Loan Status
Introduction
Loans, owner financing contracts, go through a process on creation and throughout their lifecycle. This process is represented by the status of the loan. The status of a loan is a way to understand where the loan is in its lifecycle and what actions can be taken on the loan.
Loan Statuses (or states)
- Draft: The loan is in the process of being created and isn't yet active. As of v0.38.0, this is the initial status of a loan on creation. After creation, the loan be moved to a different status in the Action Center. When this status is set, the following are true:
- The loan isn't visible to the buyer
- The buyer can't make payments on the loan
- The loan isn't included in any reports
- The loan is counted towards the active loan count
- No late fees are calculated
- No messages or reminders are sent to the buyer
- Pending: The loan is waiting on the buyer to take some action. This could be the buyer signing the loan documents, make the down payment, or any other action that's required by the buyer.
- Current: The loan is current and the buyer is making payments on the loan. This is the status that the loan will be in for the majority of its lifecycle. This status used to be called Active.
- Grace Period: The loan is in its grace period. This is a period of time after the due date of a payment where the buyer can still make the payment without being considered late. The loan automatically moves to this status after the due date of a payment and no payment has been made.
- Late: The loan is late. This is a status that the loan will move to if a payment isn't made by the end of the grace period.
- In Default: The loan hasn't been paid after the configured amount of time for a loan to be considered in default. At this status, Lendiom will start the process of repossessing the property, if enabled. This includes sending the buyer a notice of default, via text (if the communication portal is enabled) and mail.
- Defaulted: The loan hasn't had a payment made on it after the notice was sent and the configured number of days after the default notice was sent has passed. At this status, the loan is considered defaulted and no more payments can be made on the loan unless the status is manually changed back to In Default.
- Repossessed: The property has been repossessed and the loan is no longer active. This status is set manually by the owner (or one of their employees). Upon changing the status to Repossessed, the inventory and/or tract associated with the loan will be released and available for sale.
- Pending Payoff: The buyer has initiated the process of paying off the loan. This status can be triggered when the buyer makes their final payment on the loan and the payment is still pending. This status can also be triggered manually by the owner (or one of their employees). When in this status, no further payments can be made to the principal balance of the loan.
- Paid Off: The loan has been paid off and is no longer active. This status is automatically set if the balance of the loan is zero and the transaction that paid it off is successful. This status can also be set manually by the owner (or one of their employees) when recording a payoff that wasn't done through Lendiom and with a payoff discount.
- Inactive: The loan is no longer active and no further payments can be made on the loan. This is a legacy status, and as of v0.38.0, this status is no longer used. The status Paid Off or Repossessed should be used instead.
- Canceled: The loan was called off rather than paid off or repossessed, typically because it never really got going. Canceled loans are excluded from analytics and from the yearly installment income report, and late fees can't be waived on them.
- Refinanced: The loan was replaced by a new one through a refinance. The original keeps this status permanently as a read-only record: no further transactions, no late fee waivers, and no recast. It still appears in the buyer's Lendiom Pay account so they can see their history, but it's left out of their balance totals.
Lifecycle of a Status
Most loans move through the statuses in this order:
- Draft while you're still setting it up. A loan can be moved back to Draft while nothing has been recorded on it.
- Pending if the buyer still owes an action, such as signing documents or paying the down payment.
- Current once the loan is live and payments are being made. This is where a loan spends most of its life.
- Grace Period automatically, once a due date passes without payment.
- Late automatically, once the grace period ends.
- In Default after the number of days you configured, which starts the repossession process if you've it enabled.
- Defaulted after the configured number of days following the default notice.
A payment at any point in steps 4 through 7 returns the loan to Current. From Defaulted you can either move the status manually back to In Default, or on to Repossessed.
Loans that end well go Pending Payoff and then Paid Off. Loans that end another way land on Repossessed, Canceled, or Refinanced.
A Canceled or Inactive loan can come back to Draft on its own: open the loan, choose Actions, then Status, then Draft. Lendiom checks the loan first and the dialog tells you whether it can go back, what it will take back, and if it can't, why. The return is allowed only while nothing has been recorded on the loan, and the loan takes back the tract or home it released when it was canceled, so it's refused if that property has since been sold or financed to someone else. A canceled or inactive loan doesn't allow its transactions to be reversed, so a loan with payments recorded on it stays as it's; contact support if it needs to be undone. Once it's a draft again it can be edited or deleted like any other draft. Repossessed, Paid Off and Refinanced loans carry payment history and can't be moved back this way.
Which Statuses Are Considered "Active"?
At the end of 2022, Lendiom changed the pricing model to include 100 active loans in the base price. After the 100 active loans, each additional 100 active loans will be an additional $50 per month. The following statuses are considered "active":
- Pending
- Current
- Grace Period
- Late
- In Default
- Defaulted
- Pending Payoff