Housing Glossary

  • Adjustable-Rate Mortgage (ARM) A mortgage loan with an interest rate that is subject to change and is not fixed at the same level for the life of the loan. These types of loans usually start off with a lower interest rate but can subject the homeowner to payment uncertainty when the rate adjusts.

  • Amortize Paying off a debt by making regular installment payments over a set period of time, at the end of which the loan balance is zero.

  • Appraisal A written estimate of a property's current market value prepared by a professional appraiser. When a property is appraised in connection with a loan, the appraiser is selected by the lender, but the appraisal fee is usually paid by the homeowner.

  • Balloon Mortgage A mortgage loan with initially low interest payments, but that requires one large payment due upon maturity (for example, at the end of five or seven years).

  • Buy-down Mortgage A mortgage loan in which one party pays an initial lump sum in order to reduce the homeowner’s monthly payments.

  • Cash for Keys A deal a servicer may make with a resident (homeowner or renter). The resident gets a cash settlement in exchange for vacating the foreclosed home. (If you receive a “cash for keys” offer, it is strongly advised you contact an attorney or housing counselor to protect your rights.)

  • Chapter 7 Bankruptcy In the case of an individual debtor, a bankruptcy that requires all assets be liquidated in exchange for the discharge of debts, other than debts the individual debtor chooses to reaffirm and certain obligations that cannot be discharged as a matter of law.

  • Chapter 13 Bankruptcy This type of bankruptcy sets a payment plan between an individual debtor (such as a homeowner) and the creditor monitored by the bankruptcy court. Under a Chapter 13 plan, a homeowner can keep the property, but must make payments according to the court's terms within a three- to five-year period.

  • Closing When selling a house, the process of transferring ownership from the seller to the buyer, the disbursement of funds from the buyer and the lender to the seller, and the signing of all the documents associated with the sale and the loan. On a refinance, there is no transfer of ownership, but the closing includes repayment of the previous lender.

  • Co-Borrowers One or more persons who have signed a loan note, and are equally responsible for repaying the loan.

  • Collections The efforts a mortgage company takes to collect past due payments.

  • Convertible ARM An Adjustable-Rate Mortgage loan that can be converted into a fixed-rate mortgage during a certain time period.

  • Debt-to-Income (DTI) Debt-to-Income (DTI) is a calculation frequently used by mortgage companies when qualifying borrowers for a mortgage or a workout solution to resolve delinquency. It is calculated by comparing how much you pay on your mortgage(s) to your gross monthly income. A comparison or ratio of gross income to housing and other expenses (or debts) the homeowner owes.

  • Deed A document that legally transfers ownership of property from one person to another. The deed is recorded on public record with the property description and the owner's signature. Also known as the title.

  • Deed-in-Lieu of Foreclosure The voluntary transfer of title by the homeowner to the mortgage company to satisfy the mortgage debt and avoid foreclosure; also called a "voluntary conveyance. This process does not allow the borrower to remain in the house.

  • Default The inability to make timely monthly mortgage payments or otherwise comply with mortgage terms. A loan is considered in default when payment has not been paid after 60 to 90 days. Once in default the servicer can exercise legal rights defined in the contract to begin foreclosure proceedings.

  • Deferred Payments Payments that are authorized to be postponed as part of a workout process to avoid foreclosure.

  • Deficiency Balance The difference between what a foreclosed home sold for and the remaining mortgage balance. The mortgage company may require you to pay the amount of the deficiency balance.

  • Delinquency Failure to make a payment when it is due. A loan is generally considered delinquent when it is 30 or more days past due. Generally after 15 days a late fee may be assessed.

  • Equity An owner's financial interest in a property which is calculated by subtracting the amount still owed on the mortgage loan(s) from the current market value of the property.

  • Escrow Account A separate account into which a portion of each monthly mortgage payment is placed in trust; an escrow account provides the funds needed for such expenses as property taxes, homeowners insurance, mortgage insurance, etc.

