- Whole Loan
- A single residential or commercial mortgage that a lender has issued to a borrower and that has not been securitized. Whole loan lenders commonly sell their whole loans in the secondary mortgage market to buyers such as Fannie Mae. One reason lenders sell whole loans is to reduce their risk. Instead of holding a mortgage for 15 or 30 years and hoping that the borrower will repay the money, the lender can get the principal back almost immediately.
The lender no longer earns interest on the whole loans that it sells, but it gains cash to make additional loans. When the lender closes additional mortgages, it earns money from origination fees, points and other closing costs paid by borrowers. This liquidity also makes it easier for borrowers to get mortgages. Fannie Mae will buy whole loans one at a time, but some other secondary market entities will only buy pools of whole loans. Loan pools can reduce risk as long as the pool includes loans with different risk characteristics, such as varying loan terms and credit scores. Fannie Mae reduces its risk by requiring that the whole loans it buys meet specific eligibility and underwriting criteria.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
whole loan — A term that distinguishes an investment representing an original mortgage loan from a loan representing a participation with one or more lenders. Bloomberg Financial Dictionary … Financial and business terms
whole loan pools — Mortgage backed securities not issued by or guaranteed by a U.S government agency or U.S. government sponsored enterprise. The mortgage loans comprising whole loan pools are generally loans that do not meet GNMA, FNMA, or FHLMC requirements.… … Financial and business terms
Whole life insurance — Whole Life Insurance, or Whole of Life Assurance (in the Commonwealth), is a life insurance policy that remains in force for the insured s whole life and requires (in most cases) premiums to be paid every year into the policy. Contents 1 History… … Wikipedia
Whole Foods Market — Infobox Company company name = Whole Foods Market company company type = Public (nasdaq|WFMI) company slogan = foundation = 1980 (Austin, Texas) location = Austin, Texas key people = John Mackey, CEO Glenda Chamberlain, Executive Vice President… … Wikipedia
Whole note — In music, a whole note (American or German terminology) or semibreve (British or classical terminology) is a note represented by a hollow oval note head, like a half note (or minim ), and no note stem (see Figure 1). Its length is typically equal … Wikipedia
Loan value — The amount a policyholder may borrow against a whole life insurance policy at the interest rate specified in the policy. The New York Times Financial Glossary … Financial and business terms
Mortgage loan — Mortgage redirects here. For other uses, see Mortgage (disambiguation). Finance Financial markets … Wikipedia
Payday loan — A shop window in Falls Church, Virginia advertises payday loans. A payday loan (also called a paycheck advance) is a small, short term loan that is intended to cover a borrower s expenses until his or her next payday. The loans are also sometimes … Wikipedia
Savings and loan association — A savings and loan association, also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage loans. The term is mainly used in the United States; similar institutions in the United Kingdom … Wikipedia
Savings and loan crisis — The savings and loan crisis of the 1980s and 1990s (commonly referred to as the S L crisis) was the failure of 747 savings and loan associations (S Ls) in the United States. The ultimate cost of the crisis is estimated to have totaled around… … Wikipedia