Skip to content
BOL Conferences
Thread Options
#1831125 - 07/09/13 01:04 PM 90 Day Deferred Payment Program
Soccer Offline
Diamond Poster
Joined: Jan 2010
Posts: 1,028
Utopia
We are in the process of offering a consumer loan secured or unsecured product with a 90 payment deferral option. I know that state law governs this and have determined based on NYS banking law that a deferral of payment can not extend the term. So for a 60 month note the payments would have to be made up within 57 months, which results in a higher payment. I feel the payments must be disclosed for the 57 if the deferral is chosen. I know that everyone isn't familiar with New York law but lodgically what do you think?
_________________________
Everything happens for a reason

Return to Top
Lending Compliance
#1831181 - 07/09/13 02:50 PM Re: 90 Day Deferred Payment Program Soccer
Richard Insley Online
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
Unless state law forces you to schedule payments and then immediately amend your contract in order to "defer" a number of payments, you're making this more complicated than necessary. Looks to me like you simply have a 60 payment loan with a 90 day first payment period.
_________________________
...gone fishing.

Return to Top
#1831189 - 07/09/13 03:00 PM Re: 90 Day Deferred Payment Program Soccer
Soccer Offline
Diamond Poster
Joined: Jan 2010
Posts: 1,028
Utopia
I guess my confusion is our core system is looking for the 3 months interest when the first payment is made in 90 days and then the loan doesn't amortize correctly, and appears to pay off in 63, which according to NYS can't happen. I have legal looking at it and they aren't sure either.
_________________________
Everything happens for a reason

Return to Top
#1831269 - 07/09/13 04:26 PM Re: 90 Day Deferred Payment Program Soccer
Richard Insley Online
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,179
Toano, VA
Whether or not a loan amortizes to $0.00 is determined by the payment schedule you create and load into your servicing system. Since the loan has 60 extra days in the first payment period, there will be lots more interest over the life of the loan...and that makes the payments go up. At a term of 60 months, you should be able to go 90 days to the first payment without kicking the loan into negative amortization or non-amortization (a condition unique to daily simply interest amortization by the U. S. Rule method.)
_________________________
...gone fishing.

Return to Top
#1831290 - 07/09/13 04:54 PM Re: 90 Day Deferred Payment Program Soccer
Soccer Offline
Diamond Poster
Joined: Jan 2010
Posts: 1,028
Utopia
Thanks Richard I appreciate your help!
_________________________
Everything happens for a reason

Return to Top

Moderator:  Andy_Z