  • Escrow Analysis A periodic review of escrow accounts to make sure that there are sufficient funds to pay the taxes and insurance on a home when they are due.

  • FHA Federal Housing Administration

  • Filing A foreclosure action filed with the court.

  • First Mortgage A mortgage that has a first-priority claim against the property in the event the homeowner defaults on the loan.

  • Fixed-Rate Mortgage A mortgage loan with a fixed interest rate that remains the same for the life of the loan.

  • Forbearance An agreement to temporarily suspend or reduce monthly mortgage payments for a specific period of time. The mortgage company will then postpone legal action when a homeowner is delinquent. A forbearance is usually granted when a homeowner makes satisfactory arrangements to bring the overdue mortgage payments up to date. This is a temporary option and monthly payments may increase after the forbearance period is over.

  • Foreclosure The legal process by which a property may be sold and the proceeds of the sale applied to the mortgage debt. A foreclosure occurs when the loan becomes delinquent because payments have not been made or when the homeowner is in default for a reason other than the failure to make timely mortgage payments.

  • Foreclosure Intervention Steps by which the mortgage company works with the homeowner to find a permanent solution to resolve an existing or impending loan delinquency.

  • Foreclosure The legal process by which a property may be sold and the proceeds of the sale applied to the mortgage debt. A foreclosure occurs when the loan becomes delinquent because payments have not been made or when the homeowner is in default for a reason other than the failure to make timely mortgage payments.  Foreclosures can also occur on property with delinquent taxes, water bills or condominium association fees.

  • Government-Sponsored Enterprises (GSEs) Private corporations created by the U.S. Government to reduce borrowing costs. For example, Fannie Mae and Freddie Mac are GSEs.

  • Hardship A hardship is the reason why a homeowner is having trouble making their mortgage payments, such as job loss, medical emergency or illness, divorce, etc. A hardship may be short term (less than 6 months) or long term (more than 6 months). When contacting your mortgage company or a housing counselor for assistance, homeowners may be required to demonstrate/explain any hardship they are experiencing.

  • Hazard Insurance Insurance coverage that pays for the loss or damage on a person's home or property. It is generally required under mortgage contracts to pay for loss or damage to a person’s home or property.

  • HECM Home Equity Conversion Mortgage. A type of Federal Housing Administration (FHA) insured reverse mortgage. Home Equity Conversion Mortgages allow seniors to convert access the equity in their home.

  • Home Affordable Foreclosure Alternatives Program (HAFA) The Home Affordable Foreclosure Alternatives Program is part of the government’s Making Home Affordable Program, and provides foreclosure alternatives to homeowners who can no longer afford their mortgage payments.

  • Home Affordable Modification Program (HAMP) The Home Affordable Modification Program was part of the government’s Making Home Affordable Program, and provided homeowners an opportunity to modify their loan to more affordable monthly payments. The program ended December 31, 2016.  

  • Home Affordable Refinance Program (HARP) The Home Affordable Refinance Program is part of the government’s Making Home Affordable Program, and provides homeowners an opportunity to refinance their loan to more affordable monthly payments – even if they have limited or no equity in their home.

  • Home Equity Line of Credit (HELOC) A way of borrowing money against the equity or assets the homeowner has in the home to pay for home repairs, college education, or other personal expenses.

  • Housing Counseling Agency An agency—such as NHS Brooklyn--that provides counseling and assistance to individuals on a variety of issues, including loan default, fair housing, and home purchase.

  • Housing Expense The sum of a homeowner’s mortgage payment, hazard insurance, property taxes, and homeowner association fees.

  • HUD Housing and Urban Development, a federal agency. HUD administers programs that develop and support affordable housing. It makes loans available for lower- and moderate-income families through its FHA mortgage insurance program and its HUD Homes program.HUD also protects consumers through education, Fair Housing Laws, and housing rehabilitation initiatives.

  • Interest Rate A rate which is charged or paid for the use of money. In the case of a mortgage, interest is charged on a monthly loan payment. It is expressed as a percentage.

