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ARM Investor Fields tab

Navigation:  Loans > Loan Screens > Investor Reporting Screen Group > Sell Loan To Investor Screen >

ARM Investor Fields tab

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When selling an ARM loan, you can use this tab to enter and transfer additional fields to the Loans > Investor Reporting > Loan Investor Fields screen that are part of the individualized loan record.

 

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WARNING: If the loan being sold is an ARM (payment method 7 or payment method 6 with the User ARM fields marked) then complete this tab before completing the Setup tab. If this tab is accessed for any type of loan besides ARM, the system will display the message “MUST BE AN ARM LOAN."

 

Loans > Investor Reporting > Sell Loan To Investor Screen, ARM Investor Fields tab

Loans > Investor Reporting > Sell Loan To Investor Screen, ARM Investor Fields tab

 

The Investor Name tied to the account (as set up on the Loans > Investor Reporting > Investor Master screen) as well as the investor master and Group Number (as pulled from the Loans > Investor Reporting > Investor Group screen) are displayed at the top-left of this screen.

 

Transferring Information

Every field on this tab appears twice. In the ARM column, the system displays ARM fields as they appear on the Loans > Account Information > ARM Information screen. When <Transfer and Save> is pressed, the system will transfer all field information shown in the ARM column to the corresponding fields in the Investor column. That information will then be transferred by the system to the Loan Investor Fields screen.

 

Changing Information

Information in the ARM column fields can be changed on this tab as needed. This will not change the information found on the ARM Information screen. However, this feature allows you to pass different data to the Loan Investor Fields screen rapidly.

 

Service Fee Adjustments

Some fields that have the potential for being adjusted by the service fee rate on the loan are Interest Rate Offset Margin, Next Rate, Rate at Start of Period, Lifetime Maximum Rate, and Lifetime Minimum Rate (see table below). For example: If the Interest Rate Offset Margin is 3.50% and the service fee rate on the loan is .250%, then you would adjust this field to 3.25%. If any of the five fields mentioned above are blank in the ARM column, they should not be adjusted by the service fee rate on the loan.

 

The fields on this tab are as follows:

 

Field

Description

Interest Rate Pointer

 

Mnemonic: LNAMPT

This field displays the index rate pointer used on the account as indicated on the Loans > Account Information > ARM Information screen. Index rate pointers and descriptions are institution-defined and created/edited on the Loans > System Setup Screens > Interest Rate Table screen.

Rate Change Frequency

 

Mnemonic: LNAMFQ

This field displays the rate change frequency for the loan as indicated on the Loans > Account Information > ARM Information screen.

Interest Rate Offset Margin

 

Mnemonic: LNAMOF

This field is used in conjunction with the rate pointer (see above) and the rate tables system. It displays the interest rate offset margin as indicated on the Loans > Account Information > ARM Information screen. This value can be either positive or negative to allow points above or below the rate indicated by the rate index.

Next Rate Change Date

 

Mnemonic: LNAMDT

This field displays the next rate change date on the loan as indicated on the Loans > Account Information > ARM Information screen.

Days Before Rate Change

 

Mnemonic: LNAMAD

This field displays the number of days before the next rate change as indicated on the Loans > Account Information > ARM Information screen.

Next Rate

 

Mnemonic: LNAMNA

This field displays the next rate to be used for the loan as indicated on the Loans > Account Information > ARM Information screen. This rate will become effective with the payment due on the Next Rate Change Date (see above). The system can only accept prepayments up to the installment associated with the Next Rate Change Date.

 

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WARNING: If a non-zero value is entered in this field, instead of automatically calculating the next rate as normal, the system will skip the next rate calculation. File maintenance of this field should be done with caution.

Round Rate To

 

Mnemonic: LNRRND, LNRRTQ, LNNRRS, LNRR10

This field displays how the interest rate will be rounded as indicated on the Loans > Account Information > ARM Information screen. Possible entries are eighths (1/8), quarters (1/4), sixteenths (1/16), or tenths (1/10).

Use Periodic Rate Cap

 

Mnemonic: LNRCAP

Use this field to indicate whether the account uses a periodic rate cap. See below for more information.

