Good morning all,

If we have to reimburse the customer for an error on the CD, is it required that the form of the reimbursement be a check? Or can it be applied to the principal on the loan?

I would be cutting a check. You will adjust the Cash to/from borrower. How automatically applying that to the loan balance does not really make since. If they want it applied to principal, they can make a payment with the check.

Thanks Randy. I am thinking of the 1099 implications- here is your reimbursement because we messed up, and oh, by the way you have to pay taxes on it.

Unless the reimbursement involves prepaid interest or points, which aren't typically involved in a cure, it would have no affect on 1099 reporting.

Thanks John! The reimbursement is for settlement charges that were left out of APR calculations (system glitch not caught in a timely manner)-