  • Interest-Only Mortgage A mortgage where the homeowner pays only the interest on the loan for a specified amount of time.

  • Investment Property A property not considered to be a primary residence that is purchased by an investor in order to generate income, gain profit from reselling or to gain tax benefits.

  • Investor The entity that actually “owns” a mortgage (usually a bank). The servicer is restricted as to what it can do to assist homeowners because of agreements with its investors. All workout programs have to be approved by the investor. Some servicers have models in place to ensure they only offer programs within the investors’ guidelines.

  • Lien The lender’s right to claim the homeowner’s property in the event the homeowner defaults. If there is more than one lien, the claim of the lender holding the first lien will be satisfied before the claim of the lender holding the second lien, which in turn will be satisfied before the claim of a lender holding a third lien, etc.

  • Loan Modification A change to the original financial terms of a mortgage, usually because of a hardship such as illness, job loss, or other challenge. The goal of a loan modification is to reduce the homeowner’s monthly payment amount. NHS Brooklyn offers this service at no charge, as opposed to attorneys, who charge a fee.

  • Loan-to-Value (LTV) Ratio In real estate lending, the outstanding principal amount of the loan divided by the appraised value of the property underlying the loan.

  • Loss Mitigation When the homeowner and the mortgage company are working together to determine the appropriate option/workout solution to bring the mortgage current and avoid foreclosure.

  • Mediation Mediation is a process used to resolve disagreements outside a courtroom. Both sides meet with a neutral third party who tries to help them find a resolution. “Foreclosure Mediation” under Maryland’s new law is designed to provide a dialogue between homeowners and lenders to make sure an assessment is made and the homeowner is offered any loss mitigation options for which they qualify. Borrowers must choose to participate in this process by completing the “Request for Mediation Form”. (See Pre- and Post-Filing Mediation).

  • Modification Any change to the terms of a mortgage loan, including changes to the interest rate, loan balance or loan term to bring the loan current.

  • Monthly Gross Income The total income of all homeowners who sign a mortgage before any taxes or other deductions are made.

  • Mortgage A legal document that pledges property to the mortgage company as security for the repayment of the loan. The term is also used to refer to the loan itself.

  • Mortgage Company Mortgage companies may originate (i.e., your lender) as well as service the loan. The lender who originated your mortgage may or may not service your loan. When the mortgage company services your mortgage, they do the following: collect the homeowner’s mortgage payments, pay taxes and insurance, generally manage your escrow accounts (i.e., they “service” your loan), and provide customer service and support.

  • Mortgage Insurance (MI) Insurance that protects lenders against losses caused by a homeowner's default on a mortgage loan. MI typically is required if the homeowner's down payment is less than 20% of the purchase price.

  • Mortgage Modification A change in the terms of a loan, usually the interest rate and/or term, in response to the homeowner's inability to make the payments under the existing contract.

  • Mortgage Payment The amount of money paid on a monthly basis for principal, interest, property taxes, hazard insurance and homeowner’s association fees, if applicable.

  • Mortgage A legal document that pledges property to a lender as security for the repayment of a loan. The term is sometimes also used to refer to the loan itself.

  • Negative Equity The condition of being underwater, or owing more on the property than the property is worth.

  • Notice of Intent to Foreclose (NOI) A formal written notice to a borrower informing him/her of impending foreclosure proceedings. This Notice provides crucial information about the loan and who to contact at the servicer to pursue loss mitigation options.

  • Order to Docket (OTD) A foreclosure action required to be filed in court in order for mortgage servicer to move forward with foreclosure proceedings.

  • PITIA Shorthand for principal, interest, taxes, insurance, and, if applicable, association fees which are the components of the housing expense.

  • PMI (Private Mortgage Insurance) A type of mortgage insurance used with conventional loans. Like other kinds of mortgage insurance, PMI protects the lender—not you—if you stop making payments on your loan.

  • Post-file Mediation Mediation after a foreclosure action has been filed in court.

  • Pre-file Mediation Mediation before a foreclosure action is filed in court.

