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WRITE OFF ANALYSIS

Function
To provide status and pertinent information regarding loans within the portfolio that have been written-off as bad debts.  The report reflects the loans, amount disbursed, amount written-off, date of write-off, and any funds recovered after the loan was written-off.


Operating Instructions

Cutoff Date                
This date (use calendar to change) will determine which activity will be included in the report.  Any recorded activity with an activity date beyond the cutoff date will not be included in the calculations.

Loans Written-off 
between __ and __  When a loan is written-off, the “status date” field within the Loan Master file is completed with the date of the write-off.  

Using the calendar, select a date range (ex: between 01/01/08 and 12/31/08) to limit the loans on the report to those with a status date within the range selected.  If you wish to include all written-off loans, use a broad range (ex: between 01/01/75 and 12/31/08).

Sort Options              
Select Alphabetical or Loan Number 

Include address       
Check this box if you want the borrowers’ address to appear on the report. 

Selection Criteria     
Options for narrowing selection criteria include: 

Funds

County 

City 

Loan Officer 

Loan Type

Borrower 
The following instructions relate to limiting the search to specific Funds, and the same instructions apply to each of the potential criteria above.

If you do not wish to include all loans, click on the Funds tab.  All existing funds will be displayed for your selection.  To select a fund, move the cursor to the fund to be included and click – it will then be highlighted, indicating loans with that fund are to be included on the report.  If you wish to include more funds, hold down the Ctrl key and click on the additional fund to be included.  If you select a fund by mistake, hold down the Ctrl key and click on the fund again – the highlighting will disappear, indicating it no longer is to be included in the selection criteria.  Continue this process until you have narrowed the search to include only those loans you wish to review.

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Things You Should Know
When loans are written-off, there are several steps that need to be taken in order for the Write-off Analysis to produce an accurate report:

1. Print a Loan Master file report including both Master File and Loan Activity reports to help determine what entries need to be made. 
2. Edit the Loan Master file status to “Write-off” and enter the date the loan was written-off in the field “status date”.  Editing the loan’s interest rate to zero at this point will assist in posting any funds later recovered.  If the Loan Master file shows a late fee, escrow, or service fee, those may be edited to zero also.  Once a loan is written-off, these fees are no longer applicable. 
3. If there is accrued interest outstanding, enter an adjusting entry, type of Repayment, with activity date as the date the loan is being written off and the activity total as zero.  Enter the accrued interest to be written off under both “current interest” and “accrued interest” as a negative number.  The net affect on “principal” should be zero. 
4. Again using adjustments, enter a negative disbursement in the amount to be written off.  (It is very important the activity date of this adjustment is the same as the date entered in the Loan Master file as the write-off date.)  If this is the loan balance, the result should be a new balance of zero. 

The primary reason for zeroing the loan balance through the steps above is to remove that loan from delinquency reports.  Once a loan balance is zero, it will not appear on those reports.  

If funds are later recovered, the amount recovered is posted through Loan Activity as 1) a disbursement for the amount of recovered funds, followed by 2) a subsequent activity posted as a repayment in the same amount as the disbursement.  If the Loan Master file reflects an interest rate of zero (see #2 above), this process should again result in a loan balance of zero.  

Because the report utilizes data already entered in Loan Master files and through Loan Activity, the report may be prepared as often as desired with no impact on the database.