Glossary Letter: E

Equity lending is a type of financing where a borrower uses the equity in an asset, such as real estate or a business, as collateral for a loan. The loan amount is typically based on the value of the equity, which represents the ownership interest in the asset.  In loan management, assessing the equity value… Continue reading Equity Lending

Escrow projections within loan management software refer to the estimated future activity within an escrow account. This functionality helps lenders and borrowers anticipate upcoming escrow disbursements for various purposes, such as property taxes and insurance premiums. Borrowers can use these projections to budget for their total monthly housing expenses, including the loan payment and anticipated… Continue reading Escrow Projections

An escrow cushion is an additional amount of money held in an escrow account beyond the estimated costs of taxes, insurance, and other expenses. This extra amount acts as a safeguard to ensure there are sufficient funds in the account to cover any unexpected increases in these expenses. Lenders calculate the escrow cushion based on… Continue reading Escrow Cushion

Escrow payment is the payment made by the borrower through his escrow account for property tax and insurance related expenses. Typically, escrow is collected by the mortgage lender from the borrower, which is held in an escrow account to pay for property-related expenses such as property taxes and homeowners insurance. These payments are part of… Continue reading Escrow Payment

An escrow analysis is a periodic review of a borrower’s escrow account, typically performed annually by mortgage lenders or servicers. During the analysis, the lender compares the actual expenses paid out of the escrow account with the amount collected from the borrower. If there’s a significant difference, the lender may adjust the borrower’s monthly escrow… Continue reading Escrow Analysis

An escrow holdback, also known as a repair escrow, is a financial arrangement used in real estate transactions. It involves setting aside a portion of the buyer’s closing funds in a neutral third-party account (escrow) until specific repairs are completed on the property. This arrangement ensures that necessary repairs are addressed before the sale is… Continue reading Escrow Holdback

An escrow account is an account where the lender keeps the escrow funds paid by the borrower. This account is governed and managed by the lender to pay property taxes and insurance premiums on behalf of the borrower. The lender ensures that the escrow account is funded with the accurate amount that is needed for… Continue reading Escrow Account

Equity, also referred to as shareholders’ equity or owner’s equity for privately held companies, represents owners’ financial claim on a business. It essentially reflects the amount of money that would be returned to shareholders if all of the company’s assets were liquidated (sold and converted to cash) and all of its debts were paid off.… Continue reading Equity