Rookie question - loan mod
Just doing my research and wrapping my head around NPLs. I have a question about the timing of the modification:
Example: my borrower has 10k in arrears, and an interest rate of 12%
Let's say I call him up and we agree on him paying 5k in arrears, I forgive the other 5k and I lower his rate to 10%. Who goes first? Does he pay me the $5,000, and then I modify the loan after I receive payment? What protection does the borrower have that we made the deal and all they have to pay is 5k and I'll forgive the other 5? I guess I'm unsure how that process works.