What is a Loan Tape?
A loan tape is a detailed file that contains information on a portfolio of loans held by a bank or other financial […]
What is Interest Accrual?
Interest accrual refers to the accumulation of interest on a loan over a period of time. As interest accrues on a loan, […]
What is Prepayment Rate?
A prepayment rate, also known as the constant prepayment rate (CPR), is a metric used in lending to measure the percentage or […]
What is a Verification Agent?
A verification agent, also sometimes referred to as a verification trustee or review agent, plays an important role in debt facilities and […]
What is Portfolio Duration?
Portfolio duration is a measure of the average maturity of all the debt instruments in a portfolio, weighted by the relative value […]
What is Excess Spread?
Excess spread is a key concept in consumer finance, specifically when looking at warehouse facilities and asset-backed securitizations. At a high level, […]
What is Weighted Average Life of a Loan Portfolio?
The weighted average life (WAL) of a loan portfolio is a measure of the average length of time that each dollar of […]
What is a Recurring Revenue Loan?
A recurring revenue loan is a type of financing option for businesses that rely on regular, ongoing revenue from subscription, membership, or […]
What is Credit Enhancement?
One of the major risks in securitization relates to the variability of cash flows from the underlying assets. If mortgage borrowers default […]
What is Overcollateralization?
Overcollateralization (OC) is an important concept in structured finance, especially in collateralized loan obligations (CLOs) and other asset-backed securities. For CLOs and […]
How are Servicing Metrics Different for Loans vs Credit Cards?
Banks and other financial institutions provide various lending products to consumers and businesses, including installment loans and revolving lines of credit like […]
What is a Surety Bond and Why it’s Needed for a Lending License
A surety bond is a crucial component in obtaining and maintaining a lending license. This post will provide an in-depth overview of […]