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GLOSSARY
Work study
Need-based financial aid award in which the federal government subsidizes part of the cost of a student's wages at a job usually on campus.
Working capital loan
Working capital loan is a short-term debt provided to a business to bridge the gap between buying or manufacturing product and actually receiving customer payments for sold product.
Workout
A mortgage in which basic terms: interest rate, term and monthly payment, have been altered to prevent a foreclosure.
Workout assumption
Workout assumption is the transfer of an existing mortgage from an at-risk borrower to a qualified third-party. A workout assumption is usually only a consideration when a borrower has serious financial problems that aren't likely to be resolved. The lender must approve a workout assumption.
Worm
A worm is a malicious computer program that can replicate and distribute itself via a network. Worms can run themselves, while viruses rely on a host program.
Wraparound loan
A wraparound loan is a refinancing technique used with mortgages. A lender makes a new loan to the homeowner, and places the loan in a subordinate position to the existing first mortgage. After funding (rather than at funding), the borrower uses the proceeds from the new loan to pay off the old first mortgage.
Wraparound mortgage
A consolidation of balances on all mortgages into one loan.
Writ
Writ is a written, binding order issued by a judge, judicial officer or court.
WSJ prime rate
WSJ prime rate is a consensus prime rate published by the Wall Street Journal, which obtains the information via a survey of financial institutions. The prime rate is a benchmark lending rate that generally remains 3 percentage points higher than the fed funds rate.
Yield curve
Zone of possible agreement describes the potential common ground between two negotiating parties. Each party in a negotiation should have points on which they will and will not compromise. The zone of possible agreement encompasses the points on which both sides are willing to compromise.
Yield spread premium
Yield spread premium is the difference between the interest rate a borrower pays on a mortgage loan, and the lender's par rate for which that borrower qualifies. This difference is the broker's compensation for originating the mortgage. Yield spread premiums are disclosed on the HUD-1 Form.
Yupcap
Yupcap is a slang term for a young, educated, working professional who can't afford to buy a home. Yupcaps have reliable, competitive income, but are kept out of homeownership due to the rising cost of real estate in the U.S.
Zero balance
The wonderful appearance of a zero balance occurs when a borrower has paid of their loans and there is nothing left to repay.
Zero capital gains rate
Zero capital gains rate is the 0 percent tax rate that's applied when an individual sells property in a designated enterprise zone. The existence of the zero capital gain rate is intended to stimulate investment in designated communities.
Zero-down-payment mortgage
A zero-down-payment mortgage is a real estate property loan that finances 100 percent of the purchase price. A borrower who funds a zero-down-payment mortgage will be required to purchase private mortgage insurance.