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Mr. Cooper Glossary

A | B | C | D | E | F | G | H | I | J | K | L | M

N | O | P | Q | R | S | T | U | V | W | X | Y | Z


A

What is an appraisal?

An appraisal is a written report by a qualified professional (appraiser) estimating the value of a property. During the appraisal process, appraisers generally evaluate the condition of a house’s interior, roof, siding, and foundation. They may also examine windows, doors, flooring, plumbing, electrical work, and fixtures.

In some instances an appraiser may perform a “drive-by appraisal” as an alternative. In these cases, they examine the exterior of a home only, often from their car. Property records and information on comparable homes in the area help determine a final value.

Further reading

Home Appraisals Explained


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D

What is a deferral?

See P for “What is a payment deferral?”


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What is a Deed in Lieu of Foreclosure?

If there isn’t a financially feasible way to keep your home, and you’ve decided to move on, a Deed in Lieu of Foreclosure (DIL) may be an alternative to foreclosure. DIL means that you voluntarily transfer ownership of your home to your lender, the lender terminates the loan, and the remaining balance due is forgiven. However, it may have tax consequences and/or impact your credit, so you’ll want to contact your tax advisor to discuss these potential impacts.

With a Deed in Lieu, you’ll have plenty of time to plan your move and transition out of your home. You may be eligible for relocation assistance. If there are other liens and judgments against your property, those must be paid off or removed prior to finalizing the DIL. You may also be eligible for assistance in removing some or all of these liens or judgments.

Further reading

See also forbearance

See also loan modification

See also short sale

Mortgage Assistance

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowners


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F

What is Fannie Mae?

The Federal National Mortgage Association (FNMA), known as Fannie Mae, is a government-sponsored enterprise set up to make mortgages available to low- and moderate-income borrowers. It was first established in 1938 during the Great Depression as part of President Franklin D. Roosevelt’s New Deal program and became a publicly traded company thirty years later.

Fannie Mae purchases mortgages from lenders in order to provide the lenders with liquidity so they can offer more mortgages. Its brother organization is the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac.

This entity guarantees millions of mortgages throughout the country, helping to reduce the down payment and credit requirements for low- and middle-income families. Rather than providing loans, it backs or guarantees them in the secondary mortgage market.

In what is called “securitization,” Fannie Mae, as well as Freddie Mac, bundles the mortgages it owns and sells them to investors.

Further reading

Transferring to Mr. Cooper

New Customer Support

Mr. Cooper Pandemic Relief Plans

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowners

COVID-19 Mortgage Myths That Need to Be Cleared Up Immediately


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What is a FICO® score?

A FICO score is a type of credit score created by the Fair Isaac Corporation. Lenders use borrowers’ FICO scores along with other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. FICO scores range from 300 to 850 and can vary depending on the type of loan you apply for, e.g. an auto loan versus a mortgage. These scores consider factors in five areas to determine credit worthiness, including a borrower’s:

  • Payment history.
  • Current level of indebtedness.
  • Types of credit used.
  • Length of credit history.
  • New credit accounts.

Further reading

What Makes Up Your Credit Score?

See also Middle FICO score


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What is forbearance?

Forbearance is an agreement between a servicer, such as Mr. Cooper, and a borrower to temporarily pause mortgage payments for a set period of time. It is not a waived payment or payment forgiveness, and all payments will need to be repaid at the end of the forbearance period (if that sounds out-of-the-question, don’t panic; there are several ways to do this, and Mr. Cooper is here to help you find a solution that works for you).

During the forbearance plan period, late fees will not be assessed and negative credit reporting will be suppressed.

Eligibility and terms for forbearance plans vary based on guidelines set by the owner of the loan. To learn more about the forbearance programs available for Mr. Cooper homeowners who are affected by COVID-19, click here.

Further reading

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowners

Here’s What Really Happens After a Forbearance

Mr. Cooper Pandemic Relief Plans

COVID-19 Mortgage Myths That Need to Be Cleared Up Immediately


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What is Freddie Mac?

The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, was chartered by Congress in 1970 to expand the secondary market for mortgages in the United States to support homeownership for middle-income Americans. As a government-sponsored enterprise, Freddie Mac’s mortgages are backed by the federal government and it is one of the largest purchasers of mortgages. 

