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GLOSSARY
Community Reinvestment Act - CRA
The Community Reinvestment Act, or CRA, is federal legislation that encourages banks to provide credit in the same communities where they accept deposits. The law is intended to provide families in low- and moderate-income areas with equal access to credit. CRA was passed by Congress in 1977.
Comparable value
Comparable value is a measurement of worth based on the selling price of a similar item. In real estate, comparable value is one of the key factors to consider when setting an asking price, with similar, recently sold properties being used as the basis for comparison. In other contexts, such as retail, comparable value is more subjective and less reliable.
Comparables
Comparables are recently sold properties that are similar in square footage, location and available amenities to the home for sale. These comparable properties are used in the appraisal process to help determine the fair market value of a property. This is also known as conducting a Comparative Market Analysis.
Comparables or comps
Comparables, or comps, are similar items that can be used to determine something's value. In real estate, comparables are similar, recently sold properties that are used to establish another property's fair market value. In business finance, the term "comps" is short for comparable same-store sales, which is an indication of sales trends between two reporting periods.
Comparative market analysis
Comparative market analysis is one method used by real estate agents and homeowners to determine the real market value of a property. The analysis involves reviewing recent sales prices for similar properties and making adjustments based on the property's relative condition and amenities.
Competent
Competent means capable or proficient. In the legal sense, competent describes one who's legally qualified or able to make binding decisions.
Completion certificate
A certificate of completion is required when a borrower uses a loan for home improvements or renovation and for the construction of a new home. When the construction project is finished, a certificate of completion must be signed by a qualified authority, like the architect or developer.
Compound
To compound, in the financial sense, is to calculate interest on the combined balance of principal and accrued interest. Simple interest, on the other hand, is calculated on principal only. Compound interest allows for faster accumulation of earnings.
Compound interest
Compound interest is calculated over the total amount owed, including interest that has accumulated. Borrowers experience compounding interest during negative amortization when the principal amount of the loan actually increases because the monthly payments are lower than the full amount of interest owed.
Compounding
Compounding is the process of calculating interest on the combined balance of principal and accrued interest. The value of an investment increases at a faster rate when previously accrued interest is rolled into the investment's interest-earning balance.
Compounding method
Compounding method refers to the frequency with which accrued interest is rolled into an investment's interest-earning balance. Deposit accounts may compound interest daily, monthly, quarterly, semi-annually, or annually. Although the difference among these methods can be minute for small dollar amounts, greater compounding frequency means a faster accumulation of earnings.
Comptroller of the Currency
The Comptroller of the Currency is a president-appointed official who heads the Office of the Comptroller of the Currency (OCC). The OCC supervises national banks, as well as federal branches and agencies of foreign banks.
Condemnation
In the legal sense, condemnation is government seizure of private property, either for public use, or because the property is unsafe. Property can be seized for public use under the powers of eminent domain; when this happens, the owner receives fair compensation in return.
Conditional commitment
A promise by a lender to authorize a loan if the borrower meets certain requirements in the application process.
Condominium
It is a type of ownership in a real estate project, wherein each unit owner has a title to a unit in the building or property. He has an undivided interest in all common areas and in some the exclusive use of certain limited common areas. See further Condominium conversion