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Credit Related Expenses

Definition - What does Credit Related Expenses mean?

Credit related expenses is a specific term used in real estate that refers to when a lender is forced to take a loss on a property, specifically a foreclosed property. Credit related expenses also refers to all the others losses taken by the lender as a result of the foreclosure.

Justipedia explains Credit Related Expenses

Since the 2008 financial crash/housing market crash that occurred in the United States, the topic of credit related expenses has become much more of a household term. Many banks and other mortgage lenders experienced an extremely high percentage of credit related expense after the underwater mortgage crisis happened. Many times, when a home is foreclosed, the lender does not even break even on the house. Homes that have been foreclosed on usually sell for pennies on the dollar and result in high credit related expenses.

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