Tag: Lending

Firm Commitment definition explanation

What is Firm Commitment?
1. A lending institution’s promise to enter into a loan agreement with a specific entity within a certain period of time.

2. An underwriter’s agreement to assume all inventory risk and purchase all securities directly from the issuer for sale to the public at the price specified. Read more for examples and further explanation including related video clips and also comments
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Mortgage Index definition explanation

What is Mortgage Index?
The benchmark interest rate an adjustable-rate mortgage’s fully indexed interest rate is based on. An adjustable-rate mortgage’s interest rate, known as the fully indexed interest rate, is comprised of an index value plus a margin. The margin tends to be constant, but the index’s value is variable. Several benchmark interest rates serve as mortgage indexes. Read more for examples and further explanation including related video clips and also comments
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Funded Status definition explanation

What is Funded Status?
The status of pension plan that has accumulated assets that have been set aside for the payment of retirement benefits to employees. Unfunded plans, also called pay-as-you-go arrangements, do not have assets set aside and retirement benefits are usually paid directly from employer contributions. Read more for examples and further explanation including related video clips and also comments
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Export-Import Bank Of The United States – Ex-Im Bank definition explanation

What is Export-Import Bank Of The United States – Ex-Im Bank?
A federal agency responsible for facilitating international trade by financing the purchase of domestic exports and providing guarantees or insurance for foreign lines of credit. The Ex-Im bank was created in 1934, after congress established it to be the official export credit agency in the United States. Read more for examples and further explanation including related video clips and also comments
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Pipeline definition explanation

What is Pipeline?
1) An investment company whose purpose is to collect investment funds from a pool of individual investors and invest them in financial securities.

2) The underwriting procedure which must be completed by the Securities & Exchange Commission (SEC) before a security can be offered for sale to the public.

3) A type of risk most often present in mortgage transactions. It expresses the potential for change in financial factors during the time lapse between the mortgage application and the purchase of the property. Read more for examples and further explanation including related video clips and also comments
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Credit Tranche definition explanation

What is Credit Tranche?
A system used by the International Monetary Fund (IMF) to govern its lending activities to member countries. When a member nation applies for a loan to help with balance of payment difficulties, the IMF will disperse the loan in a series of credit tranches. Tranches are a portion of the loan that is released upon the member country fulfilling conditions or requirements set forth by the IMF. Read more for examples and further explanation including related video clips and also comments
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Asset-Backed Commercial Paper Money Market Fund Liquidity Facility – AMLF definition explanation

What is Asset-Backed Commercial Paper Money Market Fund Liquidity Facility – AMLF?
A lending program created by the Federal Reserve Board on September 19, 2008, that will provide new funding to U.S. financial institutions until October 30, 2009. The Asset-Backed Commercial Paper Money Market Fund Liquidity Facility (AMLF) provides funding that allows financial institutions to purchase asset-backed commercial paper (ABCP) from money market mutual funds (MMMF) to prevent default on investors’ redemptions. Read more for examples and further explanation including related video clips and also comments
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