Collateral Maintenance

1. Introduction

Collateral Maintenance in the FLEX system is a comprehensive feature designed to manage various types of collateral associated with loans. This functionality allows users to define, track, and update information related to share pledges, co-borrowers, vehicles, real estate, and miscellaneous items used as security for loans.

2. Accessing Collateral Maintenance

Collateral Maintenance can be accessed from multiple locations within the FLEX system:

  • From the FLEX Main Menu:
    1. Navigate to Loans.
    2. Expand Maintenance.
    3. Select Collateral Maintenance.
  • From a Member’s Account (Transaction Entry/Inquiry):
    1. Access the member’s account.
    2. Right-click on a suffix.
    3. Select Collateral from the context menu.

3. Overview of Collateral Types

The Collateral Maintenance screen is organized into several tabs, each dedicated to a specific type of collateral. You can switch between these tabs to define and manage different collateral types:

  • Share Pledges
  • Co-Borrowers
  • Vehicles
  • Real Estate
  • Miscellaneous Items

4. Managing Share Pledges

The “Share Pledges” tab allows you to manage existing share pledges and add new ones.

4.1. Adding a Share Pledge

  1. Navigate to the Share Pledges tab.
  2. Click the Add button.
  3. Enter the following Basic Information:
    • Account: Enter the account number for the pledge.
    • Suffix: Enter the share or certificate suffix for the pledge.
    • Maximum Pledge: Enter the maximum amount not to be exceeded by the current pledge.
    • Percentage of Balance Secured: Enter the percentage of the loan balance secured by this account and suffix (e.g., 100% for full security, 50% if secured by two shares).
  4. Miscellaneous Details (Optional):
    • Scheduled to be Released: Informational field for a scheduled release date.
    • Description Line One/Two: Enter notes or descriptions for reference.
    • Original Pledge Amount: The original pledge amount when the record was created.
    • Original Date Secured: Informational field indicating the date the pledge record was created.
  5. Click Save.

4.2. Understanding Share Pledge Calculations

  • Current Loan Balance: System-updated field showing the current loan balance.
  • Loan Balance Deduction: Used to prioritize pledge release when multiple accounts/suffixes secure a loan. An amount entered here is subtracted from the loan balance to determine the Adjusted Loan Balance.
    • When the Adjusted Loan Balance becomes zero, the share/certificate will be released.
    • The secured share/certificate with the lowest Adjusted Loan Balance will be released first, regardless of percentage or maximum pledge.
  • Adjusted Loan Balance: Calculated as Current Loan Balance minus Loan Balance Deduction.
  • Current Pledge Amount: Calculated as Percentage of Balance Secured multiplied by Adjusted Loan Balance. This amount will not exceed the Maximum Pledge Amount.
  • Last Calculated Date: Indicates the last date the Current Pledge Amount was calculated.

5. Managing Co-Borrowers

The “Co-Borrowers” tab displays existing co-borrowers and allows you to add new ones.

5.1. Adding a Co-Borrower

  1. Navigate to the Co-Borrowers tab.
  2. Click the Add button.
  3. Enter the following Miscellaneous information:
    • Maximum Liability Amount: Enter the maximum amount for which the co-borrower is liable.
    • Loan Balance Adjustment: Used to prioritize co-borrower liability release. An amount entered here is subtracted from the loan balance to determine the Adjusted Loan Balance.
      • When the Adjusted Loan Balance becomes zero, the co-borrower is released from liability.
      • The co-borrower with the lowest Adjusted Loan Balance will be released first.
    • Percentage: Enter the percentage of the loan balance for which the co-borrower is liable (e.g., 100% for full responsibility).
    • Scheduled Release Date: Optional informational field.
    • Bankrupt: Indicates if the co-borrower is flagged as bankrupt.
    • Spouse: Indicates if the co-borrower is a spouse.
    • Delinquency Notices: Indicates if the co-borrower should receive delinquency notices.
    • Report to Credit Bureau: Indicates if the co-borrower should be reported to the credit bureau.
    • Association Code: Select the appropriate code for credit bureau reporting:
      • P: Primary borrower
      • T: Association with account terminated
      • W: Business/commercial
      • X: Consumer deceased
      • Z: Delete borrower
      • 2: Joint contractual liability
      • 3: Authorized user
      • 5: Co-maker
    • Description Line 1/2: Optional fields for additional information.
    • Consumer Information Indicator: Optional field for sending additional consumer information to the credit bureau (codes from credit bureau).
    • Credit Grade: May be used to store the co-borrower’s credit grade.
    • Credit Score: May be used to store the co-borrower’s credit score.
  4. Enter Co-Borrower Information:
    • Co-Borrower Type: Select the type of co-borrower (e.g., Individual).
    • Enter all applicable personal and contact information.
    • Use the Search field to auto-populate fields if the co-borrower is a member.
  5. Click Save.

5.2. Understanding Co-Borrower Calculations

  • Loan Amount: Displays the amount of the new loan the co-borrower is being added to.
  • Adjusted Loan Balance: Calculated as Current Loan Balance minus Loan Balance Deduction.
  • Current Liability Amount: Calculated as Percentage of Balance Secured multiplied by Adjusted Loan Balance. This amount will not exceed the Maximum Liability Amount.
  • Current Liability Date: Informational field representing the date the record was created.

6. Managing Vehicle Collateral

The “Vehicles” tab allows you to manage existing vehicle collateral and add new records. Information entered at the time of application will display here for editing.

