Consumer loan products are used as the basis of generating a Rate Table within a Consumer Loan Rate Sheet.
In this article we will cover:
The Consumer Loan Product Edit Screen
Toolbar
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Edit
- The "Edit" button will allow you to change the settings of the product.
Save
- After you click the "Edit" button, the "Save" button is how you save any changes you have made to the product.
- If you leave a relationship without saving, any changes you have made since the last save will be lost.
Print
- The "Print" button allows you to print off the settings of this product.
- The "Print" button is not visible while editing.
Close
- The "Close" button will leave the relationship and take you back to the Administration Section.
- Make sure that you save your work before closing if you would like to keep the changes you have made.
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Name
- The name at the top of the header will be the name of the product and how it is referenced throughout PrecisionLender.
- This can be edited to match the name of the product at the financial institution.
Shortcuts
- These blue links can be used to jump directly to sections on the screen.
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Tabs (Regions)
- The tabs below the header represent different regions or groups of regions that have different assumption sets for the product.
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Product Configurations & Defaults
General
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Product Enabled
- When checked, this product will be available to lenders for pricing.
Maximum APR
- Maximum APR for this product type
FFIEC / HMDA Lien Status
- Not Applicable
- Secured by a First Lien - 1.5% Spread Limit
- Secured by a Junior Lien - 3.5% Spread Limit
- Secured by a First Lien and Eligible for Small Creditor Exemption - 3.5% Spread Limit
Available Regions
- Regions for which these settings are active are signified with a check next to the region name.
- Split Out Region
- Allows you to choose regions to separate from this group of regions so they can have separate assumptions.
- Collapse Into Region
- Allows you to collapse this group of regions into another group of regions that you select.
- Only available if the Full Regionality and Advanced Funding module has been licensed.
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Base Target Return
Adjusted Target Return
- Target that takes into account adjustments made at the product level, typically based on risk ratings
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Policies & Defaults
Allowable Payment Types
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Default Payment Types
- The payment type that will be originally set when a new rate sheet of this type is created.
Default Payment Frequency
- Annually
- At Maturity
- Monthly
- Quarterly
- Semiannually
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Allowable Rate Types
- Checking the box will make that rate type available for this product.
- Available Rate Types
- Fixed
- Floating
- Adjustable
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Default Rate Type
- The rate type that will be originally set when a new rate sheet using this product is created.
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Credit Configurations & Assumptions
Risk Ratings
Collateral Options
Allow User to see Recovery Rate
- If checked, allows the user to see the Recovery Rate for a particular piece of collateral.
Default Recovery Rate
- Default rate that reflects the net expected proceeds, after all carrying and selling costs, in the event that liquidation of the collateral is required.
- Used in combination with the provided collateral value when pricing to accurately reflect the risk mitigation that particular piece of collateral provides.
Default LTV
- Default LTV that the institution configures in order to mirror its standard credit guidelines for lending in relation to a specific collateral type.
Financial Configurations & Assumptions
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Capital / Annual Loss
- Typically the Credit Capital and Annual Loss assumptions are based on the output of the credit migration analysis performed in consultation with PrecisionLender.
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Operational & Market Risk Capital Allocation
- Represents the capital necessary to hold against operational and market risk that exist no matter who your borrower is.
- Entered as a percentage of the loan balance plus a percentage of revenue.
Use Net Interest Income as Revenue in Operational Risk Capital Calculations
- If you do not include capital in funding, you may use Net Interest Income as revenue, instead of Gross Revenue, in Operational Risk Capital Calculations.
- This option is enabled by default when creating new Consumer Loan products.
Absolute Minimum Capital Allocation
- Can also be set by Risk Rating within the Risk Ratings area.
- If set at Product and Risk Rating levels, the maximum of the two minimums will be used in computations by the math engine.
Absolute Minimum Annual Loss
- Can also be set by Risk Rating within the Risk Ratings area.
- If set at the Product and Risk Rating levels, the maximum of the two minimums will be used in computations by the math engine.
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Origination and Servicing Channels
Other
Relationship Awareness Defaults
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Minimum Function Maturity - FTP
- When a loan is approaching maturity, some values can be overstated or understated due to the short term of the calculations.
- Any value entered here will override the 1-month default.
Minimum Functional Maturity - Strategic
- When a loan is approaching maturity, some values can be overstated or understated due to the short term of the calculations.
- Any value entered here will override the defaults of:
- 12 months for LOCs and Draws
- 36 months for Amortizing and Single Pay
Origination Fees
- This is used to set different origination fee defaults for loans coming through Relationship Awareness than the defaults for loans being priced.
- By checking the "Origination Fees" box you can enter a new Relationship Awareness-only default value.
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History
- The History section at the bottom list all of the dates and times that changes were made to the product.
- By clicking on a date and time you can see the setting of the product that was saved at that date and time.
- This History section is not visible when the product is in Edit mode.
