• The Security Balance Reconciliation report (which corresponds to the Security Balance Reconciliation view) compares actual loan balances to pool security balances. This report shows the Adjusted Pool Principal balance versus the Security Principal balance based on the month's pool activity. Liquidation of CD pools and prepaid and delinquent loans for the month are shown as well.
• The Pool Roll Up report compares loan level scheduled balances to the pool level security balances. Use this report for bi-weekly pools. This shows differences between scheduled pool balances and actual pool balances per loan ID. This report also shows the guaranty fee due.

• Setting the Loans Delinquent Through field incorrectly on the Investor Detail screen - Cutoff tab:
  • This can cause multiple problems. If this setting is incorrect for a couple of months, and then you correct it, you can also expect problems in the month after you correct it. Set all first of the month cutoffs to "Previous Monthend."
• Not adjusting the FIC in a timely manner:
  • Servicing Director automatically adjusts the FIC for ARM pools, payoffs, and loans liquidated; however, you must manually adjust the FIC for other items. For example, if you just transfer a delinquent loan out of the pool (without liquidating it), you must subtract the P&I amount for that loan from the FIC. Failing to do this will affect the scheduled principal amount due. This primarily affects GNMA pools, but it can also affect MBS pools.
• Setting the Pooling Method field (CD or IR) incorrectly on the Pool Detail screen - Issue Information tab:
  • This option controls how Servicing Director calculates the loan-level scheduled balance, and it controls the items listed on the reconciliation.
• Using the Security Balance Reconciliation report for bi-weekly loans:
  • This report uses a monthly payment factor, so it is not applicable to bi-weekly loans. For bi-weekly loans, use the Pool Roll Up report.
• Using the Security Balance Reconciliation report for MRS and Other S/S pools:
  • These reporting types do not use the pool level information for reporting or remitting, you can ignore any differences. For these reporting types, the Loan Level Security Balance Reconciliation report and the Private Pool Detail report are useful.
• Weighted rates:
  • Whenever a pool has multiple rates (SF or Guaranty fee) that must be weighted, you will see minor differences.
• Incorrect weighted rates:
  • These can cause major problems. If a pool has multiple rates, verify that Recalculate at Cutoff is selected on the Pool Detail screen - Rates tab in Pool Reporting.
• GNMA pools that are not adjusted:
  • GNMA (I and II) pools can have slight differences from month to month. These pools are not self-correcting, and there may be rounding differences. These differences will grow if they are not adjusted, because GNMA pools amortize independently of the loans.
• Curtailment reversals:
  • These can be a problem if the reversal is in a different month from when it was received, and there were no additional receipts of unscheduled principal in the pool. The money cannot be withheld from the security holder, and the pool must stay out of balance until a receipt of unscheduled principal (payoff or curtailment.) This affects GNMA and MBS pools
• Changing a loan payment or rate directly in the Loan table instead of on the Payment Change screen:
  • Updates use the Payment Change table; therefore, you must synchronize the Payment Change table with the Loan table.
• Expecting the Loan and Scheduled Balance columns on the Pool Roll Up report to balance to the penny for GNMA pools:
  • You will see slight differences for GNMA pools. Other pool types should balance to the penny, except for MBS pools that have had a curtailment reversal.
• Curtailments made on loans prepaid more than one month:
  • In the month that the curtailment is made, an adjustment appears in the reconciliation report. However, in the following months, the adjustment does not appear in the report, even though it still is a reconciling item. This makes the report appear out of balance when it is not. This continues until the month when the payment was actually due. Use caution when adjusting to pools with this condition.

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