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Mortgage Dictionary


Terminology, definitions, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries, as they are used on LendingRisk.com.

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C

Cash-Out Refinance
A refinance loan purpose type 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 refinance transaction in which the borrower receives additional cash that can be used for any purpose.

See Loan Purpose Type
See Mortgage Loan Purpose Type Overview
See Refinance

Churning
In the mortgage industry, the term Churning is often used synonymously with the terms: Early Payoff and Prepayment. The term Churning is a reference to the process whereby a lender solicits an existing borrower to refinance their current mortgage for a better offer with a different or the same investor. Churning represents an expensive challenge to investors and most investors will require their sellers to repay any premiums paid for loans where there is an indication that the seller has engaged in the Churning process.


See Mortgage Loan Early Payoff Overview
See Early Payoff
See Prepayment
Commitment
1. A written agreement between a lender and a borrower to make a loan on specific terms.

2. A written agreement between an investor and a seller in which the seller agrees to deliver a loan(s) with specific loan characteristics to the investor on or before a specified date.

See Best Efforts Delivery Commitment
See Mandatory Delivery Commitment
See Mortgage Correspondent Lending and Loan Production
See Mortgage Industry Seller Pull-through Overview

Conditional Commitment
A written agreement provided a lender to a borrower in which the lender agrees to make a loan provided the borrower meets certain conditions prior to the loan's closing.
Condominium
A property type of "Condominium" indicates that portions of the property are commonly owned and other portions are individually owned. The most common arrangement for condominiums are units in a multi-unit dwelling. Each unit is individually owned and the common areas such as hallways and elevators are jointly owned by all of the unit holders.

See Detached Condominium
See High-rise Condominium
See Mortgage Loan Property Types

Consolidation Loan
See Debt Consolidation Loan
See Mortgage Loan Purpose Type Overview

Construction Only
A short term loan in which the proceeds are used for the construction of a new building or home. These loans typically provide for periodic payments as each stage of the construction is completed. Once the construction of the new building or home is complete the borrower must pay the balance of the construction loan or obtain permanent financing.

See Construction To Permanent
See Loan Purpose Type
See Mortgage Loan Purpose Type Overview
Construction To Permanent
A loan in which the proceeds are used for construction financing and converted to permanent financing when the construction phase is completed.

See Construction Only
See Loan Purpose Type
See Mortgage Loan Purpose Type Overview
See Refinance

Conventional Loan
Any mortgage loan other than a VA or an FHA loan. A conventional loan may be conforming or non-conforming.

See Non-conforming Loan
Cooperative (Co-op)
A property type of "Cooperative" indicates that the building has an associated legal entity or company in which ownership of shares allows an individual the rights to a lease for residence of a unit in the building. The resident of a co-op does not own his unit; however, the resident does have the legal right to occupy the residence for as long as the individual owns the stock. A cooperative is also known as a "company share".

See Mortgage Loan Property Types


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Terminology, definitions, terms, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries.