Dictionary

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Mortgage Banker

A company that originates mortgages exclusively for resale in the secondary mortgage market.

Mortgage Broker

An individual or company that brings borrowers and lenders together for the purpose of loan origination. Mortgage brokers typically require a fee or a commission for their services.

Mortgage Insurance

A contract that insures the lender against loss caused by a mortgagor’s default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan. See private mortgage insurance (MI).

Mortgage Insurance Policy (Mortgage Protection Policy)

In Life and Health insurance, a policy from which the benefits are intended to pay off the balance due on a mortgage or meet the payments on a mortgage as they fall due upon or after the death or disability of the insured. Although Credit Life is very similar, in most states, Credit Life is used for consumer loans rather than mortgages.

Mortgage Insurance Premium (MIP)

The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

Mortgage Life Insurance

A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the principal balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds.

Mortgage (Purchase Money) Lien

A lien or charge on the property of a mortgagor that secures the underlying debt obligations.

Mortgagee

The lender in a mortgage agreement.

Mortgagee Rights

Rights granted to a mortgagee (lender), under a property contract issued to a mortgagor, by virtue of the mortgagee’s financial interest in the property.

Mortgagor

The borrower in a mortgage agreement.