Refinance auction should be started only when maxLoanRatio is exceeded for a loan
Summary
A lender can start a Refinance auction for any loan even if the loan haven't exceeded the maxLoanRatio. This can cause potential loss for the borrowers.
Vulnerability Details
A borrower borrows 1000 USDC and provides 2x worth of token as collateral to avoid liquidation
The lender starts a Refinance auction for the loan
The refinance auction fails and the collateral is seized
So the borrower ends up losing the collateral which was worth 2x the received loan.
Impact
Financial loss for borrower
Tools Used
Manual review
Recommendations
A lender should only be able to start a Refinance auction if a loan has exceeded the debt/collateral ratio
Prize pool breakdown
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