Delinquency based extra income

[yellowbean]

There is a common practice in lending that, if an asset has been in delinquency for a period of time, the total amount due will be increase by an amount ,which compensate the delinquency behavior of the borrower

it could be a fixed amount fee, or balance based/ time-based fee charge.

• Fixed Amount -> snapshot of reference balance * %
• Time Based -> a period of weighted average balance * %

The extra income will flow into account for distribution waterfall

Asset Class Coverage

• Mortgage
• Loan
• Installment

PreRequisite

• Model delinquency in Mortgage Loan Installment

[yellowbean]

It should model as expense