Sentences with phrase «agency if the borrower defaulted on the loan»

The holder may be the bank that issued the loan, a secondary market that purchased the loan from the bank or a guarantee agency if the borrower defaulted on the loan.

Not exact matches

Congress mandates that the insurance premiums the agency collects must be kept in a reserve fund that the FHA uses to pay lenders if a borrower defaults on an FHA - insured loan.

Created by the Federal Housing Administration, these loans are insured by this government agency, so that guarantees that lenders won't lose their money if borrowers default on their mortgage.

Extended on credit, unsecured debt presents a higher risk to a lender since - in the United States - there are no debtor's prisons and if a borrower defaults on a loan, there is little that a lender can do about it except seek costly legal action and report to the credit reporting agencies.

If the borrower of a loan made under this part who has defaulted on the loan makes 12 on time, consecutive, monthly payments of amounts owed on the loan, as determined by the institution, or by the Secretary in the case of a loan held by the Secretary, the loan shall be considered rehabilitated, and the institution that made that loan (or the Secretary, in the case of a loan held by the Secretary) shall request that any credit bureau organization or credit reporting agency to which the default was reported remove the default from the borrower's credit history.

That means the agency reimburses mortgage lenders if borrowers default on VA home loans.

Instead, the agency guarantees repayment to lenders if a borrower defaults, so that the lenders know they won't lose money on the deal, thus allowing them to offer competitive mortgage rates on loans that are easier to qualify for than conventional home loans.