As part of the process of making our Loan Exchange as free a market as possible, we continue to allow loan parts to be offered on the Loan Exchange even if a repayment is overdue. We believe that lenders may always wish to realise loans and there could well be other investors ready to take some additional risk on buying these loan parts at a better price. The important thing here is that such loan parts offered for sale carry a clear disclosure of the risk and additional risk warnings, prior to purchase.
Where the reason for an overdue payment is clearly down to a failure by the borrower, we classify these loans as “non-performing” on your portfolio. Where the reason for the non-payment is sufficiently serious that we consider the borrower either cannot or will not continue making payments the loan is moved to the “Recovery” section and we suspend trading in that loan on the Loan Exchange.