Bulletin ID
DLB - 99 - 52
| PublicationDate: 7/1/99 BulletinID: DLB - 99 - 52 July 1999 DLB 99-52 Subject: Follow-Up Information on Implementing the Origination Fee Reduction Dear Partner, This bulletin is a follow-up to Direct Loan Bulletin 99-39, which discussed implementing the origination fee reduction. We hope that you will find this additional information helpful. 1. Are there other edits effective on July 16 that we should be aware of? Answer: Yes. In addition to the edits listed in DLB 99-39 under question 4, we will reject records under the following conditions: a. Anticipated Disbursement Date Changes if the origination fee is 4% for the loan and the new Anticipated Disbursement Date is on or after 8/15/99, b. Anticipated Disbursement Date Changes if the origination fee is 3% for the loan and the new Anticipated Disbursement Date is before 8/15/99, c. Actual Disbursement Records, if the disbursement fee percentage doesnt match the loan fee percentage in the Loan Origination Record, d. First actual disbursements for loans with an origination fee of 4%, if the disbursement date is on or after 8/15/99, and e. First actual disbursements for 3% loans, if the disbursement date is before 8/15/99. As of July 16, to ensure that records dont reject, anticipated disbursement date changes must be completed and sent to the Loan Origination Center (LOC) at the same time as changes raising the loan amount approved and anticipated disbursement amounts using the three percent fee. Note: If the first disbursement is already on or after August 15, 1999, there is no need to change the anticipated disbursement dates. 2. When changing the origination fee for loans originated at the four percent fee rate, are there any timing issues with regard to sending in change records? Answer: Yes. a. You must first send in the change records reducing the loan to $0 and receive an acknowledgment on those records before sending records adjusting the amounts back up with the new fee. b. As of July 16, to ensure that records dont reject, anticipated disbursement date changes must be completed and sent to the LOC at the same time as changes raising the loan amount approved and anticipated disbursement amounts using the three percent fee. Note: If the first disbursement is already on or after August 15, 1999, there is no need to change the anticipated disbursement dates. 3. Will the Loan Origination Center send disclosure statements to the borrowers whose loans are zeroed out telling them they have $0 loan amounts? Answer: Yes. We have been sending disclosures to borrowers whose loans were adjusted to $0. However, the LOC is currently working on a solution to this issue and we plan to stop sending the disclosures on loans adjusted to $0 within the next 10 days. We will resume sending these disclosures after a period of time. We will let you know as soon as the changes have been made and provide additional details at that time. 4. We have created spring 2000 loans with loan fees of four percent. I know that I will need to send change records on these loans also, even though the first anticipated disbursement date for these loans is January 2000 so that the LOC can recalculate the fee to be three percent. My question is: Will the LOC recalculate the loan fee if I adjust a loan down to zero and then bring it back up on or after July 16th even though no change was made to the Anticipated Disbursement Dates? Answer: Yes. In this case, the LOC will check the accepted origination record when determining the date of the first anticipated disbursement. No change in the date is required if the anticipated disbursement dates in the LOR are already on or after August 15, 1999. If you have any further questions, please call you regional Client Account Manager or LOC Customer Service Representative. Thank you for your continued partnership in the Direct Loan Program. Sincerely, Margaret E. White Chair Direct Loan Task Force |