Best Practices for Setting Up Lending Policies

The description of a lending policy must be easily identifiable for the front-end user.

There are several reasons to set up multiple lending policies, including:

• If one organization is set up and your institution uses multiple loan acts, a separate lending policy must be set up to accommodate each loan act.
• If you are going to apply payments differently to the core system (i.e., interest first, late charges second, principal third, etc.) by products, multiple lending policies must be established to accommodate the Payment and Assumptions sections.
• If you want to combine the Note, Security Agreement, and Disclosure documents on most loans, but not on all loans, set up multiple lending policies. For example, if you want all loans except an automobile secured loan to combine documents, a separate lending policy must be established to accommodate the automobile secured loan type.
• If you prepare consumer real estate loans, and would like to use FNMA/FHLMC documents for some but not all of these transactions, multiple lending policies are necessary.
• If you want to choose whether to generate a Commercial Loan Agreement by transaction, a lending policy must be established to generate a Commercial Loan Agreement automatically, and another must be established to not generate a Commercial Loan Agreement.
• If you want Arbitration Agreement Language on certain transactions (i.e., commercial vs. consumer non-real estate), multiple lending policies are needed.