If a borrower doesn’t make their payments there are several alternatives.

The first thing to do is to make every effort to ensure that the borrower does make their payments by hiring an experienced and reputable loan servicer. The loan servicer will manage the collection and remitting of payments, respond to borrower inquiries, provide loan accounting and reporting, counsel delinquent borrowers, supervise repossessions and liquidate collateral when necessary.

Loan Market Direct offers servicing for all loans through approved third party servicers. Cost of loan servicing is a flat fee per month based on the amount of the loan. You must evaluate the cost of servicing as it affects the net investment return. Members are not obligated to have their loans serviced by Loan Market Direct servicers.

For those borrowers who don’t make their payments, even after the best efforts of an experienced servicer, Loan Market Direct has a unique solution in the form of a loan “buy-back” option. This option is called a Sell Option Contract or SOC. The SOC can usually be purchased at the time you purchase a loan. In the event of default you can sell your loan to the holder of the option. For more information on a SOC please see our FAQS.