Loan Rejection and Reinstatement

Loan Rejection and Reinstatement

Learn how loan removal requests work and how issuers handle them

Overview

When pools are shared with market makers and investors, they can request removalof specific loans they believe shouldn't be in the pool. The issuer then decideswhether to accept or reject these removal requests. This process allowscollaborative pool refinement while keeping the issuer in control of pool composition.

How Loan Rejection Works

Market Maker / Investor Requests Removal

When a market maker or investor reviews a pool and believes a loan should beremoved, they can request removal by clicking the cross icon next to that loan inthe Loans tab of the pool details page.

      • The removal request is sent to the issuer
      • The market maker/investor sees the loan status change to Under Reconsider
      • The loan remains in pool calculations until the issuer makes a decision

                                                            Loan Rejection Request - From Market Maker

Issuer Reviews the Request

The issuer sees the loan with Reconsider status in the Loans tab. Two action iconsappear next to that loan


      • Tick icon : Accept the removal request (loan will be removed)

      • Cross icon : Reject the removal request (loan stays in pool)

Possible Outcomes

Removal Accepted (Tick Icon)

When the issuer clicks the tick icon , accepting the removal request:

What Happens:

      • The loan status changes to Removed

      • The loan is excluded from pool calculations

      • Pool metrics recalculate automatically (total balance decreases, loan count decreases)

      • The loan remains visible in the pool list for tracking purposes

      • Both issuer and market maker/investor see the loan as "Removed"

What This Means:

      • The loan no longer contributes to pool metrics

      • The pool composition has been adjusted based on feedback

      • The loan is still tracked but not counted in calculations

      • The loan can potentially be reinstated later if needed

Removal Rejected (Cross Icon)

When the issuer clicks the cross icon , rejecting the removal request:

What Happens:

      • The loan remains in the pool

      • The loan status returns to normal (Accepted/Mapped)

      • Pool calculations continue to include this loan

      • The market maker/investor is informed the request was rejected

What This Means:

      • The issuer has decided to keep the loan in the pool

      • Pool composition remains unchanged

      • The loan continues to contribute to pool metrics

Reinstatement

If a removed loan needs to be added back to the pool, the issuer can reinstate it.

What Happens When Reinstated:

      • The loan status changes from Removed to Reinstated

      • The loan is included in pool calculations again

      • Pool metrics recalculate automatically (total balance increases, loan count increases)

      • The loan fully participates in the pool

When to Reinstate :

      • Issues that caused removal have been resolved

      • Pool requirements have changed

      • The loan was removed in error

      • Circumstances have changed and the loan should be included

Next Steps for Users

For Market Makers / Investors (Requesting Removal)

1. Identify Loans for Removal

      • Review the loans in the pool's Loans tab

      • Identify loans you believe should not be in the pool

      • Consider your reasoning (data quality, criteria mismatch, risk concerns)

2. Submit Removal Request

      • Click the cross icon next to the loan you want removed

      • The request is sent to the issuer

      • The loan shows as "Under Reconsider" in your view      

3. Wait for Issuer Decision

      • The issuer reviews your request

      • You will see the outcome: either "Removed" (accepted) or the loan returns to normal status (rejected)

4. Continue Review

      • If accepted, pool metrics update to exclude the loan

      • If rejected, the loan remains in the pool

      • You can provide feedback through the chat box if you want to discuss further

For Issuers (Handling Removal Requests)

1. Review the Request

      • Go to the pool's Loans tab

      • Look for loans with "Reconsider" status

      • Understand why the removal was requested (check feedback/comments)

2. Make Your Decision

      • Click tick icon to accept: Loan is removed from calculations

      • Click cross icon to reject: Loan stays in pool

3. After Accepting Removal

      • Verify pool metrics updated correctly

      • Consider if the loan should be fixed and reinstated later

      • Track removed loans for record-keeping

4. After Rejecting Removal

      • Consider providing feedback explaining your decision

      • The loan continues to be part of the pool

      • Address any underlying concerns through the feedback mechanism

5. Reinstatement (When Needed)

      • If issues are resolved, you can reinstate removed loans

      • Pool metrics will update to include the reinstated loan

      • The loan returns to full participation in the pool

Important Notes

Issuer Has Final Say - The issuer decides whether to accept or reject removalrequests. Market makers and investors can request, but the issuer controls poolcomposition.

Automatic Metric Updates - Pool metrics recalculate automatically when loans areremoved or reinstated. You don't need to manually update anything.

Loans Remain Visible - Removed loans stay visible in the pool list with "Removed"status. This maintains a complete record of what happened.

Feedback for Communication - Use the chat box icon in the Loans tab tocommunicate about specific loans. This provides context for removal requests and decisions.

Reinstatement Is Possible - Removal is not permanent. Loans can be reinstatedwhen appropriate.

All Actions Are Tracked - Removal requests, decisions, and reinstatements arerecorded for audit purposes.


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