Late Loan Events

Published: March 22, 2016

Learn how to create late loan events.

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In this video I’m going to demonstrate to you how you can create a Late Loan Event, how you can attach that Late Loan Event code to a loan, and how to generate a late fee on the loan with that Late Loan Event code.

So to get started we’re going to go into the Setup area. We’ll expand Loan Setup and navigate to Late Loan Events. Here we can click on the Add button to add a Late Loan Event code. So let’s call this, Northridge (Late fee). I’ll copy and paste that into the description. Now that we’ve named our late code or Late Loan Event code, we’re going to add different events to that code which says on “x” number of days past due, we want NLS to do this action. So let’s set the number of days when the loan becomes 1 day past due we are going to print a notice. Okay, if we’re going to have a late notice and have that notice go out to the borrower whenever they become past due on a loan, we’re going to have to configure the late notice as well. So I’ll go into the Statements area and add a late notice. Okay now that I’ve added a late notice it’s going to use this late notice right here and it’s going to be saved in the Default Comment Category. Now I can go back to Late Loan Events and we’re going to assess a late notice so we’ll check that box and we can choose when this event executes. So when there are no other payments in arrears, when no other older arrearages exist, or other arrearages exists. I’m going to leave this as Always. Next we’ll go to the Threshold and we can set a threshold as to when this late loan event will execute or when will it not execute. So if I don’t want this late loan event to execute, as long as the borrower pays within a dollar of what they should of paid or within 1% of that total payment that was due. So when I put that in here we can see that if the remaining payment amount is > $1.00 and remaining payment amount > 0% total payment due, then the late loan executes. Now it says 0% here because I haven’t click out of the field and when you do so it updates that. So we can do both $ and %, either $ or %, or just one of those two.

Next we’ll go to the Fee Assessment tab. If we’re going to access a fee then we needed to check the access fee box in this area. So we’re not going to set up the late fee at this time, we’re not going to charge a late fee at one day, but we’re going to send out a late notice. Okay, we have nothing to configure out in tasks and notes just has an area where you can add some internal loans regarding this late loan event code.

So after we have this all configured, we’ll click add again and we’ll add another late loan event. This one is going to happen after the loan is five days past due. I’m going to name this 5% late fee. So now on day five, we’re going to access a fee. I’m going to setup the threshold to $1 and 5% just like what we had before and this time when we go to the Fee Assessment tab, the fields are no longer shaded out. So we can choose the percentage fee type being the percentage of total payment, percentage of unpaid payment, the principal or loan amount. So I’ll do percentage of the total payment and that percentage is going to be 5%. I can set a fixed amount if I so choose. Okay, so we can set a max amount on what the fee can be or a minimum amount. So right now we have this set to $1 million. A late fee cannot exceed over $1 million no matter what the total payment amount is or the loan amount is. The late fee that’s going to be used is the transcode 150 for Late Fee. You can associate another late fee code if you have a custom one built. We can make the late fee intrical to the payment. So in the Payments Due screen you’re going to see a billing show and below the billing will be the breakdown of what’s include in that billing. Whether there is a principal billing or an interest billing or any fees. So if you want the fee to be included underneath the billing that generated the late fee to begin with then you’re going to want to have the late fee intrical to the payment. If you leave this box uncheck, the late fee will show up as a separate item in the Payments Due screen that is not linked to the billing that generated the late fee. If we select one late fee entry per payment, what that will do is combine all the late fees that has been charged onto a billing and combine them into one. So imagine you have a late fee of $1 and that late fee occurred 10 times on a loan. You can have 10 $1 late fees which is what you’d have if this box was unchecked or you can have one $10 if the box was checked. So again notice Task and Notes we have nothing to do here so we’ll click Okay and now we’ll restart the software.

Now queuing my loans. In this loan here has only been accrued only through October of last year but it doesn’t have a principal balance. Let’s see if we can find a loan that does have a principal balance. Yes, we do here, so I’ll use Loan 456 for John Doe and I’ll go into View, Loan Setup, and now I’m going to go into the Statements tab so that I can attached that late fee code to this loan and here is our late fee code. When I click ok and accrue this loan, it will become past due. Now the loan has been accrued through today’s date and when we go to the Payments due screen, we can see that there had been two billing that generated on this loan. One from November and one from December and each one of these billings is paste due by a significant number of days and so the late fee has generated. And again another late fee has generated up here.

Okay, so in summary, I showed you how you can set up a Late Loan Event code, in the set up under Late Loan events. I set up a code that would at first print a notice that would go out to the borrower and then after five days access a fee. Once that late loan event code had been defined we then attached that late loan event code to a loan in the Loan Setup by selecting that Late Loan Event code in the Late Fee Code box. Last, I accrued the loan so that billings would generate that would then become past due and we can see the late fee execute. We can also go into the Reports area, go to Statements, and we can see that we have late notices that went out for each of those billings. So if I process those late notices, I can go to Restatements I should be able to see those late notices here. And there we go. This is the notice that would go out to that borrower letting them know that they have a payment of $91.41 that’s due. Okay, well thank you.