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Wolters Kluwer Financial Services

ARTA® Lending

User's Guide - Bank

This publication was written for ARTA Lending.

Publication Information / Version ARTA Lending User's Guide - Bank Last Edited: August 2016

Distributed Subject to Terms of a License or other Agreement

The contents of this publication, including its appendices, exhibits, and other attachments, as updated or revised, are highly confidential and proprietary to Wolters Kluwer Financial Services, Inc. or its subsidiaries or affiliates (“Wolters Kluwer Financial Services”). This publication is distributed pursuant to a Non-Disclosure Agreement, Evaluation Agreement, License Agreement and/or other similar agreement(s) with Wolters Kluwer Financial Services, Inc. or its subsidiary or affiliate. Unless otherwise specifically provided in such agreement(s), the reproduction of this publication is strictly prohibited. Use and distribution of this publication are also subject to the responsibilities and obligations of such agreement(s), which require confidential treatment of this publication and its contents.

Information in this guide is subject to change without notice and does not represent a commitment on the part of Wolters Kluwer Financial Services.

Do Not Reproduce or Transmit Unless otherwise specifically authorized in the agreement or license under which this publication has been provided, no part of this publication may be posted, played, transmitted, distributed, copied or reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or retaining on any information storage and retrieval system, without prior written permission from Wolters Kluwer Financial Services.

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Not a Substitute for Legal Advice This publication is intended to provide accurate and authoritative information about the subject matter covered based upon information available at the time of publication. Examples given in this publication are for illustrative purposes only.

Development of this publication and the software (including forms, disclosures, reports, and other documents generated by the software) or other products that it describes was based on Wolters Kluwer Financial Services' understanding of various laws, regulations and commentaries. Wolters Kluwer Financial Services cannot and does not guarantee that its understanding is correct.

This publication is not intended, and should not be used, as a substitute for legal, accounting, or other professional advice. Wolters Kluwer Financial Services is not engaged in providing legal, accounting or other professional services. If legal or other professional assistance is required, you should seek the services of a competent professional. We encourage you to seek the advice of your own attorney concerning all legal issues involving the use of this publication and any products described in this publication. If your interpretations or your counsel’s interpretations are contrary to those expressed in this publication, you should of course, follow your/your counsel’s interpretations.

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ARTA is a registered trademark of Wolters Kluwer Financial Services, Incorporated.

All other trademarks are the property of their respective owners.

Copyright Information ©2016 Wolters Kluwer Financial Services, St. Cloud, Minnesota

This publication is the confidential information of Wolters Kluwer Financial Services. Distribution of this publication is subject to restrictions in the license or agreement under which this publication is provided to authorized Wolters Kluwer Financial Institution customers.

All rights reserved.

ii User's Guide - Bank ii

Table of Contents

Introducing ARTA Lending .............................................................................................. 1 What is ARTA Lending? ................................................................................................ 1 ARTA Lending Product Family ........................................................................................ 1

What’s in the modules? ............................................................................................ 2 What’s in the Components? ....................................................................................... 3

ARTA Lending Documentation Roadmap ........................................................................... 3 About This User’s Guide .............................................................................................. 4

Purpose ............................................................................................................... 4 Using This Guide .................................................................................................... 4 Understanding Conventions ....................................................................................... 5

Help! How to Get It .................................................................................................... 7 What’s This? Help ................................................................................................... 7

Getting Started ............................................................................................................ 9 Introduction ............................................................................................................. 9 Getting Acquainted with ARTA Lending ............................................................................ 9

To Start ARTA Lending ............................................................................................. 9 Logging into ARTA Lending ........................................................................................ 9

Navigating ............................................................................................................. 11 Using the Main Menu ............................................................................................. 11 Using the Transaction Menu ..................................................................................... 12 Using the Transaction Toolbar .................................................................................. 13

Entering Data ......................................................................................................... 14 Understanding Field Colors...................................................................................... 14 What about the Colors on the Navigator? .................................................................... 15 Special Characters ................................................................................................ 16 Date Formats ...................................................................................................... 16

Using ‘Save As’ in ARTA Lending .................................................................................. 17 Quitting the ARTA Lending Program .............................................................................. 18

Before Quitting .................................................................................................... 18 To Close and Quit ................................................................................................. 18

Starting Setup ........................................................................................................... 19 Introduction ........................................................................................................... 19 Tips for Setup ......................................................................................................... 19 General Setup ........................................................................................................ 20

Security Overview ................................................................................................ 20 Group Setup ........................................................................................................ 21 User Setup .......................................................................................................... 24

User's Guide - Bank iii

Lender Setup ...................................................................................................... 27 Lending Setup ........................................................................................................... 29

Introduction ........................................................................................................... 29 Policy Setup ........................................................................................................... 29

Tips for Creating a Policy Profile .............................................................................. 29 Setting Up a New Policy ......................................................................................... 29 Accrual Methods ................................................................................................... 31

Repayment Methods Setup ......................................................................................... 35 Initial Setup ........................................................................................................ 35

Rates Setup ........................................................................................................... 38 Initial Setup ........................................................................................................ 38 Consumer Open-End Daily Periodic Rate and APR Calculations .......................................... 40

Index History Setup .................................................................................................. 41 Creating a Custom Index ........................................................................................ 43 Deleting Indexes .................................................................................................. 44

Documents Setup ..................................................................................................... 44 Tips for Setting Up Your Documents ........................................................................... 45 Printing Blank Documents ....................................................................................... 45

Template and Report Setup .......................................................................................... 46 Templates ............................................................................................................. 46

Considerations in Designing Templates ....................................................................... 46 Creating a New Template ....................................................................................... 47 Template Navigation ............................................................................................. 47 Printing Template Setup ......................................................................................... 50 Completing the Criteria Information .......................................................................... 50 Completing the Borrower Information ........................................................................ 51 Completing the Fees ............................................................................................. 52 Completing Documents .......................................................................................... 63 Template Setup Completion .................................................................................... 65 Template Maintenance .......................................................................................... 65

Reports ................................................................................................................. 65 Setting Up a New Report ........................................................................................ 66 Report Setup Criteria ............................................................................................ 66 Designing Reports ................................................................................................. 69

Insurance Setup ......................................................................................................... 70 Introduction ........................................................................................................... 70 Credit Life Insurance Setup ........................................................................................ 70

Credit Insurance Forms .......................................................................................... 70 Credit Insurance Setup Worksheets ............................................................................ 70 Adding New Credit Life Insurance ............................................................................. 71

iv User's Guide - Bank iv

Disability Insurance Setup .......................................................................................... 75 Disability Insurance Forms ...................................................................................... 75 Adding a New Disability Insurance Plan ....................................................................... 75

Involuntary Unemployment Insurance Setup .................................................................... 77 IUI Forms ........................................................................................................... 78 Adding a New Involuntary Unemployment Insurance Plan ................................................. 78

Private Mortgage Insurance Setup ................................................................................ 80 Setting Up a PMI Plan ............................................................................................ 80 Transaction PMI ................................................................................................... 81

Data Exchange ........................................................................................................... 84 User-Defined Fields .................................................................................................. 84

Adding a New User-Defined Field .............................................................................. 84 Data Specifications .................................................................................................. 86

Creating a Data Specification ................................................................................... 87 Export Targets ........................................................................................................ 88

Setting Up the Export Target ................................................................................... 88 Exporting Data from a Transaction ............................................................................ 89

Import Sources ........................................................................................................ 90 Setting Up a New Import Source ............................................................................... 90

Import/Export Development Kit ................................................................................... 91 Consumer Loans ........................................................................................................ 92

Introduction ........................................................................................................... 92 Preparing for Consumer Open-End Loans ..................................................................... 92

Creating a New Consumer Loan ................................................................................... 93 Creating a New Loan ............................................................................................. 93 Transaction Navigator for Loans ............................................................................... 93

Criteria ................................................................................................................. 94 Borrower ............................................................................................................... 96 Fees..................................................................................................................... 99

Consumer Open-End Fees ...................................................................................... 101 Calculations .......................................................................................................... 101

Payment Frequencies ........................................................................................... 101 Basic Calculations ................................................................................................ 102 Preferred Rate Options ......................................................................................... 104 Credit Insurance Option ........................................................................................ 105 State-Specific Fee Processing.................................................................................. 106 Loan Calculations ................................................................................................ 107

Disbursements ....................................................................................................... 109 Payments .......................................................................................................... 110 Rates ............................................................................................................... 112

User's Guide - Bank v

Documents ........................................................................................................... 113 Documents List ................................................................................................... 113 Completing the Document Prompts .......................................................................... 115

Validation............................................................................................................. 115 Print ................................................................................................................... 116

Printing Your Loan Documents ................................................................................ 117 Commercial/Ag Loans .................................................................................................118

Introduction .......................................................................................................... 118 Templates ............................................................................................................ 118

Creating a New Loan ............................................................................................ 118 Criteria ................................................................................................................ 119 Borrower .............................................................................................................. 120 Fees.................................................................................................................... 122 Calculations .......................................................................................................... 123

Repayment Methods ............................................................................................. 124 Calculation Options Button .................................................................................... 125 State-Specific Fee Processing.................................................................................. 125 Calculations Results ............................................................................................. 126

Disbursements ....................................................................................................... 127 Documents ........................................................................................................... 128 Validation............................................................................................................. 130 Print ................................................................................................................... 131

Residential Real Estate Loans .......................................................................................132 Introduction .......................................................................................................... 132

Flood Hazard Determination ................................................................................... 132 Templates ............................................................................................................ 132

Criteria ............................................................................................................ 133 Borrower ........................................................................................................... 134

Fees.................................................................................................................... 137 Calculations ....................................................................................................... 145 Disbursements .................................................................................................... 150 Documents ........................................................................................................ 151 Validation ......................................................................................................... 153 Print ................................................................................................................ 154

Processing Loans .......................................................................................................155 Introduction .......................................................................................................... 155 Recalling Loans ...................................................................................................... 155

Recalling a Loan .................................................................................................. 155 Searching for a Loan ............................................................................................ 156

Validation............................................................................................................. 156

vi User's Guide - Bank vi

Overriding Validation............................................................................................ 158 Print ................................................................................................................... 159 Using the Print Preview ............................................................................................ 159 Printing ............................................................................................................... 160 Denying a Loan Request............................................................................................ 162

ARM Early Disclosure..................................................................................................165 Introduction .......................................................................................................... 165

Key Features ...................................................................................................... 165 ARM Programs Supported ....................................................................................... 166

Creating an ARM Program.......................................................................................... 166 Product ............................................................................................................ 167 FNMA/FHLMC Documents ....................................................................................... 169 Non-FNMA/FHLMC Forms and Wolters Kluwer Financial Services’ Documents ........................ 173 Non-FNMA/FHLMC Forms and Non- Wolters Kluwer Financial Services Documents .................. 173 Negative Amortization .......................................................................................... 173 Payment ........................................................................................................... 174 Rate ................................................................................................................ 176 Validation ......................................................................................................... 177 Print ................................................................................................................ 179

ARTA Lending Plus HE ................................................................................................181 Introduction .......................................................................................................... 181

Key Features ...................................................................................................... 181 Before Processing Your HE Plans ................................................................................. 182 Creating a Home Equity Plan ..................................................................................... 182

Product ............................................................................................................ 184 Payment ........................................................................................................... 184 Rate ................................................................................................................ 188 Fees ................................................................................................................ 191 Validation ......................................................................................................... 192 Print ................................................................................................................ 193

Using the Utilities .....................................................................................................195 Introduction .......................................................................................................... 195 Backup and Restore ................................................................................................. 195

Backup Guidelines ............................................................................................... 195 Backing Up Your Data Files ..................................................................................... 196 Restoring Your Data Files ....................................................................................... 197

File Operations ...................................................................................................... 198 Searching for and Deleting Transaction Files ............................................................... 199 Exporting Loans to XML ......................................................................................... 200

Autoselection Defaults ............................................................................................. 200

User's Guide - Bank vii

Font Settings ......................................................................................................... 202 Client Directories ................................................................................................... 202

Changing Client Directories .................................................................................... 202 Customer Number ................................................................................................... 204 TRID Effective Date ................................................................................................. 204

Appendix A: Glossary .................................................................................................206 How to Contact Wolters Kluwer Financial Services Support .................................................231

Technical Support ................................................................................................... 231 Toll-Free SupportLine: 1-800-274-2711, ext. 1124021 ................................................... 231

viii User's Guide - Bank viii

Introducing ARTA Lending

What is ARTA Lending?

