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E-3-04, Acronyms and Glossary of Defined Terms: D (03/01/2023)

de minimis correction

Minor amount not to exceed $500 (or such higher amount as the lender and Fannie Mae may agree) that, when remitted, refunded, or otherwise provided, corrects or otherwise resolves an identified significant defect.


Borrowed money, the repayment of which may be either secured or unsecured, with various possible repayment schedules.

debt-to-income (DTI) ratio

A ratio derived by dividing the borrower’s total monthly obligations (including housing expense) by their stable monthly income. This calculation is used to determine the mortgage amount for which a borrower qualifies. This term is used interchangeably with “total debt-to-income ratio”.

deed in lieu of foreclosure (or deed-in-lieu)

A transfer of title from a delinquent borrower to the lender in satisfaction of the mortgage debt to avoid foreclosure; also called a voluntary conveyance.


The failure to make a mortgage payment or to otherwise comply with one or more covenants of the mortgage.


A loan-level deficiency that breaches a term contained in the Lender Contract in effect at the time of loan purchase or securitization.

defect rate

The number of loans, expressed as a percentage, reflecting the total loans with defects discovered in the loan review process divided by the total loans reviewed.

delinquency advance

An amount advanced by a lender in respect of interest or principal on one or more mortgage loans, as required by their servicing contract, even though the lender has not collected the actual funds from the related borrowers. A lender may reimburse itself for delinquency advances from subsequent collections in accordance with its servicing contract.

delivery versus payment settlement

Also called “delivery against funds” or “existing issue.” A settlement option for trades of existing MBS under which Fannie Mae will credit the lender’s account at the institution that wires the security to its trading desk as soon as the security is received.


A repurchase or other remedy request issued by Fannie Mae to a responsible party to provide a specific remedy as provided in the Lender Contract.

demand deposit account

A bank account in which the funds are available for withdrawal at any time without penalty.

designated threshold amount

A level of unsecured exposure an “in the money” party will accept before making a margin call on the “out of the money” party.

desktop appraisal

An appraisal assignment for which the appraiser completes the appraisal without physically inspecting the property, using data from various sources (real estate agents, homeowners, MLS, tax records, etc). 

Desktop Originator (DO)

A Web-based application that gives originators access to DU through a sponsoring lender.

Desktop Underwriter (DU)

Fannie Mae’s automated underwriting system.


See physical depreciation.

direct surety bond

A class of bond that is written to afford protection for the direct acts of the principal in the event of a loss caused by the principal’s negligence, lack of ability, or dishonest act.

disbursement date

The date the loan funds are disbursed for the subject mortgage. The disbursement date may occur on or after the note date.


The amount by which the sales price of a note is less than its face value. The purpose of a discount is to adjust the yield upward in lieu of interest.


Desktop Originator

Document Certification

A Web-based application for document custodians to electronically submit whole loan and MBS pool certifications to Fannie Mae and the lender. It also can be used to give a warehouse lender notification about the lender’s wiring instructions.

document custodian

A financial institution that maintains custody of certain mortgage documents on behalf of Fannie Mae.

domestic partner

An unrelated individual who shares, and intends to continue sharing, a committed relationship with a borrower who signs the note.


Debt-to-income ratio


Desktop Underwriter

due-on-sale provision

A provision in a mortgage that allows the lender to demand full payment of the outstanding balance if the mortgaged property is transferred without the lender’s permission.