Glossary Letter: L

Loan servicing refers to the administrative management of a loan from the time it is disbursed until it is fully repaid. This process encompasses various crucial tasks performed by a loan servicer, typically a financial institution or a specialized company. These responsibilities include collecting monthly payments, maintaining payment records, managing escrow accounts for property taxes… Continue reading Loan Servicing

A Loan Deferment refers to a temporary pause on a borrower’s regular loan payments. This is granted for a predetermined period under specific circumstances, typically when a borrower experiences temporary financial hardship. This can help them manage cash flow during difficult times and avoid potential defaults. Loan management software can help facilitate the deferment process… Continue reading Loan Deferment

A late payment notice is a formal communication sent by a creditor to a debtor, informing them that their payment is overdue. This notice typically includes details such as the amount owed, the due date, the number of days past due, and any late fees or penalties incurred. The notice also outlines any steps the… Continue reading Late Payment Notice

Loan-to-Value Ratio (LTV) is a financial metric used by lenders to assess the risk of lending funds. It is calculated by dividing the amount of the loan by the appraised value of the property or asset being purchased, expressed as a percentage. A lower LTV indicates less risk for the lender, potentially resulting in better… Continue reading Loan-to-value Ratio (LTV)

A lien is a legal claim or right against an asset that is used as collateral to satisfy a debt. It grants the lienholder, often a creditor or lender, the authority to seize or sell the asset if the debtor fails to fulfill their financial obligations. Common types of liens include mortgage liens on real… Continue reading Lien

Liability insurance is a type of coverage that protects individuals and businesses from financial losses resulting from lawsuits or claims made against them for injury or damage to others. This insurance covers legal costs and potential settlements or judgments if the insured party is found legally responsible. Liability insurance is essential for financial protection and… Continue reading Liability Insurance

Liabilities are financial obligations or debts a company or individual owes to others. They represent asset claims arising from borrowing, purchasing goods or services on credit, or other transactions. Liabilities are categorized as current, due within a year (e.g., accounts payable, short-term loans), or non-current, due after a year (e.g., long-term debt, mortgage). They play… Continue reading Liabilities

Lender’s escrow instructions refer to the detailed directives provided by a lender to an escrow agent concerning the handling and disbursement of funds held in escrow during a real estate transaction. These instructions outline the conditions under which funds are to be released, specifying crucial details such as the parties involved, the amounts to be… Continue reading Lender’s Escrow Instructions