Amortization usually happens automatically in the afterhours once a month, but you can also use a GOLDTeller transaction to process amortizations, as explained below. The system will automatically amortize these amounts to income (for fees) or expense (for costs) on a regular basis chosen by your institution, regardless of a payment being collected in the current month.

These fields will change as fees, costs, discount/gain, and premium/loss are amortized. Amortization will begin the month following the date entered in the Date Last Amortized field below. The system looks at the month and year (it does not look at the day) when amortizing.

The following is an example of the Amortize Costs transaction in GOLDTeller. The other amortizing transactions (see below) look similarly to this one.

When this transaction is transmitted, the amount of the transaction is subtracted from the amount in this field. The amount of the transaction will be added to the amount in the Amortized Fees field below.

Deferred fees, costs, discounts/gains, and premiums/losses are entered when the loan is originally opened. However, an amount can also be entered in this field via a teller transaction as follows:

TORCs Used During the Amortization Process:

These fields will be automatically updated by the system each month as amortization occurs. The month the amortization will process must be greater than the month in this date before these fees will amortize. The system looks at the month and year (it does not look at the day).

At the time a new loan is set up, this date will need to be entered manually, so the field is file maintainable. The date opened would normally be entered in this field and will be moved from GOLDTrak PC, if GOLDTrak PC is being used.

If the amortization method is 2 (Rule of 78s), and action code 78 and a date are entered on the Loans > Account Information > Actions, Holds, and Event Letters screen, the action date will be used instead of the Date Opened field on the Loans > Account Information > Additional Loan Fields screen. Refer to the Rule of 78s calculation section in the Amortization Method field.

If Institution Option DFAM is set, the loan will amortize only up to the month of the due date. Refer to the Options section on the screen help.

This field is used in the amortization calculations. However, if the loan uses amortization method 3 (APR (FASB 91 method)), see the following description section.

Term and Rate for Amortization Method 3

The term and rate fields contain the internal rate of return and the term to be used to amortize the fees, costs, discounts/gains, and premiums/losses. These fields can be repeated three times (if you use amortization method 3) to allow you to use one rate (i.e., teaser rate) for a short period of time, and the second rate for the remaining term of the loan. These fields must be calculated by your institution and are entered through file maintenance or moved from GOLDTrak PC.

When calculating deferred costs, the deferred fees for the current month will be amortized and subtracted from the Remaining Fees field above first. Then the new remaining fee is used to calculate the cost.

If the principal balance is zero and the loan status is "open" or "closed," the total remaining deferred fees and costs are taken to income at the same time your institution has the deferred fees cycle (usually monthend) and not on the day of the payoff.

For payment method 5 loans with zero principal balance and an "open" status, normal monthly amortization is processed rather than taking all fees to income as a "closed" zero balance loan does.

Institution Option AMIP exists that will only use the institution portion of the principal balance to amortize the deferred fees or costs. To use this, submit a work order to GOLDPoint Systems.

For LIP loans, this is the LIP Disbursed Balance, also on the Account Detail screen.

For most loans, the rate is pulled from the Interest Rate field on the Loans > Account Information > Account Detail screen.

For LIP loans, the rate is pulled from the LIP Interest Rate on the Account Detail screen.

For ARM loans (payment method 7 or payment method 4 or 6 with Use ARM Fields checked on the Loans > Account Information > ARM Information screen), if amortization method 3 (interest method) is used, the rate will be one of four rates determined by your institution options.

Four Rate Options Available:

•The default is the Original Rate, pulled from the ARM Information screen.

•Institution Option AMRT uses the Current Rate, pulled from the ARM Information screen.

•Institution Option YMGN uses the index plus the margin, both pulled from the ARM Information screen. Note: The index, in this case, is stored in the Original Rate field. The system takes the Original Rate field and adds it to the Interest Rate Margin.

•The Teaser Rate from the ARM Information screen is used if the loan has a teaser rate, and the amortization is during the teaser period.

The funds will be taken to income at the same time the deferred fees cycle (generally at monthend), not on the date you sell the loan. If the loan is sold through the Sell Loan to Investor function, it will use the Date Sold to Investor field on the Loans > Investor Reporting > Loan Investor Fields screen to determine the month the funds will be taken to income at monthend. Otherwise, the system will use the Date Sold As Of field on that screen to determine the month. If both dates are blank, it will amortize the loan normally.

This field works similar to the Take All if Sold 100% field above, except it is used when a loan is sold on a percentage basis (rather than sold 100%. Example: The Remaining Fees field above is $1,000. The loan is sold 90% and you check the Take All if Sold On Percentage Basis field. At monthend the system will calculate 90% of the $1,000 and take $900 to income. The remaining $100 will continue to amortize monthly. TORC 40 is used with the Take All if Sold On Percentage Basis field.