loss severity

Definition

The percentage of lost principal when a loan is foreclosed.

Use loss severity in a sentence

You should always try to limit your loss severity so that you are not in a position of total ruin.

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In certain states a home owner may be subjected to tax penalties equal to the amount of loss severity that was experienced by the lender.

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The loss severity was very great when the bank foreclosed a loan on Mr. Jenkins who had filed for bankruptcy and had no way to repay his responsibilities.

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