Posted on: 08th Oct, 2008 09:53 am
when servicing loan we come across that at times the loans are being submitted for repurchase why do that take place and the difference between repurchase and charge off how does the lender benefit if the loan is charged off?
difficult to determine quite what information you are seeking, but here's a try:
a repurchase will typically mean that the original lender has been required by the investor to buy the loan back, due to some sort of discrepancy. this could mean that the investor found out things it didn't like about the credit, income, employment, appraisal, assets, etc. generally, it might only affect you if the servicing agent is changed.
as for charge off, that is essentially a bookkeeping entry on the part of the lender; it's used to take an "asset" off the books once it stops earning money for the lender. it has no effect on how much someone owes.
a repurchase will typically mean that the original lender has been required by the investor to buy the loan back, due to some sort of discrepancy. this could mean that the investor found out things it didn't like about the credit, income, employment, appraisal, assets, etc. generally, it might only affect you if the servicing agent is changed.
as for charge off, that is essentially a bookkeeping entry on the part of the lender; it's used to take an "asset" off the books once it stops earning money for the lender. it has no effect on how much someone owes.