Mortgage Acronym Reference Guide

Quick reference for mortgage industry terminology

For more information on a term, click the acronym to learn more!

Showing all acronyms
Loan Types & Products
ARM
Adjustable Rate Mortgage
Mortgage where interest rate changes periodically based on an index
CC
Closing Costs
Closing costs are various fees and expenses associated with finalizing a real estate transaction
FHA
Federal Housing Administration
Government-backed loan with lower down payment requirements (3.5%) and more flexible credit standards
FRM
Fixed Rate Mortgage
Mortgage with the same interest rate for the entire loan term
Conventional
Conventional home loan
Any mortgage loan that is not insured or guaranteed by the government
HARP
Home Affordable Refinance Program
Discontinued program that helped underwater homeowners refinance
HELOC
Home Equity Line of Credit
Revolving credit line allowing borrowers to draw funds against home equity
IRRRL
Interest Rate Reduction Refinance Loan
VA streamline refinance option for lowering interest rates
JUMBO
Jumbo Loan
Loan exceeding conforming loan limits set by FHFA
USDA
United States Department of Agriculture
Loans for rural properties with no down payment required
VA
Veterans Affairs
Loan exclusively for military members with no down payment required
Financial Calculations & Ratios
FF
Funding Fee
A one-time fee for VA loans that helps keep the VA loan program running without cost to taxpayers.
FF
Change of Circumstance
a significant event or new discovery that occurs after a lender has provided an initial Loan Estimate (LE) but before the Closing Disclosure (CD) is issued
CLTV
Combined Loan-to-Value
Ratio including all loans secured by the property
DTI
Debt-to-Income
Ratio comparing monthly debts to gross monthly income
LTV
Loan-to-Value
Ratio comparing loan amount to property value
MIP
Mortgage Insurance Premium
FHA loan insurance similar to PMI
PITI
Principal, Interest, Taxes, and Insurance
Components of the total monthly housing payment
PMI
Private Mortgage Insurance
Insurance required when down payment is less than 20%
Mortgage Process Terms
CD
Closing Disclosure
Final statement of actual loan terms and closing costs
COE
Certificate of Eligibility
Document required for VA loan qualification
TPO-FHA addendum
Third Party Originator FHA addendum
A document used when FHA loans are originated through third-party channels rather than directly by FHA-approved lenders.
COC
Change of Circumstance
a significant event or new discovery that occurs after a lender has provided an initial Loan Estimate (LE) but before the Closing Disclosure (CD) is issued
CTC
Clear to Close
Final underwriting approval to proceed with closing
GFE
Good Faith Estimate
Old disclosure form replaced by Loan Estimate under TRID
LE
Loan Estimate
Initial disclosure of loan terms and estimated costs
PC
Post Closing
The period and activities that occur after the official closing of a transaction
LOE
Letter of Explanation
Written explanation for credit issues or unusual circumstances
LOI
Letter of Intent
Document expressing interest in a property or loan terms
LOX
Letter of Explanation
Alternative acronym some systems use for LOE
NOO
Non-Owner Occupied
Investment property not used as primary residence
OO
Owner-Occupied
Property used as borrower's primary residence
POF
Proof of Funds
Documentation showing available money for down payment and closing
PTD
Permission to Disburse
Authorization to release funds at closing
REO
Real Estate Owned
Foreclosed properties owned by lenders
VOD
Verification of Deposit
Confirmation of funds in bank accounts
VOE
Verification of Employment
Document confirming job status and income
VOM
Verification of Mortgage
Document showing mortgage payment history
VOR
Verification of Rent
Confirmation from landlord of rental payment history
Regulatory & Compliance
AML
Anti-Money Laundering
Compliance requirements to prevent illegal money transfers
ATR
Ability-to-Repay
Rule requiring lenders to verify borrower can afford the loan
BSA
Bank Secrecy Act
Law requiring monitoring and reporting of suspicious financial activity
CFPB
Consumer Financial Protection Bureau
Primary federal regulator for mortgage lending
CRA
Community Reinvestment Act
Law encouraging lending in all communities including low-income areas
ECOA
Equal Credit Opportunity Act
Law prohibiting lending discrimination
FACTA
Fair and Accurate Credit Transactions Act
Enhancement to FCRA adding identity theft protections
FCRA
Fair Credit Reporting Act
Law governing how credit reports can be used
FHFA
Federal Housing Finance Agency
Regulator overseeing Fannie Mae and Freddie Mac
HMDA
Home Mortgage Disclosure Act
Law requiring collection and reporting of demographic lending data
HOEPA
Home Ownership and Equity Protection Act
Additional protections for high-cost mortgages
QM
Qualified Mortgage
Loan meeting specific underwriting standards for legal protection
