Configuring Loan Classification Codes (1)

Screen ID: 

Screen Title: 

Panel Number:

UCLASS-01

Configure Classification Codes

6252


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Access this screen by selecting Tool #459: Loan Classification Code Configuration.

Helpful Resources

Visit Show Me the Steps for easy instructions on how to configure loan classification code for TDR loan.

Configuring Tools for Collections

Screen Overview

This is the first of two screens used to configure Loan Classification Codes, which are attached to individual loan accounts for the purpose of managing loan loss reserves.

  • Click here for information about flagging individual loan accounts with these classification codes.

  • Click here for information about printing the Loan Classification Report.

  • Click here to learn more about the Classified Loan Summary which summarizes the reserve balance of loans that are assigned a classification code.

To create or modify a code and its reserve percentage, enter a three-character code (alpha or numeric) at the top of the screen and use Enter to proceed to the second screen.

Classification codes can be set up to handle many different situations:

1. To calculate the portion of the principal balance to be reserved as potential losses.

For example:

Code 010 = 10% Loss Potential

Code 025 = 25% Loss Potential

Code 040 = 40% Loss Potential

Code 090 = 90% Loss Potential

 

 Loan Account Current Balance Code Reserve total

 1235-780 10,150.00 010 1,015.00T

 78945-650 20,525.00 025 5,131.25

 98599-780 17,500.00 040 7,000.00

 10493-754 100,000.00 090 90,000.00

2. To track previously classified loans that have returned to a current status.

For example:

Code 020 = Loan classified in '02 audit, but current with no reserve %

3. To track loans that have reserve percentages and the audit year.

For example:

Code 011 = Loan classified in '01 audit, with a reserve of 10%

Code 029 = Loan classified in '02 audit, with a reserve of 90%

4. To track loans that have had documentation problems in the past, and might merit auditor/examiner interest in the upcoming audit.

For example:

Code 402 = Poor documentation finding in the '02 audit

 

Recommended Loan Classification Codes for Troubled Debt Restructured (TDR) and Purchased Credit Impaired (PCIL) Loans

Classification Code

Description

200

 TDR First Mortgage 20XX
300 TDR Oth Real Est/LOCs 20XX
400 TDR RE also Business 20XX
500 TDR Consumer not RE  20XX
600 TDR Business not RE 20XX
700 PCIL First Mortgage
750 PCIL Oth Real Est/LOCs
800 PCIL RE also Business
850 PCIL Consumer not RE
900 PCIL Business not RE

 

The “XX” in the description represents the year.  Since the Call Report asks for year-to-date information on TDR loans, a new classification code is assigned every year. (For example 200 = TDR First Mortgage 2013, 201 = TDR First Mortgage 2014, 202=TDR First Mortgage 2015, etc.)

Alpha-numeric codes or codes less than 200 can be used for other loan classification code types.