These adjustments are applicable to the following case types: Endowment Mortgage, Pension Mortgage, Single Premium Payment Protection, Mortgage Reconstructions, and Loan Reconstruction.

 

 

Lump sum / capital reduction   Mortgage payments along with the balance for interest may not reduce until the next month or even later depending on the lender and the actual account method, the date of the actual payment may also affect how and when you will see the payment react within the calculation. Both the date of the payment and the amount is required. Care must be taken if used at the same time as the Set Mortgage payment adjustment as this may cause an adverse effect

 

Override

This adjustment can be used to cover smaller ad hoc payments or to reflect regular additional payments made to the account.   This payment may affect the account at the time of payment or the month after.  It is possible for the additional payments to sit on the account for some time and then reduce the balance for interest when the lender does a recalculation.  The way in which it affects the account depends on the lender and the method of mortgage (annual accounts may have quite a delay).

 

Fee

This is an additional fee charged by the lender. This has no effect on the mortgage. Both date and amount are required (may include items such as survey fees and fixed rate fee).

 

Accrued fee  

This is similar to the fee adjustment, however it is added to the mortgage rather than showing as a customer payment. This can be used to include indemnity premiums and buildings and contents insurance (when appropriate).  It can also be used for further advances (when covered by the same policy) it can also be used to cover new build and retention amounts when released.  You need to enter both the date and the amount, MIRAS needs to be watched here to ensure that it only applies when required. 

 

Annual Accrued Fee

This is used to model a recurring annual fee such as buildings and contents insurance and depending on how cases are processed - some premium funded type accounts such as the Halifax career mortgage.  It will apply from the start date to the end date, and can be set to increase each year by a fixed amount or a percentage in the same way as Annual Premium. When using this adjustment alongside the ‘Monthly Premium’ adjustment ensure that their specified dates do not overlap.

 

Monthly premium

This is for all insurance premiums such as the endowment / decreasing term assurance. Date ranges and the premium amounts are required. When inputting details of a low start plan there are additional fields within the adjustment that must be completed, such as how the plan increased (simple %, compound % or amount) and the period of change. 

 

4 weekly premium

This is for all insurance premiums such as the endowment / decreasing term assurance. Date ranges and the premium amounts are required. When inputting details of a low start plan there are additional fields within the adjustment that must be completed, such as how the plan increased (simple %, compound % or amount) and the period of change. 

 

Annual Premium

This adjustment is used when endowment / insurance premiums are paid on an annual basis. They are entered in the same way as monthly premiums and can increase by either a fixed amount or a percentage over a defined period, using “Adjustment Type”, “Adjustment Value” and “Adjustment Period”.

 

Increase %                  

This allows you to apply a % increase over and above the lenders standard variable rate and may be of use for mortgages such as tracker mortgages (normally with BOE base rate).  Select the increase % and enter the date range.

 

Discount %, fixed %

These are interest rate adjustments.  When completing the screen, enter the date range along with an interest rate.

 

Capped & Collared % 

These options are available either to use separately or together, (complete details as above)

 

Surrender value    

This is for specifying policy surrender values.  Both the date and amount are required and this needs to be included within the date range of the calculation.

 

Forced recalculation

This will recalculate payments. Only the date is required; this may be used to force a payment change following a lump sum capital reduction on a yearly review mortgage. When an accrued fee is applied where the amount is for less than £1,000 a forced recalculation will be needed (a forced recalculation automatically takes place for accrued fees of £1,000 plus).

 

Recalc current rate

This is used in the case of lenders who set annual Net Payments. It is used to facilitate the recalculation of a Net Payment based on the current interest rate, rather than the rate in force at the annual review date and may be required when rates change from the SVR to a specific rate (or vice versa) part way through a year. Also when a product ends it may be used to force the rate to recalc if the system indicates that this has not been done.

 

Set IBB

This option allows you to set the current interest bearing balance and is really only for use when moving between schemes with the same lender (e.g. changing from Halifax Budget Plan to Halifax Standard).

