A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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- Callable debt
A debt security whose 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.
- Caps
(interest)
Consumer safeguards which limit the amount the interest rate on an adjustable rate
mortgage which may change per year and/or the life of the loan.
- Caps
(payment)
Consumer safeguards which limit the amount monthly payments on an adjustable rate mortgage
may change.
- Cash flow
The amount of cash derived over a certain period of time from an income-producing
property.
The cash flow should be large enough to pay the expenses of the income producing property
(mortgage payment, maintenance, utilities, etc.).
- Cash-out refinancing
A Mortgage Refinancing transaction in which the amount of money received from the new loan exceeds
the total of the money needed to repay the existing first mortgage, closing costs, points,
and the amount required to satisfy any outstanding subordinate mortgage liens. In other
words, a Mortgage Refinancing transaction in which the borrower receives additional cash that can be
used for any purpose.
- Certificate of
eligibility
The document given to qualified veterans which entitles them to VA guaranteed loans for
homes, business and mobile homes. Certificates of eligibility may be obtained by sending
form DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for
Certificate of Eligibility)
- Certificate of title
A statement provided by an abstract company, title company, or attorney stating that the
title to real estate is legally held by the current owner.
- Certificate of
Reasonable Value (CRV)
An appraisal issued by the Veterans Administration showing the property's current market
value
- Certificate of veteran status
The document given to veterans or reservists who have served 90 days of continuous active
duty (including training time) It may be obtained by sending DD 214 to the local VA office
with form 26-8261a (request for certificate of veteran status.
This document enables veterans to obtain lower down payments on certain FHA insured
loans).
- Change Frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate
mortgage (ARM).
- Charge-off
The portion of principal and interest due on a loan that is written off when deemed to be
uncollectible.
- Closing
The meeting between the buyer, seller and lender or their agents where the property and
funds legally change hands, also called settlement. Closing costs usually include an
origination fee, discount points, appraisal fee, title search and insurance, survey,
taxes, deed recording fee, credit report charge and other costs assessed at settlement.
The cost of closing usually are about 3 percent to 6 percent of the mortgage amount.
- Closing costs
Expenses (over and above the price of the property) incurred by buyers and sellers in
transferring ownership of a property. Closing costs normally include an origination fee,
an attorney's fee, appraisal fees, property taxes, deed recording fee, credit report
charge an amount placed in escrow, and charges for obtaining title insurance and a survey.
Closing costs percentage will vary according to the area of the country.
- Closing Day
The day on which the formalities of a real estate sale are concluded. The certificate of
title, abstract, and deed are generally prepared for the closing by an attorney and this
cost charged to the buyer. The buyer signs the mortgage, and closing costs are paid. The
final closing merely confirms the original agreement reached in the agreement of sale.
- Cloud (On Title)
An outstanding claim or encumbrance which adversely affects the marketability of title.
- COFI
Cost-Of-Funds Index (COFI) - Adjustable-rate mortgage with rate that adjusts based on a cost-of-funds index, often the
11th District Cost of Funds.
- Commission
The fee charged by a broker or agent for negotiating a real estate or loan transaction. A
commission is generally a percentage of the price of the property or loan.
- Commitment
An agreement, often in writing, between a lender and a borrower to loan money at a future
date subject to the completion of paperwork or compliance with stated conditions.
- Common stock
A security that represents ownership in a company but gives no legal claim to a definite
dividend or to a return of capital.
- Comparables
An abbreviation for "comparable properties"; used for comparative purposes in
the appraisal process. Comparables are properties like the property under consideration;
they have reasonably the same size, location , and amenities and have recently been sold.
Comparables help the appraiser determine the approximate fair market value of the subject
property.
- Condemnation
The taking of private property for public use by a government unit, against the will of
the owner, but with payment of just compensation under the government's power of eminent
domain. Condemnation may also be a determination by a governmental agency that a
particular building is unsafe or unfit for use.
- Condominium
Individual ownership of a dwelling unit and an individual interest in the common areas and
facilities which serve the multi-unit project.
- Construction loan
A short term interim loan to pay for the construction of buildings or homes. These are
usually designed to provide periodic disbursements to the builder as he progresses.
- Consumer Reporting Agency (or Bureau)
An organization that handles the preparation of reports used by lenders to determine a
potential borrower's credit history. The agency gets data for these reports from a credit
repository and from other sources.
- Contract sale or deed
A contract between purchaser and a seller of real estate to convey title after certain
conditions have been met. It is a form of installment sale.
- Contractor
In the construction industry, a contractor is one who contracts to erect buildings or
portions of them. There are also contractors for each phase of construction: heating,
electrical, plumbing, air conditioning, road building, bridge and dam erection, and
others.
- Conventional
loan
A loan not insured by FHA, VA or Farmers Home Administration.
- Conversion clause
A provision in an ARM allowing the loan to be converted to a fixed-rate at some point
during the term. Usually conversion is allowed at the end of the first adjustment period.
The conversion feature may cost extra.
- Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under
specified conditions.
- Cooperative housing
An apartment building or a group of dwellings owned by a corporation, the stockholders of
which are the residents of the dwellings. It is operated for their benefit by their
elected board of directors. In a cooperative, the corporation or association owns title to
the real estate. A resident purchases stock in the corporation which entitles him to
occupy a unit in the building or property owned by the cooperative. While the resident
does not own his unit, he has an absolute right to occupy his unit for as long as he owns
the stock.
- Credit enhancement
A method to reduce credit risk by requiring collateral, letters of credit, mortgage
insurance, corporate guarantees, or other agreements to provide an entity with some
assurance that it will be recompensed to some degree in the event of a financial loss.
- Credit history
A record of an individual's open and fully repaid debts. A credit history helps a lender
to determine whether a potential borrower has a history of repaying debts in a timely
manner.
- Credit loss ratio
The ratio of credit-related losses to the dollar amount of MBS outstanding and total
mortgages owned by the corporation.
- Credit-related expenses
The sum of foreclosed property expenses plus the provision for losses.
- Credit ratio
The ratio, expressed as a percentage, which results when a borrower's monthly payment
obligation on long-term debts is divided by his or her net effective income (FHA/VA loans)
or gross monthly income (Conventional loans).
- Credit-related losses
The sum of foreclosed property expenses plus charge-offs.
- Credit report
Report listing borrower's consumer credit use, including past and current debts, payment
ratings and terms, prepared by a credit bureau and used by a lender in determining a loan
applicant's creditworthiness. See merged credit report.
- Credit reporting agency (or bureau)
An organization that prepares reports that are used by lenders to determine a potential
borrower's credit history. The agency obtains data for these reports from a credit
repository as well as from other sources.
- Credit risk score
A credit risk score is a statistical summary of the information contained in a consumer's
credit report. The most well known type of credit risk score is the Fair Isaac or FICO
score. This form of credit scoring is a mathematical summary calculation that assigns
numerical values to various pieces of information in the credit report. The overall credit
risk score is highly relative in the credit underwriting process for a mortgage loan.
- Credit scoring
A process that uses recorded information about individuals and their loan requests to
assess, in a quantifiable, objective, and consistent manner, their future performance
regarding debt repayment.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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