Congratulations on your purchase of the ARTA Lending Documentation System from Wolters Kluwer Financial Services.

ARTA Lending specializes in generating loan documents for routine and high-volume lending. It provides the practical features in a framework that’s sized to fit the business needs of financial institutions like yours.

The following topics are discussed in this chapter:

ARTA Lending Product Family

Documentation Roadmap

About This User’s Guide

Understanding Conventions

Help! How to Get It

End-to-End Solution The ARTA Lending product family is a collection of modules and components that work together and share common data and general services. This allows access to information in one central location. ARTA Lending offers various modules and components to provide an automated solution for the complete lending process from start to finish. Your lending processes move easily from application and credit checking to loan origination and loan closing.

ARTA Lending Product Family

The product family consists of the modules listed below. When installed, the modules become part of ARTA Lending—not as a separate program on your desktop.

ARTA Lending Configurations

ARTA Lending

ARTA Lending plus Home Equity

ARTA Lending for Credit Unions

ARTA ARM Early Disclosure

ARTA Home Equity Early Disclosure

ARTA ARM/HE Early Disclosure

User's Guide - Bank 1


Application Module Configurations

ARTA Lending and Application Module

ARTA Lending plus Home Equity and Application Module

ARTA Lending for Credit Unions and Application Module

Credit Bureau Access Module Configurations

ARTA Lending and Credit Bureau Access Module

ARTA Lending plus Home Equity and Credit Bureau Access Module

ARTA Lending for Credit Unions and Credit Bureau Access Module

ARTA Lending and Application/Credit Bureau Access Modules

ARTA Lending plus Home Equity and Application/Credit Bureau Access Modules

ARTA Lending for Credit Unions and Application /Credit Bureau Access Modules

Module Configurations

Application Module

Application/Credit Bureau Modules

ARM/HE plus Application Module

ARM/HE plus Application/Credit Bureau Modules

(For Credit Unions) Application Module

(For Credit Unions) Application/Credit Bureau Modules

(For Credit Unions) ARM/HE plus Application Module

(For Credit Unions) ARM/HE plus Application/Credit Bureau Modules

What’s in the modules?

The ARTA Lending modules are programs that work well together and have a similar interface.

Take a quick look at the ARTA Lending modules:

2 User's Guide - Bank 2


Application Module prints a credit application and related documents. You collect and incorporatethis information only once—up front. Once a loan decision is made, information can be passedalong for appropriate loan documentation.

Credit Bureau Access Module allows quick access to credit report and credit score information.Wolters Kluwer Financial Services has teamed up with Kroll Factual Data Corporation® as our creditreport provider. Credit report information is imported directly into ARTA Lending, making your loanorigination process more efficient.

ARTA Lending Plus HE supports open-end home equity lending. When installed, early disclosures,agreements, and other closing documents for consumer open-end home equity lending become partof ARTA Lending—not as a separate program on your desktop.

What’s in the Components?

ARTA Lending functionality is enhanced by the following components:

OneSumX Customer Due Diligence is a suite of integrated and component-based services includinga risk assessment module and an identity verification component with offerings to include OFACand FINCen lists, international data source, data retention, fraud databases, and more. All thesecombine to provide a risk-based approach to meeting the ID verification and record retentionrequirements of Section 326 of the USA PATRIOT Act.

Flood Determination Services allows you to order a flood determination for a real estate ormobile home transaction with a simple click of the Flood Determination Services icon in ARTALending. Via the Internet, Flood Determination Services collects the data needed to populate theStandard Flood Hazard Determination (SFHD) and Flood Insurance Notice (FIN).

Wiz Basic Home Mortgage Disclosure Act integration enables you to collect Home MortgageDisclosure Act (HMDA) reporting data for a single application or loan transaction, obtain geo-codeand rate spread information for a transaction, and edit check the Loan Application Register (LAR)data for a single transaction. In addition, batch functions on groups of transactions are alsosupported to collect or update the HMDA data.

Wiz Sentinel Home Ownership and Equity Protection Act provides a means for you to collect theappropriate information then determine the federal HOEPA status of a transaction and the HigherPriced Mortgage status when applicable. You may also, then, select appropriate federal disclosuredocuments for the transaction. Where state or local high-cost lending laws apply, ARTA Lendingalso provides a means to collect state/local data for a single application or loan transaction andobtain state/local determination for a transaction.

NOTE: State-specific high-cost lending documents are not supported by ARTA Lending. Only the determination is provided. You should consult with your legal counsel to determine the appropriate documents to provide based on the determination.

ARTA Lending Documentation Roadmap

Documentation for the ARTA Lending Documentation System includes:



The User’s Guide – Provides supporting information for using the ARTA Lending Documentation System.

The Release Notes – Contain:

― Late-breaking information about a new release

― Brief descriptions of the new features in the program

― Information on revisions to the program

― Technical notes

― The Release Notes are included with every software release. You can find them on the product CD in the Readme folder or on the Software Support web site at: http://support.wolterskluwerfs.com.

The Installation Instructions – Contain step-by-step instructions for installing ARTA Lending. To ensure a successful installation, follow the instructions carefully. The Installation Instructions are included with every software release in the Readme folder on the product CD and on the Software Support web site at: http://support.wolterskluwerfs.com.

Credit Insurance Setup Worksheets – These tools, included in your initial package, for credit life insurance and disability insurance allow you to get information from your insurance company. The requested information is needed to properly enter information in the Credit Life and Disability setup sections, which are used in calculating and disclosing credit insurance premiums.

ARTA Lending Sample Forms Book and ARTA Training Course Workbook – These are available through our training classes.

Module Guides – These can be found on the product CD or on our web site, one guide per module:

― Guide to ARTA Lending Application Module

― Guide to Credit Bureau Access Module

― Guide to Flood Certification Component

― Guide to HMDA Component

About This User’s Guide

Purpose

The purpose of the User’s Guide is to familiarize you with the power and flexibility of ARTA Lending. The User’s Guide is mostly a reference tool, though instructions on core tasks are provided.

NOTE: Wolters Kluwer Financial Services believes the information described in this guide is accurate and reliable. Much care has been taken in its preparation. However, Wolters Kluwer Financial Services accepts no responsibility, financial or otherwise, for any consequences arising out of the use of this guide. The information contained in this guide is subject to changes and revisions may be issued from time to time.

Using This Guide

This guide is intended for anyone involved in processing loans using ARTA Lending.


http://support.wolterskluwerfs.com/



To use ARTA Lending and this guide effectively, you should be familiar with the Windows operating environment. You should know or learn Windows fundamentals before you begin working with ARTA Lending.

Due to the nature of the ARTA product family and the ability to purchase only those modules that you require, some buttons, views, or options may not be available to you that are presented in this guide. Generally, the options to which you should have access will be obvious in your program.

Organization of the User’s Guide The User’s Guide is organized to flow in a manner similar to how you might use ARTA Lending with loans.

Chapters 1 and 2 include conventions for using ARTA Lending, how to navigate, and use Help.

Chapters 3, 4, 5, and 6 discuss setup, including loan templates, security, policy, insurance, and other information required for lending.

Chapter 7 deals with importing and exporting of data, including the creation of user-defined fields.

Chapters 8, 9, and 10 deal with creating standard loans, including consumer, commercial, and real estate.

Chapter 11 deals with loan processing.

Chapters 12 and 13 deal with ARM and HE loans.

Chapter 14 discusses maintenance routines such as data backup.

Understanding Conventions

Certain conventions are used throughout the user guides. Familiarize yourself with these conventions before you begin working with ARTA Lending and using the guides.

Screen and Data Illustrations Certain data used in the documentation is fictitious, expressly and solely prepared for the purpose of concept or visual illustration associated with the appearance, maintenance, use, and operation of ARTA Lending. Any and all similarities to an actual financial institution or credit union data, or any other circumstances are purely coincidental.

Documentation Conventions

Action Description

Bold Bold typeface is used sporadically for emphasis throughout the text and consistently on words, specific file names, commands, and certain buttons that you must select.

Italics Italics are used for specialized terms and titles of other documentation and for emphasis in certain examples. Note that Flood Determination Services is always



partially italicized.

ALL CAPS Directory names, file names, and acronyms. However, when you type directory names and file names, you can use lowercase letters.

Mouse Conventions Use a single mouse click with ARTA Lending. The left mouse button is the primary mouse button, unless you have configured it otherwise.

Mouse Action Description

Point Position the pointer so it rests on the desired item on the screen.

Click Point to an item, press the left mouse button, and then immediately release the button without moving the mouse.

Double-click Point to an item, then quickly press and release the left mouse button two times.

Right-click Point to an item, press the right mouse button, and then immediately release the button without moving the mouse.

Keyboard Conventions The keys on your keyboard may be labeled differently than those described in this guide.

Keys Comments

Shortcut keys Use shortcut keys in combination or in sequence. For example, SHIFT+F3 means hold the SHIFT key while pressing the F3 key.

TAB, SHIFT+TAB,UP ARROW, DOWN ARROW, RIGHT ARROW, LEFT ARROW, HOME, END, PAGE UP, PAGE DOWN

Use these keys to navigate in the program.

Numeric keypad keys If your keyboard has a numeric keypad, press the Num Lock key to type numbers using the keypad.



File Extensions ARTA Lending uses some specialized file extensions for data and other uses.

File Extension Definition

!lk locked file

.ap application file

.bak backup file

.cb credit bureau file

.dat data file

.db setup file

.dbm template file

.ini initialization file that stores system-specific information about ARTA Lending

.ln loan file

Help! How to Get It

Regardless of your technical ability or experience with industry-related references, you may need help from time to time. With that in mind, we have developed several ways to make things easier for you.

Online Help or more specifically, What’s This? Help

User’s Guide, Module Guides, and the current Release Notes

Phone – Wolters Kluwer Financial Services Technical Support: 1-800-274-2711ARTA Lending Support, ext. 1124021

Web – http://support.wolterskluwerfs.com

NOTE: See the Technical Support page for detailed contact information

What’s This? Help

Context-sensitive Help, also known as What’s This? Help, contains a brief description of a specific field or item in a screen.

What’s This? Help button



To view What’s This? Help, click the ? button on a toolbar or the [?] button in the upper-right corner of some windows. Then, click the item you want information about. Another method is to click the mouse pointer on the item and press F1 on the keyboard. Shift+F1 also brings up the Help cursor.

TIP: To exit from What’s This? Help without making a selection, click the mouse button again or press Esc.


Getting Started

Getting Started

Introduction

The purpose of this chapter is to acquaint you with navigation in ARTA Lending and use of the toolbar and dialog boxes.


Getting Acquainted with ARTA Lending

Navigating

Entering Data

Using ‘Save As’ in ARTA Lending

Quitting the ARTA Lending Program

Getting Acquainted with ARTA Lending

To Start ARTA Lending

Double-click the ARTA Lending icon on your desktop, or select the program through the Windows Start menu.

Logging into ARTA Lending

The first thing you will see is a request to logon to ARTA Lending. You must have a valid user ID and password to gain entry to ARTA Lending.


