Question

Difference between performing assets vs non performing assets

Answer 1

After a certain number of days, the loan is classified as a nonperforming loan. After a certain amount of time, a bankwill try to recoup its money by foreclosing on the property that secures the loan. Once the bank legally owns the property, it is classified as real estate owned (REO) on the bank's balance sheet.
A nonperforming asset (NPA) refers to a classification for loans or advances that are in default or are in arrears on scheduled payments of principal orinterest. In most cases, debt is classified as nonperforming when loan payments have not been made for a period of 90 days

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