We also use LIP for just interest reserves – one of my biggest annoyances is that if the payment date is on a non-processing day, the system is defaulted to process on the day before. All our loan documents are written that payments aren’t due until the day after if the due date falls on a non-processing day, so this means we must do manual interest adjustments, so the borrower isn’t adversely impacted by processing.

 

Jack Henry tells me it’s hard coded and cannot be adjusted.

 

 

 

Hi Frances,

 

I can send you our procedures for using it for interest reserve budgets.

 

Just know that the budget line items do not take away from the availability until a draw is done. So looking at the credit line inquiry will show you the available credit. You have to click on LIP from within the credit line inquiry to see the budget amount and amount disbursed and what is left remaining on that budget line item.  

 

I went to the Jack Henry Conference and another user mentioned they often run out of money because of the interest reserve budget not being removed from the loan’s line availability until it is used.  There lenders are used to looking at the credit line inquiry and not paying attention to the LIP budget for interest reserve. A  work around would be to create two budgets, one for interest reserves, and one for all other draws. Then get people used to looking at the LIP inquiry versus the credit line inquiry. Doing this you would have to do the draws through the LIP menu. However, the interest reserve will automatically do the draw to pay interest on that same loan.

 

 

 

I would also like feedback on this for both tracking and IRs, as we are considering implementing the use of both functionalities.

 

Thank you!

 

 

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