The five criteria servicers check before NPL haircut

The five criteria servicers check before NPL haircut

Bad-loan management companies are setting five strict criteria to agree to writing off parts of nonperforming loans they have undertaken to manage either for the funds that have acquired them or for the banks the NPLs still belong to.

The servicers’ criteria concern the debtors’ income, their assets (real estate property, bank deposits etc) as well as the balance of their dues in combination with the value of the property their loan is secured against.

Servicers also examine family income and property – i.e. whether a debtor’s spouse or in some cases their children have any assets in their name, and the income and property of their guarantors.

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