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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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Second Home
A second home is different from an investment property with the distinction that is not rented to a tenant, but instead used on occasion by the owner. A second home is commonly referred to as a vacation home.

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

Second Mortgage
A mortgage loan in a subordinated position to the primary mortgage loan on a subject property. Second mortgages typically carry a higher rate than a first mortgage since they represent a higher risk for an investor.

See Home Equity Loan

Seller
A seller is an organization that provides products or services for monetary or other compensation. The term seller is used on LendingRisk.com as a reference to the Originators, Brokers, Lenders and Correspondent seller organizations that originate mortgage loans and subsequently sell them to investors on the mortgage lending secondary market.

See Investor
Seller Agreement
In the mortgage industry a seller agreement is nomenclature for non-standard legal document that is executed between a seller organization and the investor organization that details the rights, responsibilities and recourse for the seller and investor for the duration of the sales relationship. Violations of the seller agreement by either party can result in termination of the lending relationship or legal action.

See Investor
See Seller
Semi-Detached (Property Type)
A residential property where there are only two houses and they are sharing a common single wall. For reporting purposes these property types are considered "Attached".

See Attached (Property Type)
See Mortgage Loan Property Types

Servicer
1. (n.) The organization that is responsible for sending statements, accepting payments, filing required reports and managing escrow accounts for a mortgage loan.

2. (v.) Servicing. The action of sending statements and collecting payments from borrowers, filing reports, and managing escrow accounts for a mortgage loan.

See Mortgage Loan Property Types

Single Family Residence (SFR)
A residential property where the structure on the property is designed with dwelling accommodations for a single family.

See Attached (Property Type)
See Detached (Property Type)
See Mortgage Loan Property Types

Stated Income / Stated Assets (SISA) Documentation
A documentation type description used to indicate that borrower's income and assets were not verified for loan qualification purposes. The borrower's qualifying ratios are determined on the basis of information disclosed on the loan application. The borrowers stated income is based upon the previous years income. Stated income should be consistent with income typically derived from the borrower's occupation. It is assumed that a borrower's stated income is the upper estimate of the borrower's actual income. Funds to close and assets are also determined on the basis of information disclosed on the loan application. Qualifying ratios based upon the borrowers stated income and assets should generally be below maximum acceptable qualifying ratios.

A loan with SISA Documentation represents a higher credit risk than a loan with Stated Income Documentation. Investors will have price adjustments and more restrictive Loan To Value (LTV) ratios associated with loans that have a SISA documentation type.

See Documentation Type
See Mortgage Loan Documentation Type Overview
See Stated Income Documentation
Stated Income Documentation
A documentation type description used to indicate that the borrower's income was not verified for loan qualification purposes. The borrower's qualifying ratios are calculated on the basis of information disclosed on the loan application. Liabilities and assets are verified according to full or alternative documentation type guidelines. A loan with Stated Income documentation represents a slightly higher credit risk than a loan with Full/Alt Documentation. Typically, there are price adjustments and more restrictive Loan To Value (LTV) ratios associated with loans that have a Stated Income documentation type.

See Alternative Documentation
See Documentation Type
See Full Documentation
See Mortgage Loan Documentation Type Overview
Subprime Mortgage
Subprime mortgage loans are loans in which the lending decision is made using lower credit standards than those used in the conventional mortgage loan market.

See Conventional Loan

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