It stands for net weighted average coupon; the cost-adjusted weighted- average coupon (WAC) of a pool of mortgages that backs a security. Net WAC reflects the investor’s proceeds from a mortgage pass-through (PT) that is stated on a net basis- i.e., after deducting any servicing fee that is paid for the loan, where the servicing fees (servicing spread charged by the originating lender) may include the mortgage interest payment, property taxes, mortgage insurance premium, property insurance.

Gross WAC is equal to net WAC plus servicing spread.