Mortgage Markets I. Mortgage Mortgage A pledge of property to secure payment of a debt. Mortgagor: Borrower Mortgagee: Lender Properties Residential Properties Single-Family Structures Multifamily Structures Nonsidential Properties Commercial Farm II. Primary Mortgage Market
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A pledge of property to secure payment of a debt.
The ratio of monthly payment to monthly income.
The ratio of the amount of the loan to the market (or appraised) value of the property.
A point represents 1% of the borrowed funds.
Rates to be reset every month, year, two years, or three years.
Rates to be renegotiated every 3 to 5 years.
Nominal monthly repayment grows at a constant rate during a portion of the life of the contract, thereafter leveling off.
Monthly payments to be level in purchasing power terms rather than in nominal terms.
The payments never level off but continue to increase throughout the life of the loan.
The loan applications being processed and the commitments made by a mortgage originator together are called its pipeline.
Pipeline risk refers to the risks associated with originating mortgages.
The adverse effects on the value of the pipeline if mortgage rates rise.
The risk that applicants or those who were issued commitment letters will not close.
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
Residential Funding Corporation
GE Capital Mortgage Services
Prudential Home Mortgage
A mortgage loan that meets the underwriting standards to be included in a pool of mortgages underlying a security that a conduit guarantees.
A passively managed trust with units sold to investors.