Underwrite


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Underwrite

Description: The term for evaluating the risk of a person, company, or situation. Almost always done by lenders to determine the borrower's financial health and ability to repay a loan.<br /><br /> Within a bank, "underwriters" conduct the research and put together a package on a potential buyer to be reviewed by the loan decision maker.<br /><br /> The term can also refer to guaranteeing a sale, for example an investment banker might underwrite the sale of securities and agree to buy any that don't sell on the open market.<br /><br /> To Underwrite can also mean to assume liability, for example an insurance company that underwrites an insurance policy.



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