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Is the first loan classified as a nonperforming loan

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Reference no: EM13885784

In some instances, when a depository institution borrower cannot make the promised principal and interest payment on a loan, the bank will extend another loan for the customer to make the payment.

a. Is the first loan classified as a nonperforming loan?

b. What is the rationale for this type of lending?

c. What are the risks in this type of lending?

Reference no: EM13885784

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