of any relevant facts.

FHA: Federal Housing Administration, the Federal Government Agency that oversees the US Housing market. FHA mortgages are guaranteed by the Federal Government and offered by banks/lenders.

FTHB: First Time Home Buyer is a purchaser(s) that has not had an ownership interest in a residence within the previous three years.


GAAP: Generally accepted accounting principles

GSE: Government-sponsored enterprise

GFE: Good Faith Estimate is one of the documents that an applicant(s), under RESPA guidelines, is supposed to receive within 3 business days of an application. The GFE is an estimate of what the closing costs of the applicant's mortgage. The important fee section to look at on a GFE is the 800 series fees as those are lender/broker fees.

Ginnie Mae: Government National Mortgage Association is the actual guarantee agency for Federally Guaranteed mortgages by VA, FHA, RHS, and PIH. Ginnie Mae's MBS's are the only MBS's that are actually guaranteed by the Federal Government.


HCLTV: Home equity combined loan-to-value

HFA: Housing Finance Agency

HOEPA: Home Ownership and Equity Protection Act of 1994

HELOC: Home Equity Line of Credit is a revolving line of credit based on the equity in a property. Generally HELOC's are based on Prime rate. If taken out at the time of purchase many HELOC's report as a mortgage. If the HELOC is taken out subsequent to the purchase they will generally report as a revolving line of credit and will report utilization the same way any other revolving credit line does.

HUD: Housing and Urban Development is the Cabinet Department of the Federal Government that oversees the US housing market. All laws that are passed by Congress are administered by HUD.

HUD1: HUD1 is the statement that you receive that details all the costs and expenses involved in the actual closing of a mortgage.

HOA Home Owners Association: This entity makes and enforces rules for the properties in its boundaries and collects dues. Lenders need to monitor if a property is in one of these because some states have a super lien for arrears that goes in front of the mortgage.


IDR: Independent Dispute Resolution

IRS: Internal Revenue Service

IP: Investment Property

IO: Interest Only is a payment type where none of the required payment goes towards principal. While the required payment will generally be lower than an amortizing payment since nothing is going towards principal the amount owed does not go down. Like a fully amortizing mortgage a borrower is allowed to pay extra towards principal.

IRRRL: Interest Rate Reduction Refinance Loan : Ginnie Mae put rules in place to stop churning of this Veterans Affairs-guaranteed product.

IDI: Imminent Default Indicator: A tool created by Freddie Mac that lets servicers determine if the borrower about to stop making payments on their loan so they can be offered a modification.


LLC: limited liability company

LLPA: loan-level price adjustment

LOS: Loan Origination System

LPI: last paid installment

LQC: Loan Quality Center

LPMI: Lender Paid Mortgage Insurance is mortgage insurance paid by the lender instead of the borrower. This is accomplished by the lender increasing the mortgage interest rate.

LO: Loan Officer is the person that takes the actual application for a mortgage. An LO can be a licensed mortgage broker or they can work for a lender and not be required to be licensed.

LTV: Loan-to-Value is the percentage of the mortgage to either the purchase price (when purchasing) or the appraised value (when refinancing an existing mortgage).

LP: Loan Prospector is the automated underwriting engine developed by Freddie Mac for underwriting Freddie Mac eligible mortgages. LP is also used for underwriting FHA mortgages.

LIBOR: London Inter Bank Offered Rate: This was the most popular index for both residential and commercial adjustable-rate mortgages, but because of scandal it will no longer be available by 2021.


MBS: Mortgage Backed Security. These are the investment instruments that are bundled by Fannie Mae, Freddie Mac, and Ginnie Mae for sale on Wall Street.

MERS: Mortgage Electronic Registration Systems, Inc.

MI: Mortgage insurance

MIC: Mortgage insurance certificate

MIN: MERS identification number

MSA: Metropolitan statistical area

MSSC: Mortgage Selling and Servicing Contract

MUD: Municipal utility district

MIP: Mortgage Insurance Premium is similar to PMI but is used for FHA mortgages. With FHA mortgages there is an upfront MIP payment as well as a monthly MI payment.

MTMLTV: Mark-to-Market Loan-to-Value: This rather long acronym is a calculation dividing the gross UPB (including any forbearance from a previous modification) by the current property value.

MLS: Multiple Listing Service: This marketing database, set up by a group of cooperating brokers, provides property information to the buyer's agent. Certain public property information is available to consumers.

MISMO: Mortgage Industry Standards Maintenance Organization: This group creates the specifications lenders use to share data.


NCLTN: National Community Land Trust Network

NCUA: National Credit Union Administration

NPI: Nonpublic personal information

NEG AM: Negative Amortization occurs when the required mortgage payment is not sufficient to cover the interest owed on the payment. Option ARMs are considered to be neg am mortgages because the minimum required payment is less than IO. The unpaid interest is then added to the principal owed on the mortgage causing the mortgage to increase. This is the most dangerous of the “exotic” mortgages available.

NOO: Non Owner Occupied is a property where the mortgagor does not live in the property and has it as an investment.

NIV: No Income Verification is usually another name for a No Ratio mortgage, another reduced documentation type mortgage.

NINA: No Income No Asset is another type of reduced documentation mortgage.

NAMB: National Association of Mortgage Brokers is membership organization that represents the mortgage brokerage industry. In addition to the national association there are also about 43 state associations.


