In this case protection is a buyback obligation which is provided by a loan originator. A buyback obligation is a credit enhancement given by the lending company or other entity of a lending company group to the investor for a particular loan. If the loan is more than 60 days late, the lending company is obligated to buy back the investment at nominal value plus accrued interest. Usually, this means investors will be able to recover their investment in case of a borrower default.
What protection do I have in case of non-repayment?
Updated over 12 months ago