Advance

Since the loan in question is a Fixed Amortized Mortgage Loan, it is unlikely that there will be subsequent principal advances. The actual advance of principal was done by the lender through an Escrow company before the Servicer began to service the loan, so the trust accounting General Ledger should not be affected by this transaction. However, the GL accounts that the Servicer may be tracking for the purpose of aiding the Lender with the posting to the Lender’s GL accounts were affected. The Servicer can view the General Ledger implications of these transactions through the use of the GL Posting Detail Report.

G/L Account	G/L Description	Trans Code	Description	Eff Date	Debits	Credits
LENDER’S ASSET	LENDER’S ASSET	100	Principal Advance	09/18/2015	265,000.00000	0.00000
LENDER’S CASH	LENDER’S CASH	100	Principal Advance	09/18/2015	0.00000	265,000.00000

Accrual

Interest is accrued daily on the example loan. The daily accrual is $35.88541 per day during the fist month of the loan. This includes accrual of interest from 09/18/2015 through 10/17/2015 for a total interest accrual for the first month of $1,076.56230. The Trust Accounts, and the Servicer’s GL is still not involved, but for the purposes of the Lender’s GL. the GL posting Summary information up to and including 10/17/2015 is as follows:

Type	G/L Account	Description	Debits	Credits	Difference
Transactions	LENDER’S ASSET	LENDER’S ASSET	265,000.00000	0.00000	265,000.00000
Transactions	LENDER’S CASH	LENDER’S CASH	0.00000	265,000.00000	-265,000.00000
Transactions	NONE		1,402.40000	1,402.40000	0.00000
Accruals	LENDER’S ACCRUED INTEREST	LENDER’S ACCRUED INTREREST	1,076.56000	0.00000	1,076.56000
Accruals	LENDER’S INTEREST INCOME	LENDER’S INTEREST INCOME	0.00000	1,076.56000	-1,076.56000

Billing and Payment

10 days before the due date of the first payment, NLS automatically created two billings, one for principal and one for interest. The principal billing was created through the use of trans code 120 and was for $325.84. The interest billing was created through the use of trans code 122 and was for $1,076.56.

The payment from the borrower was received two days after the due date and was for $1,402.40. This payment was applied normally. The payment was automatically applied using transaction codes 200 and 202. In addition, because the loan is set up for trust accounting, transaction codes 10 and 20 (trust deposit and trust disbursement) were also generated for the amount of $1,402.40. The first deposits the money received into the trust account. The second creates a voucher for payment of that money received from the trust account to the lender.

The recurring transaction, which is set up to automatically execute on receipt of payment, automatically processed the servicing fee.

Servicing Fee

The recurring transaction is set up to execute a servicing fee of $15 upon receipt of any payment. This is done automatically by executing three transaction codes (22, 32, and 320) each in the amount of $15. The use of these three specific transaction codes is dictated by the setup of the servicing fee, specifically the use of the “Net From Cash - Total Outstanding,” option.

Trans code 22 creates a voucher for $15 from the trust to be paid to the servicer.

Trans code 32 creates a voucher for -$15 to the lender, effectively reducing the payment due to the lender from the trust.

Trans code 320 creates the general ledger entries that realize the servicing fee income to the Servicer.

After the payment—and taking into account the addition of a few more days of interest accrual—the general ledger summary for the loan is as follows:

Type	G/L Account	Description	Debits	Credits	Difference
Transactions	ACCOUNTS PAYABLE	ACCOUNTS PAYABLE	15.00000	1,417.40000	-1,402.40000
Transactions	ACCOUNTS RECEIVABLE	ACCOUNTS RECEIVABLE	15.00000	0.00000	15.00000
Transactions	LENDER’S ACCRUED INTEREST	LENDER’S ACCRUED INTREREST	0.00000	1,076.56000	-1,076.56000
Transactions	LENDER’S ASSET	LENDER’S ASSET	265,000.00000	325.84000	264,674.16000
Transactions	LENDER’S CASH	LENDER’S CASH	1,402.40000	265,000.00000	-263,597.60000
Transactions	NONE		1,402.40000	1,402.40000	0.00000
Transactions	SERVICERS FEE INCOME	SERVICERS FEE INCOME	0.00000	15.00000	-15.00000
Transactions	SERVICERS FEE RECEIVABLE	SERVICERS FEE RECEIVABLE	15.00000	15.00000	0.00000
Transactions	TRUST-CASH	TRUST-CASH	1,402.40000	0.00000	1,402.40000
Transactions	UNDISBURSED FUNDS	UNDISBURSED FUNDS	1,402.40000	1,402.40000	0.00000
Accruals	LENDER’S ACCRUED INTEREST	LENDER’S ACCRUED INTREREST	1,255.77000	0.00000	1,255.77000
Accruals	LENDER’S INTEREST INCOME	LENDER’S INTEREST INCOME	0.00000	1,255.77000	-1,255.77000

Remittance to Lender

Now that the payment has been received and the servicing fee processed, there are three vouchers outstanding.

The first is a voucher for a payment to the Lender in the amount of $1,402.40.

The second is a voucher for a payment to the Lender in the amount of -$15.00.

The third is a voucher for a payment to the Servicer in the amount of $15.00.

If these vouchers are used to print checks (see Check Printing) the checkbox to combine vouchers that are for the same payee will be used, and this will result in a check to the Lender in the amount of $1,387.40 and a check to the Servicer in the amount of $15.00. These add up to the amount that is currently in the trust account, and after these checks are processed against that account, the balance in the trust account will be zero.