Introduction to Lending Renewals

It is common in the mortgage and commercial term market place for a bank to offer its clients several term and payment options before renewing a loan.

This functionality allows banks to capture the data required to renew a loan.

The client can either choose one of the suggested scenarios, negotiate another complete separate scenario, or, if the client does not respond to the renewal notice or request to negotiate a term, the system automatically renews the loan to a default product, like a six months open term.

Renewal, however, can occur at any time during the life of the loan and is not dependent on a renewal maturity date. If a loan is renewed outside of the automatic renewal period, the bank will manually complete the renewal process. Further, if the loan in consideration is delinquent or it is identified as a high risk loan, the bank does not automatically renew the loan. Any renewal will be a manual effort which provides the bank the ability to proficiently handle the delinquent and higher risk loans on more appropriate terms.

No matter the renewal choice or the timing of the renewal, the system provides the appropriate workflow, including screens and fields, to capture the data to renew the loan. Finally, the system provides confirmation on the completed renewal details.

This functionality provides the following benefits:

• Ability to generate the pricing scenarios for loan renewal.
• Ability to define rules for not producing the pricing scenarios.
• Ability to suppress the renewal when reject reasons are met.
• Ability to store the details of the suppressed renewals for manual intervention.