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A mortgage loan servicer takes care of the loan's day-to-day administration until the borrower pays it off. Some lenders do their own mortgage servicing, but many aren’t large enough to deal ...
In this way, the DSC (debt service coverage) ratio provides a way to assess the financial quality, and the associated risk level, of this pool of loans, and shows the surprising result that despite some loans experiencing DSC below 1, the overall DSC of the entire pool has improved, from 1.66 × to 1.76 ×. This is pretty much what a good loan ...
Loan servicing is the process by which a company (mortgage bank, servicing firm, etc.) collects interest, principal, and escrow payments from a borrower. In the United States, the vast majority of mortgages are backed by the government or government-sponsored entities (GSEs) through purchase by Fannie Mae, Freddie Mac, or Ginnie Mae (which purchases loans insured by the Federal Housing ...
“A loan provides stability and certainty, which allows for better financial planning.” If you do choose to use your credit card for larger expenses, don’t use it for anything else until you ...
When a debtor chooses to default on a loan, despite being able to service it (make payments), this is said to be a strategic default. This is most commonly done for nonrecourse loans , where the creditor cannot make other claims on the debtor; a common example is a situation of negative equity on a mortgage loan in common law jurisdictions such ...
For instance, using a loan to buy a reliable car to get you to and from work is a good use of bad debt. Even though the car will depreciate over time, paying interest on a loan will be one of the ...
The debt service coverage ratio is the ratio of income available to the amount of debt service due (including both interest and principal amortization, if any). The higher the debt service coverage ratio, the more income is available to pay debt service, and the easier and lower-cost it will be for a borrower to obtain financing.
Consider a secured installment loan: Some lenders offer secured installment loans to those with poor credit. These loans are backed by collateral, like a house or car, reducing the risk for the ...