|Banking Terms – A||Banking Terms – B||Banking Terms – C||Banking Terms – D|
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In this section, we will discuss about “Bank Run” or “Run on a Bank” which is an important topic related to Banking Industry. Looking back in most recent case, when famous Investment bank Lehman Brothers filed bankruptcy in September 2008, ICICI Bank UK Plc held exposure of 57 million Euros in the Senior Bonds of […]Continue Reading... Comments Off on Bank Run (Run on a Bank)
A bridge loan (also known as “Swing loan” or “Caveat loan”) mortgage is an interest only loan, secured on your current property, to allow the proceeds to be used for buying new property, before selling the existing property. A bridge loan is. It is a short-term loan typically taken out for a timeframe of 1 […]Continue Reading... Comments Off on Bridge Loan
Nowadays we heard a lot about Bitcoin currency which was recently banned by the Reserve Bank of India. This is a peer-to-peer payment system network and digital currency which was not used throughout the world and not regulated by any Central Bank. As it is used across all the countries in the same form, it […]Continue Reading... Comments Off on What is Bitcoin
Abbreviations Meaning ABCI Association of Business Communicators of India ABCP Asset Backed Commercial Paper ACF Auto Correlation Function ACU Asian Clearing Union AD Authorized Dealer ADB Asian Development Bank ADF Augmented Dicky Fuller ADR Asset Development ReserveContinue Reading... Comments Off on List of Abbreviations used in Banking Industry
Any financial security if at all backed by a loan, lease or receivable against assets other than real estate and mortgage backed securities can be defined as an ‘Asset Backed Security’. Let us analyze the definition for a better understanding. A financial security is a contract between the issuer (of security) to the investor (who […]Continue Reading... No Comments.
Below are the risks associated with Mortgage loans Credit Risk is the risk to earnings from borrowers failure to meet the bank’s contract Interest rate risk to earnings from fluctuation of interest rates in market Price risk is the risk to earning from changes in the values of foreign exchange, equity etc Transaction risk is […]Continue Reading... No Comments.
Securitization is a process whereby assets (e.g. Mortgages) are removed from the bank’s balance sheet and sold to a Third Party. The bank continues to service the assets and maintains direct relationship with customers. The third party then issues Securities to Investors. These Securities are backed by assets purchased from the bank. Investors invest in […]Continue Reading... No Comments.
Term mortgage means the loan provided against the physical asset. Mortgage backed securities are the chunks of fixed income securities which are backed by the physical assets in its early life cycle. First the bank provides the required mortgage loan to the borrower. Now the next step is the schedule of repayment which is decided […]Continue Reading... No Comments.
Fixed rate mortgage A fixed-rate loan is a mortgage that allows borrowers to fully amortize a mortgage by making equal monthly payments of principal and interest for a pre-determined term and a constant interest rate. Interest rates remains fixed throughout the loan period. Do not vary according to the market price Advantage Spread out of […]Continue Reading... No Comments.
The mortgage loan process involves many steps from generating money from the investors to process the loans to the borrowers. The entire process is explained below Origination Processing Underwriting Closing Post Closing Ware-housing Secondary Marketing Servicing Origination: Loan Origination is the first step of this cycle. It is the process by which a borrower applies […]Continue Reading... No Comments.