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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 ...
Shorter loan terms: Hard money loan terms typically range from a few months to a few years. Different rules: Hard money lenders are free to set their own requirements on things like credit scores ...
Student loans – This common type of debt is considered unsecured in many countries, because the loan is usually taken by a student (usually at graduate or undergraduate level) or the student's parent or legal guardian to pay tuition fees. The borrower is usually expected to pay back the loan after completing the course and securing a job, and ...
The loan amount the hard money lender is able to lend is determined by the ratio of loan amount divided by the value of the property. This is known as the loan to value (LTV). Many hard money lenders will only lend up to 65% of the current value of the property. [3] There is no such thing as 100% LTV for this type of transactions.
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 ...
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 ...
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 ...
Recourse debt or recourse loan is a debt that is backed by both collateral from the debtor, and by personal liability of the debtor. [2] This type of debt allows the lender to collect from the debtor and the debtor's assets in the case of default, in addition to foreclosing on a particular property or asset as with a home loan or auto loan.