 

Set IBB start date

This adjustment allows you set a date for the interest bearing balance by entering in a start date and end date. The start date is the IBB start date and the end date is used to see which calculations this should be included in. The date entered will overwrite the start date entered in the multilender screen and set the IBB from the date given and recalculate according to the lender selected. This adjustment will also make provision for any bank holidays that occur during the year, ensuring that any dates are either rolled forward or back to miss bank holidays.

 

Monthly payment

This accommodates additional monthly payments or underpayments made to a mortgage. Please note that accrued fees and lump sums should be used for mortgage related overpayments as these are then applied according to the selected lenders conditions. This adjustment can also be used to cover insurance payments made on the mortgage.  These work in a similar way to monthly premiums but reduce the mortgage balance. Date ranges and amounts are required.  When specifying an increasing monthly payment an adjustment type (simple %, compound % or amount) can be entered along with the period of change. When entering this adjustment use the 1^st of the month for the date you want it to take effect from as with the Set Payment adjustment.

 

Missed payment - Mortgage

Only the date of the missed payment is required, we advise that you enter the 1^st day of the month rather than the contractual due date (if consecutive payments are missed, you must enter the date range). Only use when no mortgage payment has been made.

 

Set Mortgage payment

Please note that this adjustment should never be used in a mortgage comparison. The purpose of this adjustment is to create over / underpayments based on using the system adjustment generator (full details are in the adjustments section, we recommend that you familiarise yourself with this section prior to use). This allows you to override the monthly mortgage payment for a given period, as calculated by Redress Manager. When a positive value is entered this indicates the actual mortgage payment made by the customer, replacing the system calculated value. A negative value works in the same way as a negative Monthly Payment adjustment.

 

No Payment

This allows payments that would normally have been made to be cancelled, therefore affecting the mortgage balance. This will include the mortgage payment along with any “Monthly Payment”, “Lump Sum”, or “Over-ride” for the period specified. It does not affect Endowment, DTA premiums etc.

 

Set Payment Day         

This allows you to change the day of the month on which the mortgage payment is made and will accept a value from 1-31 inclusive. Use the 1^st of the month as the start date (month you want it to take effect from) and the new date as the value entry. This will ensure that no monthly payments are missed.

 

MIRAS Amount

This adjustment is to be used when you need to enter a non standard MIRAS amount. If the loan falls within the standard MIRAS range then select standard on the main screen. If an adjustment is needed you can select the amount of advance that is entitled to MIRAS, i.e. dual MIRAS of £60,000 or a reduced allowance of £20,000.  A date range and the eligible amounts are required.  Where a mortgage is split into two parts (see set loan A & set variable loan A), care must be taken when allocating MIRAS (especially for the repayment side of the comparison due to the balance reducing).

 

When loan A is the main recipient of MIRAS and any surplus is available to loan B; create a MIRAS amount adjustment and select ALL as the target for the adjustment.  When loan A is the only recipient of MIRAS, select loan A as the target for the adjustment. To enable the standard MIRAS % to be used in your calculation you must ensure that the main screen is set to standard MIRAS, this will enable you to modify the MIRAS amount while applying the standard MIRAS % rates automatically.  If the MIRAS % is to be altered the MIRAS % adjustment must be used as well.

 

When loan B is the main or only recipient of MIRAS, two adjustments MUST be used. The first to set the amount and allocate to loan B, and the second to set the amount available to loan A (zero must be inserted if there is no relief available under loan A).

 

Particular care should be taken when a case involves more than one calculation; MIRAS applies to only the first £30,000 of the loan so the second and subsequent calculations should be set to “No MIRAS” if the first endowment policy covers a debt of £30.000 or more.

 

MIRAS %

This adjustment allows you to select the MIRAS rate applicable between the dates specified. Again it should only be used when the standard MIRAS % rates in the system are to be overwritten by a different amount specific to your case. If the standard rate applies no adjustment is needed.

 

Interest Balance

This allows you to set the amount on which the interest is to be charged. This may be useful for the newer style of mortgages such as Intelligent Finance (Halifax) etc where the client has savings and these help to reduce the amount on which the debt is calculated.  Enter the date range, along with either, a positive figure such as £40,000, the amount which the interest is to be calculated on, or a negative amount i.e. -£10,000, this is deducted from the amount on which the interest is normally calculated (IBB).  This should be used in preference to the Working Balance only if the customer continues to make payments based on the full debt.  This will result in reducing debt amount.

