GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Loan Servicing


Synonyms:servicing a loan
Filed Under: financial-banking, mortgages
Tags: banking, mortgage
 

Definition of loan servicing

loan servicing
1. After a loan is granted, it must be maintained by the lender to ensure the loan terms are met. Servicing a loan involves collecting payments, keeping accounting records, computing interest and principal, etc.

Related Terms and Acronyms:

  • loan   Letting another party use something of value temporarily.
  • loan processing   The steps taken by a lender to convert a loan application into an approved loan for the potential borrower. These steps include processing the application, conducting a credit investigation, evaluating the loan, etc.
  • mortgage (mtg)   A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • owner financing (O/F, OF, OWN)   A transaction in which the seller lends all or part of the money to the buyer.
  • umbrella mortgage   A specific arrangement where one document encompasses one or more already existing mortgages registered on the same property. The mortgagee is responsible for remission of payment(s), to lender(s), while the mortgagor makes one payment to the mortgagee. Also referred to as a wraparound.
  • wraparound mortgage   A refinanced home loan in which the balances on all mortgages are combined into one loan.

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