Consumer Loan Collections (Resolving Delinquent Loans) Flashcards
What should staff refer to when a borrower is unable or unwilling to pay?
The institution’s collection policy for loss mitigation options.
What is forbearance?
A short-term relief allowing borrower to pause or reduce payments.
What does restructuring a loan typically involve?
Adjusting loan terms to make payments more manageable.
What is wage garnishment?
A court order for repayment by a third party, like an employer.
What is repossession in loan collections?
Acquiring personal property securing a delinquent loan.
What is foreclosure in loan collections?
Legal process extinguishing borrower’s rights to property.
What is the equitable right of redemption?
Borrower’s right to pay debts and reclaim property after repossession.
What happens if a borrower doesn’t pay during the redemption period?
The lender has the right to sell the collateral.
What is the statutory right of redemption?
Time extended after foreclosure sale for borrower to redeem property.
What is loan charge-off?
An accounting procedure removing uncollectible loan from assets.
What is collateral?
Assets used to secure a loan, like a home.
What does the Consumer Credit Protection Act (CCPA) regulate?
Limits wage garnishment amounts and procedures.
What is the equitable right of redemption?
Time allowed for borrower to pay debt and reclaim property.
What is restructuring?
Long-term adjustment to loan terms to aid repayment.
What is statutory right of redemption?
Redemption period after foreclosure before title deed transfer.