 

Payment Balance

This option can accommodate certain types of deferred or stabilised mortgages and will allow customers to make payments based on a lower or level balance, therefore deferring payment on the rest of the debt/mortgage (does not affect interest charged).  Enter the date range along with the amount e.g. a positive figure such as £30,000; this will calculate the actual payments on the £30,000.  Alternatively enter a negative amount such as - £10,000, this will reduce the figure on which the repayment is normally calculated by the £10,000.  This will result in an increase in the debt outstanding. 

 

Working Balance

This allows a combination of the above.  The one value is applied and both actions activated.  This is to accommodate fluctuating balances when the balance varies and payments are made based on the actual balance outstanding.  This is ideal for current/saving/mortgage accounts where the customer is charged based on the difference in their mortgage minus their savings (i.e. IF and other similar mortgages). 

 

Interest Balance Cap

When required (for Credit Card Payment Protection Insurance cases) this adjustment ensures that interest is refunded on the correct amount.

 

Set loan A balance - Split Loans

This allows you to break-up the loan into two parts (both can have different interest/MIRAS rates along with different deferred values etc.)  Enter the date and a positive value which will be identified as loan A (loan B will automatically be set to the remainder) or a negative value when Loan A will be set to the outstanding balance minus the value specified.  If you need to reset the loan back into one, enter a fresh adjustment with the new date and enter zero in the value box.

 

This adjustment may be useful in staff cases where two parts of a loan are on different rates (preferential rate on a fixed amount).

 

Enter the specific rate adjustment along with the term - use the loan column to allocate the rate to loan A or B. If a fixed rate is allocated to loan A, then the standard variable rate will be automatically applied to loan B (this can work the opposite way.)

Loan A will remain at the value this adjustment sets it to, but Loan B will fluctuate in accordance with payments made. It is therefore recommended that loan B is used to cover any repayment element of the loan.

 

See MIRAS Amount adjustment for treatment of MIRAS with split loans. 

 

Set Variable Loan A

This is entered in the same way as Set Loan A Balance but it allows both Loan A and Loan B to fluctuate (Useful for part conversion to Repayment and when other adjustments cause an outstanding balance to reduce, thereby affecting the MIRAS balance).

 

For instance, this can be used when Loan A represents a loan for a house and Loan B a loan for a car.  MIRAS relief would only apply to Loan A and we therefore need to ensure that when Loan A drops below £30,000 that the MIRAS relief reflects this.  If a lump sum is repaid and it needs to be applied to both loan A & B then this adjustment should be used.  This adjustment can be used to apply different rates on the two parts of the loan. 

 

Care needs to be taken to ensure that the correct set loan is used to reflect the lenders approach.  You also have the ability to alter the payment method on part of the loan e.g. currently all the loan is on an interest only basis but part of the loan is converted to repayment, or currently all repayment and part converts to interest only.  Our understanding from certain lenders is that this adjustment produces a more realistic result than the set loan A balance.

 

Change Calculation (calc) type

This adjustment enables you to conduct a mortgage on a part interest / part repayment basis.  Select the adjustment; enter the date that the change is to take effect along with the element of the loan to be changed i.e. loan A or B, (to do this use the drop down sub menu in the loan box). Using the value -1 will switch to Repayment and -2 will switch to Interest Only. Highlight the description i.e. change to repayment.   When used with the Set Loan A balance adjustment we recommend that the repayment element is conducted under loan B as this part of the loan can alter.

 

Payment Rate %  

This adjustment will help with deferred mortgages where the customer made payments based on interest calculated at a different rate to that actually charged to the mortgage.  When using this adjustment enter the date range along with a value: if you enter a positive value e.g. 10, the system will calculate the interest element of the repayment based on the 10.  If you want to reduce the normal rate by 3, enter a negative value e.g. -3.  This adjustment will result in the mortgage balance increasing. With most deferred schemes it will be necessary to also add the payment balance adjustment to enable you to gain the most accurate deferred calculation.

 

Payment rate difference %

This adjustment performs the same function as the payment rate % adjustment

The difference is that where the previous adjustment replaced the interest rate used in the calculation, this adjustment amends the standard variable rate applied to the account at the time by a percentage of its value.

