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GLOSSARY
Cloud on title
The provision or conditions disclosed by a title search that unfavorably affect the title to property and cannot be removed except by court action, release or deed.
CLTV
CLTV, or combined loan-to-value ratio, is a borrower's total mortgage debt outstanding divided by the value of the mortgaged property. Total mortgage debt outstanding includes unpaid balances under first and second mortgages. CLTV is expressed as a percentage.
CLTV or Combined loan-to-value ratio
A ratio which compares the person's overall mortgage debt to the home's fair market value. This is expressed as a percentage.
Cluster development
Cluster development is a method of laying out planned developments whereby homes are grouped together in some areas so that other areas can be preserved as open space. Cluster development is intended to balance population density preferences with the desire to maintain some amount of natural, undeveloped land.
CM
CM means compounding method. It designates whether a deposit account compounds interest daily, monthly, quarterly, etc.
CMG plan
A CMG plan is a non-traditional mortgage loan that acts as a debt facility and checking account combined. The borrower deposits her paycheck into the CMG account, and the debt balance is immediately reduced. As the borrower makes payments out of the account for regular expenses and spending, the debt balance is increased. The amount of income that isn't spent each month is applied as a monthly mortgage payment. CMG plans can reduce the duration and interest costs of a mortgage significantly, but they're only appropriate for borrowers who have strong and predictable incomes.
Co-borrower
A co-borrower in any lending situation is a person who accepts responsibility for repaying the debt. This is also known as a co-signer or a co-applicant.
Co-branded cards
Co-branded cards signify a relationship between a financial institution and another business, or between the financial institution and a card issuer such as American Express or VISA. Businesses such as department stores and airline companies commonly partner with a financial institution to provide a branded credit card that rewards customers with frequent buyer points. Financial institutions partner with the credit card issuers so that cardholders can benefit from wide scale acceptance of the card.
Co-housing
Co-housing, also known as cooperative housing and community housing, is a type of residence where families live in separate units, but share certain facilities, such as kitchens and laundry rooms.
Co-pay
Co-pay is the insured's portion of certain medical expenses, as defined by the insured's health plan. The co-pay is usually structured as a flat fee for a certain service, such as $20 for an office visit and $10 for a prescription.
COFI
COFI, or cost of funds index, is a weighted average of interest rates paid on checking and savings accounts in Arizona, California, and Nevada. The index is published monthly, and represents the cost of deposit funds for the financial institutions in these states. COFI is used as a base rate, or benchmark, for adjustable-rate mortgages in the western U.S.
Coinsurance
Coinsurance is an insurance arrangement whereby the insured party and the insurance provider share costs as defined by the policy documentation. Most health plans incorporate some type of coinsurance arrangement, either by requiring co-payments from the insured, or by requiring the insured to pay a percentage of costs incurred after the deductible is met.
Collateral
It is the asset that acts as the guarantee in the repayment of the loan. The borrower may risk losing this asset if he is unable to repay his loan according to the terms of the loan contract or the mortgage or the trust deed.
Collateral note
A collateral note is a debt or note payable that's secured by certain assets. If the borrower defaults on the loan agreement, the lender may assume ownership of the pledged assets.
Collateral surety
Collateral surety is commercial paper (a short-term investment) that's pledged as security for a loan. If the business defaults on the loan agreement, the lender may assume ownership of the commercial paper holdings.