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C

Call Option: A provision of a note which allows the lender to require repayment of the loan in full before the end of the loan term. The option may be exercised due to breach of the terms of the loan or at the discretion of the lender.

Caps (interest): Consumer safeguards which limit the amount the interest rate on an adjustable rate mortgage can change in an adjustment interval and/or over the life of the loan. For example, if your per-period cap is 1% and your current rate is 7%, then your newly adjusted rate must fall between 6% and 8% regardless of actual changes in the index.

Caps (payment): Consumer safeguards which limit the amount monthly payments on an adjustable-rate mortgage may change. Since they do not limit the amount of interest the lender is earning, these consumer safeguards may cause negative amortization.

Cash flow
: The flow of cash through a business or household. In business terms, cash flow involves the flow of cash into a company in the form of revenues, and out of the company in the form of expenses.

Cash flow broker: Professional whose primary purpose is to unite income stream sellers with funding sources. They may operate as referral sources or as the primary liaison for cash flow transactions.
 
Cash flow industry: The buying, selling, and brokering of privately held debt in the secondary marketplace; the marketplace where businesses and individuals get help managing their cash flow needs.
 
Cash flow instrument: Future payment or series of payments. Also called a debt instrument or income stream.
 
Cash flow specialist: A cash flow professional who brokers cash flow transactions or buys cash flow instruments.
 
Cash flow transaction: Occurs whenever a funding source pays cash to an individual or business in exchange for an income stream.

Cash Out: Any cash received when you get a new loan that is larger than the remaining balance of your current mortgage, based upon the equity you have already built up in the house. The cash out amount is calculated by subtracting the sum of the old loan and fees from the new mortgage loan. For example, if your existing loan is $100,000, you might refinance it with a loan of $120,000. After you pay off your current loan ($100,000) and any loan-origination costs for the new loan (for example point fees of $2,000), you would be left with $18,000 cash out. Cash-out loans may not be available for all types of property.

Cashier's Check (or Bank Check): A check whose payment is guaranteed because it was paid for in advance and is drawn on the bank's account instead of the customer's.

Ceiling: The maximum allowable interest rate of an adjustable rate mortgage.

Certificate of Eligibility: Document issued by the Veterans Administration to qualified veterans which verifies a veteran's eligibility for a VA guaranteed loan. Obtainable through local VA office by submitting form DD-214 (Separation Paper) and VA form 1880 (request for Certificate of Eligibility).

Certificate of Title: Written opinion of the status of title to a property, given by an attorney or title company. This certificate does not offer the protection given by title insurance.

Certificate of Veteran Status: FHA form filled out by the VA to establish a borrower's eligibility for an FHA Vet loan. Obtainable through local VA office by submitting form DD 214 (Separation Paper) with form 26-8261a (request for certificate of veteran status).

Chain of Title: The chronological order of conveyance of a property from the original owner to the present owner.

Chattel mortgage: A mortgage on personal property, given to secure a debt. Typically used in the sale of a business. Also called a security agreement.

Closing (or Settlement): The settlement or closing is the conclusion of your real estate transaction. It includes the delivery of your security instrument, signing of your legal documents and the disbursement of the funds necessary to the sale of your home or loan transaction (refinance).

Closing Costs: Costs for services that must be performed before your loan can be initiated. Examples include title fees, recording fees, appraisal fee, credit report fee, pest inspection, attorney's fees, taxes, and surveying fees.

COFI: Cost of Funds Index. An index of the weighted-average interest rate paid by savings institutions for sources of funds, usually by members of the 11th Federal Home Loan Bank District.

Collateral: Something of value (land, a home, a car, etc.) that is pledged as security to ensure the payment of a debt. Collateral is promised to a lender until a loan is repaid. If the borrower defaults, the lender has the right, by law, to seize the collateral.
 
Collateral-based income streams: Cash flow instruments that are secured by collateral.
 
Collectibility: Refers to the funding source's ability to collect future income stream payments once they are purchased.
 
Commission: Fee paid to a broker for executing or referring a cash flow transaction.

Commitment: A promise to lend and a statement by the lender of the terms and conditions under which a loan is made.

Condominium: A form of property ownership in which the homeowner holds title to an individual dwelling unit and a proportionate interest in common areas and facilities of a multi-unit project.

Conforming Loan: A mortgage loan which meets all requirements to be eligible for purchase by federal agencies such as FNMA and FHLMC. The maximum conforming loan amount is currently $227,150 for a one unit property.

Consumer-based income streams: Cash flows in which the party that owes payments is a consumer, a private individual.

Contingency: A condition which must be satisfied before a contract is legally binding.

Contingency-based income streams: Cash flows in which the recipient is not necessarily legally entitled to receive payments, or in which the amount of the payment is uncertain or contingent upon outside factors.

Contract of Sale: The agreement between the buyer and seller on the purchase price, terms, and conditions of a sale.

Conventional Loan: Loans that are not made under any government housing program; they are not subject to the restrictions of government housing programs, such as loan size limits.

Conversion: The process of converting a qualified prospect into an active client.

Convertible ARMs: A type of ARM (adjustable rate mortgage) loan with the option to convert to a fixed-rate loan during a given time period.

Conveyance: The document used to effect a transfer, such as a deed, or mortgage.

Corporation: A legal entity, chartered by a U.S. state or the federal government, and separate and distinct from the persons who own it. It is regarded by the courts as an artificial person; it may own property, incur debts, sue or be sued.

Credit Report: A report detailing the credit history of a prospective borrower that's used to help determine borrower creditworthiness.

Creditor: One who is owed payments on a debt by a debtor.