 

E.g. a positive value of 20% will reduce the actual rate by ¹/₅ of its true value i.e. 5% down to 4%.  This amended rate is used to calculate the interest element of the repayment.  The interest charged to the account will be at the full rate, thus resulting in the mortgage balance increasing. With most deferred schemes it will be necessary to also add the payment balance adjustment to enable you to gain the most accurate deferred calculation.

 

Please note that in this adjustment if you state a negative value i.e. -10% it will result in an additional 10% being added to the charged rate. When inputting details you do not enter the % sign.

 

Payment Amount %

This is used for deferred rate mortgages where the amount paid is a percentage of the amount due. As with other deferred interest rate adjustments, enter start and end dates.  For example customer paid 70% of the amount due, enter date scheme started along with the date it ended.  In the value box enter 70. Again the payment balance adjustment may be needed here to produce the correct results.

 

Payment Miras Int (Diff %)

This is used to change the interest rate used when using other payment % rates. Normally the rate a payment and interest are calculated on are the same but by using other adjustments you can alter the rate used when calculating a monthly payment. This adjustment allows you to set the rate to be used for the MIRAS part of a monthly payment. This may need to be used on some deferred cases.

 

Redress adj before int

This is used to increase the redress amount prior to interest being added. This adjustment will be useful when processing FOS case 2, where the premiums plus interest must be included within the redress before interest is applied.

 

Redress adj after Int

This is used to increase the redress amount after interest has been calculated. This adjustment will be useful when processing FOS case 7, where the outstanding Interest Only balance must be included within the redress with no interest added.

 

Set Clawback

This can be used to set the clawback balance used by lenders who apply clawback to their Interest Only payments.

 

Instant Override

Allows users to override the lender specific timing for which override adjustments are applied to the mortgage.  Adding this adjustment for a specified time period will ensure all overrides will be applied immediately and can be used when processing Payment Protection Insurance (PPI) complaints.

 

Set Term

When Payment Protection Insurance is linked to a mortgage or loan but on a shorter term basis this adjustment, alongside the split loan, will allow two elements (Loan and PPI) to be allocated the different terms. The value must be entered as months (e.g. 60 for 5 years) on the date that you want it to start (usually the start of the mortgages/loan).

 

Premium Claim

If a claim has been upheld within a PPI calculation this adjustment can be used to acknowledge the claim paid. The adjustment works in a similar way to the Surrender Value adjustment within a Mortgage Endowment complaint case, where the value is deducted from the result at the end of the calculation.

 

No Premiums

As a customer would not have made any payments during a claim period they need to be removed. The ‘No Premiums’ adjustment works in a similar way to the ‘Missed Premiums’ adjustment for a mortgage case.

 

Monthly income

This is for all Income payment received within an investment case. Date ranges and the income amounts are required.

 

4 weekly income

This adjustment is same as above but on a 4 week basis. Enter the start date, the value and the end date (For example, 4 months can be entered as ‘4m’).

 

Quarterly income

This is for all Income payment received within an investment case every 4 months. Date ranges and the income amounts are required.

 

Annual income

This is for all Income payment received within an investment case on an annual basis. Date ranges and the income amounts are required.

 

Single Premium PPI

This adjustment works similar to the Accrued fee adjustment; however it is used in PPI cases.

 

Regular PPI Premium

This also is used in PPI cases and works in the same way as the Monthly Premium adjustment.

 

Force capital redress

This overrides the system set up to use force the use of the capital balance for a loan. Some loan methodologies add interest at the start of the loan meaning the balance contains capital and interest. This option will ensure the capital amount is used for redress calculations.

 

Force balance redress

This overrides the system set up to use force the use of the outstanding balance for a loan. Some loan methodologies add interest at the start of the loan meaning the balance contains capital and interest. This option will ensure the outstanding balance including interest is used for redress calculations.

 

Min payment amount

This is primarily for credit cards where a minimum payment is required. Note that MIRAS will affect this value as it takes affect after this is calculated.

 

Min payment balance %

This is primarily for credit cards where a minimum payment % is required. Note that MIRAS will affect this value as it takes affect after this is calculated.

