Is a standard collections phase/process that is set up to happen at greater than 90DPD. Where all that is due on an account upon origination is due and demandable consistent with the terms and conditions of the signed contract (T&C sec. 5 Events of default).
In this stage
The bank may;
Decide the loan amount including all amortization amounts, fees, and interest accrued and unpaid to be immediately due and payable.
Decide to charge and collect all fees as well as recover attorney’s fees and litigation expense and other cost that it may incur.
Decide to take action to protect the rights of the bank to recover including assigning it to a 3rd pty for collections and/or do a debt sale arrangement for the identified accounts.
On the Collections perspective.
The account is due and demandable on its entirety.
The account will reflect the total yield on the account. (Minus what was paid during its pre-termination phase.)
All future interest to be earned and other applicable fee’s will be reflected as part of the debt and will appear in the collections system as the total amount due.
All Penalties incurred
All interest earned and unearned
Collections fees
Litigation fees if applicable.
Collections flag shall reflect that the account is terminated.
The account will be queue to be written off. (Actual write off to be done at 180DPD)
Demand letter with SOA (Statement of account) shall be issued to the account (DPD should be a trigger event)
Collections may at this event may include cost to collect and attorneys’s fees at part of the total amount due.
The System shall trigger termination based on DPD (DPD 91).
2. Accruals on the loan are stopped.
At 91+ DPD the system will stop charging of interest on the loan.
The loan is considered close but unsettled (Should be reflected in the System )
3. The account will be provision at 100%
4. The account is either assigned to Field, Legal or to the Agency.
*Collections flag will reflect account assignment and status
5. In terms of servicing;
The account is still collected like a normal account. Unless excluded for special handling.(Legal)
Past fee’s applicable (Late fee, Legal if assessed and not yet filed for litigation) can still be waived if it would entail recovery of the debt owed.
6. In Terms of the Bank account of the Customer.
The bank account of the customer would still be open. (For approval and Comment by Risk)
But it shall be in a post no debit status.
Only deposits shall be allowed and no withdraws