6.1. Adding Vehicle Collateral

  1. Navigate to the Vehicles tab.
  2. Click the Add button.
  3. Fill in information across the following sub-tabs:
    • Vehicle Info
    • Title
    • Insurance
    • Insurance GAP / MBP / VSI
    • Repo Info (not detailed in provided document)
    • Service Contract

6.2. Vehicle Info Tab

  • Vehicle Information: Enter details such as Year, Make, Model, VIN, Type, Color, Description, Body Style, Mileage, License State, and License Number.
  • Value:
    • Original Value: May be used to store the original value.
    • Book Value: Stores book values (e.g., Kelley, NADA).
    • Current Value: Used for loan-to-value calculations.
    • Trade-In Value: Stores trade-in value.
    • Current Value Date: Date of current value assessment.
  • Acquisition Dates:
    • Date Secured: Date vehicle was secured.
    • Date Release Scheduled: Date when vehicle is scheduled to be released as collateral.
    • Actual Release Date: Actual date of release.
  • Other Information:
    • Deed Held?: Indicates if the deed is held.
    • UCC Held?: Indicates if UCC is held.
    • UCC Expiration Date: Expiration date of UCC.
    • Lien Holder Position: Indicates lien holder position (e.g., 1st, 2nd).
  • Collateral Description: Line 1 and Line 2 for additional description.

6.3. Title Tab

  • Title Information:
    • Title Held: Indicates if the credit union is holding titles (used for tracking missing titles).
    • Title Number: May be used to store the title number.
    • Date Applied For: Date title was applied for.
    • Date Received: Date title was received.
    • Title State: Two-digit state abbreviation.
  • Owner Information: Identify registered owner’s name and address.
  • Title Holder: Identify title holder’s name and address.

6.4. Insurance Tab

  • Insurance One/Two Information:
    • Expiration Date: Used to track expired insurance.
      • For continuous until canceled binders, input loan maturity date.
      • If binder is unavailable, input 30 days from loan date for review.
    • Agent Name, Office Phone, Cell Phone, Email Address: Agent contact details.
    • Company Code, Address Line 1/2, C/S/Z+4: Insurance company details.
    • Policy Number, Description, Cost: Policy specifics.
    • Purchased by C.U.?: Checkbox.
    • Financed?: Checkbox.

6.5. Insurance GAP / MBP / VSI Tab

  • GAP Insurance:
    • GAP Insurance?: Checkbox.
    • Expiration Date, Insurance Company, Policy Number, Policy Amount.
  • MBP Information:
    • MBP?: Checkbox.
    • Expiration Date, MBP Company Name, MBP Contract Number, Policy Amount, Phone Number.
  • VSI Insurance:
    • VSI Insurance?: Checkbox.
    • Expiration Date, Insurance Company, Policy Number, Policy Amount.

6.6. Service Contract Tab (under Vehicles)

  • Service Contract Information:
    • Service Contract?: Checkbox.
    • Expiration Date, Service Company Name, Contract Number, Policy Amount, Phone Number.

7. Managing Real Estate Collateral

The “Real Estate” tab displays existing real estate records and allows you to add new ones. It includes five sub-tabs.

7.1. Adding Real Estate Collateral

  1. Navigate to the Real Estate tab.
  2. Click the Add button.
  3. Fill in information across the following sub-tabs:
    • Property
    • Title (Same as Vehicle Title tab)
    • Insurance (Same as Vehicle Insurance tab)
    • Flood Insurance
    • Service Contract (Same as Vehicle Service Contract tab)

7.2. Property Tab (under Real Estate)

  • Property Value:
    • Current Value, Senior Lien Balance, Current Value Date, Loan to Value.
  • Property Address: Line 1, Line 2.
  • Acquisition:
    • Deed Held?: Checkbox.
    • Date Secured, Scheduled Release Date, Actual Release Date.
  • Property Info:
    • Parcel Number, Property Description 1-4.
  • Lien Holder Position, Census Tracker.
  • Legal Description: Text area for legal description.

7.3. Flood Insurance Tab (under Real Estate)

  • Flood Insurance Information:
    • Flood Insurance?: Checkbox.
    • Expiration Date, Company Name, Policy Number, Amount.

8. Managing Miscellaneous Items

The “Miscellaneous Items” tab tracks collateral that does not have a title or does not fit into other collateral types. It includes five sub-tabs.

8.1. Adding Miscellaneous Items Collateral

  1. Navigate to the Miscellaneous Items tab.
  2. Click the Add button.
  3. Fill in information across the following sub-tabs:
    • Property (Similar to Real Estate Property tab, but with fewer fields)
    • Title (Same as Vehicle Title tab)
    • Insurance (Same as Vehicle Insurance tab)
    • Insurance GAP / VSI (Same as Vehicle Insurance GAP/MBP/VSI tab, but without MBP)
    • Service Contract (Same as Vehicle Service Contract tab)

8.2. Property Tab (under Miscellaneous Items)

  • Property Values:
    • Current Value, Original Value, Current Value Date.
  • Dates:
    • Date Secured, Date Release Scheduled, Actual Release Date.
  • Property Information:
    • Address Line 1/2, Description Line 1-4.
  • Other Information:
    • Deed Held?: Checkbox.
    • UCC Held?: Checkbox (Yes/No).
    • UCC Expiration Date, Lien Holder Position.

9. General Notes and Best Practices

  • Required Fields: None of the fields within Collateral Maintenance are inherently required by FLEX. Always refer to your credit union’s specific policies and procedures for entering collateral information.
  • Data Accuracy: Ensure all entered collateral information is accurate and up-to-date to maintain proper loan security and reporting.
  • Confidentiality: This document is published by Computer Marketing Corporation/FLEX and is intended solely for its contracted clients. It may contain privileged or confidential information and should not be disseminated without authorization.