During the facility lifecycle loan repayments will typically be generated from the borrower achieving unit sales (full or individual) or successfully completing a refinance facility.
In an enforced or distressed recovery the repayment will most likely be generated from CrowdProperty’s appointed agent, receiver or administrator successfully selling the asset having enforced our first charge security rights.
Upon crystallisation of the repayment amount, deduction will be made for all outstanding fees owed on the facility which will duly be distributed to the relevant parties. This may include enforcement fees and disbursements such as lawyers, agents, receivers or administrators, as well as CrowdProperty’s management fees.
Subsequent distribution of the net repayment amount will be processed according to whether the loan has been determined to be ‘performing’ or ‘non-performing’.
‘Performing’ loans are defined as those with the reasonable expectation of full recovery of all outstanding capital and interest. ‘Non-performing’ loans are defined as those where less than the full amount of capital and interest outstanding is expected to be received.
Performing loan distribution
If Credit have assessed the loan as ‘performing’ each repayment is considered to relate to outstanding borrower interest first, with any excess over the total interest due being processed as a capital distribution. Borrower interest is distributed as investor interest and CrowdProperty margin.
Borrower interest outstanding is processed as contractual period interest first, followed by any protection period interest.
Non-performing loan distribution
If Credit have assessed the loan as ‘non-performing’ each repayment is considered to relate to outstanding capital first, with any excess over the total capital recovered being processed as an interest distribution.
In situations where total borrower interest outstanding cannot be fully recovered, CrowdProperty margin is processed in the same proportion as any investor interest distribution.