Navigation:  Loan Screens > Account Information Screen Group > ARM Information Screen > Rate Caps & Negative Amortization tab > Negative Amortization field group > Maximum Principal

Entry: User, numeric

F/M: Yes

Mnemonic: LNAMMX

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

 

This field contains the maximum amount the loan principal balance can be increased due to deferred interest (negative amortization). On negative amortizing loans, where the principal balance can increase, this field sets the maximum allowed. At the time a payment method “7” loan is opened using a 680 tran code, the system will automatically enter 125% of the original loan amount in this field. This is a required field for all payment method 7 loans. If you do not allow the principal balance to increase (negative amortizing), you must enter the original principal balance.

 

If a principal increase transaction or deferral of unpaid interest makes the balance exceed the amount in this field, the system gives an error message and cancels the transaction.