L.A. Speak : Lender Lexicon

been around the block n . Prospective borrower who has tried every bank in town.

derog abbrev. Short for derogator y. Blemish on a borrower’s credit report. “We turned them down on their second because they had too many derogs. “ Syn. ding.

mirror test n. hypothetical client-screening “standard” used by aggressive lenders. For example, does your breath fog a mirror? Congratulations, you just passed the mirror test . Here’s your mortgage.

new stop n. loan application a bank knows it won’t approve but must, by law, process. “Just what I need, another stack of new stops .”

NOD Notice of Default. Document filed with the county when lender has foreclosed on a property. The ultimate ding on a credit report.

upside down adj. Owing more money on a property than it is worth because depreciation has wiped out the equity. “They bought in Studio City when the market peaked; now they’re upside down on their condo.”

short pay v. Buying a property at market value and forgiving the seller the remaining debt. Usually the seller is upside down .