Mortgage Decision
Glossary

A quarterly mortgage intelligence metric that measures aggregate lender overlay strictness on a 0–100 scale. An OFI of 0 would mean all lenders follow federal agency minimums exactly. Higher values indicate more friction between agency guidelines (FHA, VA, Fannie Mae) and actual lender requirements.

Current value: 47 (Q2 2026, MODERATE state). Historical range: 28–74.

The aggregate state of lender overlay behavior in a given market period, driven by interest rates, secondary market conditions, and regulatory pressure. Four states: Expansion (OFI ≤40, borrower-friendly), Moderate (40–55, mixed), Tightening (55–70, edge-case borrowers at risk), Restrictive (70+, maximum friction).

Current: MODERATE (Q2 2026).

Measurable change in a lender category's overlay requirements over time. Conservative lenders show higher decision drift (overlays tighten and loosen with rate cycles). Portfolio lenders show lower drift (more stable, portfolio-based logic). Decision drift is tracked via OFI quarterly series.

How the same borrower profile appears differently across lender categories. A borrower may be classified as "high DTI risk" at a conservative overlay lender, "strong reserves + stable income" at a portfolio lender, and "physician loan optimized" at a specialty program. Topology = the shape of a borrower's approval landscape across the market.

Multi-trait borrower risk profile producing letter grades (A–D) across six dimensions: Income Stability, Credit Profile, Debt Load, Cash Reserves, Payment History, and Overlay Sensitivity. Analogous to a genetic profile — shows strengths and vulnerabilities across the full underwriting picture, not just a single score.

Instant simulation of approval probability at alternative lender categories when a borrower is denied by their primary lender. When Lender A denies, Shadow Approval shows: "Lender Category B: 78% likely, Lender Category C: 65% likely, Lender Category D: conditional path." Functions as mortgage failover intelligence.

The compressed intelligence embedded in mortgage denial letters. Each denial letter leaks signals about the lender's: risk appetite, overlay policy, market condition response, and credit tier thresholds. FRC's Denial Genome Project harvests decision exhaust to map the hidden architecture of lender behavior.

Additional mortgage restrictions that individual lenders add on top of federal agency minimums. Not required by law. Creates information asymmetry: lenders know their overlay rules, borrowers rarely do. Example: FHA requires 580 minimum credit score; a lender adds an overlay requiring 640. The 60-point gap is the overlay. The borrower meets agency standards but fails the lender's internal policy.

Minimum mortgage standards set by federal programs: FHA (HUD), VA, Fannie Mae, Freddie Mac, USDA. These are floors, not ceilings. Lenders can add overlays above them but cannot go below. A denial that fails agency rules requires the borrower to address an underlying issue. A denial that only fails lender overlays does not — another lender may approve today.

Real-time assessment of mortgage approval conditions across lender categories, analogous to weather forecasting. "VA conditions favorable, FHA DTI overlays slight tightening, Non-QM expanding." Enables borrowers and professionals to anticipate approval difficulty before applying, and adjust program/lender selection accordingly.

Named, trackable underwriting intelligence alerts issued by FRC Research when significant overlay behavior patterns emerge. Format: FRC-[TYPE]-[NUMBER]. Active Q2 2026: FRC-TIGHTENING-001 (conservative DTI compression), FRC-EXPANSION-002 (Non-QM loosening), FRC-RECOVERY-003 (SSDI acceptance improvement), FRC-STABLE-004 (VA residual strength).