HERA Housing and Economic Recovery Act of 2008
HOC Homeownership Center
HUD U.S. Department of Housing and Urban Development HUD-OIG U.S. Department of Housing and Urban Development
Office of Inspector General
LAPP Lender Appraisal Processing Program LASS Lender Assessment Subsystem
LoanSTAR Loan Systematic Technical Accuracy Review MBS Mortgage-Backed Securities
MHA Making Home Affordable Program MIP Mortgage Insurance Premium
ML Mortgagee Letter
MPF Mortgage Partnership Finance MPP Mortgage Purchase Program NADL Native American Direct Loan
NSP 1 Neighborhood Stabilization Program 1 NSP 2 Neighborhood Stabilization Program 2 NSP 3 Neighborhood Stabilization Program 3
NSP-TA Neighborhood Stabilization Program—Technical Assistance OAE Office of Audits and Evaluations OCC Office of the Comptroller of the Currency OF Office of Finance for the Federal Home Loan Banks OFHEO Office of Federal Housing Enterprise Oversight OI Office of Investigations OIG Office of Inspector General OMB Office of Management and Budget OREO Other Real Estate Owned
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PLOU Portfolio Loan Oversight Unit
PMOU Property Management Oversight Unit PSPA Senior Preferred Stock Purchase Agreement
Recovery Act American Recovery and Reinvestment Act of 2009 (ARRA) REFCORP Resolution Funding Corporation
REMIC Real Estate Mortgage Investment Conduit
REO Real Estate Owned
RHS Rural Housing Service SAH Specially Adapted Housing SAS Statement on Auditing Standards SEC Securities and Exchange Commission System Federal Home Loan Bank System TARP Troubled Asset Relief Program The Board Mortgagee Review Board (MRB) Treasury U.S. Department of the Treasury
UP Home Affordable Unemployment Program USDA U.S. Department of Agriculture
USDA-OIG U.S. Department of Agriculture Office of Inspector General VA U.S. Department of Veterans Affairs
VA-OIG U.S. Department of Veterans Affairs Office of Inspector General
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Glossary
The technical terms below are used in one or more of the housing program descriptions.
Acquired (Refunded) Loan—A loss mitigation option in which VA purchases
the loan from the private lender and sets affordable payments for the Veteran, allowing the Veteran to retain his or her home. Acquired (Refunded) loans are serviced by VA’s portfolio loan servicer.
Affordable Housing—Affordable housing refers to housing, either for purchase
or for rent, that is affordable to people with low to moderate incomes. Such housing may be provided or supported by government or by the private sector. HUD and others define affordability in terms of the proportion of household income that goes toward housing. HUD defines low and moderate income as a certain percentage of the area’s median income. Affordable housing projects serve a wide range of neighborhood needs. Many are designed for seniors, the disabled, homeless families, first-time homeowners, and others with limited resources.
Claims—A request or demand for payment on a guaranteed loan by the loan
holder due to default by the borrower. The guarantor will generally issue the payment to the loan servicer who will be responsible for forwarding the funds to the loan holder in accordance with its servicing agreement.
Debt—A specific sum of money due by agreement or otherwise.1 Obligations can be incurred by households (consumer debt) or corporations (corporate debt). Corporate debt can also refer to securities issued by corporation, each an individual obligation owed by the corporation to the investor.
Deed-in-lieu (DIL)—A voluntary transfer of property from the borrower to the
loan holder for a release of all obligations under the mortgage.
Foreclosure—Process by which a mortgage’s holder seizes the property of a
homeowner who has not made interest and/or principal payments on time as stipulated in the mortgage contract.2 Foreclosure laws vary according to each state’s statutes on the topic. Generally, foreclosures are either judicial (i.e.,
1 Black’s Law Dictionary 330 (7th ed. 2000)
2 Campbell R. Harvey’s Hypertextual Finance Glossary (2011), online at www.duke.edu/~charvey/ Classes/wpg/bfglosf.htm. Last viewed on August 30, 2011.
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conducted primarily through court proceedings) or non-judicial (i.e., conducted largely outside of the state’s judicial system).
Guarantee—An agreement to repay a loan or ensure performance. It may be
limited in time and amount.3 With respect to mortgage-backed securities, a guarantee takes the form of assurance of timely principal and interest payments to security holders.4
Insurance—Indemnification one obtains against loss from a specific hazard or
peril.5 Mortgage insurance is one such example. A federal agency may insure private lenders against the risk that a particular borrower will default on his or her mortgage. By offering to insure the borrower’s mortgage, the federal agency reduces the risks those private lenders might incur, and thereby encourages those lenders to extend credit to borrowers who might not otherwise qualify for mortgages in the private market.
Lender Appraisal Processing Program (LAPP)—A program which allows VA-
authorized lenders to receive appraisal reports directly from appraisers and process them without direct VA involvement, enabling lenders to speed up the time involved with closing a loan.
Loss Mitigation—Steps taken by the mortgage lenders to avoid the need to
foreclose upon properties subject to a mortgage upon which the borrower is at risk of going into default. Such steps may benefit both the lender and the borrower. Examples of loss mitigation activities include, but are not limited to, loan modifications6 and short sales.7
Native American Direct Loan (NADL)—A loan product offered by VA to Native
American Veterans choosing to use their VA home benefit on Federal Trust Lands. NADLs are utilized to purchase, build, or improve a home located on
3 Glossary of Project Finance Terms and Acronyms (2004), online at www.people.hbs.edu/besty/ projfinportal/glossary.htm#Top. Last viewed on August 30, 2011.
4 Online at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/buying/ glossary. Last viewed on August 30, 2011.
5 Institute of Financial Education, Glossary of Financial Services Terminology 40 (1990). 6 A loan modification alters the original loan’s terms to make it comparatively easier for the borrower to pay back what is owed. A loan modification may extend the period of time in which