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Yield Maintenance

   Also found in: Acronyms 0.01 sec.
Yield Maintenance
The extra money a prepaying borrower would have to pay to make the yield the same for the lender if the borrower made all, regularly scheduled payments until maturity. When a borrower prepays a loan or other debt investment, the lender loses the interest the borrower otherwise would have paid. The lender may charge the yield maintenance as a prepayment penalty to ensure that it makes the yield regardless of whether or not the borrower prepays. This has the effect of making prepayment or refinancing unattractive to the borrower.


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a 10 year yield maintenance for most other long term lenders.
For fixed rate loans, gauge the cost of any prepayment penalties or yield maintenance provisions.
Loans under this program are non-recourse with no carve-outs, and do not require yield maintenance or defeasance prepayment penalties.
 
 
 
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