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Posted by Bill Brown on September 20, 2007, 4:48 pm
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> My father (now deceased) made private loans to individuals.
> For one loan, which he sold to a third-party, his records
> show the following amounts:
>
> $71,000 loan balance
> 600 unpaid late fees
> 7,000 unpaid interest
> 13,000 cure default
> 800 processing fee
>
> What is the amount identified as "cure default"?
>
> I assume that is the amount that he got from the third-party
> for the loan.
>
> Furthermore, I assume that the "processing fee" was charged
> by the third-party.
>
> Is it likely that the "cure default" amount is net the
> processing fee; or would the "cure default" normally amount
> include the processing fee?
>
> Since "processing fee" is listed separately, I assume the
> "cure default" amount is net that fee.
>
> But I don't know what is customary for recordkeeping.
>
> Note: My father was an attorney and a CPA. He probably
> would have followed generally accepted accounting practices
> in his recordkeeping.
I googled "cure default." From the hits, I deduce the "cure
default" amount is the amount needed to make an installment
loan current -- that is the amount of payments in arrears on
the loan. I didn't read far enough to figure out whether
other fees (such as processing) are included in the "cure
default" amount but I would consider it misleading if they
were not.
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