An Appraisal Management Company (AMC) acts as an intermediary between certified or licensed real estate appraisers and clients, often mortgage lenders, seeking appraisal services. These companies ensure compliance and standardization in the appraisal process to prevent undue influence and maintain objectivity.
Appraiser pressure involves unethically requesting an appraiser to provide a valuation that is higher or lower than the property's actual worth.
A blanket mortgage is a type of financing that covers multiple properties under a single mortgage, making it a useful tool for real estate investors and developers.
Loan-to-Value Ratio (LTV) is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The LTV ratio is crucial in assessing the risk of a loan.
A Qualified Mortgage (QM) is a home loan that adheres to the guidelines set forth in the Dodd-Frank Wall Street Reform and Consumer Protection Act, designed to mitigate the risks associated with mortgage lending and prevent practices that led to the financial crises like the 2008 credit crunch.
Redlining is an illegal discriminatory practice in which lenders refuse to offer mortgages or other financial services to individuals based on the location of their property, often predominantly affecting communities of color. It can cause significant economic harm and contribute to the deterioration of neighborhoods.
A senior mortgage, also known as a first mortgage, is the primary loan taken out on a property that holds the highest claim on the borrower's assets in case of foreclosure. It holds precedence over all other loans or claims on a property in the event of the borrower's default.
An underwriter inspects and evaluates the level of risk associated with insuring loans, securities, and other types of investments, making decisions that can significantly influence lending practices, policy formulation, investment strategies, and risk management.
