closed-end mortgage

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 two forms were typically given to consumers within three days after they applied for closed-end mortgage loans, and updated versions of one (and often both) of these forms were provided just prior to, or at the time of loan closing.
1310, provides an exemption from new HMDA data reporting requirements for small financial institutions that originate 500 closed-end mortgage loans or 500 open-end lines of credit.
Beginning in 2018, institutions otherwise covered by Regulation C become subject to the new HMDA rule's requirements if, in each of the prior two calendar years, they originated at least 25 closed-end mortgage loans or at least 100 open-end lines of credit.
It manages Second Angel Commercial Mortgage Fund l LLC, a $50 million closed-end mortgage fund that lends money to builders, developers, business and homeowners for short periods of time.
In addition, under a new standardized reporting threshold, institutions that made less than 25 closed-end mortgage loans in each of the two preceding calendar years or fewer than 100 covered open-end lines of credit in each of the two preceding calendar years will be exempted from the rule.
TRID applies to nearly all closed-end mortgage loans regardless of a credit union's asset size or pricing of the mortgage.