Definitions for "Standby Commitment"
Used by borrowers (in development) as a tool to get downstream financing. For example, long-term financing commitment used to secure construction loan.
In secondary marketing, a com-mitment to purchase mortgages with specific terms, understanding that delivery is unlikely. The commitment is issued for a fee paid by the seller to the purchaser. Synonymous with an optional delivery commitment.
An agreement by a lender to provide a certain amount of money on specific terms in the future. Neither party expects funding of the loan. This commitment enables the borrower to arrange construction financing from other sources. The commitment is issued for a fee and the lender is willing to disburse the committed funds in the event that a permanent loan on more favourable terms is not obtained.
Keywords:  explicit, agrees, lend, formal, lender
A formal offer by a lender making explicit the terms under which it agrees to lend money to a borrower over a certain period of time.
A lender agrees to provide a loan at some future date at a set interest rate.
A put option in Ginnie Mae trading which gives the holder the right, but not the obligation, to make delivery.