What do you do when you chance upon a word, phrase or acronym you don’t recognize?
An option for senior housing/healthcare industry professionals is to check with a Glossary of Terms posted on the Cambridge Realty Capital Companies corporate website, www.cambridgecap.com. Here alphabetically arranged definitions for everything from a haircut to a kicker to a Mother Hubbard clause can be found.
Cambridge is one of the nation’s leading senior housing/healthcare lenders. Vice President Zach Scardina says a link to the glossary can be found in the INFOCENTER section of the Cambridge website.
He notes that more than 240 terms are defined in the glossary. The pages attract more than 200 unique visitors every month.
For those who may not know, a Mother Hubbard clause has nothing to do with an old lady finding a bare cupboard with nary a bone for her poor doggie. In the event of a loan default, the Mother Hubbard clause enables the senior housing/healthcare lender to foreclose not only on the property affected but on any other mortgage the borrower might have with the same lender, he explained.
A “haircut” is the difference between the market value of a mortgage and the amount of money a lender will advance against it. A “kicker” is a loan arrangement in which borrowers are required to pay a specific amount or percentage of income or cash flow in addition to normal debt service, he added.
Mr. Scardina says the Cambridge staff routinely defines new terms as the need arises. A recent addition to the glossary is the term “contractual allowance”, which is defined as the difference between what a hospital or senior care facility bills for services rendered and the amount actually paid by third party payers, i.e., Medicare/Medicaid and insurance companies, under contractual agreements.