A CTP violation is triggered when your loan's collateral-to-principal ratio declines below the required level. Review your loan agreement and loan account page for exact thresholds.
If the collateral-to-principal ratio on your loan drops below the required threshold per your loan agreement, triggering a CTP violation, you will receive an email notifying you to bring your loan's collateral-to-principal ratio back into compliance with the covenants in your loan documents. Your loan account page shows a summary of required ratio(s).
If the CTP violation is not cleared in the time allotted per the loan agreement, we will first provide a notice that we have foreclosed on the collateral backing your loan, and later we will liquidate sufficient collateral to repay the unpaid loan balance, including fees, and close the loan. Such a liquidation may occur immediately or on a delay after we have provided you with the foreclosure notice, and once the foreclosure notice is sent, it cannot be reversed. Any remaining collateral will be returned to you.
For loan contracts issued after February 19, 2025:
150% CTP ratio—CTP violation
An automated CTP violation will occur if your loan's CTP ratio reaches below 150%. When the CTP violation is triggered, you will receive an email notifying you to bring your loan's collateral-to-principal ratio back into compliance with the covenants in your loan documents. You will have 24 hours to clear the CTP violation.
120% CTP ratio—CTP immediate failure
At a CTP ratio of 120%, a liquidation of loan collateral will be initiated immediately to pay the outstanding loan balance and close the loan; any remaining collateral will be returned to you.
For loan contracts issued on or before February 19, 2025:
150% CTP ratio—CTP violation
An automated CTP violation will occur if your loan's CTP ratio reaches below 150%. When the CTP violation is triggered, you will receive an email notifying you to bring your loan's collateral-to-principal ratio back into compliance with the covenants in your loan documents. You will have 48 hours to clear the CTP violation.
135% CTP ratio—accelerated CTP violation
An automated accelerated CTP violation will occur if your CTP ratio reaches below 135%. When the accelerated CTP violation is initiated, you will receive an email notifying you to bring your loan's collateral-to-principal ratio back into compliance with the covenants in your loan documents. You will have 4 hours to clear the accelerated CTP violation.
110% CTP ratio—CTP immediate failure
At a CTP ratio of 110%, a liquidation of loan collateral will be initiated immediately to pay the outstanding loan balance and close the loan; any remaining collateral will be returned to you.