 

A periodic rate cap sets a limit on the interest accrual rate for the loan. Further information about periodic rate caps can be viewed in help for the Loans > Account Information > ARM Information screen. The interest accrual rate is not allowed to adjust above or below the indicated cap. For example, a loan that guarantees the rate will increase no more than 2% per year has a periodic rate cap.

 

This field informs the system to edit the appropriate fields that it controls and notify users of other fields that need data entry for the periodic rate cap to work properly.

 

The fields on this tab (seen below) that are needed in order for a rate cap to function properly are:

 

Rate at Start of Period

Start of Accrual Period

Length of Rate Cap Period

Maximum Points Per Period Up

Maximum Points Per Period Down

Rate at Start of Period

 

Mnemonic: LNAMSY

If the Use Periodic Rate Cap field above is marked, this field displays the rate as it existed at the start of the rate cap period. Maximum and minimum points upward or downward will key off this rate for the rate cap period. This information is pulled from the Loans > Account Information > ARM Information screen.

Start of Accrual Period

 

Mnemonic: LNAMPD

If the Use Periodic Rate Cap field above is marked, this field displays the starting date of the current rate cap period on the loan. This field is automatically updated based on the Length of Rate Cap Period field below. See below for more information.

 

This date is essential in capping rates for a period. If a wrong date is entered here, rate caps will not function. The date must be exactly one length of rate cap period behind the rate roll date found in the Next Rate Change Date field above. The rate cap period is determined to be from the Start of Accrual Period date to be one length of rate cap period in the future plus one day. If a wrong start date is entered, the system may determine that the period has passed, and rate caps no longer apply.

 

For example, if rates roll on a yearly basis, and the Next Rate Change Date is 06-01-09, then the Start of Accrual Period date must be 06-01-08. This may not apply if the Delay Rate Cap field is marked.

 

For new loans, this field must be manually entered. The date should be the same date as the Date Last Accrued indicated on the Loans > Account Information > Account Detail screen. After the first setup, the system will roll automatically.

Length of Rate Cap Period

 

Mnemonic: LNAMLP

If the Use Periodic Rate Cap field above is marked, this field indicates the length of the rate cap period in months. This number is typically the same as the rate change frequency, but not always. This information is pulled from the Loans > Account Information > ARM Information screen. See below for an example.

 

Example: If you were setting up a new loan, and you wanted the loan rate to begin at 12.375% on May 1, 2017, and to move no more than two points up or two points down within a year, you would enter the following in the other fields on this tab:

 

Use Periodic Rate Cap = checkmarked

Maximum Points Per Period Up = 2.00000

Maximum Points Per Period Down = 2.00000

Rate at Start of Period = 12.37500

Start of Accrual Period = 050199

Length of Rate Cap Period = 12

 

This would establish the loan as having a periodic rate cap (Use Periodic Rate Cap field above is marked) and would set the limit on the maximum number of points that the rate would be allowed to move during the given period: Maximum Points Per Period Up = 2.00000, Maximum Points Per Period Down = 2.00000. The Length of Rate Cap Period establishes the rate cap period as one year, since that field contains 12 as the number of months in the period. Had this been on a 6-month basis instead of a yearly basis, the Length of Rate Cap Period would have been 6. Rate at Start of Period is the rate from which the maximum points upward or downward is compared to, and Start of Accrual Period is essential for the functioning of this option. As the rate rolls with the next period, these two fields will be updated by the system.

Maximum Points Per Period Up/Down

 

Mnemonic: LNAMRU, LNAMRD

If the Use Periodic Rate Cap field above is marked, these fields indicate the maximum and minimum points per period that the loan accrual rate can be increased by. This information is pulled from the Loans > Account Information > ARM Information screen.

Lifetime Maximum/Minimum Rate

 

Mnemonic: LNAMHI, LNAMLO

These fields display the lifetime minimum and maximum rates that are allowed on the loan as indicated on the Loans > Account Information > ARM Information screen. These numbers should be entered as a rate, e.g., 17.00000.

 

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