littleoldlady
Member of DD Central
Running down all platforms due to age
Posts: 3,017
Likes: 1,835
|
Post by littleoldlady on Apr 4, 2024 19:50:53 GMT
Do primary lenders get their interest before mezzanine lenders get their capital?
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,881 
Likes: 11,104
|
Post by ilmoro on Apr 4, 2024 21:22:27 GMT
Do primary lenders get their interest before mezzanine lenders get their capital? Usually yes, but will depend on Deed of Priority which can cap the amount due to first charge lender (or intercreditor deed)
|
|
littleoldlady
Member of DD Central
Running down all platforms due to age
Posts: 3,017
Likes: 1,835
|
Post by littleoldlady on Apr 5, 2024 15:06:46 GMT
Do primary lenders get their interest before mezzanine lenders get their capital? Usually yes, but will depend on Deed of Priority which can cap the amount due to first charge lender (or intercreditor deed) Thanks. I guess that " The Senior Loan ranks above the Mezzanine Loan in all respects." is bad news. The loan in question is years overdue and the senior lender will have accrued a huge amount of interest, probably taking all the proceeds from the sale.
|
|
|
|
Post by overthehill on Apr 5, 2024 15:14:55 GMT
Usually yes, but will depend on Deed of Priority which can cap the amount due to first charge lender (or intercreditor deed) Thanks. I guess that " The Senior Loan ranks above the Mezzanine Loan in all respects." is bad news. The loan in question is years overdue and the senior lender will have accrued a huge amount of interest, probably taking all the proceeds from the sale.
Precisely. Something P2P platforms like to keep quiet about for 2nd and 3rd charge loans. No disclaimer on the loan agreement everybody reads but you'll find it buried in the T&Cs.
|
|
|
|
Post by Ace on Apr 5, 2024 17:46:58 GMT
Some platforms do have terms to prevent the interest earned on long overdue loans by first priority tranches from wiping out second priority tranches. For instance HNW Lending do this. When a loan looks like it won't be able to fully repay they stop paying monthly interest. When all recoveries are complete the cash is used to pay all capital in priority order, then, if there is any cash left, to pay interest in priority order.
|
|
