Distracted By Technology and Software Management?

What are you good at? What is your business good at? Too often in business, as in life, spending our valuable time and resources in areas where we have a relatively lower competence and less focus can be frustrating. Doing so also means we are taking our eye off the ball that matters most, growing the business. This applies to the finance industry. Playing to your strengths, whether they are in loan servicing, loan purchasing, loan origination or a combination thereof, can be a game changer. The fewer dis…

Break Out by Breaking the Mold

As mentioned in the Entrepreneur Magazine article, “10 Ways to Grow Your Business,” taking your business to the next level may require you to diversify and target other markets. The Nortridge Loan System (NLS) is ideal for financial services companies looking to elevate to that next level. In fact, we have had many customers add additional loan products to their portfolio.  Recently Advanced Financial Company, a lender for the timeshare industry, decided they were going to expa…

Don't Get Hung Up on Finance Charge

Most loan docs for consumer installment type loans have a field called ‘Finance Charge’ which is supposed to represent the amount of interest that you would pay if you made each and every payment on this loan on its due date; never early and never late.  If you compare this to the total amount of interest payments in the NLS amortization schedule, or to the Finance Charge field in our origination module, you may find a slight discrepancy.  This is because the common loan origination …

Lifting Up the Hood on Interest Year, The Math of Daily Accruals

Understanding how interest is accrued on a daily basis will help you ensure you are setting up your loan properly in the Nortridge Loan System. I'm going to give you some math on this one, but nothing harder than high school algebra, so don't get too nervous.  It just so happens that this stuff is best explained by example. Let's say we have a loan of $1000 with an interest rate of 12%.  Now, we can all agree that the annualized interest charge on this loan (assuming that the principal is …

Payments, Reductions, and Write-offs (Oh My)

When is a payment not a payment?  When is a transaction that is not called a payment, actually a payment?  These are questions that come up due to confusion that some loan servicing system users have with the naming conventions used in some of the standard transaction codes. Let’s start with some definitions (in context with the loan servicing world). Receivable: A transaction code which generates an item on the payments due tab.  It has an amount and a due date, and will drive the aging and past due stat…

Matching Conversion Loan Balances

Back when I spent most of my time doing trainings and implementations for new customers, I had an interesting conundrum come up: A lender using an old servicing system was in the process of converting loans into their shiny new Nortridge Loan System. One of the requirements was to match the amortization schedules from the old system. No problem. An analysis of the numbers on that amortization schedule, and a small bit of trial and error, and we were able to generate an amortization schedule identical to th…

Nortridge Software Powers Two of Inc. Magazine’s Top Job Creators!

A pair of Nortridge customers are prominently listed in Inc.’s “Hire Power Awards” featured in the magazine’s January 2013 edition.  Pacific Dental Care, ranked fourth while Heartland Dental Care was listed sixth in the magazine’s inaugural list of businesses that are adding jobs and rebuilding the economy. The Inc. Hire Power Award “celebrates…the entrepreneurs who are empowering their employees and rebuilding the economy.” Irvine, CA-based Pacific De…

Calculating the Rule of 78s: Add-Ons and Simple

The Rule of 78s is a method for amortizing an amount of interest which has been pre-computed over the life of the loan and dividing that interest over the payments of that loan.  A Rule of 78s loan employs a method of allocating the interest charge on a loan across its payment periods. As we all know, when paying off a loan, the repayments consist of two parts: the principal and the interest charge. The number 78 is derived from the 12 months in a one-year period. The sum of those parts (1 + 2 + 3 + 4…

5 Tips to Achieve More Effective Collections

Collecting baseball cards: Easy.   Collecting on delinquent loans or written-off debt: Difficult. If only it were easy as collecting baseball cards. Although the process of collecting on consumer or commercial debts may never be an easy one, there are certain things that loan servicers can do to make it smoother for everyone involved.  So says Tim Bauer, President and CEO of St. Louis-based National Asset Recovery Services, Inc., a diversified Accounts Receivable Management (ARM) firm. Accordin…

5 Things Distressed Debt Servicers Should Expect from Their Loan Servicing System

The good news: You just won that large pool of distressed debt loans. The bad news: You’re not in a position to maximize the potential value and profitabilityof this newly-acquired portfolio because you (or your loan servicing partner) may not be adequately staffed nor possess the internal controls, audits and system capabilities.  Winning a new loan pool, whether it be performing or non-performing debt (or a combination of both), can mean having to service and account for hundreds of new loans…