An Accountant's Opinion is a statement signed by an independent Certified Public Accountant that describes the scope of the examination of an organization's books and records. It provides important assurance to lenders or investors.
Debt capital refers to borrowed funds that a firm utilizes to support its business operations, growth, or investment projects. These funds come with the obligation to pay back with interest and can be sourced from various lenders, such as banks, bond investors, or other financial institutions.
A clause in a loan agreement or bank facility stating that the loan will become repayable if there is a material change in the borrower's credit standing. The clause can be contentious because it is not always clear what constitutes a material change.
Mortgage discount refers to the amount of principal that lenders deduct at the beginning of a loan as part of the loan agreement terms, which is often linked to discount points.
Insurance typically required by lenders for borrowers with a down payment less than 20%, indemnifying the lender in the case of foreclosure.
Open-End Credit is a revolving line of credit offered to consumers by banks, savings and loans, and other lenders, allowing for repeated borrowing up to a specified limit.
Piggybacking is a financial scheme in which an individual with poor credit history is added as an authorized user to a credit account held by someone with a strong credit rating, with the objective of improving the former's credit score. The legality and ethics of this practice are contentious, as it can potentially mislead lenders who base loan decisions on credit scoring.
Private Mortgage Insurance (PMI) is a type of insurance required primarily for homebuyers who obtain conventional loans with a down payment of less than 20% of the home's purchase price. It protects the lender in case the borrower defaults.
A Title Guaranty Company is an entity that provides title insurance, ensuring the validity and legality of a property title, thus protecting property buyers and lenders against potential title disputes and claims.
Usury refers to the practice of charging an interest rate on loans that exceeds the legal maximum set by state law. The limits on usury can vary based on the type of lender and loan, and federal laws sometimes override these state limits under specific conditions.
