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PROCESSING Gathering the loan application and all of the required supporting documents (including the property appraisal, credit report, credit history, and income and expenses) so that a lender can consider the borrower for a loan.

PROPERTY APPRAISAL A supportable estimate of a property's market value determined by a trained and certified appraiser who measures the likelihood that a property will maintain its value over the duration of the loan.

PUD See Planned Unit Development.

QUALIFYING INCOME RATIO Income analysis compares only the amount of the proposed monthly mortgage payment income. (See PITI Ratio.) Another compares the amount of the total monthly payments (for example, car, credit card and proposed mortgage payments) to the monthly income.

RATE AND TERM REFINANCE The borrower replaced a mortgage loan on the subject property with another mortgage loan for the purpose of getting a better interest rate and loan term.

REAL ESTATE SETTLEMENT PROCEDURES ACT Federal legislation designed to help home buyers compare settlement costs among lenders and to eliminate kickbacks.

RECASTING An adjustment to the current mortgage- a loan modification- that does not involve the issuance of a new mortgage guaranty insurance certificate. With a recast loan, a modification may be made in the type of instrument involved. In whatever form a recast loan takes, the major benefit to the borrower is the potential for substantially reduced mortgage payments.

REFINANCE 1) To change a loan from one financial institution to another, or to rewrite the terms of a loan contract within the existing lending institution. 2) The payment of a debt from the proceeds of a new loan, using the same property as security.

REGULATION X Federal regulation prescribed by the Secretary of Housing and Urban Development (HUD) to implement Real Estate Settlement Procedures Act (RESPA).

REGULATION Z Federal regulation prescribed by the Federal Reserve Board to carry out the purposes of the Truth-in-Lending Act.

RESPA See Real Estate Settlement Procedures Act.

REVIEW UNDERWRITER Usually an underwriter from the mortgage insurer or mortgage investor. The review underwriter takes a less comprehensive look at the loan package and relies more on the findings of the primary underwriter.

SEASONED LOAN A loan that has been closed and on a lender's books for at least 12 months.

SECONDARY FINANCING Loans secured by the property, but subordinate to the first mortgage.

SECONDARY MARKET An informal market where existing mortgages are bought and sold. It is the traditional aftermarket for mortgage loans that brings together lenders that sell mortgages with lenders, investors and agencies that buy mortgages. Also called "secondary mortgage market," it should not be confused with second mortgage.

SECURITY The collateral or property given, deposited or pledged to ensure the fulfillment of an obligation or payment of debt.

SERVICING All the management and operational procedures that the mortgage company handles for the life of the mortgage, up through foreclosure if necessary, including: collecting the mortgage payment, ensuring that the taxes and insurance charges are paid promptly, and sending an annual report on the mortgage and the escrow accounts. (See Escrow Account.)

SETTLEMENT STATEMENT The complete breakdown of costs involved in the real estate transaction for both the seller and buyer.

SOLD LOAN A mortgage loan that has been sold to another institution or investor. Sold loans may continue to be serviced by the seller.

SURVEY A measurement of land, prepared by a registered land surveyor, showing the location of the land with reference to known points, its dimensions and the location and dimensions of any improvements.