Navigation:  Loan Screens > Account Information Screen Group > ARM Information Screen > Rate Caps & Negative Amortization tab > Negative Amortization field group > Defer Interest At

Entry: User, drop-down list

F/M: Yes

Mnemonic: LNDFIM

Screen: Loans > Account Information > ARM Information > Rate Caps & Negative Amortization tab

 

This field allows you to select when to defer interest. Deferring interest means that if a P/I does not cover all of the accrued interest owing with the payment, the remaining unpaid interest is added to the loan principal balance and to the Deferred Interest field (on the Loans > Payoff screen).

 

The Deferred Interest field shows how much of the principal balance is deferred interest. For the options that never defer interest or that defer only at rate rolls, the unpaid interest remains in the Accrued Interest field on the Loans > Account Information > Account Detail screen until it is paid or deferred.

 

This field accepts four values, with R-Rate Roll as the default value. To change the default value, select one of the other values from the drop-down list.

 

"Payment" will have the interest defer immediately with each payment. That is, any unpaid interest will be added immediately to the loan principal and deferred interest fields when the payment is posted. This is the most used option.

 

"Rate Roll" will cause the unpaid interest to remain in accrued interest and will then defer based on the Rate Change Frequency.

 

"Monthend" will defer all unpaid interest at monthend. Then, when the payment is collected, it will reduce deferred interest. The interest paid to date will roll at monthend when the interest is deferred. The Date Last Accrued and the Due Date (on the Account Detail screen) will roll when a payment is collected.

 

"Never" will never defer interest on the account.

 

WARNING: The default for this field is “Rate Roll.” If the loan is not a negative amortizing loan, be sure this field is changed to “Never.” Also, the Accrued Interest field should be blank.

 

The following values are available from the drop-down list for this field:

 

 

 

Note:  To run GOLDWriters on these fields, different mnemonics are required depending on the value in the field. To identify the loans with R (rate roll), you would request as follows: