What Is a Mortgage Broker? A mortgage broker is an intermediary who brings mortgage borrowers and mortgage lenders together, but who does not use their own funds to originate mortgages. A mortgage broker helps borrowers connect with lenders and seeks out the best fit in terms of the borrower’s financial situation and interest-rate needs. The
What Is a Mortgage Constant? A mortgage constant is the percentage of money paid each year to pay or service a debt compared to the total value of the loan. The mortgage constant helps to determine how much cash is needed annually to service a mortgage loan. It is calculated as dividing the annual debt
What Are Mortgage Credit Certificates? In North America, a mortgage credit certificate, also called an MCC, is a document provided by the originating mortgage lender to the borrower that directly converts a portion of the mortgage interest paid by the borrower into a non-refundable tax credit. Homebuyers whose self-reported incomes are in the lowest income
What Is a Mortgagee? A mortgagee is a lender: specifically, an entity that lends money to a borrower for the purpose of purchasing real estate. In a mortgage transaction, the lender serves as the mortgagee and the borrower is known as the mortgagor. key takeaways A mortgagee is an entity that lends money to a
What Is a Mortgage Electronic Registration System—MERS? The Mortgage Electronic Registration System (MERS) is a database created by the mortgage banking industry. A confidential electronic registry of mortgages originated in the United States, it keeps track of transfers of and modifications to servicing rights and ownership of the loans. It is used by the real
What Is Mortgage Excess Servicing? Mortgage excess servicing is a fee based off of the percentage of the monthly cash flow of mortgage backed securities (MBS) that remains after the cash flow has been divided into a coupon and principal payment for the MBS holder. Key Takeaways Mortgage excess servicing is a fee paid to
Definition of Mortgage Fraud The intention of mortgage fraud is typically to receive a larger loan amount than would have been permitted if the application had been made honestly. For example, by intentionally falsifying information on a mortgage application. Mortgage fraud schemes include straw buying, air loans, and double-sales. In addition to individuals committing mortgage
What Is Mortgage Insurance? Mortgage insurance is an insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, passes away, or is otherwise unable to meet the contractual obligations of the mortgage. Mortgage insurance can refer to private mortgage insurance (PMI), qualified mortgage insurance premium (MIP) insurance, or mortgage title
What Is Mortgage Interest? The term mortgage interest is the interest charged on a loan used to purchase a piece of property. The amount of interest owed is calculated as a percentage of the total amount of the mortgage issued by the lender. Mortgage interest compounds and may be either fixed or variable. The majority
What Is a Mortgage Participation Certificate? A mortgage participation certificate is a type of security that groups together mortgages held by the Federal Home Loan Mortgage Corporation (Freddie Mac), a government-sponsored enterprise. Mortgage participation certificates are guaranteed by Freddie Mac but not the federal government itself, and they are are taxable by federal, state, and
