Commitment Fee

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Related to Commitment Fees: Upfront Fee, Management fee

Commitment Fee

Compensation paid to a lender by a borrower for the lender's promise to give a mortgage at some future time.

A commitment fee, frequently employed in real estate transactions, is an expense separate from interest charged on the loan to be secured by the mortgage. The controversy surrounding nonrefundable commitment fees arises when a borrower decides not to proceed with the loan and then demands return of the fee on the premise that the lender has performed no services to earn it. The courts have consistently rejected this contention and held that the lender is entitled to the commitment fee either as Liquidated Damages for breach of contract or as compensation for earmarking the funds for loan to the borrower.

References in periodicals archive ?
All other terms of the Loan Agreement remain in effect unamended, including the above-mentioned interest rates and commitment fees, as well as the condition precedent to drawdown that nothing has occurred since the closing of the Loan Agreement on November 18, 2014 (the "Closing Date") which could reasonably be expected to have a material adverse effect on the Company (as defined in the Loan Agreement).
Batocabe said government should run after officials whose incompetence has resulted in government's incurrence of huge commitment fees.
The Fortress agreement, which can be increased to the same $150 million, lowers commitment fees, allows Arcapita to shop for better terms from other lenders, and limits the circumstances under which Fortress can terminate the loan.
The IRS argued that the nonrefundable portion of the commitment fees should have been included in Freddie Mac's income in the year of receipt, because the taxpayer had met the Sec.
arbitrators who are considering the adoption of cancellation and commitment fees.
Commitment fees paid to banks are regarded as interest subject to the Interest Rate Restriction Law and the law governing regulations on interest on deposits and capital subscriptions, so banks say they find it difficult to fix such fees.
Given the Company's strong current and projected future cash flow generation capability from its operations at NagaWorld (including the recoupment of commitment fees paid and the Company's share of net wins from its machine installed base at NagaWorld), the state of the previously-owned gaming machine market, and its strong relationships with gaming equipment manufacturers, Elixir Gaming anticipates funding its 2010 gaming machine purchases for its existing project pipeline from cash on hand and expected net cash flow from operations.
Additionally, the credit facility has an option to increase the aggregate size of the facility by at least USD250m with additional commitments, there is no change in pricing terms or commitment fees to the existing facility as well as extended its maturity to 7 December 2021.
Anthony Akoto Osei, the Minority Ranking Member for Finance in Parliament, has announced that hoping to secure the much-hyped US$3 billion loan, the Mahama-led National Democratic Congress (NDC) government has offered a huge US$54 million as commitment fees to the China Development Bank (CDB).
The term of the credit facility was extended by three years to 4 January 2016, with lower interest rate and commitment fees.
Commitment fees of 1% are common, although lower fees can sometimes be negotiated.
They expressly provided for T's payment of commitment fees and certain other costs, including amounts X earned in its capacity as an agent.