Glossary: Debt To Income Ratio – Dunning Notice

Debt To Income Ratio – the amount of fixed monthly debt a borrower owes. This debt includes credit cards, car payments and any other regular financial outlays. A bank will generally not authorize a mortgage payment that pushes the total amount of monthly debt (including the mortgage payment) over thirty-eight percent. Subprime lenders are a little more flexible and set their maximum at sixty percent.

Deed In Lieu – a means of escaping an overly burdensome mortgage. If a homeowner can’t make the mortgage payments and can’t find a buyer for the house, many lenders will accept ownership of the property in place of the money owed on the mortgage.

Department of Housing and Urban Development (HUD) – the agency responsible for enforcing the federal Fair Housing Act. Among HUD’s many programs are urban renewal, public housing, rehabilitation loans, FHA subsidy programs, and water and sewer grants.
The Office of Interstate Land Sales Registration, the Federal Housing Administration (FHA) and the National Mortgage Association (GMNA) are all under HUD as well as the new Mortgage Registry developed as part of the National Mortgage Reform and Anti-predatory Lending Act of 2007.

Derogatory Public Record – a public record of the negative variety, also known as Adverse Public Record. These are usually found on a credit report and include things like bankruptcy, judgments, suits, liens, wage attachments collection items, and/or delinquency (past due items).

DIDMCA (Depository Institutions Deregulation and Monetary Control Act) – a piece of legislation introduced in 1980, the DIDMCA allowed banks and other lending agencies to match the interest rate charged to the risk of the borrower. This law made subprime lending legal and marks the beginning of the subprime mortgage industry.

Discharge – a court order that says you do not have to repay the specified debt. Creditors are not able to take any further legal action against you in regards to these debts. Debts are discharged as part of the bankruptcy proceedings.

Dividends – the distribution of a company’s earnings to its shareholders, usually in the form of a quarterly check. The company’s board of directors authorize and determine the amount of the dividend. Dividends are taxed as income in the year they are received by the shareholder and come from the company’s earnings after taxes.

Dot-Com Bubble – a speculative bubble covering roughly 1995-2001. During this time, stock markets in Western nations grew tremendously in value due to the stupendous growth in the Internet sector. A combination of rapidly increasing stock prices, easily attainable venture capital and lots of stock speculation created an environment in which anything could happen. The potential for gain was enormous and attracted many investors. When the bubble burst in 2000, it’s effect was so great that is sparked a mild recession that lasted three to four years.

Dow Jones Industrial Average – one of several stock market indices created by Wall Street Journal editor and Dow Jones & Company co-founder Charles Dow in 1896. The index was compiled in order to gauge the performance of the industrial component of America’s stock markets. It is the oldest continuing U.S. market index, aside from the Dow Jones Transportation Average, which Dow also created.
Today, the averages consists of 30 of the largest and most widely held public companies in the United States such as 3M, American Express, Pfizer, Microsoft, Proctor & Gamble, McDonalds, GM, GE, Wal-Mart, Walt Disney and Citigroup, owner of Citibank. The only company currently listed that was part of the original 1896 index is GE. The Dow Jones, as it is most often called, is an average of the stock prices of its member companies. The higher the average, the more the stock is worth and the healthier the economy is seen to be.

Down payment – the percentage of the purchase price that the buyer must pay in cash and may not borrow from the lender. The down payment amount, in addition to the mortgage, equals the purchase price of a property. Generally speaking, the down payment is anywhere from 5 percent to 20 percent of the total purchase price. A borrower who is able to put up a high down payment will enjoy a more favorable interest rate over the term of the mortgage than one who is not able to do so.

Dunning notice – a notice sent to the client indicating that payment on a debt is past due. Demand letters, acceleration notices, and cure notices are all forms of dunning notices.

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