Getting Started

NOTE: When you open ARTA Lending for the very first time, the default User ID is Supervisor and the Password is password.

NOTE: If you cannot logon or do not see the Navigator items you need to complete tasks, contact your security administrator. Security setup for Groups and Users is discussed in detail in Starting Setup.


Getting Started

Navigating

After a successful logon, the main ARTA Lending program screen is split into two parts: the navy-blue Navigator displays the primary program functions on the left side. The information related to each Navigator choice displays on the right side.

You may choose to use the mouse or keyboard to navigate through ARTA Lending.

Using the Main Menu

The Main Menu contains the following commands, each of which has a subsequent drop-down menu of commands.

NOTE: The choices on the Main Menu will vary depending on the ARTA Lending modules installed.

The Main Menu drop-down menus are as follows.

To change the size of either side of the screen, drag the bar that separates the two sides.

The Navigator

Select List View –For many Navigator choices you have the option to open a new, blank item from the top of the list or select from the alphabetically organized list of completed items.

The black indicator shows your current location in the Navigator.

Click the plus sign to expand a selection on the Navigator. Click the minus sign to collapse or hide the selections.


Getting Started

Main Menu Name Drop-Down Menu Commands

File Client Printer Setup Exit

View Status Bar Refresh

Application New Recall Application Worklist Loan Decision Worklist

Lending New Recall Loans Worklist Setup Insurance

Early Disclosure ARM Programs HE Plans

General Setup Lender Group User Data Exchange

Utilities Backup and Restore File Operations Autoselection Defaults Font Settings

HMDA Reporting Client Directories Customer Number

Help What’s This? Shift+F1 About ARTA…

TIP: To open a menu from the keyboard, press Alt and type the underlined character of the menu. For example, press Alt, then G to display the General Setup menu, then press L for Lender.

Using the Transaction Menu

Whenever you are working in a loan or other transaction, the Transaction menu contains the following commands, each of which has a subsequent drop-down menu of commands.


Getting Started

The Transaction menu drop-down menus are described below.

Menu Name Drop-Down Menu Commands

File Save Ctrl+S Save As… Preview and Print… Ctrl+P Import Export Close Exit

Edit Undo Ctrl+Z Cut Ctrl+X Copy Ctrl+C Paste Ctrl+V

View Toolbar Status bar Parties Calculations Summary Amortization

Options Add Documents Validation

Help What’s This? Shift+F1 About ARTA…

Using the Transaction Toolbar

Whenever you are working in a loan or other transaction, the Transaction Toolbar is displayed below the Transaction menu. The Transaction Toolbar displays button icons that correspond to menu commands.


Getting Started

Toolbar Button Descriptions

Save

Preview and Print

Cut

Copy

Paste

Undo

Previous (Ctrl+PgUp)

Next (Ctrl+PgDwn)

Validation

Add Documents

Import data

Export data

Calculate Payments

Parties

HMDA

Flood Determination Services

Red Flag/ OneSumX Customer Due Diligence

HOEPA

What’s This? Help

Toolbar Tips The Parties button gives you quick access to all the parties to the loan information.

Click the Save button to quickly save your loans.

Clicking the Print and Preview button displays the Print option on the Navigator; you must select the Print All Selected Documents to print to the printer.

Clicking the Undo button will reverse changes made within a field before you leave that field.

TIP: If you forget what a toolbar icon represents, place the mouse pointer on the button for a few seconds—but do not click. This displays a pop-up screen with the name of the toolbar button’s command on it. The pop-up screen is called a “tool tip.”

Entering Data

Understanding Field Colors

As you enter information into data fields, you may notice that different colors display from field to field. ARTA Lending continually monitors data entry to ensure that the right type and value of data is entered into a field. Field colors are used by ARTA Lending to help ensure proper data entry and to help troubleshoot and correct data entry errors.


Getting Started

Field Color Reference

Field Colors Description

Blue

Designates your current field location.

Green

Indicates a required field; therefore, you must enter data into the field. If left blank, it will result in a validation warning.

Yellow

Indicates the normal data entry field. You can enter data, or leave the field blank if not applicable for your institution or for the given transaction.

Purple

Indicates a field is protected, but the value can be changed while processing a loan. If changed, it will result in a validation notice.

Gray

Indicates a protected field. The field is visible during loan processing, but you cannot enter, change, or erase data appearing in the field.

Red

Signals potential data entry errors. If left unchanged, it will result in a validation notice.

Dark Red

Indicates a change has been made to a protected (purple) field. It will result in a validation warning if not changed back to the preset value.

White on Black During template creation, this indicates a field has been set to invisible. You will not see these fields when processing a loan using the template.

NOTE: Some of the field colors listed above will only show when field attributes are set in a template. See Template and Report Setup for information on setting field attributes in a template.

What about the Colors on the Navigator?

Text in the left-hand transaction Navigator will sometimes change from white to a different color when displaying documents selected during a loan operation.


Getting Started

Navigator Color Description

Red Signals potential data entry errors. If left unchanged, it will result in a validation notice.

Yellow Indicates an autoselected document is no longer needed when changes were made after the autoselection took place.

Special Characters

Do not use special characters when typing into text boxes. Some of the special characters have special meaning to the program and cause errors when printing documents.

Special characters to avoid using include the following:

! @ # $ % ^ & *

( ) / | + = < >

Date Formats

ARTA Lending provides flexible date entry, allowing you to type a full date using four-year digits such as, 7/1/2005 for July 1, 2005, as well as a number of “shortcut” techniques for entering dates. A common shortcut technique is abbreviating the year to only two digits such as 7/1/05 or 7/05. Date fields in the program attempt to interpret information entered so dashes or date separators are not needed since the program automatically formats the date. When deciding whether a date should be forward-dated or backdated, the program assumes that a loan is entered on the same day that it is closed.

NOTE: Double-check the final date displayed if you used a shortcut to enter it.

Date Shortcuts Entering 3m will calculate a date 3 months into the future.

Entering the letter “t” will default to today’s date.

Entering the word “first” will default to the first of the next month.

If you type one, two, or three digits in a date field, the program interprets this as the number of days from today’s date. The program calculates the date you want as the system date (today’s date) plus the number of days (typed) into the future. For example, entering ‘30’ will display the date 30 days into the future.


Getting Started

When placing four to seven digits in a date field, the program will attempt to interpret the date. It is important to note that what the program interpreted may not match what you meant. To be sure that the correct date is entered, type a full 8-digit date (for example, 11/01/2005).

IMPORTANT: One exception to the above shortcuts is the “first payment date”' field found on the Calculations screen. The above rules still apply, but instead of calculating from today’s date, the field calculates from the date entered in the “funding date” field on the same screen. You are responsible for verifying that a date you enter is correct if you use a date shortcut and enter fewer than 8 digits.

Date Interpretations ARTA Lending further tries to assist you by determining a date, in some cases, from rules about various date fields. An example of this is the Related Documents section on the Line of Credit document. Document prompts request the date of the security agreement, mortgage, and guaranty. Because these documents would typically have been executed on the same day or before the current transaction, the program assumes that these dates will equal or precede the note date of the current transaction.

Another factor in date interpretation is the system date. The system date has a year beginning with the 20xx century indicator. If you type fewer than 8 digits to describe a “related document” date, the program assumes, since it is a prior date that a 19xx century is required. So, if today's date is 11/1/05 and you type 010105 as the date for a related document, the system interprets the shortcut date as 01/01/1905. In these situations, you must type full 8-digit date to get the date to print with the 20xx century indicator.

Using ‘Save As’ in ARTA Lending

When creating or editing information in many parts of ARTA Lending, a Save As button appears at the bottom of the screen. This functionality allows you to reuse information. For example, in Lender Setup, you can use the Save As button to save lender information under the name of a different branch. When you open the branch information, you only need to change information specific to the branch rather than re-enter everything.

To use Save As: 1. Open any previously saved information.

2. Edit as necessary to create a different profile.

3. Click Save As.


Getting Started

4. Enter a new name and click Save.

5. Click OK on the screen to finish.

Quitting the ARTA Lending Program

Before Quitting

Before you quit ARTA Lending, make sure all loans, templates, and setup files are saved and closed.

Save Your Files You can save loans at any time.

To save files, click the Save button on the toolbar.

Another way to save your files is to press the Ctrl+S shortcut.

IMPORTANT: Remember to save your work often!

To Close and Quit

Always exit ARTA Lending by clicking the close button [X] in the upper-right corner or by choosing the Exit option from the File menu.

IMPORTANT: Do not turn off or restart your computer while the program is running. Exiting the program in an irregular way can cause data corruption.

Type the name for the new item, in this case a lender, and click Save.


Starting Setup

Starting Setup

Introduction

Before processing transactions, you need to set up ARTA Lending for use at your institution. This chapter will step you through the following:

Tips for Setup

Lender Setup

Security Overview

Group Setup

User Setup

Adding information into the various setup sections will allow you to customize ARTA Lending to your daily uses, allowing your loan officers and customers to only work with information needed to complete transactions at your institution. Note that basic setup information applies to all modules and components in ARTA Lending.

Tips for Setup

Setup and Customization The setup areas are designed for setting, customizing, and maintaining your lending information for processing transactions with the appropriate loan documentation. This is where you define the default settings for your financial institution. In the setup areas, you enter data once and reuse it during application and loan transactions.

Some important notes before you begin setup:

ARTA Lending performs best if you enter as much information as you can in the setup areas. This will help increase the productivity of your ARTA Lending users.

Your ability to achieve your goals is based on your own needs and how well you can define them and then transfer them into the design of ARTA Lending.

It is your responsibility to verify that the setup information is accurate and correctly entered into the program and to review the setup after program updates.

Setup can be approached as a repeated process. If you make errors during setup, you can always go back and make changes.

Setup allows you to define default settings for your institution, which will eliminate repetitive data entry.

As you move through the setup screens, press the Tab key to move to the next field or Shift+Tab to move back a field. You may find this easier.


Starting Setup

NOTE: The purpose of the following setup information is to instruct you on the use of ARTA Lending and not to advise you on the guidelines, policies, procedures, or requirements of your institution. Do not alter your policies based on this information.

General Setup

In General Setup you can set up lender information and establish the security for your institution in ARTA Lending by setting up users and groups and assigning users to groups.

IMPORTANT: The setup items can be entered in any order you choose. However, at least one lender and one policy must be defined for ARTA Lending to select and print documents.

Entry into the setup sections of ARTA Lending is based on the user permissions established in Groups and Users. A user must have the proper permissions to access setup and change or enter information. Without proper permissions, setup choices do not appear on the Navigator menu.

NOTE: Carefully read the following sections in this chapter for more information on establishing permissions and security in ARTA Lending: Security Overview, Group Setup, and User Setup.

Security Overview

Each user who will do work on ARTA Lending must be assigned a user ID and password. This is specified in each user’s profile, accessed from the General Setup, User section of the Main Navigator.

In addition to a user ID and password, users need permission to work in various areas of the program. Permissions to use various modules, nodes, and menus in ARTA Lending are controlled by Groups. Even with a user ID and password for logon rights, a user will not be able to do work on ARTA Lending until they have been assigned to a group.

TIPS: A security administrator must create at least one group before a user can log on. These groups define the access rights of individual users that are assigned to the groups. The security administrator can create as many groups as needed to meet the security needs of their institution.

After groups are created, the security administrator updates each user profile to assign the user to a group, thus establishing the user’s permissions to the program, and to add a unique user ID and initial password for the user.

Once groups and users are set up, users will be able to log on and access those functions and areas to which they are authorized.

ARTA Lending will dynamically display only those functional areas to which a user has permissions. This means a loan processor might only see the Loans tasks if that is the only permission to the program.


Starting Setup

Someone who only uses the Application module would not see other Navigator commands. This can help make staff training easier.

