Mortgage Acronyms

Financial Crimes Enforcement Network, the entity that a SAR would be reported to

Desktop Underwriter. The AUS used by Fannie Mae.

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

Home Equity Conversion Mortgage. Loan for borrowers 62+ years. Uses equity in their home to create cash disbursements.

America Association of Residential Mortgage Regulators. Responsible for the creation of the NMLS.

Suspicious Activity Report - FinCEN under the Bank Secrecy Act (BSA) when there is a suspicion of money laundering/fraud

Federal National Mortgage Assoc Fannie Mae-Congressional entity to increase access to mortgages. Conforming mortgage.

Principal = loan amount. Interest = rate the finance charge you pay for borrowing. Taxes = RE taxes. HO Insurance

Consumer Financial Protection Bureau. Federal regulator that regulates the mortgage industry.

Equal Credit Opportunity Act a law that makes it illegal for any creditor to discriminate against any applicant.

No income verification, a loan that requires no income verification

Loan Prospector. The AUS used by Freddie Mac.

Federal Deposit Insurance Corporation. Regulates depository institutions.

No income No Asset loan. A loan that does not require income or assets.

Federal Trade Commission

US Department of Housing and Urban Development. HUD is the primary housing and lending regulatory authority in the US

Yield Spread Premium - generally paid in origination fees, broker fees or discount points

Loan-to-Value a ratio used by the lender that divides the amount of money borrowed by the appraised value

Homeowner’s Association

If you put down less than 20% most lenders require this Private Mortgage Insurance.

Social Security Number

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

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

Appraisal Management Company. The middleman between appraisers and mortgage companies.

Payment received by lender on the sale of a closed mortgage loan to the secondary market called Service Release Premium

Tax Identification Number

Higher Priced Mortgage Loan

Combined Loan to Value divide the 1st lien & the total line of HELOC credit or 2nd lien by the purchase price or the AV.

Fair and Accurate Credit Transactions Act prevents identity theft, puts limits on information sharing. Amendment to FCRA

Principle Interest Taxes & Insurance. 4 main components of your monthly mortgage payment.

Planned Urban Development is RE combination of housing, recreation, commercial & industrial parks all w/in 1 subdivision

Anti-Money Laundering, law in place to require financial institutions to prevent, detect & report money laundering.

Verification of Mortgage. Used to verify that a borrower has X mortgage.

Nationwide Multistate Licensing System and Registry

Calculated by ÷ the sum of the 1st lien & the disbursed amount of HELOC or 2nd lien by purchase price or appraised value

Mortgage Disclosure Improvement Act

Affiliated Business Arrangement. An arrangement between 2 different companies providing services in the closing of a RE.

In this doc disclosures are set forth: finance charges, APR, amnt financed, total of payments, & total sales price

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

Home Ownership and Equity Protection Act, regulates high cost home loans

Verification of Employment. Used to verify that a borrower is employed.

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

Annual Percentage Rate calculates the annual percentage rate you would pay on the loan.

Consumer Handbook on Adjustable Rate Mortgages. Required disclosure on ARM loans to educate the consumer about the loan.

Home Affordable Refinance Program allows borrowers w/ no equity in their homes to take advantage of low interest rates

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

Fair Isaac Corporation is a numeric summary of the information in your credit reports that represents your credit risk.

Verification of Rent. Used to verify that a borrower pays rent and pays their rent on time.

Mortgage Loan Originator

Homeowners Protection Act, regulates the cancellation of private mortgage insurance

Good Faith Estimate document given to borrowers. An estimate of all closing costs & fees for the proposed mortgage loan.

Cost of Funds Index, index used on ARM loans (margin + index)

Federal Financial Institutions Examination Council. Collects and distributes HMDA information.

TILA-RESPA Integrated Disclosure Rule.

Qualified Mortgage – a type of loan that requires the lender to make sure the borrower has the ability to repay the loan

Federal Housing Administration oversees US Housing Market. Mortgages are backed by the Federal Gvt & offered by lenders

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

New legislation (10/2015), requires the Loan Estimate & Closing Disclosure, replaces the GFE, TIL & HUD-1 disclosures.

Ginnie Mae, Government National Mortgage Association. (the Fannie and Freddie of government lending)

A borrower purchases a home appraised at $200k w/ a down payment of $40k. This means he has a loan-to-value ratio of 80%

Mortgage Backed Security investment instruments that are bundled by Fannie, Freddie & Ginnie Mae for sale on Wall Street

Debt to Income, two ratios, front end and back end. (Ex of debts: credit cards, car loans, student loans.)

VA Interest Rate Reduction Refinance Loan allows you to lower the interest rate on an existing VA home loan.

Mortgage Assistance Relief Services Rule

Bank Secrecy Act – requires suspicious activity reports (SARS) regarding suspicious activities.

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

Mortgage Electronic Registration System

Paid to the broker for giving a borrower a higher interest rate in exchange for lower upfront costs

Ability to Repay requires lenders to determine borrowers ability to repay their loan - verify information under QM

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

Office of the Comptroller of the Currency

Government Sponsored Enterprise is a financial services corporation created by the US Congress (Fannie and Freddie Mac)

Department of Veterans Affairs. This federal agency guarantees mortgages that assist eligible veterans in buying homes.

Stated income, Stated Asset borrower only states their income and assets, does not require verification.

Home Equity Line of Credit-loan to lend a maximum amount w/in a loan term where the collateral is the borrower’s equity

Fair Credit Reporting Act. Regulates how consumer-reporting agencies use consumer information.

Truth in Lending is received from the lender or bank within 3 days of application.

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

Interest Only, a payment that only covers the interest on the loan.

An adjustable rate mortgage has a fixed rate for a set period of time & then the rate is adjusted.

Monthly Mortgage Insurance. Mortgage insurance charged monthly on an FHA loan.

Federal Home Loan Mortgage Corporation. Authorized by Congress to provide a secondary market for residential mortgages.

Marketing Services Agreements

Gramm-Leach Bliley Act. Requires disclosure of information-sharing policies

Dept of Veterans Affairs. This federal agency guarantees mortgages that assist eligible veterans in buying homes.

Home Mortgage Disclosure Act. Requires lenders to report lending patterns geographically to prevent redlining & reverse

Owner-occupied. A loan on a property owned by the owner

Investment Property, a non-owner occupied property that is rented out by the borrower

Credit Alert Verification Reporting System - federal database of people who have federal debt delinquencies.

Certificate of Eligibility required document on VA loans to determine the amount of eligibility a veteran borrower has.