Setting up Payment Rules in Servicing Director

Setting up Payment Rules in Servicing Director

Different investors have different rules for how payments should be applied to loans. Some investors for example, might require that escrow funds always be applied first or that interest be applied first. The payment rules determine and control how payments are applied in payment processing or how the rules are used in the investor accounting application.

You can set up payment rules to specify how your institution handles installments due, exception amounts, prepayments and DSI loans by using the new payment rules screen. after you add a new payment rule. you can apply the payment rule at several different levels.

Servicing Director delivers a default payment rule called default rules. Every active loan is assigned a payment rule automatically. You can change the rule that is assigned to active loans by setting up a new payment rule and then changing the rule specified on the Company Screen in table Setup. The rule selected in the company screen is assigned to new investors when they are set up.

You can also specify different payment rules at the investor level by selecting a payment rule for the payment processing rules field on the funds applied tab in the investor accounting application. Or you can select the payment rules at the loan level on the payment screen in the Customer Service application.

 


 
When posting funds against fee balances, when multiple fees are due, servicing director processes the fee payments in the following order, if no exclusions are selected on the New Payment Rules screen - Setup tab
  1. NSF                                                    310
  2. Legal fee                                             320
  3. Corporate Advance Non Recoverable      321
  4. Corporate Advance Third Party              322
  5. Other Fees                                          330
To Set Up a Payment Rule:
  1. Select the System Administration application
  2. Select Table Setup
  3. Select Payment Rules
  4. Click Open
  5. Click New
  6. Enter a code and description for the payment rule
  7. Select Allow Posting Past Maturity Date check box, to allow payments for a loan to post after the loans maturity date. If you do not check this box, payments received after the maturity date are rejected
  8. Select the transaction processing order under the hierarchy for calculated payments
    This order will be used for processing payments received through the Lockbox Payments Import Event
    Note: For best results in applying payment rules, it is recommended that you select a hierarchy that posts installments first
  9. Select the Late Charges check box, if you want to exclude late charges from any payment automatically applied from unapplied funds,or processed through the Lockbox Payments Import Event
  10. Select the NSF fees check box if you want to exclude NSF fees from any payment automatically applied from unapplied funds, or processed through the Lockbox Payments Import Event
  11. Select the Legal fees check box if you want to exclude legal fees from any payment automatically applied from unapplied funds, or processed through the Lockbox Payments Import Event
  12. Select the Other Fees check box if you want to exclude other fees from any payment automatically applied from unapplied funds or processed through the Lockbox Payments Import Event
  13. Click OK to save your changes
Note: In the payment posting process, an installment payment will reflect if the due date of the payment is later than the maturity date and the allow posting past maturity date check box is not selected.
In the lockbox payments import event, all payment transactions (including late charges and fees) will be deposited to unapplied if the maturity date is prior to the posting date and the allow posting past maturity date check box is not selected

ArticleNumber:

000050213

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