If the repayment of a particular loan is late for more than an agreed number of days (usualy it is 90 days), then the broker (loan originator) is obligated to buy back the loan and cover remaining principal as well as outstanding interest. In other words, if a loan is very late, the broker repurchases it from the investor parties, covering the remaining principal invested & outstanding interest.
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What is the Buyback Obligation?
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