[L]
Lease Purchase
Assists low- to moderate-income home buyers in purchasing a home by allowing them to lease a home with an option to buy; the rent payment is made up of the monthly rental payment plus an additional amount that is credited to an account for use as a down payment.
Lien
A legal claim against property that must be satisfied When the property is sold.
Loan servicing
The tasks a lender performs to protect a mortgage investment, including collecting monthly payments from borrowers and dealing with delinquencies.
Loan Fraud
Purposely giving incorrect information on a loan application in order to better qualify for a loan; may result in civil liability or criminal penalties.
Loan-to-Value (LTV) Ratio
The relationship between the dollar amount of a borrower's mortgage loan and the value of the property.
Lock-In
Since interest rates can change frequently, many lenders offer an interest rate lock-in that guarantees a specific interest rate if the loan is closed within a specific time.
Loss Mitigation
Activities designed to reduce either the likelihood of the corporation suffering financial losses on a loan or the final dollar value of those losses in the event of a borrower default.
Lender option commitments
An agreement giving a lender the option to deliver loans or securities by a certain date at agreed-upon terms.
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[M]
Margin
An amount the lender adds to an index to determine the interest rate on an adjustable rate mortgage.
Mortgage
A lien on the property that secures the Promise to repay a loan.
Mortgage Banker
A company that originates loans and resells them to secondary mortgage lenders like :Fannie Mae or Freddie Mac.
Mortgage Brokers
Mortgage Brokers are companies that originate loans with the intention of brokering them to wholesale lending institutions. A mortgage broker will already have established relationships with these companies.
Mortgage Insurance
A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price.
Mortgage Insurance Premium (MIP)
A monthly payment -usually part of the mortgage payment - paid by a borrower for mortgage insurance.
Mortgage Modification
A loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments.
Mandatory delivery commitment
An agreement that a lender will deliver loans or securities by a certain date at agreed-upon terms.
Medium-term notes
Unsecured general obligations of Fannie Mae with maturities of one day or more and with principal and interest payable in U.S. dollars.
Modification
Any change to the original terms of a mortgage.
Mortgage
A legal document that pledges property to a lender as security for the repayment of the loan. The term also is used to refer to the loan itself.
Mortgage-Backed Security (MBS)
A Fannie Mae security that represents an undivided interest in a group of mortgages. Principal and interest payments from the individual mortgage loans are grouped and paid out to the MBS holders.
Multifamily housing
A building with more than four residential rental units.
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[N]
Nonperforming asset
An asset such as a mortgage that is not currently accruing interest or on which interest is not being paid.
National principal amount
The hypothetical amount on which interest rate swap payments are based. The notional principal amount in an interest rate swap generally is not paid or received by either party.
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