Use of a Super-user ID A super-user ID is provided so that when ARTA Lending is installed, the security administrator can log on to the program to create one or more Security Groups, and to assign a User ID and initial password to each user.

IMPORTANT: Immediately after installing ARTA Lending, the security administrator can log on to ARTA Lending using the super-user ID, to setup security: The super-user ID is “supervisor” and the password is “password”.

We recommend using the super-user ID for initial security administration purposes only. The super-user ID does not have a profile; therefore it cannot be assigned to a group and will not have permission to some ARTA Lending functions.

After logging on with the super-user ID, we recommended that the security administrator, create a “security administration” group. This allows you to:

Specify a security administration group with all program permissions.

Administer security and user access without providing the initial super-user ID and password to other users.

After this group is created, and the security administrator or other users are assigned to this group, you should change the initial password for the super-user ID. This will help limit access to the program using the super-user ID.

Group Setup

Before any users can log on to ARTA Lending, security groups must be created by the security administrator.

To create security groups:

1. On the Main Navigator, select General Setup, Group.

Group Setup from the Main Navigator


Starting Setup

You can also access Group Setup by selecting Group from the General Setup menu, as shown below.

The Select Group to Edit screen appears.


Starting Setup

2. Click Add New to create a new group. The Group Setup screen appears.

NOTE: Permissions on the Group Setup screen may vary slightly depending on which ARTA Lending modules or components are installed.

3. Type a unique name for your security group in the Group name text box. The group name must be at least one character. Letters, numbers, spaces and other keyboard characters can be used.

4. Select the appropriate check boxes and corresponding options to give this group access to the program functions you want. Clear the check box to remove a permission.

5. When you have finished setting permissions, click OK to save your changes and return to the Select Group to Edit screen.


Starting Setup

Deleting a Security Group You cannot delete a group that has users assigned to it. To successfully delete a group, first reassign or remove all assigned users. Also, in order to delete a group, you must have permission to User Setup and Group Setup.

To delete a security group:

1. From the Select Group to Edit screen, right-click the group you want to delete.

2. Click the Delete command from the shortcut menu that appears.

3. In the confirmation message that appears, click Yes to verify you want to delete the selected group.

Group Setup Report The Group Setup Report shows the permissions given to the group, and lists the names and user IDs of users assigned to the group. You can view and print out a report of the group you are currently working with by clicking the Print Group Setup button at the bottom of the Group Setup screen. The Report Preview screen is displayed.

User Setup

After one or more Groups are defined, the security administrator can add users to each group as appropriate. If you created your user profiles before creating groups, you will need to assign each user to a group before a user can access any features in ARTA Lending.

TIP: When creating the user IDs and passwords, we recommend that the security administrator set all user passwords to an initial generic password. Each user should be instructed to change their password upon their first logon.


Starting Setup

To create or edit Users:

1. On the Main Navigator, select General Setup, User.

User Setup from the Main Navigator


Starting Setup

2. Click Add New to create a new user, or click a user name to edit an existing user’s information. The User Setup screen appears.

3. Enter the appropriate information in the fields and click OK to save your changes.

NOTE: You must at least fill in the Full Name, User ID, Group and Password for each user.

Observe the following rules for User ID:

The ID must be between 1 and 35 alpha or numeric characters.

Spaces are allowed.

No special characters are allowed.

Observe the following rules for passwords:

The password must be between 8 and 35 alpha or numeric characters.

No special characters are allowed.

Spaces are allowed.

Asterisks appear for each keyed character.


Starting Setup

Passwords are case-sensitive.

NOTE: If a user forgets the password, the administrator will need to reset it in User Setup.

Lender Setup

Lender information is needed to print in the “lender” section of the documents and must be set up to autoselect and print your loan documentation. It also gives you more options for printing your reports.

NOTE: You will need to belong to a group with permissions to Lenders to add or edit the contents.

To setup a lender:

1. Expand General Setup, select Lender.

2. Click ***Add New*** to start a new Lender or, if other Lender profiles exist, select one of themto edit.

3. Complete the Lender Setup information and click OK.

Remember that the green field color indicates required information and the field must have an entry.

Enter the hyphen for the tax identification number (TIN), which differs from the social security number. Example: 12-1234567


Starting Setup

If you check this box to use an alternate address, more text fields appear for alternate address entry.

Credit high and low ranges that you enter here are passed to party Details in transactions. However, the setup ranges will be overwritten if you pull a credit report using Credit Bureau.


Lending Setup

Lending Setup

Introduction

Setting common defaults for use during transactions is beneficial. The use of standard default material speeds and reduces the number of decisions required during the loan application process. This chapter addresses the addition of default information to the following setup areas:

Policy Setup

Repayment Methods Setup

Rates Setup

Index History Setup

Documents Setup

Policy Setup

The policy profile designates which state’s document set to use for the transaction along with other optional policy issues, such as default values for late charges and available accrual methods. This information must be completed for proper document autoselection and printing.

NOTE: You must have permission for Lending Setup, Policy to add or edit policies.

Tips for Creating a Policy Profile

Some items to note before creating policies:

You must have one policy profile set up to effectively use ARTA Lending.

Try to name your policy profile with a meaningful name; for example, Consumer Non-Real Estate. This will help you easily recognize the different policies created.

You can set up as many different policies as you need for the different kinds of loans you process.

Once created, you can select a policy profile whenever you create a loan or template.

Information from a selected policy profile will only default into the loan documents once. Edits made to the policy after beginning a loan will not refresh the prompts.

Setting Up a New Policy

1. Expand Lending Setup from the Navigator and select Policy.

2. Click ***Add New***.

3. Complete the Policy Setup information and click OK.


Lending Setup

After you make your state selection, the Accrual Methods button is displayed.

These items may not apply in every state.

Enter standard vesting language.

Check this box to select the Fed box option.

Check this box to define custom fields.


Lending Setup

Custom Fields on Documents ARTA Lending provides two custom fields that you can define for use on documents. The heading text you type displays as a prompt on the screen. Each field allows you to enter loan-specific data. Both the heading and the text entered will appear on the upper right-hand corner of some documents such as the UN and NDas notes.

Accrual Methods

After you make your state selection for your Policy profile, the Accrual Methods button displays.

Accrual Method Setup All accrual methods listed on this screen may not be applicable in your state. All methods are selected by default. Clear the check mark from those accrual methods that you do not want to have available at loan transaction time.

Click this button to select the accrual methods for this Policy profile.


Lending Setup

Accrual Method Descriptions Actual/365—The actual/365 accrual method is used to calculate simple interest loans. The word actual refers to the actual days in each period that are counted in charging interest. With this method, daily interest is calculated based on 365 days per year. The resulting daily factor is multiplied by the actual number of days in the period over which interest is being calculated.

Actual/360—The actual/360 accrual method is used to calculate simple interest loans. The word actual refers to the actual days in each period that are counted in charging interest. With this method, daily interest is calculated based on 360 days per year. The resulting daily factor is multiplied by the actual number of days in the period over which interest is being calculated.

You may clear the options not used by your institution.

Click a check box to clear the check mark.


Lending Setup

Actual/Actual—The actual/actual accrual method is used to calculate simple interest loans. The word actual refers to the actual days in each period that are counted in charging interest. With this method, daily interest is calculated based on the actual number of days in the year (365 days for nonleap years and 366 days for leap years). The resulting daily factor is multiplied by the actual number of days in the period over which interest is being calculated.

Periodic—The periodic accrual method is used to calculate simple interest loans. The daily interest factor is calculated based on equal-length periods.

Precomputed Add-OnThe interest of the loan is calculated at the beginning of the transaction and added to the principal. When add-on interest is used to calculate a loan, an add-on rate is used instead of a simple interest rate.

The APR is higher than the rate stated in the loan agreement because the add-on accrual method does not take into consideration the reduction of principal as installment payments are made.

Precomputed DiscountThe interest of the loan is calculated at the beginning of the transaction and deducted in advance from the face value of the loan. The borrower receives the face value less the interest.

Precomputed SimpleThe simple rate is considered an equivalent rate of interest (ERI). The payment is calculated such that the ERI is not exceeded.

Split Rate Add-OnThis method of accruing split rate interest assigns an add-on interest rate to two or three different tiers.

If the tiers are based on the loan amount, the interest rate for each tier is applied to that portion of the loan balance, which falls within that tier.

If the tiers are based on a number of months, the interest rate is determined by a formula which weights the interest rate for each tier according to the number of months in the loan term which are contained in that tier. The tiers can be based either on the loan amount or on a number of months.

Split Rate Simple—This method of accruing split rate interest assigns a simple interest rate to two or three different loan amount tiers. The interest rate for each tier is applied to that portion of the loan balance that falls within that tier.

Split Rate Setup The Split Rate Setup button appears in Policy setup under the Calculation Options area.

NOTE: Split Rate Setup is not available in every state.


Lending Setup

Define Split Rates by Dollar Amount If split rate simple is the only available split rate accrual method for the “Applicable law state/document set” selected, the Split Rate Setup screen allows you to define tiers by dollar amount.

Define Split Rates by Dollar Amount or by Months If split rate add-on is the only available split rate accrual method for the “Applicable law state/document set” selected, the Split Rate Setup screen allows you to define tiers by dollar amount or by months.

If split rate add-on and split rate simple are both available accrual methods for the “Applicable law state/document set” selected, the Split Rate Setup screen allows you to define tiers by dollar amount or by months. If you define the tiers by months and calculate a loan using the split rate simple accrual method, you will receive the following error message: Split rate definition based on monthly tiers is not currently supported.

The Split Rate Setup button is available with the Split Rate Add On and/or the Split Rate Simple accrual method.

Define your split rate tiers by the dollar amount of the loan.

♦ Type the dollar amount that defines the upper end of the first split rate tier.

♦ Type the interest rate for the first split rate tier. Repeat for the second split rate tier.

♦ Type the interest rate for the third split rate tier.


Lending Setup

Repayment Methods Setup

This section allows you to define the repayment method options available for consumer open-end loans during the draw period and repayment period.

Setting up repayment methods allows you to choose which of all defined methods will be used in the transaction. The methods specified in the transaction will print on the loan documents.

NOTE: You must have permissions to Lending Setup, Repayment Methods to edit the contents. For more information see Consumer Loans: Payment Frequencies.

Initial Setup

1. Expand Lending Setup from the Navigator and select Repayment Methods. Note the two repayment period tabs.

2. Select one or more repayment methods from the Draw period repayment methods tab. Draw period repayment methods describe the payments during the draw period and are required for all consumer open-end loans.

Choose this option if your split rate tiers are defined by the term of the loan.

Type the number of months in the first and second split rate tier.


Lending Setup

Select one or more repayment methods from the Repay period repayment methods tab. Repay period repayment methods are only used when the draw period expires before the maturity date.

Check all of the Draw Period repayments applicable to your plans.

Selections are saved as you select each option.

You may select as many repayment methods as you want in this setup section.

When you process an open-end loan, you will be able to select up to three repayment methods for the given transaction. At least one method for the draw and repayment periods must be chosen in order to process a loan.


Lending Setup

3. When you are finished, you may return to the Main Navigator. The program saves your selections.

Check all Repay Period repayments that are applicable to your plans.

As you check your selections, the program saves your data.

You may select as many repayment methods as you want in this setup section.

When you process an open-end loan, you will be able to select up to three repayment methods for the given transaction. At least one method for the draw and repayment periods must be chosen in order to process a loan.


Lending Setup

Rates Setup

The Rates setup area allows you to define your fixed or variable interest rate index. This helps ensure proper calculations at transaction time.

NOTE: You must have permission to Rates to add or edit the contents.

Initial Setup

1. Expand Lending Setup from the Navigator and select Rates.

2. Click ***Add New***. Type a descriptive name for this new interest rate plan. The rate plan name is used to identify the plan.

