Matching Pairs Mortgage and Loans -D-Online version Practice terms commonly used in mortgage underwriting in English. Match the terms with their explanation. by Linda Asher 1 Documentation 2 Deed of Trust 3 Default 4 Delinquent 5 Deed in lieu of foreclosure 6 Discount point 7 Direct lender 8 Demand clause 9 Derogatory 10 Deed 11 Deficiency 12 Down payment 13 Debt consolidation 14 DTI ratio Borrowers transfer ownership of the property to the mortgage lender to avoid foreclosure and to fully satisfy the borrower's debt obligation to the lender. This constitutes one step away from foreclosure because the borrower would more than likely default otherwise. It saves the lender the hassle of filing for foreclosure. This is the lender that receives a borrower's loan application, reviews borrower qualifications, underwrites the loan and funds it. Borrowers pay an upfront cost to secure an interest rate lower than the par rate. One of these is equal to 1 percent of the loan amount. When the remaining loan balance is not satisfied through the proceeds of a foreclosure sale, the lender is left with this. Lenders have the right to demand that the borrower repay a loan at any point in time, and that right is spelled out in the this clause of the mortgage contract. Borrowers need not default on loan for lender to demand repayment. Borrowers pay off several debts with a single large loan. This is often accomplished through a cash-out refinance, which is usually unsecured. The interest rate charged for the single loan is often significantly lower than the interest rates charged on the various other debts. Borrowers provide all the required paperwork and information that the lender requires to document the facts in the application and make a loan approval decision. A negative item on a borrower's credit report which damages the borrower's credit score. These include foreclosure, bankruptcy, short sale, deed in lieu of foreclosure and late credit card payments. This ratio represents the proportion of outstanding debt a borrower carries compared with the borrower's gross income. Many lenders further distinguish between two types: the back-end ratio and the front-end ratio. Borrowers provide a sum of money to anchor the property purchase. Conventional mortgage lenders require a borrower to contribute a 20 percent in this concept to avoid paying private mortgage insurance. Borrowers do this when they fail to stay current on payment obligations, resulting in a breach of contract of the loan note. This usually triggers an acceleration of the balance and the creditor's right to foreclose, seize collateral or take other corrective action. Borrowers who fail to submit timely payment on a loan obligation have this status. When protracted this usually results in a borrower's default of a loan, which usually triggers an acceleration of a loan balance and a creditor's right to demand repayment of the entire loan obligation. In some US states, this is used as an alternative to a mortgage document. It is signed by the borrower at closing and gives a trustee, who is not the lender, an interest in the property and the right to take control of the property if the borrower defaults on the loan obligations. The trustee is typically a title insurance company and acts as the lender's agent in a non-judicial foreclosure. This formal document executed by the seller transfers the seller's ownership in a property to a buyer. It must typically contain the name of the seller (grantor), the buyer (grantee), the consideration (sales price), the property and its description.
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