What is a Conduit Borrower?
Conduit borrowers are essentially individuals or corporate entities that assume debt in order to secure a loan for a third party. Essentially, the conduit borrower is functioning as the lender to the third party, and normally makes a profit for the effort. By assuming debt and providing a securities loan to customers that don’t meet the credit requirements of the originating loan institution, the conduit borrower assumes full responsibility for the repayment of the original loan. The concept of a conduit borrower can be illustrated by viewing the process as an intermediary between an entity that needs a loan, and a lender who is in the business of making loans. When factors make it impossible for the borrower to secure the loan directly, the conduit borrower may step in to function as the pipeline or conduit between the two parties. In exchange for securing the loan, the conduit borrower will negotiate terms and conditions with their client that are agreeable to both the conduit borrow
” Conduit borrowers are essentially individuals or corporate entities that assume debt in order to secure a loan for a third party. Essentially, the conduit borrower is functioning as the lender to the third party, and normally makes a profit for the effort. By assuming debt and providing a securities loan to customers that don’t meet the credit requirements of the originating loan institution, the conduit borrower assumes full responsibility for the repayment of the original loan. . The concept of a conduit borrower can be illustrated by viewing the process as an intermediary between an entity that needs a loan, and a lender who is in the business of making loans.
Related Questions
- Does a borrower have to submit an application for restructuring before meeting with the qualified lender to discuss either the distressed loan notice or the inputs into a restructure plan?
- May a qualified lender modify a distressed loan notice when it is being sent to a borrower(s) who has filed bankruptcy?
- What is a Conduit Borrower?