3. Complete the Rate Setup information and click OK.

Choose this option if this rate plan is to be used for your consumer open-end loans.

If you have no floor and/or no ceiling, you may choose Specific value and leave the rate field blank.

The four options available for Rate change affects are discussed below.


Lending Setup

Rate Change Affects The four options for Rate change affects are:

Payment

Final payment

Payment amount and final payment

Term of loan

NOTE: These four options also link to the repayment method selected for a transaction (that is, installment, balloon, and so on). You will always see all four options for Rate change affects for all loan types. If an unsupported option is selected, however, it will be flagged at the validation step.

The following table lists the applicable Rate change affects options for the repayment method selected:

Rate change affects

Repayment Method

Payment amount

Final Payment

Payment amount & final payment

Term of loan

Installment X X X

Balloon X X

Amortized Balloon

X X X

Single Payment

X

Interest Only X

Principal Reduction

X

Demand Interest Only

X

Two-Phase loans for ARTA The first phase of a two-phase loan is always going to be interest only. The second phase of a two-phase loan is going to be one of the following three types:

Installment

Balloon

Amortized balloon

You may define your interest rate for a two-phase loan in one of two ways:

― One fixed rate definition throughout both phases.


Lending Setup

― One variable rate definition throughout both phases (If the initial rate change occurs at the end of the first phase, this would be similar to doing a fixed/variable.)

If you have specified #2 above (one variable rate definition through both phases), then the only option is to have changes affect the payment amount.

Consumer Open-End Daily Periodic Rate and APR Calculations

ARTA Lending allows you to calculate the APR and daily periodic rate for consumer open-end loans. The Lending Setup Rates screen and the Rates screen in a transaction (variable and fixed) collect data required for the calculations.

The Finance charge computation method, Billing frequency, and Accrual method are collected for the calculations.

If you enter an Index value or Interest rate along with the Accrual Method (for Daily Rate computation method) or Billing Frequency (for Cycle Rate computation method), APR and Periodic Calculations can be performed. To facilitate the calculation process, a Calculate Rates button is included in the Lending Setup Rates screen and Rates screen in a transaction. Clicking the button calculates the periodic rate and APR, and displays the values in their respective prompts on the Rates Setup screen and Rates screen in a transaction.

NOTE: The periodic rate and APR fields can be left blank until the entire screen is completed. Click the Calculate Rates button then to update these fields.

If you change any of the required calculation data items and click on the Calculate Rates button, a new set of calculated values will populate and replace the last calculated/entered value(s).

When creating a template and choosing a Rate definition, all fields on the Rates view will be protected (gray) and the Calculate Rates button will not be available. If a rate definition is not chosen when

Index value plus margin must equal a value greater than zero for the periodic rate and APR to be calculated.

To calculate, you must select a finance charge computation method, billing frequency, and accrual method.


Lending Setup

defining a template, then all the fields on the Rates view will be available for entry and the Calculate Rates button will be active. If a Rate plan is updated, all templates that use the rate plan will get the updated rates/values.

Index History Setup

Index History is used for all indexes. It is used for ARM early disclosures, variable rate home equity disclosures, and closing documents. Index History Setup allows you to create your own internal index, change the index rates, view the current index history values and effective dates, and print index information.

The regulation implementing the Truth-in-Lending Act requires that some ARM disclosures provide a 15-year rate history. If you create a customized index, you may also have to enter and maintain a 15-year history.

Home equity index rates are based on an interest rate index, such as the 1-Year Treasury Index, 26-Week Treasury Bill Rate, the Federal Home Loan Bank of San Francisco Cost of Funds, or a lender’s internal cost of funds.

Wolters Kluwer Financial Services Supplied Indexes ARTA Lending is delivered with 12 predefined indexes available for loan processing, including ARM and Home Equity loans.

ARTA Lending is delivered with the following 12 predefined indexes that are referred to as Wolters Kluwer Financial Services Supplied indexes.

Click this button to print a report of all indexes.


Lending Setup

Index Description

1 year LIBOR Index - WSJ

The average of interbank offered rates for one-year U.S. dollar-denominated deposits in the London market ("LIBOR")

1 year Treasury Index The weekly average yield on United States Treasury securities adjusted to a constant maturity of one year.

10 year Treasury Index The weekly average yield on United States Treasury securities adjusted to a constant maturity of ten years.

11th District FHLB Cost of Funds

The Cost of Funds Ratio to 11th District Federal Home Loan Bank Institutions.

26 week T-Bill Rate The auction average of short term U.S. government bills with a 26 week maturity.

3 year Treasury Index The weekly average yield on United States Treasury securities adjusted to a constant maturity of three years.

5 year Treasury Index The weekly average yield on United States Treasury securities adjusted to a constant maturity of five years.

6 month LIBOR Index - WSJ

The average of interbank offered rates for six month U.S. dollar-denominated deposits in the London market ("LIBOR")

6-month Weekly Average CD Index

This index is the weekly average of secondary market interest rates on 6-month negotiable Certificates of Deposit.

JP Morgan Chase Bank Prime

The prime commercial lending rate announced by Chase Manhattan Bank.

National Average Contract Rate

The National Average Contract Interest Rate for Major Lenders on the Purchase of Previously Occupied Homes.

Wall Street Journal Prime U.S. Prime Rate

The base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks known as the Wall Street Journal U.S. Prime Rate

Wolters Kluwer Financial Services-supplied indexes can be used to create custom indexes by choosing the Save As option on the index. Edits can include the index name, rates, description, and so on.

NOTE: Any Wolters Kluwer Financial Services-supplied index that you edit is no longer considered Wolters Kluwer Financial Services-supplied nor will it be updated when rates are updated.

Index Updating Wolters Kluwer Financial Services updates the rate histories for indexes regularly. The rates are updated as they become available to Wolters Kluwer Financial Services; some rates are only published on a quarterly or semiannual basis.


Lending Setup

The monthly index update is available on our web site only; it will not be available in CD-ROM format. The Internet-based updates are located in the ARTA Lending downloads area of our software support Web site at http://support.wolterskluwerfs.com.

If the indexes, automatically updated with the latest full release, meet your needs—then you do not need to download or install the monthly index update from our Web site. For disclosures, you only need to use a rate up to one-year-old.

At a minimum, you must update your custom rates once per year. Without doing so, you may not be able to produce a report with past rates.

This index history update information applies to the entire ARTA Lending family of products.

Creating a Custom Index

You can create your own custom index, or you can copy a Wolters Kluwer Financial Services-supplied index and modify the copy to create your custom index.

NOTE: Users must be included in a security group with permissions to Index History to add or edit the contents. Users will not be permitted create custom indexes that display 5 places to the right of the decimal place.

1. Expand Lending Setup in the Navigator and select Index History.

2. Click ***Add New*** to start with a blank screen or click on the existing index you want to modify.

3. Complete the Index Setup information and click OK.



Lending Setup

Deleting Indexes

Wolters Kluwer Financial Services-supplied indexes cannot be deleted; however, any information on Wolters Kluwer Financial Services-supplied indexes can be changed. Once it is changed, it is no longer considered a Wolters Kluwer Financial Services-supplied index.

To select a user-defined index to delete, right-click on the index name, and then choose Delete.

A confirmation dialog box appears to confirm the deletion. To delete the index, click Yes.

Documents Setup

This setup area allows you to specify your document preferences by applicable jurisdiction, which includes setting the binding type, number of copies, and watermark.

NOTE: You must have permissions to Documents to add or edit the contents.

1. Expand Lending Setup from the Navigator and select Documents.

2. Choose a state from the drop-down list.

3. For each document, select Binding type, number of Copies, and Watermark—if preferred.

These fields are ticker tape fields. Ticker tape fields can hold more characters than are shown on the window. As you enter characters, the text appears to move to the left accommodating the additional characters.

Check this box to activate this index, so it can be used for creating loans.

This description prints on your notes and Truth-in-Lending.

An edited Wolters Kluwer Financial Services-supplied index will not have this check mark.


Lending Setup

Tips for Setting Up Your Documents

Indicating two copies will produce one original document and one copy.

When you are finished and click another item on the Navigator, your Document Setup information is saved.

Printing Blank Documents

ARTA Lending allows you to select and print a document with out requiring fields to be completed. This gives you flexible access to your documents. To print a blank document:

1. Expand Lending Setup and select Documents.

2. Choose the desired state to its view documents.

3. Click the Print blank button for each document you want to be printed as a blank document. Printing a blank document uses your Binding selection. It will print a single blank copy regardless of your number of copies setting.

Checking the Watermark box adds the word “copy” to all subsequent printed documents.

Binding Types: Default = Document Default Simplex = Single Sided Left Duplex = Book Like Top Duplex = Short Edge

Check this box if you want the Transaction Navigator to display Wolters Kluwer Financial Services’s acronym for the document description; for example, instead of displaying Note it will display NDaS-SI-AL.

Check this box to convert all data input into upper-case letters when printing.


Template and Report Setup


Templates

Templates in ARTA Lending allow you to improve the consistency and accuracy of the loan processing from application to documents.

The purpose of a template is to save the processor time by storing standard information in a reusable form. For each template field, you can determine if there is information that will not usually change from one use to another that can be set as a default. Additionally, you can determine how much flexibility end-users should have to change data or force behavior.

Considerations in Designing Templates

For optimal use, design templates for the type of loans and applications that you most frequently process. For example, you could create templates for consumer secured non real estate loans and consumer unsecured.

Before you begin creating your templates, you need to understand the concept and think about the purpose of the template. The usability of your template depends on how you design the templates. Be sure to make good use of your ability to protect fields or make fields invisible.

You should consider how many fields it is beneficial to preset with information. Your goal is to set information that will not change from one use to another. The final result should be a template, which needs additional information in the blank fields—but not a great deal of changes or deletions in the preset fields.

When creating a template, some fields that contain preset data (defaults) from other areas in setup such as Policy, Rates, and PMI will appear grayed and cannot be changed. For example, if attaching a policy to a template, users will not be able to change the minimum interest (fee in lieu) value nor change the late charge information. The default values are set in Policy, Rates, and PMI in the Loan Setup and Insurance Setup sections.

Tips for Creating Templates Planning is an important aspect of creating a template. Consider the information you want set in

the fields for a specific template.

You cannot set date fields as invisible fields.

Every field is set to Normal. You do not need to right-click on every field. Right-click on the fields you want to change from Normal to set as Required, Protected, or Invisible.

To unprotect data fields in template setup, right-click the field and select Normal.

When naming your templates, we recommend descriptive titles to easily recognize which template to select for your loan transactions. See Getting Started for the table of special characters to avoid when naming your templates.

Troubleshooting: If you need to call SupportLine for assistance, keep in mind that you must have access to the template setup area to review settings, such as invisible fields.



Creating a New Template

To begin working with templates, open a blank template.

NOTE: You must have permission to Lending Setup, Templates to create or edit a template.

1. Expand Lending Setup, select Templates.

2. Choose Applications or Loans.


4. Complete the information for the template.

Template Navigation

The Navigator for Template setup is identical to the Navigator used when creating a new loan or application.

Loan Navigator Items

Criteria Defines the loan purpose, type of collateral securing the loan, the lending policy, and lender profile.

Borrower Collects the borrower information and some preliminary loan details.

Fees Collects the appropriate fees. ARTA Lending is a state-specific program. Fees vary from state to state.

Calculations Collects the information necessary to calculate payments.

Payments Collects the payment information for consumer open-end loans.

Rates Collects the rate information for consumer open-end loans.

ARTA Lending guides you through these items when creating a template.



Loan Navigator Items

Disbursements Typically not completed when creating templates.

Documents Contains information for all applicable loan documents.

User-Defined Fields

Add custom fields to your template

Validation Typically not completed when creating templates.

Print Typically not completed when creating templates.

