Showing posts from June, 2008

Tracking Discount Earned on Purchased Loans

Q: How can I keep track of the discount earned along with the interest and principal on a loan with your loan servicing software?

A: By way of an example...

Start by clicking "Loan from Template" in the toolbar. Click Mortgage. Enter "Discount Earned" for the account number. Set the dates as you see fit, enter $100,000 for the principal, and 10% for the interest rate. Click the Regular payment. Pick a borrower and a lender and hit finish.

Select the new "Discount Earned" and then click Loan > Lender > Multiple Lenders. Click new and pick a lender. Adjust the percent interest in loan to 100% (complete ownership). Set the price paid to $60,000 and click Save. (So the lender bought a $100,000 balance for $60,000.) Click Done in the Multiple Lenders dialog.

Double-click the loan and click "Save" to record a payment on the loan. Do this a couple more times to add a few payments to the loan.

Once you've created …