Rate Caps
A limit on the amount the interest rate charged to the borrower can be charged. Usually there are two caps. One is the "Period Cap" which limits the amount the interest rate may change at the end of each adjusted period. The second so "Life of Loan" (LOL) cap, which sets the highest interest rate that can ever be charged. The LOL Cap is often specified as "X"% above either the initial rate or the fully-indexed accrual rate. (Also called "Interest Rate Caps.")

Rate Index
See Index.

Real Estate Owned (REO)
A term frequently used by lending institutions as applied to ownership of a real property acquired for investment or as a result of foreclosure.

Real Estate Settlement Procedures Act (RESPA)
A federal law that requires lenders to provide home mortgage borrowers with information about known or estimated settlement costs.

Recasting
Adjusting the terms of an existing mortgage.

Resolution Trust Company (RTC)
See FIRREA.