Reporting Early Payoff StatisticsOnce the necessary mortgage loan servicing data is available, the investor runs an Early Payoff report that generates early payoff statistics for loans in their portfolio by seller. Early payoff reports vary depending on the reporting needs of the investor. The early payoff report in this article is intended to fulfill an investor requirement to report month end active servicing early payoff statistics by seller.
Creating the Report...
Report Seller Early Payoff StatisticsThe seller's early payoff statistics are defined as the principal balance dollar amount value and the early payoff percentage value for loans in an early payoff status.
The early payoff percentage value is the sum of the seller's early payoff loans principal balance dollar amount divided by the seller's total active servicing dollar amount for the early payoff period being reported.
Step #1The seller's active servicing for the early payoff reporting period, typically 180 or 360 days, is calculated.
The seller's total active servicing for the early payoff period is equal to the sum of the principal amount of all loans in the investor's servicing portfolio, for the seller, where the loan's status is Active, Repurchase, Bankruptcy, Foreclosure, Prepayment or Early Payoff for the period calculated. Typically, the only loans excluded by an investor when calculating the active servicing for a seller are those that have been sold servicing released by the investor or loans that are still on the investor's servicing system but considered paid in full and not in a early payoff status.
Step #2The seller's early payoffs amount for the reporting period is calculated.
The seller's early payoff amount is equal to the sum of the principal amount of all loans in the investor's servicing portfolio, for the seller, where the loan is either paid in full or a specified percentage (e.g. 75% of the original principal balance) of the loan is paid off and the investor's purchase date for the loan is less than or equal to the investor's defined early payoff days, typically 180 to 360 days, from the early payoff report date.
Step #3The seller's early payoff amount is compared to the seller's active servicing amount to report an early payoff percentage.
In this step, the investor retrieves the active servicing records in Step #1 and compares them to the early payoff records identified in Step #2. The result is used to report the percentage of Early Payoffs by seller.
Many Early Payoff reporting scenarios exists. A few things to consider when performing analysis to report early payoffs are:
- Most investors will want to report Early Payoffs in buckets of 90, 180 and 360 days. For hints on how to report data in buckets see the Reporting Debt To Income (DTI) article on this site.
- A common mistake when reporting Early Payoff in buckets is the comparison of the Purchase Date to the Current Date to determine the Early Payoff report bucket. The Purchase Date should always be compared to the Loan Status Date to determine the Early Payoff report bucket.
- A loan with a significant principal balance reduction in the first 360 days may be considered an Early Payoff. Determine if this is a consideration and plan your reports accordingly.
- It is recommended that once a loan is identified as an Early Payoff that the relevant data be saved to an Early Payoff archive table for reporting purposes. Saving Early Payoff data to a separate reporting table insures data against loan status changes and year-end servicing data updates or deletions and serves as a basis for generating trend reports.
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