Heidi M Tourangeau
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Obsolescence              A force influencing the value of property caused by external or economic changes and decreasing functional utility of a property or deterioration.
Office of Thrift            A division of the U.S. Treasury Department responsible for the
Supervision (OTS)        examination and regulation of federally chartered and state chartered savings associations.
Open Ended Mortgage/ A mortgage with a provision that the outstanding loan amount
Trust Deed                 may be increased upon mutual agreement of the lender and the customer.
Option                       The right given for consideration to purchase or lease a property upon specified terms within a specified time.
Origination Date         The date the loan application was taken.
Origination Fee           The amount charged for work involved in the evaluation, preparation, and approval of a proposed mortgage loan.
Owner Occupant          A customer who will be residing in the subject property as their primary residence.
Owner Occupied          In a loan transaction, a subject property that will be occupied by
Property                     the customer as their primary or secondary residence.
Partnership                 A business association of two or more owners who share in the profits and losses of the business.
Payment Adjustment    On an ARM, the period of time when the monthly payment can
Period                        change (either upward or downward) according to the terms of the  loan.
Payment Change Cap   On an ARM, the annual limit on the amount that the monthly payment can increase or decrease. This feature is offered on some adjustable rate loans instead of an interest rate cap.
Payment Shock           A situation that occurs when ARM monthly mortgage payments rise very sharply at an adjustment, or when a proposed housing payment is significantly higher than the current housing expense. The customer may not be able to afford the payments the loan will require.
Payoff                        The complete repayment of loan principal, interest, and any other sums due; payoffs occur either over the full term of the loan through monthly amortization or through prepayments.
Penalty Clause            A clause in a promissory note specifying a penalty for late payments.
Personal Property        Movable property; all property that is not real property.
PITI                          Principal, interest, taxes, and insurance.
Pipeline                     Generally this refers to loans that are in process.
Planned Unit               A comprehensive development plan for a large land area. A PUD
Development (PUD)     usually includes residences, roads, schools, recreational facilities, commercial, office, and industrial areas. Also, a subdivision having lots or areas owned in common and reserved for the use of some or all of the owners of the separately owned lots.
Points                        An up-front fee collected in addition to the promissory note interest rate. Each “point” charged is equal to 1% of the loan amount. Points may be called an origination fee or “discount points” depending on the purpose.
Portfolio                     Portfolio describes loans that the bank keeps in its own investment portfolio, with no intention of selling. Because the bank intends to keep these loans, they do not have to meet standard secondary market guidelines and offer more flexibility on terms of LTV and loan amount limits among other things.
Power of Attorney        A legal document authorizing one person to act on behalf of another.
Pre-Approval               Pre-Approvals provide a credit decision for a customer who has not yet made an offer to buy a property. It requires a completed application package and is processed and underwritten in the same way as a loan with an identified property. The customer receives a written commitment letter identifying terms and conditions of a final loan approval to accompany a purchase offer on a property. Also see Credit Approval.
Preliminary Title          Document issued by a title company after a title search,
Report                       identifying any defects or exceptions to title. This report commits to insure the lender if/when a formal title policy is issued. May also be referred to as a title commitment, title report, prelim, or binder.
Prepayment                The payment of all or part of a mortgage debt before its contractual due date.
Prepayment Clause      A clause in the promissory note that stipulates the amount of principal a customer may pay ahead of schedule without penalty, as well as the penalty for larger prepayments.
Prepayment Penalty     A charge that compensates the lender for the costs and lost revenue when a customer pays off a loan early either by selling the property or refinancing as market rates change. The pricing on a specific transaction may determine whether a prepayment penalty applies.
Pre-Qualifying             Pre-Qualifying (known also as Credit Approval) a customer involves calculating the sales price or loan amount, for which a customer can qualify, based on income debts and money available for down payment and closing costs. Pre-Qualifying helps the Loan Consultant assist the customer in choosing a loan. The loan is not underwritten and no credit decision is made. Customers should never be discouraged from applying for a loan.
Pricing Package           The complete pricing for a loan, including interest rate, fee/points, margin, life cap, and prepayment penalties.
Prime Rate                 The interest rate commercial banks charge their most credit-worthy customers for short-term loans. It is often used as an index but is not a stable index.
Principal                    The original balance of money lent, excluding interest. Also, the remaining balance of a loan, excluding interest.
Priority                       That which is earlier or previous in point of time or right (as the priority of a first trust deed/mortgage over a second trust deed/mortgage).
Private Mortgage         Insurance written by a private company protecting the mortgage
Insurance                   lender against financial loss in the event the customer defaults on a mortgage. The premium is paid by the customer and is included in the mortgage payment. It is typically required on loans with an LTV greater than 80%. Also see Mortgage Insurance.
Promissory Note          A written promise to pay a specific amount at a specified time.
Purchase Agreement    A written proposal by a buyer to purchase real estate that becomes binding upon the acceptance by the seller.
Qualifying Income       The customer’s monthly income as used to calculate debt ratios in the underwriting process.
Qualifying Rate           The interest rate used to determine whether a customer qualifies for a loan. This rate may or may not be equal to the initial or note rate on the loan.
·        For fixed rate mortgages, the qualifying rate is the same as the note rate (the interest rate the customer will be charged for the entire loan term).
·        For ARMs with initial fixed interest rate or fixed payment periods greater than one year, the qualifying rate is the start rate.
·        For ARMs with initial fixed periods of one year or less, the rate used for qualification is the higher of either the loan’s start rate or another percentage rate, which is designated by the bank and varies based on the loan’s characteristics and current market conditions. 
·        Qualifying rates are subject to change at any time. 
Quiet Title                  An action to remove a cloud on title.
Quitclaim Deed            A deed, which conveys without warranty whatever present right, 
                                 title, or interest the grantor may have. Used in many states
                                 to clear a questionable interest in property.