Loan Processing – Loan Application

Lending Lending Loan Processing - Loan Application

This document provides a comprehensive guide to the Loan Processing and Loan Application functionalities within the FLEX system. It is designed to assist users in navigating the workflow, understanding key features, and ensuring accurate data entry for efficient loan management.

1. Overview of Loan Processing

Loan Processing in the FLEX system covers the entire loan lifecycle, from initial application to approval/denial, disbursement, and posting. The system offers configurable security options to implement stops at various stages of the process.

1.1 Accessing Loan Processing

  • Location: Loan Processing is accessed via the Loans section in the FLEX Main Menu.
    • FLEX Main Menu > Loans > Loan Processing

1.2 Loan Processing Workflow

The Loan Processing module utilizes a workflow displayed on the left side of the screen.

  • Workflow Indicators:
    • Red Push Pin: Marks the screen currently in use.
    • Green Check Mark: Indicates steps that have been completed.
  • Configuration Dependency: The available options within the workflow may vary based on the credit union’s specific configuration.

2. Loan Application Workflow Steps

The loan application process follows a structured workflow.

2.1 Account Selection

The Account Selection screen allows users to search for or select a loan.

  • Search Criteria:
    • Member Name
    • Account Number
    • Loans already in process by Loan Officer ID
    • Loan application by Loan Officer ID
  • Loans In Process Panel:
    • Displays loans that have been set up in the disbursement area but not yet posted, or recently posted loans (visible for 30 days).
    • Fund: Completes the workflow and posts the loan.
    • Delete: Removes the selected loan in process.
    • Print Forms: Directs to the Print Forms section for the selected loan.
  • Loan Applications Panel:
    • Displays applications that have already been started.
    • New App: Initiates a new loan application.
    • Copy: Allows copying an existing application to create a new one with similar attributes.
    • Edit: Enters the application for viewing or maintenance.
    • Print App: Prints any loan application forms.
    • Print: Prints the loan worksheet and/or adverse action letter.
    • Fund: Navigates to the final step of the workflow for loan posting.

2.2 Loan Selection

This section allows users to view existing loans, in-process loans, and loan applications for a selected member’s account.

  • New Loan: Creates a new loan on the selected account, bypassing the loan application process.
  • Loans Currently on Account:
    • Add-On: Initiates the process for adding to an existing loan.
    • Refinance: Initiates the process for refinancing an existing loan.
  • Loans In Process For Account:
    • Represents loans set up for disbursement but not yet posted, or recently posted loans.
    • To access, highlight and click Fund or double-click the loan.
    • Delete: Removes the selected loan in process (not possible if already posted).
    • Reverse Posted: Reverses recently posted loans (visible for 30 days). Not applicable if any activity has occurred on the loan.
    • Print Forms: Directs to the Print Forms section of the workflow.
  • Loan Applications For Account:
    • Applications already started in the system.
    • To access, highlight and click Edit or double-click the application.
    • New App, Copy, Edit, Print App, Print, Fund: Functions mirror those described in the Account Selection section.

2.3 Create New Application

When creating a new application:

  • Member Applicant: Enter the account number.
  • Non-Member Applicant: Leave the account field blank; a birth date and Social Security Number (SSN) are required.

3. Loan Application Details Screen

This is the central screen for processing the entire loan application, utilizing various tabs.

  • Navigation: Use the tabs to move through application steps.
  • Buttons: Perform functions such as running credit reports, printing the application, printing the worksheet, or printing an adverse action letter.
  • Next Button: Leaves the loan application screen and proceeds to the funding process.

3.1 Top-Level Actions

  • URL Links: Displays/selects URLs configured in URL Configuration.
  • Save and Exit: Saves entered information and returns to the Account Selection screen.
  • Add Applicant: Adds an additional tab for a co-borrower or additional applicant.
  • Delete: Removes an applicant. Deleting the primary applicant deletes the entire application.
  • Audit: Views changes made to the application.
  • Print App: Prints the loan application form.
  • Print: Prints the loan worksheet and/or adverse action letter.
  • Credit Reports: Views existing or retrieves new credit reports.
  • Change Log: Views changes made to the loan application, including status, loan officer, and date.
  • OFAC Search: Performs an OFAC search.