OFAC: Office of Foreign Assets Control

O/O: Owner Occupied is the mortgagor's principal or primary residence.


P&I: Principal and interest

PAL: Price-adjusted loan

PERS: Project Eligibility Review Service

PITIA: Principal, interest, taxes, insurance, and other assessments

PUD: Planned unit development

PITI: Principal-Interest-Taxes-Insurance is the total housing expense on a monthly basis. Also includes homeowner's association fees, and monthly mortgage insurance if applicable

PMI: Private Mortgage Insurance is charged on conforming mortgages that are over 80% LTV.

PPP: PrePayment Penalty is charged in those states that allow it by subprime lenders and an occasional conforming lender to assure the lender of making a profitable mortgage investment. A PPP can be either hard or soft. A hard PPP means that the borrower will pay a penalty for paying the mortgage off before a specific time period whether they sell or refinance. Most PPP's are for 3 years or less and with subprime lenders will generally be the same as the fixed period of an ARM mortgage. A soft PPP means that the borrower will have to pay a penalty if they sell or refinance within the first year or refinance within the remainder of the PPP.

PR: Primary Residence

PIH: Public and Indian Housing is the Federal Agency that, like FHA, guarantees mortgages

PIW: Property Inspection Waiver: Certain transactions that are underwritten through Fannie Mae's Desktop Underwriter are eligible for this appraisal alternative; Freddie Mac has its own version.

PID: Public Improvement District: This is a defined geographical area established with the consent of a municipality to provide specific types of improvements or maintenance financed by assessments against the property owners.

PMIER: Private Mortgage Insurer Eligibility Requirements The government-sponsored enterprises want to make sure mortgage insurers have enough money to pay claims


QAS: Quality Assurance System

QRPC: Quality Right Party Contact: The standard servicers are to use when communicating with a borrower about resolving a delinquent loan.


RD: Rural Development

REIT: Real estate investment trust

REMIC: Real Estate Mortgage Investment Conduit

RHS: Rural Housing Service

RPM: Rapid payment method

RESPA: Real Estate Settlement Practices Act is the Federal Law that regulates what is allowable and not in the sale/purchase of residential real estate.

REO: Real Estate Owned: Not the name of a long-defunct truck manufacturer, but what a bank has on its books after it buys a property out of foreclosure.


SEC: Securities and Exchange Commission

SFC: Special feature code

SFHA: Special Flood Hazard Area

SIFMA: Securities Industry and Financial Markets Association

SMBS: Stripped mortgage-backed security

SRP: Service Release Premium is similar to YSP except that SRP is usually not available to brokers but only to direct lenders. In addition, unlike YSP, SRP is not shown on the HUD1.

SIVA: Stated Income Verified Asset is a type of reduced documentation mortgage that is more fully explained in another pinned topic, Mortgage Documentation types.

SISA: State Income Stated Asset is another type of reduced documentation mortgage.

SCRA: Servicemembers Civil Relief Act : Active duty military families receive extra protections against foreclosure under this law. Violations could be costly.


TIL: Truth in Lending is the other major document that an applicant is to receive within three business days of applying for a mortgage. The TIL shows what the payments are supposed to be and also what the cost of the mortgage will be.

TILA: Truth in Lending Act

T&I: Taxes and insurance

TLTV: Total-Loan-to-Value is another name for CLTV.

TIN: Tax Identification Number: Non-citizens that do not have a Social Security number but still want to purchase a home must have one of these in order to obtain a mortgage.

TIC: Tenants in Common: A form of property ownership where each person has a separate and undivided interest in the home, but one party may hold a larger equity stake than the other or others. Mortgage originators could use the different equity stakes to adjust how much they are willing to lend.


UCC: Uniform Commercial Code

UETA: Uniform Electronic Transactions Act

USPAP: Uniform Standards of Professional Appraisal Practice

USDARHS: United States Department of Agriculture/Rural Housing Services, like FHA these mortgages are guaranteed by the Federal Government.

UPB: Unpaid Principal Balance: The amount the borrower owes on the loan, minus the interest, taxes and insurance payments.

UCD: Uniform Closing Dataset: This GSE creation allows information on the closing disclosure to be communicated electronically.


VA: Veterans Administration, like FHA, guarantees mortgages for the Federal Government. However, VA mortgages are only available to members of the military, their immediate family, and veterans of military service.

VOR: Verification of Rent is a form that is sent to the landlord to verify the timely payment of rent.

VOM: Verification of Mortgage is a form that is sent to a lender to verify the timely payment of the mortgage. This is normally used when a mortgage is not reporting up to date or when it is a private mortgage that doesn't report at all.

VOD: Verification of Deposit is a form sent to the bank/credit union/savings bank to verify the amount of funds in the account and to provide an average balance over a specified, usually 60 day, period.

VOE: Verification of Employment is a form that is sent to the employer to verify employment. Many times a VOE will be done verbally by the lender just prior to closing.


WAM: Weighted Average Maturity : it is not the name of a British pop group, but part of a mortgage servicing rights buyer's portfolio analysis.

WAC: Weighted Average Coupon: Servicing rights buyers look at this measure to help gauge the likelihood of the underlying loans refinancing.

W-2: W-2's are tax forms provided by the employer to show total year's income.


YSP: Yield Spread Premium is what a lender pays a broker for bringing the mortgage application to them. It will normally be shown as a percentage initially, and then as a dollar amount on the HUD1.

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