Commercial Lending Glossary
A glossary of definitions for common terms used in commercial real estate hard money lending & CRE investing.
The Equal Credit Opportunity Act, popularly known as the ECOA, is a 1974 law which makes unlawful the discrimination of applicants-based on race, color, religion, national origin, sex, marital status, or age-by any creditor. Failure to comply can subject a financial institution to civil liability for various damages.
Electronic Funds Transfer (EFT)
The electronic transfer of money between banks. An EFT can take place between multiple financial institutions or within a single institution, and can include payments made with a credit card, direct deposits or debits, wire transfers, and e-checks.
A claim against a property by a party that is not the owner. Most commonly, an encumbrance will be a mortgage, easements, or property tax liens - regardless of type, encumbrances impact the property's ability to be transferred, and usually must be cleared before the property can be freely used again.