3.2 General Information Tab

Information may auto-populate based on Loan Type Configuration defaults but can be modified. This tab contains several sub-tabs:

3.2.1 Loan Info Tab

  • Status: Select the loan application status. Status codes are configurable by the credit union.
  • Loan Officer: Select the assigned loan officer (configured in Teller Configuration).
  • Application Teller: Select the user entering application details (important for access level monitoring).
  • Insurance Sales Officer: Select the user who sold insurance, if applicable.
  • Loan Source: Tracks sources (e.g., CUDL, In-house, Call Center). Source Codes are configured in Loan Application Configuration.
  • Credit Type: Selects whether the application is Individual or Joint.
  • Loan Type: Auto-populates from the initial selection but can be changed.
  • Purpose Code: Selects the loan’s purpose (configured in Purpose Code Configuration).
  • Security Code: Selects the security code (configured in Security Code Maintenance), impacting credit bureau reporting.
  • Fixed/Variable: Selects fixed or a valid variable rate code.
  • Description: Enter a brief description for the loan (e.g., “2016 Chevrolet Tahoe”). Appears on account inquiry and loan detail screens.
  • Estimated Market Value: Indicates collateral market value, used for Loan-to-Value calculation.
  • Open Ended/Closed Ended: Indicates loan type (e.g., Line of Credit is open-end, Vehicle is closed-end).
  • Dates:
    • Entry Date: System-populated date when the application was added.
    • Review Date: System-populated date when the application was added; can be manually updated.
    • Completion Date: System-populated date when the loan was flagged with an approved or denied status.
  • Combined Monthly Amounts (System Calculations):
    • Income: Based on income entered under applicant(s).
    • Payments: Based on credit report tradelines and user-added obligations.
    • Payments W/Loan: Payments, obligations, and new loan payment amount.
    • Disposable: Difference between income and payments.
    • Disposable W/Loan: Difference between income and payments with the new loan.
  • Ratios (System Calculations):
    • Current: Payments divided by income.
    • With Loan: Payments with new loan divided by income.
    • Unsecured: Unsecured debts divided by income.

3.2.2 Payment Info Tab

  • Calculate Payment/Calculate Term:
    • Calculate Payment: Determines payment amount based on Total Amount Financed, Term, Frequency, and Interest Rate.
    • Calculate Term: Determines loan term based on Total Amount Financed, Frequency, Interest Rate, and Payment.
  • Base Amount: Enter the base loan amount.
  • Gap/VSI/MBP Fees: System-populated based on Gap Insurance and MBP tab information.
  • Financed PPFC: Enter any financed pre-paid finance charges.
  • Loan Amount: Base loan amount plus Gap/Warranty Fees and Financed PPFC.
  • Payment: System-calculated if Calculate Payment is selected.
  • Method: Select how payment will be made.
  • Frequency: Select payment frequency.
  • Interest Rate: Enter the interest rate.
  • Begin Skip/End Skip: Supports summer skip loans.
    • Defines a month/day range for annual payment skips.
    • Payment amount is increased to ensure the loan pays off at the defined term.
    • Example: June 15 – August 15 skip, with normal payment on the 10th, means no payment from June 10th until September 10th.
  • Disbursement Date: Enter the loan disbursement date.
  • First Payment: Enter the first payment date.
  • Term: Enter the loan term or select from the drop-down.
  • Payment Protection Tab:
    • Displays available insurance options and costs (rate plans loaded by FLEX).
    • Allows selection of a plan to be added to the loan.
    • Coverage Type: Selects coverage plans to display.
    • Selection: Available plans show description, premium, and new payment with added payment protection.
  • Gap Insurance and Warranty Tab:
    • Displays Gap Insurance and MBP records.
    • Add: Creates a new record.
    • Edit/Delete: Modifies or removes existing records.
    • Add/Edit Gap And MBP Section:
      • Vehicle Information: Enter vehicle details for Gap or MBP quotes.
      • Get Quote: Interface with third-party insurance products for GAP and/or MBP premium quotes.

3.2.3 Combined Obligations Tab

  • CB Score: Enter the credit bureau score. May auto-update if configured in Score Type General Control.
  • CB Grade: Enter the credit bureau grade. May auto-update if configured in Score Type General Control.
  • Total Credit: Enter total credit from the credit report.
  • Available Credit: Enter total available credit from the credit report.
  • Unsecured Credit: Enter total unsecured credit from the credit report.
  • Credit Reports:
    • Displays date, time, and bureau of all credit reports for applicants on this loan application.
    • Transfer: Transfers tradelines to obligations in the application.
  • Recent Scores: Displays credit scores and grades from recent credit requests.
  • Obligations:
    • Displays all obligations stored in the application for each applicant.
    • Includes original amount, current amount, payment, secured/unsecured status, inclusion in ratio, frequency, and months delinquent.
    • Secured: Checkbox to indicate if the obligation is secured.
    • Include: Double-click to include the obligation in calculated ratios.

