Treatment of Conversion of Loans Homework Help

Treatment of Conversion of Loans

In case of conversion by the borrowers of a loan from fixed rate or vice-versa, or to a lower fixed rate, the loan would continue to remain in the receivables pool. The profit loss on account of change in the interest rate would accrue to be come by the receivables pool and indirectly the Class PTC-holders. The conversion charge received from borrowers who have exercised the option would accrue to the Class B PTC-holders.

Repayment of Loan by the Borrower

On the borrower having completed repayment in all respects on the loan, the S&P Agent would intimate the trustee and return the documents relating to the mortgage debt to the borrowers.

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