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 : In finance a commitment is an agreement issued by a
lender, sometimes in the form of a letter (commitment letter) agreeing to make a
loan at a certain rate during a certain specified period. Commitment
fee is the amount the lender charges for holding up his end of the
bargain.
The purpose of such agreements is so that a corporation or
homebuyer can make plans for the future, but rescind if there are changes to
those plans, and the commitment usually carries an escape clause just for that
eventuality.
The term "commitment holder" could be
applied to the potential borrower who holds a loan commitment from a
lender.
Another type of commitment has to do with the sale of loans in the SECONDARY
MARKET. In this instance, a bank or mortgage
company makes a commitment to secondary market buyers to provide x number of mortgages
for pooled portfolio investments. This is done by issuing securities backed by
the mortgages and other types of loans held by the issuing
institution.
 : Swindlers
have a field day with this last type of commitment. In ScamSpeak, a
Commitment Holder is one who holds commitments from both a financial institution
and secondary market purchasers.
The commitment from the financial institution, preferably a well-known European
bank, is to make blocks of securities or single large-denomination securities
available to the commitment holder to sell to his secondary market contracts.
The commitment from the secondary market purchasers is to buy the securities
provided by the financial institution.
In effect, the Commitment Holder is a securities broker. Is this a bad
thing? No, not really, and that's not where the problem exists.
The scam is that the target is not told about the loans that back the securities
issued by financial institutions.
He is told that the securities are issued based on large funds deposits held by
the banks for extremely wealthy people.
He is told that these very wealthy people make huge profits on the trades, and
that through special, secret dispensation the target can deposit money in the
bank and participate in the huge profits.
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