Reperforming Loan - RPL

DEFINITION of 'Reperforming Loan - RPL'

A loan on which the borrower was behind on payments (delinquent) by at least 90 days but has resumed making payments. The payments that the borrower missed have not necessarily been paid, however.

Often, the borrower of a reperforming loan has filed for bankruptcy and has continued making payments as a result of the bankruptcy agreement. Borrowers whose loans are classified as reperforming will have fewer refinancing options because of their past delinquencies.

BREAKING DOWN 'Reperforming Loan - RPL'

For mortgage investors, reperforming loans are considered risky (much like subprime loans). They fall into a category known as "scratch-and-dent" loans. Rating agencies look at a borrower's repayment patterns and the lender's ability to manage the loan in determining investment risk for reperforming loans. That stands in contrast to a nonperforming loan, in which the borrower has not made payments for over 90 days and has not resumed repayment of the loan.

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