 

Set system payment

This replaces the payment created by the system. Note that this is different to Set Mortgage payment or other adjustments as this is used as a replacement for the system payment only and it does not view any system payment as an under or over payment but rather the expected payment.

 

Override (use payment)

This will either use the current system generated payment or the payment specified using ‘set system payment’. The value should match the system payment, any amount specified will be ignored.

 

Accrued fee (use payment)

This will either use the current system generated payment or the payment specified using ‘set system payment’. The value should match the system payment, any amount specified will be ignored.

 

Set arrears balance

This adjustment will set an amount for the arrears balance when used on a capital and interest calculation. This will adjust the repayments to reflect an interest only arrears balance on the account. A payment recalculation will be required in order to for this adjustment to take effect. This can be in the form of an interest rate change or a forced recalculation adjustment.

 

Adjust IBB balance

The value entered for this adjustment if positive will add to the interest bearing balance (IBB) and if negative, will take away from the IBB. The effect of the Adjust IBB can be altered by the lender setup so care needs to be taken to ensure the correct value is achieved when using this adjustment

 

Adjust Payment Balance

This adjustment works similar to the set payment balance adjustment but allows you to increase/reduce the balance used to calculate repayments.

 

No calculation

This adjustment returns a zero result for all items for the period that it is set.

 

Allow Zero Balance

If the balance of a case reaches zero during the period that this adjustment is applied the calculation will continue however payments will stop and the interest charges will not be applied. Typically Redress Manager would halt the calculation at this point. Note that you will need an additional ‘Allow Zero Balance’ adjustment row for each tab that you wish to apply the adjustment for.

 

Allow Negative Balance

If the balance of a case enters a negative state during the period that this adjustment is applied the calculation will continue however payments will stop and the interest charges will not be applied. Typically Redress Manager would halt the calculation at this point. Note that you will need an additional ‘Allow Negative Balance’ adjustment row for each tab that you wish to apply the adjustment for.

 

Disallow Negative Interest

This adjustment is used in conjunction with the ‘Allow Zero Balance’ and ‘Allow Negative Balance’ adjustments. Any negative interest applied to a balance would be changed to zero.

 

No Recalc

When this adjustment is applied, for the period that it is applied, Redress Manager will not recalculate monthly payments. Note that you will need an additional ’No Recalc’ adjustment row for each tab that you wish to apply the adjustment for.

 

 

Merge Split IBB

If a Loan B is removed from a case while this adjustment is applied, the result will be that IBB’s are added together rather than resorting to Loan A’s IBB only. Note: Before using this adjustment please speak to Exasoft to understand the correct way in which this adjustment should be used.

 

Set Balance

This adjustment will set the outstanding balance to the amount specified. It may not work on loans that are calculated up front. Note: If a split is present during the period the adjustment is applied, the balance for Loan B would be affected.

 

Adjust balance

This adjustment will alter the outstanding balance by the +/- amount specified. It may not work on loans that are calculated up front.  Note: If a split is present during the period the adjustment is applied, the balance for Loan B would be affected.

 

Use current term

When performing a payment calculation, if this adjustment is applied, the term specified as a value would be used to calculate the payment. Note: this would override the system setup for term.

 

Payment received

This adjustment is used to show a credit against the credit card balance relating to a payment from the consumer

 

Insurance premium

This adjustment will show a debit against the credit card balance relating to a charge for PPI insurance

 

Interest

This adjustment will show a debit against the credit card balance relating to the monthly interest charge

 

Purchase

This adjustment will show a debit against the credit card balance relating to a purchase made by the consumer

 

Refund

This adjustment is used to show a credit against the credit card balance relating to a refund from the card provider

 

Late payment fee

This adjustment is used to show a debit against the credit card balance relating to the consumer making a late or missing a monthly minimum payment

 

Over limit fee

This adjustment will show a debit against the credit card balance relating to the consumer exceeding their agreed credit limit

 

Cash advance fee

This adjustment will show a debit against the credit card balance relating to the consumer making a cash withdrawal

 

 

*The System Generate icon is always available in the adjustment setup of a multi-lender case.

 

Please review the other parts of the Adjustments section for more information on date requirements and ranges.

 

Related Topics

Adjustments