Along with its sister organization Fannie Mae, Freddie Mac buys mortgages on the secondary market, bundles them, and sells them as a mortgage-backed security to investors on the open market. This secondary mortgage market increases the supply of money available for mortgage lending and increases the money available for new home purchases.

Further reading

Transferring to Mr. Cooper

New Customer Support

Mr. Cooper Pandemic Relief Plans

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowners

COVID-19 Mortgage Myths That Need to Be Cleared Up Immediately


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L

What is a loan modification?

A loan modification changes the terms of your loan. This might be necessary if your circumstances change and you are unable to keep up with the agreed payments.

If you’re facing long-term hardship, Mr. Cooper may be able to modify your loan so it has more manageable terms. However, borrowers eligible for a loan modification must meet certain criteria and abide by the terms and conditions outlined by the investor of their loan.

While refinancing means replacing your existing loan with a new one, a loan modification keeps your existing loan and changes its terms. If you qualify for a loan modification, we’ll look for a way to reduce your monthly payments.

There are several ways to do this. We may be able to lower your interest rate or maybe extend the loan’s term length so that each month’s payment is a little lower.

Further reading

Mortgage Assistance

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowners


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M

What is a middle FICO® score?

A middle FICO score is a borrower’s second highest FICO score among what the three major credit reporting agencies (Experian®, Equifax®, and TransUnion®) report. This is the score mortgage lenders generally use when they qualify homebuyers for home loans. If there is more than one borrower on a loan, lenders typically use the score reported for the borrower with the lowest middle FICO score.

Further reading

What Makes Up Your Credit Score?

See also FICO score


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P

What is a payment deferral?

A payment deferral allows a lender or servicer to push a set number of paused or missed monthly mortgage payments to the end of the loan. The deferred payments can typically be paid back by making one lump sum payment when the loan matures or is otherwise paid off.

There are a few different types of payment deferrals, which are determined by the guidelines set by the owner of the loan. One type of deferral pushes the full amount of the paused or missed monthly payments (principal, interest, taxes and insurance) to the end of the loan. Another type of deferral pushes only the principal and interest portion of the paused or missed payments to the end of the loan. In the second case, if the loan is escrowed, any missed tax and insurance payments are not deferred but arrangements can be made to pay them back over a specified period of time.  

Further reading

Mr. Cooper Pandemic Relief Plans

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowners

COVID-19 Mortgage Myths That Need to Be Cleared Up Immediately


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R

What is a repayment plan?

With a repayment plan, an extra amount is simply tacked on to your regular monthly payment until the missed amount owed is paid back. This usually happens over 3 to 6 months, but could vary depending on your circumstances.

If you qualify for a repayment plan, we’ll spread the sum of the missed amount due over a manageable timeframe. Instead of owing it all at once, and potentially incurring late fees, you’ll have a smaller increase to your future monthly payments until you’re all caught up.

Further reading

See also forbearance

Mortgage Assistance

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowners


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S

What is a short sale?

Sometimes there just isn’t a financially feasible way to keep your home or you may simply decide you want to move on. One option for doing this quickly and effectively, without the difficulties of the foreclosure process, is a short sale. A short sale means that the net proceeds from your sale of the property are not enough to pay off your mortgage; however, the investor is agreeing to accept less than the full amount owed.

With investor approval, a short sale may allow you to sell your home for less than you owe on the mortgage.

If your investor agrees to a short sale, you can work with a real estate agent to list the property. They’ll execute a sales contract as normal—but this contract is subject to the investor’s approval and is not final until they agree, even if both the seller and the buyer agree on the terms.

A short sale may have tax consequences and/or impact your credit, so you’ll want to contact your tax advisor to discuss these potential impacts.

Further reading

See also forbearance

See also loan modification

See also Deed in Lieu of Foreclosure

Mortgage Assistance

Frequently Asked Questions About COVID-19 for Mr. Cooper Homeowner


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Tradenames and trademarks used in this blog post are the property of their respective owners. Nationstar Mortgage LLC d/b/a Mr. Cooper is not affiliated, associated, or sponsored by any of these owners. Use of these names and trademarks is not intended to and does not imply endorsement, but is for identification purposes only. Information provided does not necessarily represent the views of Mr. Cooper. Information is subject to change without notice.