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Setting Up Consumer Loan Products

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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

Here is the Consumer Loan Product Edit Screen

 

Toolbar

Here is the toolbar that you use to edit products

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.

 

Header

Here is the header at the top of the product edit screen

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 links can be used to jump directly to sections on the screen.

 

Tabs (Regions)

Here are the tabs representing different regions or groups of regions for the product

  • The tabs below the header represent different regions or groups of regions that have different assumption sets for the product.

Product Configurations & Defaults 

General

Here are the product configurations and defaults that that you can change for each product

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 First Lien and Eligible for Small Creditor Exemption - 3.5% Spread Limit
  • Secured by a Junior Lien - 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.

Base Target Return

Adjusted Target Return

  • Target that takes into account adjustments made at the product level, typically based on risk ratings


Policies & Defaults

Here are the policies and defaults that that you can change for each product

 

Allowable Payment Types
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
Allowable Rate Types
  • Checking the box will make that rate type available for this product.
  • Available Rate Types
    • Fixed
    • Floating
    • Adjustable
Default Rate Type
  • The rate type that will be originally set when a new rate sheet using this product is created.

 


Credit Configurations & Assumptions

Here are the credit configurations and assumptions that you can change for each product

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

 Administration-Products-FinancialConfigurations_Assumptions.PNG

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.

 

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

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.

 

Origination and Servicing Channels 

 

Other

Relationship Awareness Defaults

Here are the Relationship Awareness defaults that you can choose from

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.

 

 

History

 Here is the history of changes made to the product

  • 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.

 

 

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