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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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P

Pair-off Fee
A fee charge to a seller if the seller fails to deliver the amount of mortgages necessary to fulfill a loan sales agreement commitment with the investor by the specified date. The investor typically charges the pair-off fee based on current market prices, to compensate the investor for secondary market commitment shortfalls.

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

Pipeline Report
A list of loans that are committed for delivery to a lender. Pipeline reports are non-standard reports and will vary depending on the needs of the lender. Pipeline reports are used throughout the mortgage industry for the purpose of forecasting revenue, managing sales, secondary marketing and determining staffing levels.

See Best Efforts Delivery Commitment
See Commitment
See Pull-through Rate
PITI
The combination of principal, interest, taxes and insurance which make up a mortgage payment is commonly referred to by the acronym of PITI in the mortgage industry.

See Borrower Debt to Income (DTI) Overview
See Debt To Income (DTI) Ratio
See Housing Ratio
See Total Ratio
Planned Unit Development (PUD)
A property type of "Planned Unit Development (PUD)" indicates that the home is located in an area of land developed in accordance with a plan approved by the local government. It is this idea of an approved plan that makes the PUD desirable. Rather than placing businesses or houses on a site, the developer must come present the local government with a plan describing how the elements of the site will fit together and fit into the surroundings.
Prefabricated Housing
See Manufactured Housing
See Mortgage Loan Property Types

Prepayment
In the mortgage industry, the term Prepayment is used synonymously with the terms: Borrower Runoff and Early Payoff. In the mortgage industry, the term Prepayment is typically used in reference to the process whereby a borrower refinances their current mortgage for a better offer with a different lender. Prepayments might also occur as a result of the borrower making extra payments or selling the property. Prepayments represent an increasingly expensive challenge to lenders, as most investors will require their sellers to repay any premiums for loans that prepay.


See Mortgage Loan Early Payoff Overview
See Borrower Runoff
See Early Payoff
See Prepayment Penalty
Prepayment Penalty
(1) Fees paid by the borrower if they pay the loan before its due date.

(2) Fees paid by the seller to the investor if a loan originated by the seller is paid off before its due date.

See Mortgage Loan Early Payoff Overview
See Borrower Runoff
See Early Payoff
Primary Residence
A mortgage loan with a property usage type of primary residence indicates that the borrower occupies the subject property.

See Investment Property
See Mortgage Loan Occupancy and Property Usage Types
See Property Usage Type
See Second Home

Principal
The outstanding balance, owed by the borrower, on a mortgage loan.
Product Type
In the mortgage industry loans with similar risk and credit characteristics are grouped by loan program type for identification purposes. A single loan program has many loan products. For example, an investor loan program of Conforming ARM may offer 3/1, 5/1, and 7/1 "Conforming ARM" products.

See Loan Product

See Program
Production
Production is the act of making something that is traded or sold. On LendingRisk.com the term production is a reference to the making and subsequent sale of mortgage loans.

See Investor
See Seller
Program Type
A description used by an investor to market a loan product. Examples of program types are Fannie Mae's "Flexible 97®" and "Expanded Approval®". These programs are specific to the bank or lender that offers them.

See Loan Program

See Product
Property Type
A predefined description indicating characteristics of the property secured by the mortgage loan.

See Attached

See Detached
See Mortgage Loan Property Types

Property Usage Type
A mortgage loan's property usage type is often confused with the loan's occupancy type. The loan's property usage type indicates the borrower's intended use for the mortgaged property. Examples of property usage types are - Investment, Primary Residence and Second Home

See Investment Property
See Mortgage Loan Occupancy and Property Usage Types
See Occupancy Type
See Primary Residence
See Second Home

Pull-through Rate
In the mortgage industry the pull-through rate is a percentage that measures the dollar volume of loans that a seller delivers versus the dollar volume of loans committed for delivery.

See Fall Out Percentage
See Mortgage Industry Seller Pull-through Overview

Purchase
In the mortgage industry a purchase is a loan made in association with the original mortgage on a piece of property.

See Loan Purpose Type
See Mortgage Loan Purpose Type Overview
See Refinance


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