NOTE: The Loan Navigator items, Payments and Rates, are only present for templates involving open-end loans. User-Defined Fields will only be present if they have been setup prior to creating the template.

Application Navigator Items

Criteria Defines the loan purpose, type of collateral securing the loan, the lending policy, and lender profile.

Fees Collects the appropriate fees. ARTA Lending is a state-specific program. Fees vary from state to state.

Calculations Collects the information necessary to calculate payments.

Payments Collects the payment information for consumer open-end loans.

Rates Collects the rate information for consumer open-end loans.

Applicant Collects the applicant information and some preliminary loan details.

Assets/ Liabilities

Specify application-related assets and relevant liabilities.

Income/ Expenses

Describe applicant income and expenses.

Application Documents

Select documents to print with each application.



Application Navigator Items

Print Print and preview documents.

Tracking Setup application tracking.

NOTE: For open-end loans the Navigator displays Payments and Rates and removes Calculations and Disbursements. ARTA Lending does not perform calculations for open-end credit loans, and the required rate information is different from other types of loans. User-Defined Fields will only be present if they have been setup prior to creating the template. User Defined field are discussed more in Data Exchange.

Setting Field Properties You can protect fields in templates from changes by setting field properties. To set field properties in your templates, right-click the field and select the appropriate designation from the pop-up menu.

When creating templates, you do not have to right-click on every field. Every field has a setting of Normal. Right–click on the fields you want to change from Normal; choose another field property as described below.

NOTE: Fields that appear gray, when creating templates, were set in other areas such as Policy Setup. These fields cannot be changed while you are creating a template. However, these fields can be changed during loan transaction if the default is not suitable.

Field Property Descriptions Field property types include:

Normal - A yellow color indicates a normal data entry field. Enter data or leave the field blank. Both options are acceptable and will not be validated

Required - A green color indicates a required data entry field. If data is not entered, a message appears during validation. The word ‘INCOMPLETE’ will appear on the loan or application documents if you do not override validation or return to enter data in this field.

Protected and cannot be changed – A gray color indicates the data entered during template creation will only display during loan or application creation and cannot be altered.

When setting properties for a field, your selection can apply to an entire grouping of information; for example, fields, columns, or numerous options.



Protected but can be changed – A purple color indicates the value in this type of field can be changed during loan or application creation. Once the field is changed, the field will change color to a dark red and ARTA Lending will produce a validation notice.

Invisible – This field type is indicated by inverse coloring, that is, black background with white text. The contents of this field will not appear during loan transactions but will be saved with the loan or application.

Note: To see the actual field colors used for each field type, go to Entering Data.

Filling out the Template ARTA Lending presents the fields required for a template on a section-by-section basis as displayed in the Navigator, beginning with Criteria. You can move between sections by clicking Next at the bottom of each screen after completing entry.

Printing Template Setup

To print a report of all fields in your template and the properties assigned, click the Print Template Setup button.

Completing the Criteria Information

Choices in Criteria will determine the loan type, what documents are selected, and which prompts are displayed during the loan transaction.



NOTE: Checking the Bypass autoselection check box prevents ARTA Lending from running autoselection when the template is used. It tells ARTA Lending to use the documents selected during template creation for the individual loan transactions.

Completing the Borrower Information

Customize the field properties to meet your needs during loan transactions.



Tips You may choose to preset the City and/or State fields if they are commonly the same.

Only fill out Borrower information names for the number of borrowers for the loan. Do not fill out more names, especially last names, than borrowers.

Do not add cosignor information to a loan template unless a cosigner is always required.

You may also preset field information or field properties within the additional borrower details screen, if appropriate.

Because you may be setting field information and/or field properties when creating your template, we recommend that you frequently save your work.

Completing the Fees

ARTA Lending is a state-specific program. Fees vary from state to state. Specific fees for your state will appear in your program. Some state fees are processed during calculations.

Fees also vary according to the type of transaction set in Criteria: consumer, open-end, or real estate.

Choosing Business changes the prompts to collect information appropriate for a business entity.

Enter a T in the Note Date field. ARTA Lending will insert the system date when the template is used to create a loan.



Consumer/Family/Household Fees Screen

Some items do not apply in every state or may use different terminology.

Define the fee as a fixed dollar amount ($) or as a percent of the loan amount

A pro rata charge is allowed on transactions not secured by residential real estate and in applicable jurisdictions.



Consumer Open-End Fees Screen

Third-Party Fees You have the option of entering your own user-defined fee names and other information. Some common third-party fees are provided. If you have any of these fees, just complete the information for that fee.

Choose how third-party fees will be calculated: as a flat dollar amount or on a cost/unit (for example, $5 per $1,000 of credit) basis.

Cost/Unit What you enter in this field will appear exactly as entered in your itemized estimate of third-party fees for how you calculate this fee; for example, you could enter the following:

$5 per $1,000 of credit; $5/$1,000 of the credit limit; $15 per recorded document; or $.25 per acre

Check this box if third-party fees apply.

Check this box if this third-party fee is considered a finance charge (FC).



Real Estate Fees, Commissions

Real Estate Fees, Items Payable



Real Estate Fees, Items Required by Lender in Advance

Real Estate Fees, Reserves Deposited



Real Estate Fees, Title Charges



Real Estate Fees, Government Recording



Real Estate Fees, Settlement

To set field properties for an entire column, right-click the first cell in the column and select a different field property.



Field Property Description

Normal Normal field entry

Required Required and will be validated

Required (column) Column is required and will be validated

Protected and cannot be changed Set and displayed; no change allowed

Protected and cannot be changed (column)

Column is set & displayed; no changes

Protected but can be changed Set and displayed but change is allowed

Protected but can be changed (column)

Column is set/displayed; changes are allowed.

Invisible Set and not displayed in processing.

Invisible (column) Column is set & not displayed in processing

Completing Calculation Information

Repayment Methods

Installment Calculates fully amortized loans with a regular schedule of principal and interest payments. The Skip Payment option can be used as part of an installment loan. To access Skip Payment, click the

This example uses the Installment repayment method.



Calculation Options button. Skip Payment calculates a series of monthly payments, then a period where one or more payments are skipped, then continues the series of payments again. ARTA Lending does not require skipped payments to run consecutively. The same period is skipped each year for the term of the loan. Interest is not capitalized (added back into the loan balance) for the skipped month(s).

Balloon/Amortized Balloon

Regular payment defined calculates a final payment on the basis of the number of regular payments and the defined regular payment amount. This is similar to the Amortized Balloon option; however, the Balloon repayment method calculates the amount of the balloon payment or calculates the amount of the regular payments allowing you to define the other.

Final payment defined calculates a regular payment on the basis of the number of regular payments and the defined balloon amount. This is similar to the Amortized Balloon option; however, the Balloon repayment method calculates the amount of the regular payments or the amount of the balloon payment allowing you to define the other.

Amortized Balloon calculates a regular payment based on a long-term amortization with a balloon payment due on a shorter term (call date). ARTA Lending calculates the regular payment and the balloon payment.

Single payment Calculates a single payment of principal and interest due at maturity. The payment date is also the maturity date of the loan. If the loan purpose is consumer and Multiple Advance is selected, ARTA Lending uses Reg Z, Appendix D calculations and the interest will be estimated. By checking the Multiple Advance box, this loan type can be used for single repayment construction loans.

Interest only Calculates interest payments due on a regular basis with a final payment comprised of the principal and any remaining interest. If the loan purpose is consumer and Multiple Advance is selected, ARTA Lending uses Reg Z, Appendix D calculations and the interest will be estimated. By checking the Multiple Advance box, this loan type can be used for interest only construction loans.

Principal reduction Calculates interest payments at regular intervals and principal payments at the same or different intervals. You can specify the principal payment amount or ARTA Lending can calculate it.

Irregular Payment Irregular Payment repayment method is available for one- and two-phase loans. ARTA Lending allows you to create irregular payment streams and, where appropriate, calculate an APR for loans with irregular payments. The irregular payment repayment method supports the following types of loans: fixed rate, single-advance consumer, fixed- or variable-rate commercial, single or multiple advance commercial, open-end or closed-end commercial. The irregular payment feature is not supported on loans secured by residential real estate.

NOTE: There must be one empty payment amount field in the irregular payment details for ARTA Lending to calculate this repayment type.

Demand Calculates interest payments due on a regular basis. The principal and remaining interest is payable when the lending institution demands payment. The calculations assume a one-year maturity for Reg Z purposes.



Two phase Calculates a two-part loan repayment with Phase I being interest only and Phase II allowing a choice of installment, balloon, amortized balloon, or irregular payment. If the loan purpose is consumer, and Multiple Advance is selected, ARTA Lending calculates the loan based on Reg Z, Appendix D with the following assumptions:

Phase I (Construction Phase)—Truth-in-Lending information is estimated. ARTA Lending assumes this phase is interest only.

Phase II (Permanent)—ARTA Lending allows your choice of installment, balloon, amortized balloon, or irregular payment.

By checking the Multiple Advance box, this loan type can be used for construction/permanent financing.

Custom Repayment This repayment method, restricted to commercial/agricultural loans only, allows you to customize your payment language for loans where other repayment types do not meet your needs.

Calculation Options Button The options below appear when you click the Calculation Options button at the top of Calculation. Check the options that apply to this template and click OK.

Type your custom payment language here. Because you can enter your own payment language, you will need to override validation. The custom repayment language you create will not be covered by BSI’s warranty. Keep in mind the space available on the documents.



Disbursements When creating a template, because disbursement information is specific to each loan transaction, it is uncommon to set disbursement information. It is recommended that disbursement information not be entered during template creation.

NOTE: Remember Disbursements, Validation, and Print typically are not completed when creating templates.

You can add or remove the documents that you want available with this template when creating your loans.

Completing Documents

The Document List shows a table of documents selected for this loan and displays them on the Navigator as well.

Any documents appearing yellow or red in the Navigator indicate the document is either not needed or is invalid. Right-click the document name on the Navigator to delete or check the document status.

NOTE: Document status may change when the template is actually used in loan creation. It is best to test your template using a sample loan to verify document status.

Minimum interest may not be available in your state.

Check this box to skip the payments scheduled for certain calendar months. Any month designated as a skipped month is skipped for every year of the term. This option only applies to loans with installment repayment methods.



Add Documents

If you choose to add or change any of the documents that were automatically selected for the loan, click Add documents…. This brings you to the following screen.

Remove Documents Place a check mark in the box to the left of each document name you want to remove, then click the Remove selected documents button.

Select the document you want to add to the loan. To select multiple documents, hold down the Ctrl key as you select each document.

This allows you to select documents from a different state.



If the revised list of documents is your preference each time the template is to be used and you do not want the system to rerun autoselection, return to the Criteria screen on the Navigator and check Bypass autoselection.

Checking the Bypass autoselection box prevents ARTA Lending from running autoselection when the template is used. It tells ARTA Lending to use the documents selected during template creation. However, please be aware our warranty may not cover omissions due to the removal of documents that would have been autoselected or the appropriateness of manually added documents.

Template Setup Completion

Since you are creating a template rather than a loan, it is not necessary to select Validation and Print from the Navigator. Save and close the template by clicking the Save icon on the toolbar.

NOTE: Do not use the Save As button when changing Collateral types, Secured by fields, when changing between open-end and closed-end loan types, and between fixed rate and variable rate. In these situations, it is recommended to create a new template.

Test your template using a sample loan to uncover any validation warnings, compliance issues, or corrections you want to make.

NOTE: Verify if you are in loan creation and using the template for testing, that you are no longer in template setup, as the screens look very similar.

Template Maintenance

Due to program and document changes in each new release of ARTA Lending, template maintenance may be required for the transactions and documents to function properly, especially when old documents are removed from the program and replaced with new documents or new features and functions are added to the program.

