A Buyback Obligation is an obligation of the Loan Originator towards the investor for a particular loan. If the loan is more than 60 days late, the Loan Originator is obligated to buy back the investment at nominal value plus accrued interest. Usually, this means investors will be able to recover their investment in case of a borrower default. While there is no action needed from investors, the Buyback Obligation process may take a while, depending on the Loan Originator. If the Loan Originator defaults on its contractual Buyback Obligation obligation, the commitment might not be executed in a way that investors receive the money.
The Buyback Obligation is given at the loan level and is marked with an icon.