The ABC's of Short Sale / Loan Mod - Common Abbreviations

We see the abbreviations everywhere and here are a few common ones and what they mean:

• BPO: Broker Price Opinion - the process used by a hired real estate broker to determine the potential selling price or estimated value of a home.
• DIL: Deed-in-lieu of Foreclosure - is a transaction where the homeowner voluntarily transfers title to the property to the lender in exchange for a release from the mortgage obligation.
• DTI: Debt to Income Ratio - Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income.  This number is one way lenders measure your ability to manage the payments you make every month to repay the money you have borrowed.
• HAFA: Home Affordable Foreclosure Alternatives Program - provides homeowners the opportunity to exit their homes and be relieved of their remaining mortgage debt through a short sale or a deed-in-lieu of foreclosure (DIL). It also provides homeowners with $10,000 in relocation assistance.
• HAMP: Home Affordable Modification Program - is a loan modification designed specifically to help homeowners impacted by financial hardship. The goal of a HAMP modification is to reduce your monthly mortgage payment to 31% of your gross (pre-tax) monthly income. If eligible, the modification permanently changes the original terms of your mortgage.
• HUD: United States Department of Housing and Urban Development - is a Cabinet department in the Executive branch of the United States federal government founded in 1965 to develop and execute policies on housing and metropolises.
• HUD-1: A closing statement provided by escrow to itemize services and fees charged to your bank in a short sale. This gives the bank the total amount they will receive at the end of the short sale after they have paid all the costs and fees. As of October 2015,  the estimated HUD has been replaced by a document called the Closing Disclosure that consolidates the HUD-1, Good Faith Estimate, and Truth in Lending Act disclosures
• LTV: Loan to Value Ratio - is a comparison between the value of your loan and the value of your home. LTV is determined by dividing  your loan amount by the appraised value of 
• RMA: Request for Mortgage Assistance - is a form that most banks will require you to fill out to start the loan modification or short sale process.   This includes information about the homeowners, intention to keep or sell the property, description of hardship, and all income and expense information.​

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