3.2.4 Vehicles Tab

  • Allows entry of vehicle information if known at application time; carries over to loan disbursement.
  • Stores vehicle, title, insurance, GAP, and service contract information.
  • Separate sub-tabs available for each type of information.
  • If vehicle information is unknown (e.g., for pre-approvals), this screen can be skipped and information entered during loan disbursement.
  • Refer to Collateral Maintenance in FLEX Academy for more information.

3.2.5 Notes Tab

  • A free-form area for adding notes pertinent to loan processing.
  • These notes are not member or collection notes and are not available through Account Inquiry.
  • Notes added here are included on the loan worksheet.
  • Program Security (LANOTE): If enabled, notes will include a teller, date, and timestamp, and cannot be deleted by another user. Otherwise, the Notes section is free-form.

3.2.6 HMDA Tab

  • Available if the loan type is configured for a HMDA record.
  • Add: Adds a new HMDA record.
  • Fill in all HMDA record information.
  • Information can be added later via HMDA Maintenance.
  • Refer to HMDA Configuration and Maintenance in FLEX Academy for more information.

3.2.7 Ratios Tab

  • Displays any custom ratios defined by the credit union.
  • Custom ratios must be created through Loan Ratio Configuration.
  • Refer to Loan Ratio Configuration in FLEX Academy for more information.

3.2.8 Closing Costs Tab

  • Only available if the loan type is configured to prompt for Closing Costs.
  • Used exclusively if TILA/RESPA forms are printed through the FLEX system.

3.3 Applicant Main Tab(s)

Applicant information auto-populates from member information. Additional applicants can be added using Add Applicant.

  • Sub-tabs: Each Applicant tab contains several sub-tabs: Applicant, Employer, References, Income, Assets, Obligations, Financial.

3.3.1 Applicant Tab

  • If the applicant is a member and the account number was entered, many fields will auto-populate.
  • Fill in all applicable applicant information.

3.3.2 Employer Tab

  • Fill in applicable employer information for the applicant.

3.3.3 References Tab

  • Add: Adds reference(s).
  • Fill in applicable reference information.
  • If a reference has an account, the account number can be entered to populate information.
  • Multiple references can be added.

3.3.4 Income Tab

  • Add: Adds income entries.
  • Options displayed are defined by the credit union using Income Type Codes in Application Codes Configuration.
  • The system distinguishes Primary Income (EMP Code) from Other Income.
  • All entered income, regardless of frequency, is converted to a monthly amount for debt-to-income ratio calculation.

3.3.5 Assets Tab

  • Add: Adds a new asset.
  • Fill in applicable asset information.
  • Multiple assets can be added.
  • Options displayed are defined by the credit union using Asset Codes in Application Codes Configuration.

3.3.6 Obligations Tab

  • If a credit report has been pulled, debts may auto-populate.
  • Obligations can be edited or manually entered.
  • Add: Adds a new obligation.
  • Fill in applicable obligation information.
  • Obligations with a current balance/payment are used to calculate the debt ratio.
  • Options displayed in Obligation Type are defined by the credit union using Obligation Type Codes in Application Codes Configuration.
  • Names Previously Used to Obtain Credit: Informational fields for maiden names, nicknames, etc.
  • Member Loans: Transfers credit union debts into the application (may duplicate if also on credit report).
  • Score: Views and/or edits an applicant’s credit bureau score file. Allows manual entry of scores/grades not pulled via FLEX.

3.3.7 Financial Tab

  • Stores other information regarding the applicant’s financial stability.
  • If any “Yes” boxes are marked, additional fields will display to store information, potentially affecting other calculations.

4. Continuation of Workflow

Once all information in the General Information and Applicant(s) main tabs is entered, and credit union policies are met for loan funding, the user can proceed.

  • Next Step: Loan Set-up and Disbursement.
  • Loan Status: Depending on credit union configuration, the loan status code may need to be changed to “Approved” or a status that allows progression.
  • Proceed: Click Next to move to Loan Set-up and Disbursement.