Washington State Department of Financial Institutions

Glossary of Terms

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M

Magnetic Ink Character Recognition (MICR) - A language that is universally used by bankers on checks, consisting of Arabic- type numbers printed on the bottom of each check. The special ink used in printing these numbers is capable of being magnetized when processed through automated check processing equipment. SECU uses this process on its checks.

Maker - Person who signs a check or note; person who promises to pay an obligation when due.

Margin - The amount (expressed as a percentage) added to the index for an Adjustable Rate Mortgage (ARM) to establish the interest rate on each adjustment rate. For example, if the index rate is 6%, and the fully indexed rate is 8.75%, the margin is 2.75%.

Market Price - Last reported price at which the stock or bond sold, or the current quote.

Market Value - The current value of your home based on what a willing purchaser would pay. The value determined by an appraisal is sometimes used to determine market value.

Maturity - The date when a note or other obligation becomes due and payable

Member - A person holding at least one credit union share who has the opportunity to receive the credit union's financial and related services and has a right to vote at the annual meeting.

Money-market account - Offered by full-service brokers, these are similar to checking accounts but usually pay higher rates. Minimum deposit levels are higher than checking, and access to the account may be limited.

Money-market fund - A mutual fund that invests in short-term corporate and government debt and passes the interest payments on to shareholders.

Mortgage-backed securities - Securities issued by government-related agencies that buy up mortgage loans from lenders such as banks and savings and loan associations.

Mortgage Banker - A company that originates loans and resells them to secondary mortgage lenders like- Fannie Mae or Freddie Mac.

Mortgage Broker - Any person who for compensation or gain, or in the expectation of compensation or gain (a) makes a residential mortgage loan or assists a person in obtaining or applying to obtain a residential mortgage loan or (b) holds himself or herself out as being able to make a residential mortgage loan or assist a person in obtaining or applying to obtain a residential mortgage loan. RCW 19.146.010(12). Mortgage brokers are involved in a high percentage of high-cost loans, and sometimes receive a payment from the lender for steering the client to a higher-cost loan (otherwise known as a "yield spread premium") or for the volume of loans the brokers steer towards the lender (otherwise known as "volume-based compensation").

Mortgage Brokers Practices Act (MBPA) - A law that is designed to promote honest and fair dealings and to preserve public confidence in the lending industry by preventing fraudulent practices on consumers.

Mortgage Insurance Premium (MI or PMI) - A monthly payment -usually part of the mortgage payment - paid by a borrower for mortgage insurance.

Mortgage Insurance - A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price.

Mortgage Lender - The lender providing funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application process through closing.

Mortgage Life Insurance - Term life insurance paid by the borrow in which the amount of coverage decreases as the mortgage balance declines.  In the even the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds.

Mortgage Modification - A loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments.

Mortgage Rate - The cost or the interest rate you pay to borrow the money to buy your house.

Mortgage - A loan secured by a lien on your home. In some states the term mortgage is also used to describe the document you sign to show that you have granted the lender a lien on your home; other states use a deed of trust document instead of a mortgage. It may also be used to indicate the amount of money you borrow, with interest, to purchase your house. The amount of your mortgage is usually the purchase price of the home minus your down payment.

Mortgagee - A person or firm to whom property is conveyed a security for a loan (lender)

Mortgagor - One who borrows money, giving as security a mortgage or deed of trust on real property (borrower).

Mutual Funds - A fund that pools the money of its investors to buy a variety of securities.

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