Reports

Report Setup provides a quick way to create reports. You can design your reports by entering the desired information to print. Reports can be as inclusive or as narrowly targeted as desired. For example, reporting can be done by:

Loan officer

Branch Office

Loan processor

Loan purpose

Collateral type

Funding date

Note date

Maturity date



Loan Amount

In addition, reports can be customized with custom fields.

Setting Up a New Report

To begin working with reports, open a new report.

NOTE: You must have permission to Lending Setup, Report to add or edit the contents.

1. Expand Lending Setup from the Navigator and select Reports.


3. Complete the Report Setup information and click OK.

Report Setup Criteria

For best results, enter as much Report Setup Criteria information as you can to get detailed reports. The Report Setup Criteria is described as follows:

Check this box to use custom fields in your report.

Click Save As to save a copy of the report criteria and make changes. Click Print Report to

send the report to the printer.

Click Print Setup to print the report setup information.



Report Type allows you to choose Loans in Progress Report, If the Application Module is installed you can also access the Application Tracking Report. Refer to the Guide to ARTA Lending Application Module for more information on the Application Tracking report.

Report name allows you to enter the report name. Refer to Getting Started for the table of special characters to avoid when naming reports.

Title allows you to enter a title.

Optional report heading allows you to add a report headline.

Path designates the location of the saved loans or applications and produces a report for only the items saved to the designated path. This makes it possible to produce reports from different sets of saved loans.

Lender identification identifies the lender and various branches. Select from the list of lenders that were created in the Lender Setup section.

Loan officer identifies the selected loan officer. Select from the list of loan officers that were created in the User Setup section.

Processor identifies the selected loan processor. Select from the list of loan processors that were created in the User Setup section.

NOTE: This field will not be available when you choose the Application Tracking Report Type.

Loan purpose produces loan reports specific to the selected purpose; for example, personal or business.

Collateral type produces loan reports specific to the selected collateral type: residential real estate, other collateral, or unsecured.

Tracking item status (Application module only) produces application tracking reports based on the selected overdue, pending, or requested status.

Name includes produces a report when entering first or last name or both, which shows the loans or applications that have a borrower name that matches the text entered.

Application date from (Application module only) allows you to enter a range of dates (from and to) to produce a report that contains all applications with an application date that falls within the given range, inclusive. Entering the shortcut “T” (for today) defaults in today’s system date.

Funding dates from specifies a range of funding dates for reporting.

Note date from allows you to enter a range of dates (from and to) to produce a report that contains all loans that have a note date that falls within the given range, inclusive. Entering the shortcut “T” (for today) defaults in today’s system date.

Assumed date of closing from (Application module only) allows you to enter a range of dates (from and to) to produce a report that contains all applications, in a pending or ready status, with an assumed date of closing that falls within the given range, inclusive. The assumed date of closing is entered on the tracking screen for the application.



Maturity date from allows you to enter a range of dates (from and to) to produce a report that contains all loans that have a maturity date that falls within the given range, inclusive. Entering the shortcut “T” (for today) defaults in today’s system date.

Interest rate from allows you to enter a range of interest rate percentages to produce a report that contains all loans that have an interest rate, which falls within the given range, inclusive.

Loan amount from allows you to enter a range of amounts to produce a report that contains all loans that have a loan amount that falls within the given range, inclusive.

Credit insurance from allows you to enter a range of amounts to produce a report that contains all loans that have a credit insurance premium that falls within the given range, inclusive.

Sort by allows you to sort the loan applications on the report by:

Borrower

Collateral type

Credit Insurance

Funding date

Lender

Loan amount

Loan number

Loan officer

Loan purpose

Maturity date

Note date

Processor

Rate

Click the drop-down arrow to select one of these from the list.

Order allows you to select the sort order: ascending or descending. Click the drop-down arrow to select from a list.



Designing Reports

Once you design a report, you can save the setup information. This allows you to use the same setup again as well as create other similar report setups with a head start.

NOTE: The more report setup criteria items you enter, the more concise your report will be. This will produce more targeted loan reports.

Using Custom Fields Check the Use custom fields check box and select the fields and field order for your report.

To select custom fields for your report, select a field from the listing on the right and click <Add.

If you select a field, and then change your mind, select that field and click Remove>.

To remove all fields, click Remove All>>.

Click OK when finished.

The custom fields will be printed on the report in the order specified here.

This listing contains available fields to select for reports.


Insurance Setup

Insurance Setup

Introduction

This chapter includes information about setting up insurance often required as part of the loan application process. Specifically:

Credit Life Insurance Setup

Disability Insurance Setup

Involuntary Unemployment Insurance Setup

Private Mortgage Insurance Setup

Credit Life Insurance Setup

Credit life information must be completed to calculate single or joint credit life insurance.

Credit Insurance Forms

Insurance companies provide forms for use with the credit insurance plans you set up in ARTA Lending. Contact your credit insurance company for information about ordering forms and inform them you have purchased ARTA Lending. The credit insurance company will contact Wolters Kluwer Financial Services and place an order for programming the insurance forms. Once the forms are available, you will receive a Custom Documents compact disc with accompanying installation instructions and access codes.

NOTE: ARTA Lending is not shipped with preset credit insurance rates. You must enter your own insurance rates into the Insurance setup section.

Credit Insurance Setup Worksheets

You must contact your insurance company for the needed credit insurance information. Send your insurance company a blank copy of the Credit Insurance Setup Worksheet and use the completed copy to enter and maintain your credit life, disability insurance, and Involuntary Unemployment Insurance information. Once you have entered the setup information from the completed worksheets, you should maintain a copy of the worksheet for your records.

IMPORTANT: Your state law may not allow some of the options specified in the worksheets. As always, check with your legal counsel to verify that your information is acceptable under your state law.


Insurance Setup

Adding New Credit Life Insurance

NOTE: You must have permissions to Insurance to add or edit the contents.

1. From the Navigator, expand Insurance and select Credit Life.


3. Read the Credit Insurance Warning information and click OK.

4. Complete the Credit Life Setup information using the completed worksheet and click OK.


Insurance Setup

Select the rate type from the drop-down list; enter the months and rates for decreasing coverage.

Type a life insurance plan name that represents the type of coverage characteristic to differentiate between plans; for example, Gross coverage.

Click Print to print a copy of your plan. Click Save as to save a copy of the plan; save as a new plan, and define the differences.

Click the Monthly Entry Rates button to manually enter rates for each month.

Click the Additional Coverages button to select the additional coverages options to be applied to the insurance plan.


Insurance Setup

Monthly Entry Rates Monthly Entry Rates allows rates to be entered manually for each individual month. This feature can be used if the credit life rates do not follow the standard per $100 per year or per $1,000 per month formulas. If monthly entry rates are needed the Decreasing Rates grid must be cleared.

Substitute Level Life Rates In a limited number of states, it is acceptable to substitute level rates where decreasing life rates would normally be used. Check with your legal counsel to determine if this is an acceptable option in your state.

Truncated Coverage Available Truncated coverage allows for a term less than the term of the loan to be covered with insurance. If the Truncated coverage available check box is checked, the truncated option will then be available for each loan using this credit life plan.

Click this button to clear entries in the table.


Insurance Setup

Additional Coverages In a number of states, additional coverage options are available with credit life insurance such as dismemberment, accidental death, terminal illness or accelerated death, and paraplegia/quadriplegia. To add additional coverages, click the Additional Coverages… button.


Insurance Setup

Disability Insurance Setup

Disability information must be entered to calculate single or joint disability insurance. ARTA Lending is flexible and allows you to set up as many disability rate plans as you need. Setting up the rates is generally a one-time event.

Disability Insurance Forms

Insurance companies provide forms for use with the disability insurance plans that you set up in ARTA Lending. Contact your credit insurance company for information about ordering forms and inform them that you have purchased ARTA Lending. The credit insurance company will contact Wolters Kluwer Financial Services and place an order for programming the insurance forms. Once the forms are available, you will receive a Custom Documents compact disc with accompanying installation instructions and access codes.

NOTE: ARTA Lending is not shipped with preset disability insurance rates. You must enter your own insurance rates into the Insurance setup section.

Disability Insurance Setup Worksheets You must contact your insurance company for the needed disability insurance information. Use the Disability Credit Insurance Setup Worksheet to enter and maintain your disability and credit life insurance information.

Important: Your state law may not allow some of the options specified in the worksheets. As always, check with your legal counsel to verify that your information is acceptable under your state law.

Adding a New Disability Insurance Plan

NOTE: Users must be included in a security group with permissions to Insurance to add or edit the contents.

1. From the Navigator, expand Insurance and select Disability.




Insurance Setup

4. Complete the Disability Insurance Setup information via the completed worksheet and click OK.

Type a name that re-presents the type of coverage characteristic to differentiate between the plans, such as retroactive, elimination, single,

Use the options listed on the worksheet to complete the fields in this screen.

Click this button to enter the rates.


Insurance Setup

Truncated Coverage Available Truncated coverage allows for a term less than the term of the loan to be covered with insurance. If the Truncated coverage available check box is checked, the truncated option will then be available for each loan using this disability plan.

Disability Rate Setup Table

Disability Rate Table Types The type of entry table to use should be based on the one selected by your credit insurance company.

Monthly entry—Allows you to enter rates in the table for each individual month.

Interpolated—Allows you to enter beginning and ending values for a range of months, and the program will calculate each rate within that range using an interpolation formula. For example, if you enter a rate value for month 1 and month 12, the rates for months 2 through 11 are calculated.

Bracketed—Allows you to enter beginning and ending values for a range of months, and the program will insert the same rate into each month within that range. For example, if you enter a rate value for month 1 and month 12, the rates for months 2 through 11 are populated with the rate you entered for month 12.

Involuntary Unemployment Insurance Setup

Your Involuntary Unemployment Insurance (IUI) plans must be entered into the setup section before processing your loans requiring IUI insurance.

Click this button to clear the figures from the table.


Insurance Setup

IUI Forms

Insurance companies provide forms for use with the unemployment insurance plans that you set up in ARTA Lending. Contact your credit insurance company for information about ordering forms and inform them that you have purchased ARTA Lending. The credit insurance company will contact Wolters Kluwer Financial Services and place an order for programming the insurance forms. Once the forms are available, you will receive a Credit Insurance Forms compact disc with accompanying installation instructions.

NOTE: IUI information is included in the Credit Insurance Setup Worksheets that are completed by your insurance company.

IMPORTANT: Your state law may not allow some of the options specified in the worksheets. As always, check with your legal counsel to verify that your information is acceptable under your state law.

Adding a New Involuntary Unemployment Insurance Plan

NOTE: You must have permission to Insurance to add or edit the contents.

1. From the Navigator, expand Insurance and select IUI.



4. Complete the IUI Setup information and click OK.


Insurance Setup

IUI Rate Setup Table If the monthly entry IUI Rate type is selected, the IUI Rate Table also becomes available.

NOTE: Rates can be entered on the opening Insurance screen when $100/year or $100/TOP are chosen in the Level Rates section.

Choosing a Rate type of Monthly Entry allows access to the IUI Rate Table.

Type a descriptive name that represents the type of coverage characteristic that will differentiate one plan from another.


Insurance Setup

Private Mortgage Insurance Setup

Your Private Mortgage Insurance (PMI) plans must be entered into the setup section before processing your loans requiring PMI insurance. This information is needed to calculate Private Mortgage Insurance.

Setting Up a PMI Plan

NOTE: You must have permission to Insurance to add or edit the contents.

1. From the Navigator, expand Insurance and select PMI.


3. Complete the PMI Setup information and click OK.


Insurance Setup

Tips In the PMI Rate Table…

enter the number of months that each rate could apply.

enter the rate to be used to calculate PMI for the given number of months.

For best results, enter all rates that could possibly apply to any loan under this plan. ARTA Lending will calculate the termination date at loan transaction time.

