Glossary

Seller Contribution Defined
A seller contribution is money paid by the seller for closing costs or a down payment that is normally paid by the buyer. Different loan programs have different restrictions on how much the seller can contribute and for what.
For example, on a conforming loan you put 5% down so the seller can [...]

Service Release Premium Defined
A service release premium is income paid to a bank when they sell a mortgage with a higher than par rate into the secondary market. In the mortgage industry it is known as SRP. It is the same as yield spread premium because it is income derived from increasing your [...]

Servicing Defined
Servicing is the act or “service” of collecting your payments, reporting payment history to credit reporting agencies, and administering you escrow payments of taxes and insurance for a fee the lender pays. Some mortgage companies are exclusively servicing companies handling the mortgages of others. Other mortgage companies enter the servicing business to [...]

Subordination Defined
Subordination is the state of one loan being “behind” or “subordinate” too another or “superior” loan in lien position. Lien position is the order of claim on the collarteral (the home) should a default occur and is usually based on time or “who came first”.
For example, you buy a house [...]