Following the Bank Rate change yesterday, we are hoping to adjust the interest rates and subsequently the payments due for each of our loans on the Margill Loan system.

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Q: Following the Bank of England Base Rate change yesterday, we are hoping to adjust the interest rates and subsequently the payments due for each of our loans on the LMS system.

All our loans are set at interest of a set margin + BoE Base rate, as BoE base rate changed from 4.5% to 4.25%, I need to change all loan interests -0.25% and then adjust the expected repayments to reflect the interest rate change

A: There are two ways to do this. The Old way and the New way as of version 5.6 (but do update to 5.7 at www.margill.com/get). We recommend the New way…

The Old way (Booo…) 

You can change the rates easily by selecting the loans you wish to change and the Ctrl Alt Shift i. This window will appear allowing you to reduce the rate of all the loans by .25. So you will enter -.25 and click on Add to actual rate (so you will add -.25%)

As for changing the payments to reflect this change, with the above method you would have to go in each loan and recompute the payments for Balance = x (right mouse click > Payments….).

The New way (Yeah…)

I’m not sure if you are on the latest version (5.7 when writing this) but new options are available for variables rates.

You can now link loans to Rate tables and when you change the Rate table, then all Payment schedules get updated to the new rate and you can tell Margill to recompute the Due payments to reach a final balance of 0, X or the existing balance, before the rate change. So very powerful options that you can add to existing loans. A bit of work once but then you are all set. Global changes allows you to mass change the Records to the new variable rate method (see lower down).

You might need to Activate the Advanced Variable Interest Rate module in Settings (your Settings will not look like this yet – Modules is not a separate tab in Margill 5.7 – I am on Beta 5.8).

This is where you create those new tables (under Tools):

In my email I sent you the rates so you need not type in all the rates (not explained here). You can import rates from a simple Excel sheet or a Margill TVL format (our older rate table types).

You should create the Rate table with all rates including yesterday’s rate.
Once the Rate table is create, go to your loan (try one first manually before using the Global changes) and see all the circled items. You can also add your spread.
When you click on Update Rates,

be careful to change the date manually to yesterday, not today. The system will be default, enter today’s date, not your rate date from yesterday.

You can also have the Due Pmts recalculated automatically to reach the existing balance or another balance of your choice although this option will do this automatically – best is try out a few loans manually to see the exact process…

So there you have it. You will be all set when rates change in the future. You will then simply add the rate change and all loans linked to this table will automatically be update: interest rate and all Due payments!

Global changes:
Global changes will allow you to update all loans of your chosing to the new Rate table and to enter the Spreads for each loan individually. In the Main window, choose the loans to update > right mouse click > Global changes

This is a two step process. First chose the table Abbreviation and Save.

Then enter your spread (Variable rate +or -). You will have to enter all your spreads one by one if they are different. If no Rate table is tied to the loan, then you will notbe able to enter the spread:

So with this, all loans will have the Rate tables and spreads but not the auto Due Pmt recalculation unfortunately. This option:

So, no way around this, hyou will have to check the box loan by loan in the Data tab.

This has not been added to the Global changes. I guess we’ll have to add this to our To do list in version 5.8. On it.

Hopefully this will help you out…

Calculating interest on fees and expenses on the clients behalf – for Law firms

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Question: We are a personal injury law firm that advances its clients and upon settlement we wish to calculate the interest on these fees that are added at different dates.

Answer: Margill products easily do these calculations and hundreds of law firms use Margill for this specifically or for their legal calculations (prejudgment / post judgment).

Depending on your volume, you could either use Margill Interest Calculator (low volume) or Margill Loan Manager (higher volume of accounts and transactions).

Margill Law Calculator:

Use the calculation called “Recurring Payments (Amortization)”:

Calculation Method is usually Simple interest (not compound).

Origination date and First Payment Date would be when the first fees / expense is paid by the law firm.

Fees are usually totally irregular so use the “Irregular” Payment Frequency.

Rates can be fixed or even be tied to your bank’s interest rate (check Interest Table in this case – you would have to had created the interest table).

Click on “Add Irregular Payments” to add the fees.

Fees should be added as negative amounts (positive amounts are payments you would have made to your client – rare in these situations since the payment is made upon settlement). Enter the date at which the interest starts on these (some law firms will only charge interest 30 days after the amount is paid to the supplier). A comment can be added.

If you have many of these for a file, you can add them with a very simple Excel sheet with two or three columns (press on the ? to see the format).

Then click on Save.

Then Compute to create the Payment schedule

Schedule looks like this:

Now I want to calculate the interest until August 22. I had forgotten to add a fee of $222.22 on July 7 so I will add it here. Use the icons on the right or the right mouse click:

Notice there are no Payment amounts on lines 5 and 6 since the goal is simply to get a balance on these dates.

So total interest is $189.99.

