Glossary of Mortgage Terms
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- Warranty ( Warranties )
- Written guarantees of the quality of a product and the promise to repair or replace defective parts free of charge.
- Waive Escrow
- Authorization by the lender for the borrower to pay taxes and insurance directly. This is in contrast to the standard procedure where the lender adds a charge to the monthly mortgage payment that is deposited in an escrow account, from which the lender pays the borrower?s taxes and insurance when they are due.
- Wholesale Lender
- A lender who provides loans through mortgage brokers or correspondents. The mortgage broker or correspondent initiates the transaction, takes the borrower's application, and processes the loan.
- Workout Assumption
- The assumption of a mortgage, with permission of the lender, from a borrower unable to continue making the payments.
- Worst Case Scenario
- The assumption that the index to which the rate on an ARM is tied rises to 100% in the second month and remains there.
- Wrap Around Mortgage
- A mortgage on a property that already has a mortgage, where the new lender assumes the payment obligation on the old mortgage. Wrap-around mortgages arise when the current market rate is above the rate on the existing mortgage, and home sellers are frequently the lender.