Financial rating, the probability of not being able to pay the downpayment on a selected date. Downpayment could be defined as an interest only (the main stress factor) and within 90 days overdue (as a main stress factor 2, than all debt has to be taken as a failed one).
Later it could be focused on a different factors. You may even mitigate the risk by taking deposit on an account in amount of 90 days downpayment. Or second debtor as a guarantor on the first debt. Or agreement with employer that a salary will go firstly on your account. You can also use other facility to decrease your facity risk - credit card to pay the interest client owes. Another mitigant is the acceptance of liquid downpayment, but not in cashm Such examples could be airline miles, electricity downpayment, accepting foreign currency, short term rent of the part of the property, additional work being done at home, phone bills...
Some of this solutions could not be useful in a real life, some could. Important is to keep the loan "alive" and push a solution. Many time "dead" loans are able to be colected one or two years after as the financial situation changed. It could be a secondary problem causing the loan downpayment not performing.
Why shall we focus on such a distress loans? this loans are usually niche on a market. Place where risk could be managed easily, as the assessment process was done properly, misfit could be 1 month or percentally small. Than the balance sheet, write off is better or smaller and income on such a loans is higher, as we can charge additional fees.
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