closed-end mortgage

(redirected from Closed-End Mortgages)

Closed-end mortgage

Mortgage against which no additional debt may be issued.

Closed-End Mortgage

1. In banking, a bond secured by a mortgage in which the mortgage may not be paid off before maturity, and the property in question may not be used as collateral on any other transaction without the bondholder's permission.

2. In real estate, a mortgage in which the principal amount may not be increased. Further borrowing is not permitted using the same mortgage as collateral.

closed-end mortgage

A mortgage with a prohibition against additional borrowing using the same lien. The prohibition against additional borrowing protects the existing creditors from having the security diluted. Compare open-end mortgage.

closed-end mortgage

A mortgage loan in which all sums have been funded at closing.Contrast with open-end mortgage, in which the principal balance may increase over time. A home loan is typically a closed-end mortgage;a construction loan is typically an open-end mortgage.

References in periodicals archive ?
The courses include an overview of Regulation Z as it pertains to federally regulated and closed-end mortgages (3 hours of federal laws and regulations); a discussion of current mortgage fraud schemes (2 hours of ethics: fraud, consumer protection, and fair lending issues); and, 2 hours of training related to Fannie Mae's HomeReady Mortgages (nontraditional mortgage products).
A seventh guideline governing closed-end mortgages, expected in October, will add even greater burden to a situation some lenders already find daunting.
It noted that the Dodd-Frank Wall Street Reform and Consumer Protection Act "prohibits any contractual requirement that would impose the use of nonjudicial foreclosure as the process for mortgages on principal dwellings and for closed-end mortgages on secondary dwellings.
But before its recent deadline for feedback on amendments that would revise the disclosure rules for closed-end mortgages, or mortgages that can't be paid off until they mature, the agency was deluged with nearly 4,000 comments.
In other Reg Z news, in late July the Fed proposed significant changes to Reg Z intended to improve the disclosures consumers receive in connection with closed-end mortgages and home equity lines of credit (HELOCs).
These include second-mortgage production (both closed-end mortgages and lines of credit) originated through LaSalle Bank and Standard Federal Bank, and these loans are closed in the name of the individual bank entity.
Standard Federal Bank and LaSalle Bank figures include second-mortgage production--both closed-end mortgages and lines of credit--originated through LaSalle Bank and Standard Federal Bank.
1) Based on loan count, as of 5/31/97; first-lien, closed-end mortgages only