  • Pre-foreclosure Sale Sale in which the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Also referred to as a “short sale.”

  • Primary or Principal Residence The property in which the homeowner will live most of the time, as distinct from a second home or an investment property that will be rented.

  • Principal Reduction The reduction in loan balance which occurs with each payment of a positively amortized mortgage.

  • Principal The amount of money borrowed to buy a house, or the amount of the loan that has not been paid back to the servicer. This does not include the interest paid to borrow that money.

  • Private-Label Mortgages Loans that are not owned, guaranteed or insured by Fannie Mae, Freddie Mac, Ginnie Mae, or another Federal agency.

  • Recast/Re-Amortize In certain instances when a substantial payment or contribution is made to reduce the unpaid principal balance of a homeowner’s mortgage loan, the homeowner could have the unpaid principal balance recast or re-amortized. This is when the mortgage company recalculates the monthly payment based on the lowered principal balance, using the same interest rate and time remaining under the existing mortgage terms.

  • Refinance A loss mitigation option that involves paying off one loan by obtaining another; refinancing is generally done to secure better loan terms, but may not result in lower monthly payments.

  • Repayment Plan A loss mitigation option that is an agreement between a servicer and a delinquent borrower where the borrower agrees to make additional payments to pay down past due amounts while making regularly scheduled payments.

  • Repayment Plan A process in which a homeowner promises to pay down past due amounts on a mortgage while continuing to make regular monthly payments on a property.

  • Reverse Mortgage A loan available to homeowners, 62 years or older, that allows them to access part of the equity in their homes.

  • Second Mortgage An additional mortgage on property. In case of a default, the first mortgage must be paid before the second mortgage. If a workout is obtained on the first mortgage, the second mortgage may still enter foreclosure.

  • Servicer A mortgage company that works on behalf of the lender (or itself) in support of a mortgage, including collecting mortgage payments, ensuring payment of taxes and insurance, managing escrow accounts, managing communications with the homeowner, mitigating loss, initiating foreclosures, and otherwise “servicing” the mortgage. The servicer may be the same as the lender, or a specialized company that only handles loans under contract with specific lenders or investors. Servicers also contact delinquent borrowers. Sometimes referred to as just the mortgage company.

  • Servicing Transfer When one servicer is replaced by another by the lender.

  • Short Sale (also called Pre-foreclosure) A loss mitigation option in which a mortgage company works with a delinquent homeowner to sell the house by a real estate agent prior to the foreclosure sale. The sale price is less than what is owed on the mortgage. The servicer should make arrangements to forgive the difference, or set up a payment plan.

  • Short Sale Sale in which the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage. Also referred to as a “Pre-foreclosure Sale.”

  • SONYMA State of New York Mortgage Agency, a public authority created in 1970 by the state government of New York to provide affordable homeownership to low- and moderate-income New Yorkers. It offers affordably priced fixed-rate mortgages through several mortgage programs for eligible homebuyers.

  • Title The documented evidence that a person or organization has ownership of real property.

  • Trust A relationship in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another.

  • Underwater The condition of having negative equity, or owing more on the property than the property is worth.

  • Underwriting The process of examining all the data about a homeowner's property and income documentation to determine whether the mortgage modification should be issued. The person who does this is called an underwriter.

  • Unpaid Principal Balance (UPB) Amount of a loan that is due to the lender. This does not include additional charges, such as interest.

  • Voluntary Conveyance The transfer of title from a homeowner to the mortgage company to satisfy the mortgage debt and avoid foreclosure; also called a "Deed-in-Lieu of Foreclosure."

  • Weighted Average Life Average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding.

  • Workout Options to resolve or restructure a loan or prevent someone from going into foreclosure.

  • Workout A way to resolve or restructure a loan to prevent a homeowner from going into foreclosure through a loan modification, forbearance or short sale.

East Flatbush

2806 Church Ave.

Brooklyn, NY 11226


9701 Avenue L

Brooklyn, NY 11236


(718) 469-4679

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