Mandatory disclosure
The complement of laws and regulations which dictate the information that must be disclosed to mortgage borrowers as well as the methods and timings of such disclosures.
Manufactured housing
A house, which, is entirely built in a factory and subsequently transported to a designated site for installation. Also known as a pre-fab they are often built without knowing where they will be sited, however, they are subject to a Federal building code administered by HUD.
Margin
The amount a lender adds to the index on an adjustable rate mortgage generally 2 to 3 percentage points to establish the fully indexed interest rate.
Market niche
A particular combination of criteria that lenders use in setting prices and underwriting requirements that takes into account loan, borrower and property characteristics. Such criteria are believed to affect the default risk or cost of the loan. For example, borrowers not intending to occupy the house they purchase pay more than those who do, and borrowers who refinance solely the balance on an existing loan will pay less than those who opt to take “cash out”.
Market Value
The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may differ from the price a property could actually be sold for at a given time.
Maturity
The protracted period until the final payment is due. This is usually but not always the term, which is the period used to calculate the mortgage payment.
Maximum loan amount
The largest size loan that may be executed through a particular loan program. In instances where the loan is targeted for sale to Fannie Mae or Freddy Mac, the maximum will be the largest loan eligible for purchase by these agencies. With FHA loans, the maximums are set by the Federal Housing Administration, and vary by geographical area. For other loans, the maximums are set by lenders.
Maximum loan to value ratio
The maximum permissible loan-to-value ratio on a selected loan program..
Maximum lock
The longest period for which a lender will lock the rate and points on any program. The most common maximum lock period is 60 days, however, some programs do have a 90 days maximum; very few go beyond 90 days.
Minimum down payment
The minimum allowable ratio of down payment to sale price on any program. If the minimum is 10%, for example, it means that on a $100,000 house the purchaser must make a down payment of at least $10,000.
MIP (Mortgage Insurance Premium)
Insurance provided to the lender from the FHA against incurring a loss due to the borrower’s default on payment.
Monthly debt service
Monthly payments that are required on credit cards, installment loans, home equity loans, and other debts but not including payments on the loan applied for.
Monthly Fixed Installment
The portion of the total monthly loan payment that is applied toward principal and interest. When a mortgage negatively amortizes, the monthly fixed installment does not include any amount for principal reduction and doesn’t cover all of the interest. The loan balance therefore increases instead of decreasing.
Monthly housing expense
See Housing expense.
Monthly total expenses
See Total housing expense.
Mortgage
A legal document that evidences pledge of a property (a lien) taken by a lender as security for the repayment of a loan. The terms “mortgage” or “mortgage loan” are used loosely to refer both to the lien and the loan. Generally, they are actually defined in two separate documents: a mortgage and a note.
Mortgage auction site
Same as Lead generation site.
Mortgage bank
See mortgage company.
Mortgage Broker
An individual or company that charges a service fee to bring borrowers and lenders together for the purpose of loan origination. Unlike institutional (banking) loan officers, a mortgage broker must be licensed and adhere to strict regulatory dictates. The mortgage broker will generally counsel clients on the loans available from different wholesalers, take the application, and usually processes the loan. When the file is complete, but occasionally sooner, the lender underwrites the loan. In contrast to a correspondent, a mortgage broker does not fund a loan.
Mortgage company
A mortgage lender who sells all loans in the secondary market. This is as opposed to loans from a portfolio lender, who retains loans in its portfolio. Mortgage companies may or may not service the loans they originate.
Mortgagee
The lender.
Mortgage Insurance
A policy designed to insure the mortgage when the down payment is less than 20 percent. The accompanying costs are the responsibility of the homebuyer. See private mortgage insurance, FHA mortgage insurance.
Mortgage lead
An information packet about a consumer that a loan provider might be able to convert into a borrower. The information is gleaned from filling out a questionnaire about yourself on-line in response to an ad and, subsequently you become a lead.
Mortgage formulas
Mathematical formulas that are used to equate the common measures such as monthly payment, balance, and APR used in the mortgage market
Mortgage insurance
Loss insurance provided to a mortgage lender in case of borrower default. In most instances, it is the borrower who pays the premiums.
Mortgage insurance premium
Up-front and/or periodic charges the borrower is assessed for mortgage insurance. Mortgage insurance plans differ in their combinations of up-front, monthly and annual premiums. However, the most widely used premium plan is a monthly charge with no upfront premium.
Mortgage insurance cancellation
The canceling of a mortgage insurance policy.
Mortgage lender
The financial party who disburses the funds to the borrower at closing. This lender in turn receives the note corroborating the borrower’s indebtedness and obligation to repay as well the mortgage which, evidences the lien on the subject property.
Mortgage modification
A change in the terms of a loan, most often on the interest rate and/or term period. It is derived in response to the borrower’s inability to make the payments under the terms and conditions of the existing contract.
Mortgage payment
The monthly payment comprised of interest and principal made by the borrower.
Mortgage price
The interest rate, points and fees paid to the lender and/or mortgage broker.
Mortgage program
A collection of mortgage characteristics that lenders deem fit to distinguish as a distinct instrument. These include whether it is “conforming” (eligible for purchase by Fannie Mae or Freddie Mac) or “non-conforming”, whether it is an FRM, ARM, or Balloon; the term; the initial rate period on an ARM; whether it is FHA-insured or VA-guaranteed; and if is not FHA or VA.
Mortgage referrals
Recommendations on where to go to obtain a mortgage.
Mortgage scams
Deceitful and manipulative schemes by lenders, brokers, home sellers and at times, even borrowers.
Mortgage shopping
As the term implies, attempting to find the best price/performance on a mortgage.
Mortgage spam
Unsolicited offers for great mortgage deals that appear in your email inbox.
Mortgage suitability
The principal that mortgage lenders should be held liable in such cases as providing loans, which are unsuitable for the borrower.
Mortgagor
The borrower or homeowner.
