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Mortgage Dictionary


Terminology, definitions, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries, as they are used on LendingRisk.com.

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H

HELOC
An acronym for Home Equity Line Of Credit.

See Home Equity
See Mortgage Loan Purpose Type Overview
High Cost Mortgage Loan
The Home Ownership Equity Protection Act (HOEPA) establishes a class of "high cost" mortgage loans that require special disclosures and are subject to other requirements. A high cost loan is defined as a closed end, non-purchase mortgage loan, secured by a borrower's primary residence, that has an annual percentage rate in excess of 10 percent above Treasury securities with a comparable maturity, or that has total fees and points that exceed the greater of $400 or 8 percent of the total loan amount.

See Home Ownership Equity Protection Act (HOEPA)
High-rise Condominium
A property type of "High-rise Condominium" indicates that the individually owned unit is located in a multi-unit dwelling that has a building structure with more than six stories and is equipped with elevators.

See Condominium
See Mortgage Loan Property Types

HMDA
An acronym for Home Mortgage Disclosure Act.

See Home Mortgage Disclosure Act (HMDA)
HMDA LAR
An acronym for Home Mortgage Disclosure Act Loan Application Register. Lenders that accept mortgage applications are required to file a HMDA LAR in accordance with guidelines established by the Federal Reserve Board

See Home Mortgage Disclosure Act (HMDA)
HMDA Rate Spread Percent
The HMDA Rate Spread Percent is the spread between the Annual Percentage Rate (APR) and the comparable treasury security utilizing the "Treasury Securities of Comparable Maturity under Regulation C" table, action taken, lock-in-date, APR, loan term and lien status. The HMDA Rate Spread is a calculated field.

See Home Mortgage Disclosure Act (HMDA)
HOEPA
An acronym for Home Ownership Protection Act.

See Home Ownership Equity Protection Act (HOEPA)
Home Equity
Home Equity is the amount of ownership that the borrower has built up through mortgage payments and property appreciation. A simple equation for determining Home Equity is the current market value of a home minus the outstanding mortgage balance.

See Home Equity Loan
See Second Mortgage

Home Equity Line of Credit
A loan in which the borrowed amount is dependant upon the amount of equity in the borrower's home. A Home Equity Line of Credit differs from the Home Equity Loan in that the borrower is allowed to obtain multiple advances of the loan proceeds at his or her discretion, versus receipt of the entire proceeds at closing, up to an amount that represents a specified percentage of the borrower's equity in a property.

See Home Equity
See Mortgage Loan Purpose Type Overview
See Second Mortgage

Home Equity Loan
A loan in which the borrowed amount is dependant upon the amount of equity in the borrower's home.

See Home Equity
See Mortgage Loan Purpose Type Overview
See Second Mortgage

Home Improvement Loan
A refinance loan purpose type in which some or all of the borrowed funds are used to repair, remodel, renovate, rehabilitate, or otherwise improve the borrower's home. When the financing for such improvements is a first mortgage, the transaction is treated as either a Purchase or a Limited Cash-Out Refinance transaction.

See Cash-Out Refinance
See Limited Cash-Out Refinance
See Loan Purpose Type
See Mortgage Loan Purpose Type Overview
See Refinance

Home Mortgage Disclosure Act (HMDA)
The Home Mortgage Disclosure Act was enacted by Congress in 1975 and made permanent in 1988. HMDA is implemented by the Federal Reserve Board's Regulation C and requires lenders to report and publicly disclose data collected on mortgage loan applications to include:
  • Loan type and amount
  • Property location and type
  • Loan disposition (Denied or Approved) and,
  • Applicant Data
    • Ethnicity
    • Race
    • Sex
    • Income
Home Ownership Equity Protection Act (HOEPA)
The Home Ownership Equity Protection Act was enacted by Congress in 1994 to provide addtional protectection to consumers from high cost home mortgage lending practices. HMDA is implemented by the Federal Reserve Board and establishes a class of "high cost" mortgage loans that require special disclosures and are subject to other requirements.

See High Cost
Homeowners Association
An association of homeowners in a particular subdivision, planned unit development (PUD), or condominium organized to manage the common area of the development and to enforce the association rules and regulations.
Homestead
Status provided to a homeowner's principal residence in some states that protects the home against judgments up to specified amounts.
Housing and Urban Development (HUD)
A U.S. government agency established to implement federal housing and community development programs.
Housing Ratio
Lenders use a Housing Ratio as an indication of the borrower's ability to repay a mortgage loan. The Housing Ratio is the borrower's monthly housing expenses (to include taxes, insurance, etc.) divided by the borrower's monthly income.

For a conforming loan, lenders typically want the borrower to have a Housing Ratio of 28% or less. The housing expenses included in the expense portion of the Housing Ratio equation are the house payment (principal & interest), taxes (state and local real estate taxes), insurance (home and/or private mortgage insurance) and homeowner's association fees. The combination of principal, interest, taxes and insurance is commonly referred to by the acronym of PITI in the mortgage industry. The Housing Ratio does NOT include estimated monthly utilities - e.g. water and electricity expenses.

Lenders review the Housing Ratio and the Total Ratio to determine how much they will lend a borrower.

See Borrower Debt to Income (DTI) Overview
See Debt To Income (DTI) Ratio
See PITI
See Total Ratio

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Terminology, definitions, terms, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries.