Point User Guide 491
the index is known as the fully indexed rate. For example, if the current index value is
5.50% and your loan has a margin of 2.5%, your fully indexed rate is 8.00%. Margins on
loans range from 1.75% to 3.5% depending on the index and the amount financed in
relation to the property value.
MCAW (Mortgage Credit Analysis Worksheet)
FHA worksheet (HUD 92900).
MERS (Mortgage Electronic Registration Systems)
Electronic registry for tracking ownership of mortgage rights. Uses MIN numbers.
MIN (Mortgage Identification Number)
Number used in the MERS system.
MIP/FF (Mortgage Insurance Premium/Funding Fee)
Insurance from FHA to the lender against incurring a loss because of the borrower’s
default.
MISMO (Mortgage Industry Standard Maintenance Organization)
The body that oversees the maintenance of the MISMO XML standard that is used by
companies involved in the mortgage industry.
negative amortization
Occurs when monthly payments are not enough to pay all the interest due on the loan.
This unpaid interest is added to the unpaid balance of the loan. The danger of negative
amortization is that the home buyer ends up owing more than the original amount of the
loan.
NFIP (National Flood Insurance Program)
A component of FEMA in which nearly 20,000 communities across the United States and
associated territories participate by adopting and enforcing floodplain management
ordinances to reduce future flood damage.
no-cash-out refinance
A type of refinance mortgage where the amount covers any remaining balance of a first
loan, plus the closing costs and liens. Additionally, it produces no more than one percent
of the principal of the new loan in cash.
note rate
The interest rate on a mortgage note.
origination fee
The fee charged by a lender to prepare loan documents, make credit checks, inspect and
sometimes appraise a property; usually computed as a percentage of the face value of the
loan.
participation status
A community’s level of participation in the National Flood Insurance Program.
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