RESPA
Real Estate Settlement Procedures Act
Federal law governing mortgage closings and requiring specific disclosures
SAFE
Secure and Fair Enforcement Act
Law requiring loan originator licensing and registration
TILA
Truth in Lending Act
Law requiring clear disclosure of loan terms and costs
TRID
TILA-RESPA Integrated Disclosure
Combined rules creating the Loan Estimate and Closing Disclosure forms
Secondary Market & Investors
AUS
Automated Underwriting System
Computer system providing quick loan approval decisions
DO
Desktop Originator
Older Fannie Mae system interface for loan delivery
DU
Desktop Underwriter
Fannie Mae's automated underwriting system
FHLMC
Federal Home Loan Mortgage Corporation (Freddie Mac)
Government-sponsored enterprise competing with Fannie Mae
FNMA
Federal National Mortgage Association (Fannie Mae)
Government-sponsored enterprise that purchases mortgages from lenders
GNMA
Government National Mortgage Association (Ginnie Mae)
Government agency guaranteeing government-backed mortgage securities
GSE
Government-Sponsored Enterprise
Entities like Fannie Mae and Freddie Mac with government backing
LP
Loan Prospector
Freddie Mac's automated underwriting system
MBS
Mortgage-Backed Securities
Bundled loans sold to investors as securities
ULDD
Uniform Loan Delivery Dataset
Standardized format for delivering loan data to GSEs
Systems & Technology
AI
Automated Indexing
System automatically categorizing loan documents
API
Application Programming Interface
Connection method between different software systems
CRM
Customer Relationship Management
System tracking borrower interactions and pipeline
EDM
Electronic Document Management
System for storing and organizing digital loan files
LOS
Loan Origination System
Primary software managing the entire loan process
MFA
Multi-Factor Authentication
Security requiring multiple verification methods
OCR
Optical Character Recognition
Technology converting scanned documents to editable text
POS
Point of Sale
Borrower-facing application system like Floify
PPE
Pricing and Product Eligibility
Engine determining rates and available loan products
SaaS
Software as a Service
Cloud-based software delivery model
SSO
Single Sign-On
One login providing access to multiple systems
Credit & Underwriting
ACH
Automated Clearing House
Electronic payment network for direct deposits and payments
AU
Automated Underwriting
Computer-based loan approval process
AVM
Automated Valuation Model
Computer-generated property value estimate
BPO
Broker Price Opinion
Less detailed property valuation alternative to full appraisal
DE
Direct Endorsement
FHA-approved underwriter who can approve FHA loans
FICO
Fair Isaac Corporation
Most common credit scoring model used in mortgage lending
NSF
Non-Sufficient Funds
Bounced check or payment due to insufficient account balance
PIW
Property Inspection Waiver
GSE program allowing loans without traditional appraisal
SAR
Staff Appraisal Reviewer
Person reviewing appraisals for accuracy and compliance
TC
Tri-merge Credit
Credit report combining data from all three major bureaus
UW
Underwriting/Underwriter
Process or person reviewing loan for approval
Property & Title
ALTA
American Land Title Association
Organization setting title insurance standards
CC&R
Covenants, Conditions, and Restrictions
Rules governing property use in a community
CPL
Closing Protection Letter
Title company's guarantee protecting against agent errors
O&E
Ownership and Encumbrance
Report showing property ownership and liens
Title Insuraance
Title Innsurance
A unique type of insurance that protects both homeowners and lenders from financial loss due to defects in the title
PR
Preliminary Report
Initial title report before final policy
PUD
Planned Unit Development
Type of community with shared common areas
SFR
Single Family Residence
Standalone home on its own lot
Miscellaneous But Important
DPA
Down Payment Assistance
A type of financial aid designed to help eligible homebuyers with the costs associated with purchasing a home, primarily the down payment and closing costs.
EPO
Early Payment Default/Early Payoff
Loan paid off within first few months
LLC
Limited Liability Company
Business entity that might own investment property
MERS
Mortgage Electronic Registration Systems
Electronic registry tracking mortgage ownership transfers
MOD
Loan Modification
Changes to original loan terms to help struggling borrower
NOD
Notice of Default
Formal notice starting foreclosure process
NPL
Non-Performing Loan
Loan in default or close to default
NTS
Notice of Trustee Sale
Public notice of foreclosure auction date
POA
Power of Attorney
Legal document allowing someone to sign on borrower's behalf
POC
Paid Outside of Closing
Fees paid separately from closing transaction
QC
Quality Control
Post-closing review process for compliance
REX
Real Estate Excise Tax
State-specific transfer tax on property sales