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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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M

Mandatory Delivery Commitment
A mortgage industry loan sales agreement in which a seller commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. If the seller institution fails to deliver the amount of mortgages necessary to fulfill the commitment by the specified date, it is obligated to pay a "pair-off" fee, based on then-current market prices, to the investor to compensate the investor for the shortfall.

See Best Efforts Delivery Commitment
See Mortgage Correspondent Lending and Loan Production
See Mortgage Industry Seller Pull-through Overview
See Pair-off Fee

Manufactured Housing
A property type of "Manufactured Housing" indicates housing, such as mobile homes, that is primarily constructed in a plant or factory prior to transporting it to the lot as a completed unit or as a number of complete sections or rooms which can be joined on-site with a minimum of effort. This property type is also commonly to as a "Prefabricated" home in the mortgage lending industry.

See Mortgage Loan Property Types

Manufactured Housing Double Wide
A property type of "Manufactured Housing Double Wide" indicates that the manufactured home is twenty feet or more in width and is towed to its lot in two separate units that are then joined together.

See Manufactured Housing
See Mortgage Loan Property Types

Manufactured Housing Multi-wide
A property type of "Manufactured Housing Multi Wide" indicates manufactured housing that is transported to its lot in more than two units and then joined together.

See Manufactured Housing
See Mortgage Loan Property Types

Manufactured Housing Single Wide
A property type of "Manufactured Housing Single Wide" indicates that the manufactured home is sixteen feet or less in width and can be towed to its lot as a single unit.

See Manufactured Housing
See Mortgage Loan Property Types

Margin
The margin is the fixed percentage value that is added to an index value to calculate the adjusted interest rate of an Adjustable Rate Mortgage (ARM) when it is calculated at a scheduled interval. While the index can change, the margin remains constant throughout the life of the mortgage.

See Adjustable Rate Mortgage (ARM)
Metropolitan Statistical Area (MSA)
A metropolitan statistical area is defined by the U.S. Office of Management and Budget (OMB) and is the result of the application of published standards to Census Bureau data. MSA's are used in the mortgage industry for grouping and reporting on statistical key performance indicators.

See Geographic Concentration
See Mortgage Industry Key Performance Indicators (KPI)


MISMO
An acronym for Mortgage Industry Standards Maintenance Organization (MISMO). MISMO maintains voluntary electronic commerce standards for the mortgage industry.
Modular Housing
A property type of "Modular Housing" indicates that the home is built in sections in a factory setting. Finished modules are then transported to the home site and placed on a pre-made foundation, joined, and completed by a builder. A modular home conforms to the building codes that are required at the specific location it will be delivered to.

See Mortgage Loan Property Types

Mortgage
A mortgage is a financial contract or agreement where a person borrows money to buy property. In common usage the term mortgage almost always refers to a contract or agreement between a lender and a borrower to pay back money for a home loan. For mortgage lending professionals the term mortgage is also commonly used to refer to the legal note or deed that is created to secure the borrower's financial obligation for repayment of the mortgage loan.
Mortgage Backed Security (MBS)
An asset-backed bond or other financial obligation secured by a pool of mortgage loans. Cash flows for the MBS are backed by the principal and interest payments from the associated pool of mortgage loans.
Mortgage Broker
A person or company that arranges mortgage loan financing for a borrower. Mortgage brokers established relationships with one or many correspondent or wholesale lenders and are able to find loans at competitive rates through these relationships. Mortgage brokers are paid a fee by the borrower or the lender when a loan closes.

See Correspondent Lending and Mortgage Loan Production Overview
Mortgage Fraud
1. An action where the borrower misrepresents information on the loan application in order to obtain a mortgage loan. The number and types of actions that constitute mortgage fraud range from false statements of income and employment to intent to occupy the residence secured by the mortgage loan.

2. An action in which a seller intentionally alters or misrepresents a borrower's information with the intent of defrauding an investor.
Mortgage Score
A mortgage score is NOT the same as a FICO or Credit Score. A Mortgage Score is a custom scoring model designed to predict the risk of delinquency for a mortgage loan. In addition to the contents of the credit report, a mortgage score incorporates information from the Uniform Residential Loan Application (URLA) and information about the terms of the mortgage.

The URLA does not currently capture FICO or Mortgage Score information for a borrower; however, the MISMO specification for the mortgage loan application provides the following enumerations for the electronic transmission or mortgage score type and values between systems:
  • FraudFilterScore
  • GE_IQScore
  • Other
  • PMIAuraAQIScore
  • UGIAccuscore


See MISMO
See Uniform Residential Loan Application (URLA)
Mortgage Secondary Market
The financial market where banks, savings & loans and mortgage bankers sell mortgages to investors.

See Correspondent Lending and Mortgage Loan Production Overview
MSA
An acronym for Metropolitan Statistical Area.

See Metropolitan Statistical Area (MSA)



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