Sentences with phrase «risk if a borrower defaults»

When Fannie and Freddie buy loans, they assume the majority of the risk if a borrower defaults on their mortgage.

Not exact matches

If it is mainly the highest - risk borrowers who take advantage of higher limits, or if the higher limits encourage more reckless borrowing in general, then default rates will climb, eating away at profit marginIf it is mainly the highest - risk borrowers who take advantage of higher limits, or if the higher limits encourage more reckless borrowing in general, then default rates will climb, eating away at profit marginif the higher limits encourage more reckless borrowing in general, then default rates will climb, eating away at profit margins.

Therefore if more of the proceeds are with the borrower for a longer period of time, there is a greater risk of default and a longer present value of money impact.

Recent analyses of administrative data suggest that borrowers who leave college without earning a degree are at even greater risk of default than those who graduate, even if they graduate with more debt.

If you're considering cosigning a loan, it's essential that you understand the key risk involved: if the borrower defaults on the loan, then you are responsible for paying it bacIf you're considering cosigning a loan, it's essential that you understand the key risk involved: if the borrower defaults on the loan, then you are responsible for paying it bacif the borrower defaults on the loan, then you are responsible for paying it back.

If the borrower has low credit, the creditor charges a higher interest rate premium due to the risk of default, especially on uncollateralized debt.

Since investors» money and risk of loss is directly tied to an individual borrower, it could present the borrower with an unsafe situation if they were to default on a loan with their identity or personal details known.

The implication of no collateral which can serve as security to the lenders is that, if the borrowers default in payment, the lenders stand the risk of losing his money.

Although peer - to - peer loan sites help evaluate risk for the lender, it's important to keep in mind that these loans are unsecured, so if the borrower defaults, you lose your investment.

If the debt - to - income ratio is more than 2, the borrower will have significant difficult repaying the debt and may be at high risk of default.

Lenders do risk a loan going to collections if the borrower defaults.

Columnist Kathleen Pender wrote recently in the San Francisco Chronicle that approving FHA mortgage loans for borrowers who have outstanding debts in collection could increase taxpayer risk if these loans default and FHA doesn't have enough in its reserve fund for reimbursing lenders» losses.

So the real question is this: why is anybody willing to hold this low interest rate paper if the borrowers issuing it are so vulnerable to default risk?

A growing concern is that if the economy sputters and employment drops, defaults would rise dramatically, putting low and moderate income borrowers at greater risk of losing their homes.

Leveraged buyout loans are subject to greater credit risks than other investments, including a greater possibility that the borrower may default or enter bankruptcy and may be «covenant lite» loans, which do not include terms that allow the lender to monitor the performance of the borrower and declare a default if certain criteria are breached.

By lending to risky borrowers, the companies are assuming larger amounts of risk that can lead to financial problems if the borrowers default on their loans.

Including a cosigner on a loan decreases the risk for the lender because the lender has another person who is obligated to repay the loan if the borrower defaults.

The reverse mortgage called the Home Equity Conversion Mortgage (HECM) and traditional FHA loans are both federally insured, and require that borrowers pay a mortgage insurance premium in order to decrease risk to lenders if the homeowner defaults on the loan.

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.

By comparing the ratio between current debt and income, it is possible to determine if the borrower can reasonably handle another obligation without significantly increasing the risk of default.

If one ex-spouse failed to make his or her share of the joint payment, the other ex-spouse would be forced to make the full payment or risk ruining the credit scores of both borrowers by defaulting on the joint loan.

If the borrower defaults on payments, they must either reborrow the money or risk losing their vehicle.

The lender takes a bigger risk with an unsecured loan because they don't have any collateral to claim if the borrower defaults.

Lenders are often more willing to lend higher sums to consumers if the loan is secured by collateral because they have something tangible to repossess or foreclose on if the borrower defaults, according to Andrew Chan, a financial adviser at Locker Financial Services, LLC in Little Falls, N.J. Because this is a lower risk for lenders, they may also be more willing to forgive lower credit scores.

A cosigner is taking a significant risk in agreeing to sign a student loan, as his or her credit score will be negatively impacted by a missed or late payment, and because he or she will become responsible for the debt if the primary borrower goes into default.

If your current home is sold conditionally on financing, banks are having appraisers undervalue homes to protect themselves from the risk borrowers default in a rising interest rate environment.

Indeed, if you fund Kiva loans with a US Bank Flexperks Travel Rewards card, all you have to pay for your revenue tickets is the time value of your money and the risk of your Kiva loans defaulting (which can be substantially mitigated against by carefully choosing your loans and diversifying your loans across borrowers and countries).

The federal government would bear most of the risk, facing potentially large losses if borrowers defaulted on reactor projects that could not be salvaged.

Banks are typically averse to underwriting non-recourse loans as it means assuming more risk on their part as this type of loan only allows them to foreclose on the property in the event of a default, and does not allow them to seek additional money from the borrower if the proceeds from the foreclosure are less than what is owed on the loan.

The Federal Housing Administration insures loans for FHA - approved lenders, like Compass Mortgage, to reduce their risk if a borrower happens to default on their mortgage.

Otherwise, the risks are just too high because if the borrower defaults in the early years of the loan, the lender is stuck with a bad loan.

Mortgage underwriting is the process a lender uses to determine if the risk (especially the risk that the borrower will default [1]-RRB- of offering a mortgage loan to a particular borrower is acceptable and is a part of the larger mortgage origination process.

In addition, the lender faces the risk that the value of the property underlying the mortgage could drop in value to below the outstanding balance on the mortgage; if this event induces the borrower to default due to moral hazard, the lender must not only incur the costs of implementing a foreclosure but also must sell the property at a price that fails to recoup the lender's investment.