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#1838424 - 08/01/13 02:01 PM Ignoring Odd days interest
bstritecky Offline
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Joined: Feb 2005
Posts: 313
sd
I need some help! We are testing a new mortgage platform system. The new system ignores odd days in the date calculation of the APR. Odd days interest is declosed on GFE and HUD and is deducted from amount financed correctly but when calculating the APR they are using only whole periods. If I use APRwin, and use the calendar feature and put in closing day and first payment day, my APR is different. They are telling us they dont support odd days! I have read the various posts on Banker's online and I am really confused. Can we ignore odd days in just the date calculation?

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Lending Compliance
#1838724 - 08/01/13 10:06 PM Re: Ignoring Odd days interest bstritecky
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,178
Toano, VA
Unless you're planning to use that system for loans with a term of less than 10 yrs, Section 1026.17(c)(4)(iii) allows you to ignore any number of "short odd days" and up to 32 "long odd days." That should cover most mortgage loans for most lenders. If you think there's any possibility this system will need to calculate shorter terms, read the remaining subsections of paragraph (c)(4) and deal with your vendor accordingly. To me, software developer shortcuts like this are a big red warning sign...where else will you find design "surprises" like this?

APRWIN will verify your APRs, but you will have to:
1. manually confirm that the term of each loan and number of odd days conform with Section 1026.17(c)(4),
2. key in "1" as the number of whole unit periods and "0" odd days for the first payment stream, and
3. accept the default values APRWIN supplies for the whole and fractional unit periods for the remaining streams.
_________________________
...gone fishing.

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#1839269 - 08/05/13 01:13 PM Re: Ignoring Odd days interest bstritecky
bstritecky Offline
Gold Star
Joined: Feb 2005
Posts: 313
sd
Thank you so much!!!! They have a "switch" to turn on and acted like I was an alien because I wanted APR's to calculate odd days. I'm hoping your "red flag" doesn't haunt me!!!

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