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Mortgage Terms Glossary
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Second Mortgage
a mortgage that has a lien position behind (is subordinate to) the first mortgage.

Secondary Market
the buying and selling of existing mortgages by entities such as commercial banks, pension funds, and Wall Street firms.

Secondary Market Investor
an entity, such as FNMA or FHLMC, that buys mortgage loans for investment or sells them again to another secondary market investor. Secondary market investors do not actually service loans and do not collect payments from borrowers.

Servicer
the entity that collects payments and manages escrow accounts of a loan. Often designated when a loan has been purchased by a secondary market investor.

Settlement
see closing.

Subprime
credit that is less-than-perfect. This may include late or missed payments, past bankruptcies, or judgements. A borrower whose credit is considered subprime may still be eligible for a loan, but will generally be subject to higher interest rates.


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Mortgage Glossary © Copyright 2004, 2008