Negative Amortization definition

Negative Amortization. That portion of interest accrued at the Note Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan for such month and which, pursuant to the terms of the Mortgage Note, is added to the principal balance of the Mortgage Loan.

Negative Amortization. A gradual increase in the mortgage debt that occurs when the monthly fixed installment is not sufficient for full application to both principal and interest. The interest shortage is added to the unpaid principal balance to create "negative" amortization.

Negative Amortization means with respect to each Negative Amortization Loan, that portion of interest accrued at the Mortgage Interest Rate in any month which exceeds the Monthly Payment on the related Loan for such month and which, pursuant to the terms of the Note, is added to the principal balance of the Loan.

Examples of Negative Amortization in a sentence

• Negative amortization features may be applied to either adjustable rate mortgages or fixed rate mortgages, the latter commonly referred to as graduated payment mortgages (GPMs).

• Negative amortization refers to a method in which a loan is structured so that the borrower’s minimum monthly (or other periodic) payment is contractually permitted to be less than the full amount of interest owed to the lender, with the unpaid interest added to the loan’s principal balance.

• Negative amortization also results in lower levels of home equity as compared to a traditional amortizing mortgage product.

• Negative amortization is permitted in the IDR plans and as part of one alternative repayment plan option.

• Negative amortization after the effective date of the modification is prohibited.

More Definitions of Negative Amortization

Negative Amortization means the additions to the principal amount of a Loan arising from the insufficiency of regularly scheduled payments to cover interest as it accrues against the principal amount of the Loan as provided for therein.

Negative Amortization means the portion of interest accrued at the Mortgage Interest Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan for such month and which, pursuant to the terms of the Mortgage Note, is added to the principal balance of the Mortgage Loan.

Negative Amortization. With respect to each Distribution Date, the amount of interest on the Mortgage Loans that the related Mortgagors are not obligated to pay as interest (and which shall be added to the Scheduled Principal Balance of each such Mortgage Loan) due to the negative amortization feature of such Mortgage Loans, in each case during the related Collection Period.

Negative Amortization means an amortization method under

Negative Amortization means an amortization method under which the outstanding balance may increase at any time over the course of the loan because the regular periodic payment does not cover the full amount of interest due.

Negative Amortization. With respect to a Pay Option ARM Loan, any portion of interest accrued at the Mortgage Interest Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan for such month and which, pursuant to the terms of the Mortgage Note, is added to the principal balance of the Mortgage Loan.

Negative Amortization means an increase in the principal