You can save the schedule and update over time. use the Save button on top.

It’s that easy.

If you have a higher volume and wish to import hundreds of transactions on a regular basis, then the Margill Loan Manager is a powerful database that allows impressive options.  Below is the Main window with all your cases and you can obtain the global “portfolio” balances at any date, create statements, send emails, mass import data, and so much more!

Jurismedia / Margill Loan Manager: officially SOC 2 certified

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Jurismedia, developer of Margill Loan Manager, the world-class loan servicing software is proud to announce that it is now SOC 2 certified.

SOC 2, which stands for System and Organization Controls 2, is a framework developed by the American Institute of Certified Public Accountants (AICPA) to help organizations demonstrate their security and privacy controls, focusing on areas like security, availability, processing integrity, confidentiality, and privacy.

SOC 2 focuses on five key trust principles:

  • Security: Protecting systems and data from unauthorized access and disclosure.
  • Availability: Ensuring information and systems are reliable for operation and use.
  • Processing Integrity: Guaranteeing that system processing is complete, valid, accurate, timely, and authorized.
  • Confidentiality: Limiting access to or placing restrictions on the use of certain types of information.
  • Privacy: Protecting the right to have some control over personal information.

You can consult our certification here.

SOC 2 Attestation

Part of Warren Buffett’s empire just got sued by the US government

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The US government has sued a unit of Warren Buffett’s Berkshire Hathaway, accusing it of pushing borrowers into unaffordable loans—so customers would buy homes from the company’s manufactured housing business.

The U.S. Consumer Financial Protection Bureau filed the lawsuit Monday against Berkshire’s Clayton Homes manufactured housing division. The complaint alleges that Vanderbilt Mortgage and Finance, a unit of Clayton, ignored “clear and obvious red flags” that borrowers could not afford their loans.

To read the whole article, follow this link.

Appolo Says Private Credit May Reach $40 Trillion by 2030

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Apollo Global Management said that a booming part of private credit is already a $20 trillion industry and that the market as a whole may reach $40 trillion within the next five years.

An interesting article by James Crombie from Bloomberg News about the subject can be consult here.

 

 

Annual congress of APDEQ

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Marc Gelinas, CEO for Margill, is currently attending the 64th edition of the annual congress of the Association of Economic Development Professionnals of the province of Quebec. (Association des Professionnels en développement économique du Québec  – APDEQ), which is being held in the city of Sherbrooke.

This year’s theme is the equation of economic prosperity, inpired by quantum. Several workshops and activities are presented around this theme.

Margill CEO attending Canada Fintech Forum in Montreal

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September 10, 2024 – Margill CEO Marc Gelinas is currently attending the Canada Fintech Forum in Montreal.

The Canada Fintech Forum is a landmark international gathering that aims to showcase emerging global trends in Fintech, new technology solutions for the financial industry and emerging Fintech start-ups. The Fintech Forum also aims to facilitate networking and collaboration between financial institutions, technology providers, start-ups and other key players in the financial services sector, as well as contribute to the visibility of Canada’s Fintech talent.

Photo Marc Gélinas – Canada Fintech Forum, Montreal

Margill Loan Manager – How to create a report which identifies all of the unpaid payments

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Q: How can we create a report which identifies all of the unpaid payments?

A: I would create and run a Transaction report.

1. Create a New report template. On the top right, pick up at least the Unpaid Pmt Line status (there could be other Unpaid Pmt Line statuses).

2. On the left from the “Transaction Data” theme, pick up at least Line Status, Pmt Date and Expected Pmt. I also included the Outstanding amount balance that will appear on each transaction.

3. Then add the loan identifiers such as loan ID, Borrower data, etc. (I moved them up for the report with the arrows on the right). You could also add an email, phone number, etc. so collectors can easily reach these clients. You could also email these clients directly in Margill (or automate the process, but I will not cover this here).

I called my report “Unpaid Pmts”. Run it for the desired loans and period. I ran mine for January 2024:

I have 4 unpaid payments. Notice the Outstanding amount on loans 10104 and 10392. This shows that these are bad payers since the Outstanding (balance) is higher than the current unpaid payment. You can show totals and export to Excel or other.

 

Open banking

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In Budget 2024, the Government of Canada announced its plan for the implementation of consumer-driven banking.

Consumer-driven banking, also known as open banking or consumer-directed finance, refers to frameworks that allow consumers and small businesses to securely transfer their financial data through an application programming interface (API) to approved service providers of their choice. Consumer-driven banking enables consumers to securely use data-driven financial services that can help them better manage their finances and improve their financial outcomes.

Consumer-driven banking may offer many benefits, but it’s important that Canada introduces it in a way that protects consumers.

For more information about the subject, visit this page on the Government of Canada’s website.

A little banking humor!

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Always borrow from pessimists, they won’t expect to get paid back…