- Consumer reporting agency (or bureau)
An organization that prepares reports that lenders use
to determine a potential borrower's credit history. The agency obtains data for
these reports from a credit repository as well as from creditors such as
mortgage lenders, credit card companies, department stores, etc.
- Contingency
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.
- Contract
An oral or written agreement to do or not do something.
- Conventional loan
A home loan that is not insured or guaranteed by the
federal government. Contrast with government loan. Can be for conforming or
non-conforming loan amounts.
- Conventional Mortgages
- A type
of mortgage in which the underlying terms and conditions meet
the funding criteria of Fannie Mae and Freddie Mac. About 35-50% of
mortgages, depending on market conditions and consumer trends, are conventional
mortgages. In other words, Fannie Mae and Freddie Mac guarantee or
purchase 35-50% of all mortgages. Conventional mortgages may be fixed-rate
or adjustable-rate mortgages.
- Convertibility clause
A provision in some adjustable rate mortgages (ARMs)
that allows the borrower to change the ARM to a fixed rate loan at specified
times during the life of the loan.
- Convertible ARM
An adjustable rate mortgage (ARM) that can be
converted to a fixed rate loan under specified conditions.
- Cooperative (co-op)
A type of multiple ownership in which the residents of a multi-unit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
- Cost of Funds Index (COFI)
An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings, and advances of the 11th District members of the Federal Home Loan Bank of San Francisco. See adjustable-rate mortgage (ARM).
- Covenant
A promise in a mortgage or deed that requires or prevents certain uses of the property that, if violated, may result in loss or foreclosure of the property.
- Credit
An agreement in which a borrower receives money or
something of value in exchange for a promise to repay the lender on specified
terms at a later time.
- Credit History
An evaluation of an individual's capacity and history of debt repayment. A credit history helps a lender to determine whether a potential borrower is likely to repay a loan in a timely manner.
- Credit Life Insurance
A type of insurance that pays off a loan if one of the borrowers dies while the policy is in force.
- Credit Limit
The maximum amount that can be borrowed under the home
equity line of credit.
- Credit Rating
An expression of creditworthiness based upon present
financial condition and past credit history.
- Credit Report
A report of an individual's credit history prepared by
a credit bureau and used by a lender in determining a loan applicant's
creditworthiness. See merged credit report.
- Credit Repository (Credit Bureau)
An organization that gathers, records, updates, and
stores financial and public records information about the payment records of
individuals who are being considered for credit.
- credit score
- A number representing an estimate of an individual's creditworthiness. A common credit score used in the United States is the FICO score.
- Credit Scoring
Credit scores are numerical values that rank individuals according to their credit history at a given point in time. Your score is based on your past payment history, the amount of credit you have outstanding, the amount of credit you have available, and other factors. According to Fannie Mae--one of the major investors in home loans, credit scores have proven to be very good predictors of whether a borrower will repay his or her loan.
- Creditor
A person to whom money is owed.
- Curtailment
A payment that reduces the
principal balance of a loan.
- Debt
An amount owed to another. See installment loan and
revolving liability.
- Deed
The legal document conveying title to a property.
- Deed of Trust
The document used in some states instead of a
mortgage; title is vested in a trustee to secure repayment of the loan. It is recorded in public records.
- Deed-in-lieu
A deed given by a borrower to the lender to satisfy a
debt and avoid foreclosure. Also called a "voluntary conveyance."
Loan Glossary 
