Changing the Loan Type

Related Topics

The Loan Type Change dialog box lets you change the loan type of an existing loan. To access the Loan Type Change dialog box, under Member Services on the Portico Explorer Bar, click Account Information. The Overview tab appears on top. Click the Loans tab. Locate the member using the search tool on the top menu bar. Select the down arrow to select the search method, then enter the search criteria. Select the green arrow or press ENTER to locate the member. Click Change Type on the Loans - General tab.

Loan Type Change

How do I? and Field Help

To change the loan type, click the New Loan Type down arrow to select the new loan type to be assigned to the loan.

In the Previous Loan Information group box, the Previous Loan Type field lists the previous loan type (Keyword: GA). The Loan Balance field indicates the principal amount due on the loan.

You can enter credit union-defined information in the Profile Codes group box (Length: 6 alphanumeric / Keyword: LI). The code consists of six categories (A-F). Each category has a maximum of 37 subcategories. The valid subcategories are A-Z, 0-9, and blank. For example, the code 0A9G3D might appear in this field. If Y appears in the PERSONAL USE PROFILES field on the 370 or 620 Report Rules, the system calculates the number of loans for each subcategory within each category. (The 370 and 620 Reports provide loan profile information for your credit union.) Using the above example, this loan would be included in the totals for subcategory 0 of category A, subcategory A of category B, subcategory 9 of category C, subcategory G of category D, subcategory 3 of category E, and subcategory D of category F. If a blank appears in one of the categories in this field, the word NONE appears on the 370 and 620 Reports instead of a blank subcategory code. You do not have to receive the 370 or 620 Report to use this field.

Click Save to save the loan type change. Click Cancel to close the dialog box without saving your changes.

The following procedures describe the requirements for student loans, escrow loans, residual loans, and adjustable rate mortgage (ARM) loans.

Student Loans: When you change a non-student loan to a student loan, the error message THIS IS NOT A STUDENT LOAN appears. To change the loan type, refinance the loan. To change a student loan to a non-student loan, delete the student loan information by selecting the Delete Information option on the Loans – Student Loan tab. Then, change the loan type on the Loan Type Change dialog box.

Escrow Loans: To change a non-escrow loan type to an escrow loan type, change the loan type on the Loan Type Change dialog box. Then create the escrow segment of the loan using the Loans – Escrow Info tab. The system does not allow you to change an escrow loan type to a non-escrow loan type. The error message MUST REMOVE ESCROW SEGMENT appears. Change the escrow share account balance to zero, then change the loan type.

Residual Loans: The Residual Payment Option check box is selected on the Loan Profiles - Account Information tab for residual loan types. When changing a non-residual loan type to a residual loan type, you must complete the fields in the Residual Loan Information group box.

  1. In the Payment field, enter the final amount to be paid on a residual loan (Length: 12 numeric including decimal / Keyword: FP)
  2. Click the Date down arrow to select the date of the final payment on the residual loan from the pop-up calendar or enter the date in MM/DD/YYYY format (Keyword: FD).
  3. In the Description field, enter the description of the residual loan (Length: 25 alphanumeric / Keyword: RD).

When you change a residual loan type to a non-residual loan type, the message RESIDUAL SEGMENT WILL BE DELETED appears. Press ENTER to delete the residual payment record.

After you change the loan type, update the Calculation Method (Type) field on the Loans – Payment tab. The Calculation Method (Type) field on the Loans – Payment tab must correspond with the Payment Type field on the Loan Profiles – Account Information tab. When originating the loan, the credit union selects the payment recalculation method on the Loan Profiles – Recalculations tab.

Adjustable Rate Mortgage (ARM) Loans: The ARM loan processing options are located in the ARM/Home Equity group box on the Loan Profiles – Rate Information tab. When you change a non-ARM loan type to an ARM loan type, change the loan type on the Loan Type Change dialog box and complete the Adjustable Rate Information dialog box. When you change an ARM loan type to a non-ARM loan type, maintenance is not required.

Delinquency Method B Loans: The message TRANSACTION COMPLETE - DIFFERENCE IN DELQ METH appears when the new loan type has a different method of calculating delinquency from the old loan type. The delinquency method for the loan type appears in the Delinquent Method field on the Loan Profiles - Account Information tab. Change the delinquency method on the Loans – Delinquency tab if necessary. The system transfers the delinquency method on the specific loan to the new loan regardless of the default value on the Loan Profiles - Account Information tab. This message is just a warning.

Variable Rate Index Processing: Loan type changes will be prevented if the old loan type is not a Variable Rate Index Processing loan type and the new loan type is a Variable Rate Index processing loan type. If the old loan type is a Variable Rate Index Processing loan type and the new loan type is not a Variable Rate Index processing loan type, all Variable Rate Index Processing parameters on the Adjustable Rate Information dialog box will be deleted.

Statement Lead Days: When a loan is changed from a type that does not support statement lead days to a type that does support statement lead days, the system will automatically default the appropriate Lead Days field value for the loan type and payment frequency. When a loan is changed from a type that supports statement lead days to one that does not support statement lead days, the Lead Days field will automatically be changed to 00.

Reversing a Loan Type Change: You may not reverse a loan type change using the Reversals - Same Day Reversals tab. You must use the Loan Type Change dialog box. For a prior-day reversal, use the Loan Type Change dialog box.

General Ledger Effects:

  • DEBIT 701XXX Loan principal general ledger account specified on the Loan Profiles - Account Information tab for the new loan type
  • CREDIT 701XXX Loan principal general ledger account specified on the Loan Profiles - Account Information tab for the loan type prior to the loan type change

Related Reports:

  • Non-Financial Transaction Register Report 030
  • Loan Profiles Report 370
  • Charged-Off Loan Summary Report 620

Teller Balancing Effects: The teller balancing effects are as follows:

  • Adds the transaction amount to the Transfers/JV amount field on the Balancing and Close tab
  • Adds one to the Transfers/JV count field on the Balancing and Close tab

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