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LendingRisk.com Mortage Industry Dictionary

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

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Fund a.k.a. Loan Funding

1. To provide monies to complete a mortgage loan transaction.

2. A transaction in which an investor purchases the servicing rights for a mortgage loan on the secondary market.

Note: Many investors refer to the loan purchase transaction on the secondary market as funding a loan and even provide a report called a funding schedule to the seller; however, it is important to note that this is a misuse of the term "fund". The proper term for this type of transaction is a "purchase" and the corresponding report should be a purchase schedule.

See Mortgage Loan Funding Quality Overview

Funding Quality

In the mortgage industry investors track and report statistics for loans delivered for purchase by a seller. The results of these statistics measure a seller's ability to accurately deliver quality loan packages and is commonly referred to as the seller's Funding Quality.

See Mortgage Loan Funding Quality Overview
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Terminology, definitions, terms, explanations, and documents for business professionals in the mortgage lending and mortgage risk management industries.