Loans > Loan Screens > Investor Reporting Screen Group > Loan Investor Fields Screen > Investor Loan Basics tab > Calculation Codes field group

Mnemonic: LNIPCL

Use this field in the Calculation Codes field group to indicate a calculation method for the investor's principal portion of a payment from the customer loan account. This information is copied from from the Investor Calculations tab on the Investor Group screen (if valid information is entered in the Investor fields). The value entered in this field group overrides any value entered in the Investor Calculations tab on the Investor Group screen for the customer loan. The available methods are Principal Collected this Month x Portion Sold and Investor Gets Principal First.

Investor Gets Principal First

For loans sold as a participation, this calculation method remits all of the principal portion of payments or curtailments to the investor before your institution receives any of the principal. During the time the investor is receiving all of the principal, your institution receives only its portion of the interest. Once the investor has received the full amount of the principal, all future principal and interest payments will go to your institution.

This method should only be used when calculating interest on a collection basis, and with Interest calculation codes 2, 4, 9, and 10.

The following steps are used to determine whether the investor receives all, part of, or none of the principal:

1.	Subtract the portion sold from 100% of the principal value to determine your institution's ownership percentage.

2.	Multiply your institution's ownership percentage by the balance sold to determine your institution's portion.

3.	Determine what the new unpaid principal balance would be if the payment were applied.

4.	From the new unpaid principal balance, subtract your institution's portion of the balance sold to determine Amount A.

Once Amount A is determined, one of the following occurs:

1. If Amount A is greater than or equal to zero, the investor will receive all of the principal portion of the payment.

2. If Amount A is negative, the gross principal portion of the payment is changed to a negative and becomes Amount B. Amount A subtracted from Amount B equals Amount C.

•If Amount C is negative, that amount becomes the investor's portion of the principal and your institution will receive the difference (This is the final payment for which the investor receives money. Generally, both the investor and your institution will receive part of the principal for one payment, and the investor becomes fully paid at this point).

•If Amount C is greater than or equal to zero, your institution receives the full principal portion of the payment (This is the point where the investor has been “paid in full” and no longer receives any funds).

The following steps are then used to determine the distribution of interest:

1.	Multiply the balance sold by the percent sold to determine the amount purchased by the investor.

2.	Subtract the amount purchased by the investor from the balance sold to determine Amount D.

3.	If Amount D is greater than zero, subtract Amount A from the principal balance prior to payment to determine Amount E.

4.	Amount E is the balance used to calculate interest and service fees. If Amount E is negative, your institution receives all of the interest, and there is no service fee.

The following is a sample loan that will be used to demonstrate how the calculations would be determined.

Beginning principal balance:

100,000.00

Interest rate:

10.00%

Term (in months):

360

P&I constant:

877.57

First due date:

03-01-00

Portion sold:

50.00%

Balance sold:

100,000.00

Payment #	Due Date	LMEB	Amount to Principal	Unpaid Principal Balance of Loan	Amount to Interest
1	03-01-00	100,000.00	44.24	99,955.76	833.33
282	08-01-23	50,641.94	455.55	50,186.39	422.02
283	09-01-23	51,186.39	459.35	49,727.04	418.22
284	10-01-23	47,727.04	463.18	49,263.86	414.39

Principal Calculations

1	100% - 50% (portion sold) = 50% (Institution ownership percentage)

2	50% x 100,000.00 = 50,000.00 (Institution’s portion of principal)

3	I. 100,000.00 - 44.24 = 99,955.76 (after payment one)

II. 50,186.39 - 459.35 = 49,727.04 (after payment 283)

III. 49,727.04 - 463.18 = 49,263.86 (after payment 284)

4	A. I. 99,955.76 - 50,000.00 = 49,955.76 (Amount A)

Investor principal:

44.24

Institution principal:

0.00

B. II. 49,727.04 - 50,000.00 = <272.96> (Amount A)

459.35 x <1.0> = <459.35> (Amount B)

<459.35> - <272.96> = <186.39> (Amount C)

Investor principal:

186.39

Institution principal:

272.96

C. III. 49,263.86 - 50,000.00 = <736.14> (Amount A)

463.18 x <1.0> = <463.18> (Amount B)

<463.18> - <736.14> = 272.96 (Amount C)

Investor principal:

0.00

Institution principal:

463.18

Interest Calculations

1	I. 100,000.00 x 50% = 50,000.00 (Investor’s amount purchased)

II. 100,000.00 x 50% = 50,000.00 (Investor’s amount purchased)

III. 100,000.00 x 50% = 50,000.00 (Investor’s amount purchased)

2	I. 100,000.00 - 50,000.00 = 50,000.00 (Amount A)

II. 100,000.00 - 50,000.00 = 50,000.00 (Amount A)

III. 100,000.00 - 50,000.00 = 50,000.00 (Amount A)

3	I. 100,000.00 - 50,000.00 = 50,000.00 (Amount B)

II. 50,186.39 - 50,000.00 = 186.39 (Amount B)

III. 49,727.04 - 50,000.00 = <272.96> (Amount B)

4	I. Without service fee:

50,000.00 x 10% / 12 = 416.67 (Investor’s interest)

833.33 - 416.67 = 416.66 (Institution interest)

With service fee:

50,000.00 x 9.5% / 12 = 395.83 (Investor interest with 0.5% service fee)

50,000.00 x 0.5% / 12 = 20.83 (Rough calculation of service fee)

416.67 - 395.83 = 20.84 (Actual service fee used after rounding adjustment)

833.33 - 395.83 - 20.84 = 416.66 (Institution interest)

II. Without service fee:

186.39 x 10% = 1.55 (Investor interest)

418.22 - 1.55 = 416.67 (Institution interest)

With service fee:

186.39 x 9.5% / 12 = 1.48 (Investor interest)

186.39 x 0.5% / 12 = 0.08 (Rough calculation of service fee)

1.55 - 1.48 = 0.07 (Actual service fee used after rounding adjustment)

418.22 - 1.48 - 0.07 = 416.67 (Institution interest)

III.	414.39 - 0.00 = 414.39 (Institution interest)

No investor interest.

No service fee.