Arrears matter to brokers for a reason that is easy to miss: most commission agreements stop paying trail on a loan while it is in arrears beyond a set number of days, usually 30 or 60. The client is still with the lender, the loan is still on the book, but the trail line goes to zero. On the statement it usually appears as an ARREARS payment type or as a trail line that has simply disappeared.
That makes arrears the third way trail leaks, alongside discharges and paydowns, and the one most likely to be missed because nothing has actually closed. It is also an early warning: a client in arrears is a client under financial pressure, and a call from the broker can catch a hardship arrangement or a restructure before it becomes a default and a forced sale.
For valuation, arrears are a red flag. Buyers exclude arrears loans from annualised trail and may discount the multiple if the arrears rate is above the market's.