1. Loan Project ► Types of loans ► Personal loan: Money received by the borrower is paid back in monthly installments, including monthly interest on outstanding principal ► Commercial loan/business loan: ► Keeps the loan for a fixed period of time. ► Returns the principal as a lump sum payment. ► Makes regular payment of interest on the loan

2. Terminology used ► Full value of the loan: Total amount of money borrowed ► Foreclosure: Bank takes over the ownership of a particular asset when the borrower fail to make the payments, and sells the asset in the market ► Loan Work out: ► Set up a new schedule of interest payment ► Temporarily deferring interest payment ► Foreclosure Value: Money recovered when bank foreclosed on the loan ► Default Value: The amount recovered if the work out fails

3. Team Project ► You are loan officers working for the Acadia Bank Loan Information ► You will be given full value of the loan ► Foreclosure Value of the loan ► Default value of the loan

4. Borrower information ► Years of Experience ► Education level ► Economy at the time of workout

5. ? Should Acadia Bank enter into a work out agreement with the borrower or should it foreclose on the loan?

6. Good Luck!