A mortgage loan that permits a new home purchaser to undertake the obligation of an existing loan without altering loan terms. Typically applicable to FHA and VA loans.
Computerized Loan Origination (CLO) refers to the process of initiating a mortgage loan using specialized computer software that connects the originator with one or more mortgage lenders. This system allows real estate brokers to offer a wider range of services.
A construction loan is a short-term real estate loan utilized to finance building costs. Funds are disbursed as needed or according to a prearranged plan, repaid upon project completion, often from a mortgage loan. These loans typically come with higher interest rates and origination fees.
A junior mortgage, also known as a second mortgage or subordinate mortgage, is a mortgage loan that is subordinate to another loan against the same property. In the event of default and foreclosure, the holder of the junior mortgage is only repaid after the senior mortgage and any other prior liens have been settled.
An originator can refer to any entity involved in the initial transaction of a mortgage loan, the planning stages of a new securities offering, or the initiation of money transfer instructions.
A reduction certificate is a document in which the mortgagee (lender) acknowledges the sum due on the mortgage loan. It is typically used when mortgaged property is sold and the buyer assumes the debt.
An instrument for recording and acknowledging final payment of a mortgage loan. The lender acknowledges that the debt has been satisfied.
A Self-Amortizing Mortgage is a mortgage designed to be paid off entirely through regular principal and interest payments over the loan term, without requiring a large lump sum payment at the end.
An upside-down mortgage, also known as an underwater mortgage, is a situation where a homeowner owes more on their mortgage loan than the current market value of the property. This results in negative equity, making it challenging for the homeowner to sell or refinance the property without incurring a financial loss.
A term used in the secondary mortgage market to distinguish an investment that represents an original residential mortgage loan (whole loan) from a loan representing a participation with one or more lenders or a pass-through security representing a pool of mortgages.
