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Simple English definitions for legal terms

good-faith margin

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A quick definition of good-faith margin:

Good-Faith Margin: Good-faith margin is the amount of money that a creditor would typically require for a specific investment, without considering the customer's other assets or securities positions. It is the cash or collateral that an investor must pay to a securities broker to protect the broker against losses from securities bought on credit. In simple terms, it is the money that an investor must put down to show that they are serious about their investment and to protect the broker from potential losses.

A more thorough explanation:

Definition: Good-faith margin refers to the amount of margin that a creditor would typically require for a specific security position, based on good judgment. This amount is established without considering the customer's other assets or securities positions held with respect to unrelated transactions.

  • When an investor buys securities on credit through a broker, they may be required to pay a good-faith margin to protect the broker against losses. For example, if an investor wants to buy $10,000 worth of stock on margin, the broker may require a good-faith margin of $2,000.
  • Another example of good-faith margin is when a borrower takes out a loan and uses collateral to secure it. The lender may require a good-faith margin, which is the difference between the loan's face value and the market value of the collateral. For instance, if a borrower wants to take out a $50,000 loan and uses their car as collateral, the lender may require a good-faith margin of $10,000 if the car is worth $40,000.

These examples illustrate how good-faith margin is used to protect creditors against potential losses. By requiring a certain amount of margin, creditors can ensure that they have some protection if the value of the securities or collateral decreases. Good-faith margin is typically based on industry standards and the creditor's assessment of the risk involved in the transaction.

good-faith improver | good-faith purchaser

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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