Appendix A - Merge Field Descriptions (Loans) > Event 5, Daily Simple Interest Rate Change

This event automatically produces an event letter when the loan rate changes on a payment method 5 or a payment method 6 (non-ARM loan).

Merge Field	Field Mnemonic/ Calculation	Description
NEW INDEX	LNAPIN	New index (last index)
OLD INDEX	TRLG	Old (prior) index
OLD INTEREST RATE	TRLG	Old (prior) interest rate

Periodic Rate Caps & Scheduled Rate Changes

The Periodic Rate Cap for this screen is for Payment Method 6 loans only. ARM Loans and Construction Loans are handled separately, as discussed below.

Periodic rate caps must have a period start date and period length in months to roll forward in the afterhours. The period start date and period start rate will update with the same program that the rate roll is done in, either with the floating rate roll or the scheduled rate change.

Every night in the afterhours, it will add the period length in months to the period start date. If this calculated date is greater than or equal to the current run date and less than the next run date, the period start date and period start rate will update. The period start date will update to the new calculated date and the period start rate will update to the current loan rate.

If the loan happens to be updating the rate on the same night, it will use these new updated rate caps fields to determine the loan capping.

If periodic rate caps and scheduled rate changes are both used on a loan, the period rate caps frequency months must be in frequency with the scheduled rate change frequency and cannot be less than the scheduled rate change. This forces the period rate cap's period start date to change the same time as the scheduled rate change and allow for a scheduled rate change to occur once or multiple times during a periodic rate cap cycle.

ARM Loans and Construction Loans

Periodic Rate Cap maintenance for ARM loans is found on the Loans > Account Information > ARM Information screen.

Periodic Rate Cap maintenance for Construction Loans (LIP Method Code 1 or 101) may be set up; however, they will not affect the rate while in the Construction Phase. Rate caps must be set up on the Lifetime & Periodic Rate Caps tab on the Account Construction Detail screen if caps are required during the draw period.

Periodic Rate Caps Fields

These fields pertain to periodic rate caps, including the maximum points up/down, period start date and rate, and more. Periodic rate caps must have a period start date and period length in months to roll forward in the afterhours. The period start date and period start rate will update with the same program that the rate roll is done in, either with the floating rate roll or the scheduled rate change.

Note: If periodic rate caps are set up on a construction loan (method code 1 or 101), they will not function until the method code is removed.

Field	Description
Use Rate Cap (L2PRCC)	When this box is checked, the loan will begin using rate caps. The rate cap sets the limit on the interest rate for the loan. The interest rate is not allowed to adjust above or below this cap.
Maximum Points Up (L2PRCH)	This is the most the rate can increase during a period. The maximum points the rate can go up from the period start date to the next period start date. When a new rate is calculated, it will look at the period start rate to be sure the rate has not increased by more than the maximum points up.
Maximum Points Down (L2PRCL)	This is the most the rate can decrease during a period. The maximum points the rate can go down from the period start date to the next period start date. When a new rate is calculated, it will look at the period start rate to be sure the rate has not decreased by more than the maximum points down.
Period Start Date (L2PRCD)	This is the start date of the rate cap period. Note: When the calculated next period start date is equal to the after hours run date, the period start date and the period start rate will update. The period start date will be file maintained to the next period start date and the period start rate will be F/M to the loan rate (LNRATE). When the loan is using scheduled rate changes, the period start date and the period length in months will be required to be in frequency with the scheduled rate change. This will force the frequency to be the same for both and the period start rate will roll when rate change occurs.
Period Start Rate (L2PRCR)	This is the rate on the loan at the start of the period. Note: When the calculated next period start date is equal to the after hours run date, the period start date and the period start rate will update. The period start date will be file maintained to the next period start date and the period start rate will be file maintained to the loan rate (LNRATE). FPS GOLD Only (training note): The Period Start Rate is the end of the prior periods rate. The rate cap date and period start rate roll first, then the rate is calculated and compared to the max points up and down.
Period Length in Months (L2PRCP)	This is the length of the current rate cap period. Note: When the loan is using scheduled rate changes, the period start date and the period length in months will be required to be in frequency with the scheduled rate change. This will force the frequency to be the same for both and the period start rate will roll when rate change occurs.
Rate Change Minimum (L2PRCP)	This is the minimum the rate must change, or else it will not change. When a new rate is calculated, it will compare the current rate to the new rate, and it must change by the rate change minimum, or the rate will not change.

Field

Description

Use Rate Cap

(L2PRCC)

When this box is checked, the loan will begin using rate caps. The rate cap sets the limit on the interest rate for the loan. The interest rate is not allowed to adjust above or below this cap.

Maximum Points Up

(L2PRCH)

This is the most the rate can increase during a period. The maximum points the rate can go up from the period start date to the next period start date. When a new rate is calculated, it will look at the period start rate to be sure the rate has not increased by more than the maximum points up.

Maximum Points Down

(L2PRCL)

This is the most the rate can decrease during a period. The maximum points the rate can go down from the period start date to the next period start date. When a new rate is calculated, it will look at the period start rate to be sure the rate has not decreased by more than the maximum points down.

Period Start Date

(L2PRCD)

This is the start date of the rate cap period. Note: When the calculated next period start date is equal to the after hours run date, the period start date and the period start rate will update. The period start date will be file maintained to the next period start date and the period start rate will be F/M to the loan rate (LNRATE).

When the loan is using scheduled rate changes, the period start date and the period length in months will be required to be in frequency with the scheduled rate change. This will force the frequency to be the same for both and the period start rate will roll when rate change occurs.

Period Start Rate

(L2PRCR)

This is the rate on the loan at the start of the period. Note: When the calculated next period start date is equal to the after hours run date, the period start date and the period start rate will update. The period start date will be file maintained to the next period start date and the period start rate will be file maintained to the loan rate (LNRATE).

FPS GOLD Only (training note): The Period Start Rate is the end of the prior periods rate. The rate cap date and period start rate roll first, then the rate is calculated and compared to the max points up and down.

Period Length in Months

(L2PRCP)

This is the length of the current rate cap period. Note: When the loan is using scheduled rate changes, the period start date and the period length in months will be required to be in frequency with the scheduled rate change. This will force the frequency to be the same for both and the period start rate will roll when rate change occurs.

Rate Change Minimum

(L2PRCP)

This is the minimum the rate must change, or else it will not change. When a new rate is calculated, it will compare the current rate to the new rate, and it must change by the rate change minimum, or the rate will not change.