Systematic payment reversals cannot be processed for payments that were applied prior to conversion. Use the following procedure when reversing payments that were applied prior to conversion.
1) Review the payment history on the old system. Record the amounts that had been posted to each payment component. The easiest way to accomplish this is to print the history. Typically, the components will be:
a) Principal
b) Interest
c) Escrow
d) Late Charge
e) Fees
2) In Payment Processing, create a new payment processing batch. For ease in balancing it is suggested that payment batches of this type be grouped together and well documented.
3) Use Rapid Entry or Exception Entry to perform the reversals. Using the following examples, enter all transactions needed to process the entire payment that should be reversed:
a) Principal amount – Enter as a negative figure, using Transaction code 221 – Principal Adjustment.
b) Interest amount – Enter as a negative figure, using Transaction code 230 – Interest Only Payment.
c) Escrow amount – Enter as a negative figure, using Transaction code 240 – Escrow Only Payment.
d) Late Charge amount – Enter as a negative figure, using Transaction 300 – Late Charge Payment.
e) NSF amount - Enter as a negative figure, using Transaction code 310 – NSF Fee Payment.
f) Legal Fee amount - Enter as a negative figure, using Transaction code 320 –Legal Fee Payment.
g) Other Fee amount - Enter as a negative figure, using Transaction 330 – Other Fee Payment.
h) Miscellaneous Fee amount - Enter as a negative figure, using Transaction code 340 – Miscellaneous Fee Payment.
4) Balance the batch. The batch total should be a negative and match the total of the check(s) being reversed. Post the batch.
5) In Customer Service – Loan Modification screen, modify the due date for the loan(s) to reflect the correct due date after the payment reversal.
6) In Customer Service – Fee Assess/Waive screen, assess NSF fees, if applicable. The Late Charge, NSF Fee (if an NSF Fee that was previously paid was reversed), Legal Fee, and Other Fee balances will be adjusted by the system when the negative transaction is processed.
7) Generate a manual NSF Letter, if applicable.
8) It is suggested that a comment be entered to fully document the payment reversal.
ArticleNumber:
000046427