Adjustable-Rate Mortgage (ARM) A mortgage or home equity loan in which your interest rate and monthly payments may change periodically during the life of the loan, based on the fluctuation of an index. Lenders may charge a lower interest rate for the initial period of the loan. Most ARMs have a rate cap that limits the amount the interest rate can change, both in an adjustment period and over the life of the loan. Also called a variable-rate mortgage. Appraisal or Appraised Value The professional opinion of a licensed and independent Appraiser about the value of your home. The Appraiser visits the home, evaluates its interior and exterior condition, and compares the property to other homes recently sold in the area.

Broker Price Opinion (BPO) The estimated value of your property as determined by a Real Estate Broker, firm or other qualified individual. Buyers Agent The Agent who represents the buyer in a real estate transaction. Buyer’s Closing Costs (BCCs) The costs that a seller may pay on behalf of a buyer. Non-recurring costs are one-time costs such as escrow, title insurance and loan fees. Recurring costs are those that do not end, such as property taxes and/or insurance.

Capitalization Used to bring a loan in default current by adding delinquent and unpaid interest, fees and/or escrow advances to the unpaid principal balance of the loan. Cash Contribution Depending upon your financial situation and at the investor’s discretion, a cash contribution or promissory note for future payment may be requested. A contribution does not always imply that the remaining deficiency will be waived. Certificate of Occupancy (CO) A document issued by a local jurisdiction certifying that all building codes have been met and that your home has been properly inspected. Clear Title A title that is marketable and free of liens or legal questions regarding ownership of the property. Cooperative Short Sale program This program may help you avoid foreclosure if you owe more on your mortgage than your house is worth and do not qualify for the Home Affordable Foreclosure Alternatives (HAFA) program. It also offers relocation assistance to help with moving expenses.

Deed in Lieu of Foreclosure or Deed in Lieu Used as an alternative to foreclosure, a deed in lieu of foreclosure is where you sign over the deed to your property to the lender because you are unable to make your mortgage payments. May also be referred to as deed in lieu or ‘voluntary conveyance.’ A deed in lieu of foreclosure will have a negative impact on your credit. Default If you are unable to keep your payments up to date or meet the other terms of your loan outlined in your mortgage loan documents, your loan is considered to be in default. Deferment (also known as Forbearance) If you are facing a temporary hardship, your lender may offer you a deferment. A deferment is a postponement of your home loan payments for a set period of time. This does not release you from having to pay interest on those amounts, but you can defer or postpone having to make those payments for an agreed-upon number of months as temporary relief during a hardship period. After that period is over, your lender will work with you to develop a repayment plan that allows you to make your regularly scheduled mortgage payments plus pay off these deferred payments over time. Delinquency Cycle A delinquency cycle is the time between you missing your first mortgage payment and the foreclosure of your home. Being in the delinquency cycle does not automatically mean youll lose your home to foreclosure. This is a crucial time to reach out and get help. The sooner you take action by contacting your bank, the more options youll have available to you. Delinquent Failure to make payments on time. Dodd-Frank Certification As part of the federal government’s Dodd-Frank Wall Street Reform and Consumer Protection Act, put into effect September 2010, this certification helps prevent criminal abuse of the government’s Making Home Affordable (MHA) program.