Callable
Debt -
A debt security in where the issuer has the right to redeem the security
at a specified price on or after a specified date, but prior to its
stated final maturity date.
Caps
-
A set percentage amount by which an adjustable rate mortgage may adjust
each adjustment period. For adjustable loans, caps are usually quoted
as two numbers as in 2/6. The first number indicates how much a loan
may adjust at each adjustment period while the second number indicates
how much a loan may adjust over its lifetime.
Loans
like the 3/1 and 5/1 adjustable which have an initial fixed period
are quoted with 3 numbers as in 3/2/6 which would mean that the first
adjustment may be as much as 3%, subsequent adjustments are capped
at 2% each, and the lifetime cap is 6%.
Two-Step
loans are quoted with a single cap, which is the amount by which the
loan may adjust at its single adjustment date.
Carryback
Loan -
A loan in which a seller agrees to finance a buyer in order to complete
a property sale.
Certificate
of Eligibility -
A veteran's evidence of entitlement for a VA-guaranteed loan.
Certificate
of Reasonable Value (CRV) -
An appraisal that has been performed on a property that is being paid
for a VA loan. After the property has been appraised, the Veterans
Administration issues a CRV.
Clear
Title -
A title that is free of liens or any legal question as to the ownership
of the property.
Closing
-
Final arrangements to transfer title of property as well as allocate
charges and credits.
Closing
Costs -
Closing costs are fees paid by the borrower when a property is purchased
or refinanced. Costs incurred include a loan origination fee, discount
points, appraisal fee, title search, title insurance, survey, taxes,
deed recording fee, and credit report charges. All closing costs are
separated into "non-recurring," and "pre-paid." Non-recurring charges
are any items that are paid only once because a loan was obtained
or a property bought, such as a loan origination fee. Pre-paid charges
are those that recur over time, like insurance and property taxes.
These are summarized in the Good Faith Estimate.
Cloud
-
An outstanding claim or encumbrance, that, if valid, would affect
or impair the owner's property title.
Collateral
-
Property, real or personal, pledged as a security to back up a promise.
In a home loan, the property is considered collateral that can be
revoked if loan is not repaid according to the terms of the mortgage
or deed of trust.
Commitment
-
A written letter of agreement detailing the terms and conditions by
which the lender will lend and the borrower will borrow funds to finance
a home.
Conforming
Loan -
A mortgage loan for up to $300,700 in the continental United States
(Alaska and Hawaii limits are higher).
Construction
Loan -
A short term loan for funding the cost of construction. The lender
advances funds to the builder as the work progresses.
Conversion
-
The right of a borrower to convert an adjustable or balloon loan into
a fixed loan. The possible options are as follows...
| |
| Option |
Description |
|
| Not
Available |
Borrower
May Not Convert This Loan. |
|
| Must
Requalify |
Borrower
May Convert But Must Requalify.
Conversion Fee Applies |
|
| Auto-Qualify |
Borrower
May Convert And Is Automatically Qualified.
Conversion Fee Applies |
|
|
Conventional Mortgage -
A mortgage loan that is obtained without any additional guarantees
for repayment, such as FHA insurance, VA guarantees, or private insurance.
This is usually given at an 80% loan-to-value ratio.
Credit
Loan -
A credit loan is a mortgage that is issued on only the financial strength
of a borrower, without great regard for collateral.
Credit-Loss
Ratio -
The ratio of credit-related losses to the dollar amount of MBS outstanding
and total mortgages owned by the corporation.
Credit
Rating -
Borrowers are rated by lenders according to the borrower's credit-worthiness
or risk profile. Credit ratings are expressed as letter grades such
as A-, B, or C+. These ratings are based on various factors such as
a borrower's payment history, foreclosures, bankruptcies and charge-offs.
There is no exact science to rating a borrower's credit, and different
lenders may assign different grades to the same borrower.
Credit-Related
Expenses -
The sum of foreclosed property expenses plus the provision for losses.
Credit-Related
Losses -
The sum of foreclosed property expenses plus charge-offs.
Credit
Report -
A report to a prospective lender on the credit standing of a prospective
borrower. Used to help determine creditworthiness. Information regarding
late payments, defaults, or bankruptcies will appear here.