NOTE: Any information displayed in a screenshot is for demonstration purposes only. When filling out information for any setup screen, consult your institution policies or personnel for the correct entries to use.

Transaction PMI

ARTA Lending provides the ability to modify the PMI rate(s) for level and declining balance plans at the time of the transaction. Any modifications made will only affect the associated transaction. This allows you maximum flexibility in customizing the rate table on-the-fly to meet the needs of any situation or customer.

Choose Level balance, Declining balance, or Single premium from the list.

Escrow Premium

Do not check this box if you prefer the payments in escrow be applied to the final scheduled PMI payments. Check this box if the payments in escrow will not be applied to the final PMI payments, and will be refunded.


Insurance Setup

NOTE: Only months and rates can be changed at the transaction level — no other information defined for the plan may be modified. The PMI rates entered in the transaction apply only to the transaction, and do not affect the actual plan itself.

Setting Up Transaction PMI In order to use Transaction PMI, users must have permission. Choose General Setup, Group from the Navigator and check Transaction PMI to activate the feature and save your changes.

A PMI Insurance plan must be set up under Insurance, PMI on the Main Navigator. The plan details can be blank, but the coverage type must be selected.

TIP: You can create and save a PMI plan with no rates, then select that plan and enter PMI rates at transaction time.

Using Transaction PMI For a transaction that has private mortgage insurance, the rate setup can be entered on the Calculations screen. If you select a PMI plan with a level or declining balance as the PMI method, the PMI Rate Details… button appears.

NOTE: This button is hidden for PMI plans with a single premium coverage type, or if the user does not have permission to enter PMI rates in the transaction.

Clicking the PMI Rate Details… button displays the Rate Table popup.

Select this checkbox to activate Transaction PMI.


Insurance Setup

This table will contain any default information set from Insurance, PMI setup. Type the months and rates you want for this transaction’s PMI rate table. Click OK to save your changes with the transaction or Cancel to return to the Calculations screen without saving a new rate table for the transaction.


Data Exchange

Data Exchange

At times, there is a need to update data from one machine to another, or to move data to a single company-wide database. This can be accomplished through the export/import function. Data is sent to a single file and the file is read into another database completing the data exchange.

This chapter covers the following topics:

User-Defined Fields

Data Specifications

Exporting

Importing

Import/Export Development Kit

Before Using Data Exchange Functions Before any data can be imported or exported, at least one export target and one import source must be set up.

We recommend that you set up any User-Defined Fields and Data Specifications, if required, before setting up your Export and Import information.

User-Defined Fields

ARTA Lending lets you create custom fields. The additional fields appear during loan creation and for applications, when the Application Module is installed. These user-defined fields do not appear on documents, but they can be exported to other software programs, or they can be included in a customized ARTA Lending report.

Adding a New User-Defined Field

NOTE: You must have permission to Data Exchange to add or edit the contents.

1. From the Navigator expand Data Exchange and select User-Defined Fields.


3. Complete the User-Defined Field information and click OK.


Data Exchange

User-Defined Field Descriptions Group field — Use the drop-down arrow to select the group in which you would like the user-defined field to be included. By grouping user-defined fields, data can be more easily tracked and found.

To create a group click the Define Groups button. Type as many group names you need into the table. Each group should have its own row in the table. Once all the groups are created, click OK. Then, select the desired group from the drop-down list.

Prompt Text field — Type a unique name that describes the data this field will collect. The name of the Prompt Text field and the name of the Name field should be the same to simplify searches of the output data file created by ARTA Lending. The name entered in this field will be the way it appears in ARTA Lending.

NOTE: To keep all user-defined fields together for reporting or data exporting purposes, develop a naming convention. For example, you could place an underscore,“_”, or a number before each user-defined field to group them together at the top of the field list. This becomes more apparent when creating a custom data specification where you need to search for fields you want to include in the specification. If you want your user-defined fields in a specific order in a loan, use numerical or alphabetical combinations on the name of the user-defined fields instead of the prompt text.

Type field — Select the field type for this user-defined field from the list. There are five field types available:

Checkbox makes the user-defined field a checkbox.

Date makes the user-defined field a date-formatted field.

Past Date makes the user-defined field a date of execution of a document or transaction.

You can define the number of characters for your field.

Type a unique name that describes the data this field will be used to collect. The name entered is the name that appears in the header record in the data file that ARTA Lending creates for exporting.


Data Exchange

Future Date makes the user-defined field date in the future, often used as a ‘Do not exceed’ time.

Dollar makes the user-defined field a dollar or currency formatted field.

Rate makes the user-defined field s percentage formatted field.

Text makes the user-defined field into text field.

Width field — Enter the length of the field, that is, the number of characters allowed.

Default field — If you want a default value for a user-defined field, type the value into the Default field.

Working with User-Defined Fields in a Loan After you have created you user-defined fields, you can begin creating new loans. During loan creation, choose the User-Defined Fields section on the Navigator to see the user-defined fields displayed in their respective groups.

Data Specifications

Before you can export any ARTA Lending data or import data to a transaction, you must create a data specification that identifies the specific data items. Each export target and import source refers to a named data specification that identifies the specific data items.


After you create user-defined fields, the User-Defined Fields item will appear on the Navigator.

This example shows two groups that were created: Credit Check and Host Accounting.


Data Exchange

Creating a Data Specification

1. From the Navigator expand Data Exchange and select Data Specifications.


3. To select fields for the data specification, select a field from the listing on the right and click the <Add button.

4. To include all fields listed, click the <<Add All button.

5. If you select a field, and then change your mind, select that field and click the Remove > button.

6. If you want to rearrange the fields or select new ones, click the Remove All >> button.

7. Click the Save As button or OK to save your export target.

The standard field groups check boxes are described in the following table.

Check the standard field groups to be imported and/or exported.

Type the name of the export/import data specification you are creating.

This listing contains all available fields for exporting or importing.

Here are the fields that were selected. You can easily add or remove fields to change the order of the fields.

User-defined fields


Data Exchange

Standard Field Groups Check Box Options

Checkbox Description

Parties All fields describing all parties involved will be included in the customized data specification.

Payment Streams

All fields describing the payment streams will be included in the customized data specification.

NonReal Estate Fees

All fields describing the nonreal estate fees will be included in the customized data specification.

Real Estate Fees

All fields describing the real estate fees will be included in the customized data specification.

Using Your Custom Data Specification in a Target After you have completed your custom data specifications, you must update the export and/or import target specification to include the new data specification.

Export Targets

The compatible Windows design allows you to export data from ARTA Lending to comma delimited ASCII text files when can be imported by other applications.

Setting Up the Export Target


1. Expand Data Exchange, select Export.


3. Complete the Export Target Setup information and click OK.


Data Exchange

The Data file specification list varies with the interfaces and modules installed. Some possible choices are:

All data fields and RE fees

All data fields

Custom reporting fields

Party data fields

XML all data

If you choose XML all data, you also need to choose a stylesheet.

Exporting Data from a Transaction

Exporting data to your host system is accomplished through the Export button on the transaction toolbar, when working in a loan, or application when the Application Module is installed.

Type the file name and extension of the interface program.

Export Button

Click the arrow to browse for the file.

Random filenames are selected for exports or filenames are based on the transaction contents.

Click the drop-down arrow to select an import data file specification from the list.


Data Exchange

Import Sources

ARTA Lending’s design allows you to import data from other applications. You avoid the traditional gaps in accuracy and consistency that come from rekeying data.

The import process into ARTA Lending is facilitated by the use of an interface program. You must have at least one interface program installed to import information into ARTA Lending.

Setting Up a New Import Source


4. Expand Data Exchange, select Import.


2. Complete the Import Source Setup information and click OK.

The Data file specification list varies with the interfaces and modules installed. Some possible choices are:

All data fields and RE fees

All data fields

Type the file name and extension of the interface program.

Click this button to browse for the file.

Click the drop-down arrow to select an import data file specification from the list.


Data Exchange

Custom reporting fields

Party data fields

XML all data

Importing Customer Data into a Transaction Importing data from your host system is accomplished through the Import button on the transaction toolbar, when working in a loan, or application when the Application Module is installed.

Import/Export Development Kit

The Interface Developers Kit (IDK) is designed to assist in the development of customized import and export applications used to transfer data between ARTA Lending and other external applications or systems.

The kit is intended for use by alliance partners and other third-party developers who are interested in developing an interface to ARTA Lending. Advanced ARTA Lending users will also benefit from this documentation if they want to use Data Exchange to export ARTA Lending information for custom reports.

The IDK can be found on the Wolters Kluwer Financial Services Software Support web site at http://support.wolterskluwerfs.com.



Consumer Loans

Consumer Loans

Introduction

ARTA Lending guides you through each step of creating a loan and, based on the information entered, selects the documents for you.

After the Lending Setup information has been entered and your templates have been created, you can create new loans and applications with or without templates.

This chapter steps you through the process of creating consumer loans including:

Creating Loans Using Templates

Criteria

Borrower

Fees

Calculations

Disbursements

Open End Payments

Open End Rates

Documents

Validation

Printing

Consumer Open-End Credit ARTA Lending supports open-end credit using agreements for consumer open-end lending: personal lines of credit and overdraft protection.

“Open-end credit” is a consumer credit concept that is defined as a plan in which:

The creditor reasonably contemplates repeated transactions

The creditor may impose a finance charge from time to time on an outstanding balance, and

The amount of credit that may be extended to the consumer during the term of the plan (up to any limit set by the creditor) is generally made available to the extent that any outstanding balance is repaid. Regulation Z, §1026.2(20).

Preparing for Consumer Open-End Loans

Setting Up Repayment Methods From the Navigator, choose Lending Setup, Repayment Methods and check the repayment methods that apply to your consumer open-end products. You may select as many methods as necessary. When you process an open-end loan, you will be able to select up to three for the given transaction. At least one method for the draw and repayment periods must be selected in the setup area in order to process a loan. Please refer to Lending Setup for details on setting up repayment methods.


Consumer Loans

NOTE: The HUD-1/1A is not a required document and will not populate correctly on open-end transaction. (RR)

Setting Up Templates To prepare for processing open-end credit loans, create your templates for consumer open-end transactions. They can contain predefined product characteristics. In addition, you can protect data items from updates at transaction time.

Creating a New Consumer Loan

You can create loans by choosing the templates that were created for your loans, and then fill in the required information. This frees you from worrying about many of the details, improving the consistency of your work, and saving you time. When using templates, remember that someone may have preset information in the templates. Some information can be changed during processing a loan—depending on what field properties were set during template creation.

Creating a New Loan

1. From the Navigator, expand Loans and select New.

2. To create a loan based on an existing template, select a template from the displayed list.

NOTE: Refer to the Template and Report Setup for details on creating templates.

3. To create a loan without a template, select ***New loan without template***. The Navigator will change, displaying Criteria at the top.

Transaction Navigator for Loans

The transaction Navigator displays various choices as you prepare a loan or application. Clicking Next at the bottom of each section will step you into the next section until you’ve completed all sections.

NOTE: Nine choices are available from the Navigator if you have setup User-Defined fields.


Consumer Loans

The table below briefly describes each Navigator choice.

Navigator Choice

Description

Criteria Define the loan purpose, type of collateral securing the loan, the lending policy, and lender profile.

Borrower Enter borrower information and some preliminary loan details.

Fees Add appropriate fees.

Calculations Enter information necessary to calculate payments.

Disbursements Disclose how the amount financed is disbursed.

Documents Complete prompts for all applicable loan documents.

User-Defined Fields

Fill in custom fields, if previously defined.

Validation View validation results for potential compliance concerns.

Print Preview and print the loan documentation.

Criteria

The Criteria section of the transaction Navigator sets the basic transaction characteristics such as the loan purpose, security, collateral, and documents required to complete the transaction.

Tips for Filling Out Criteria Choosing Consumer/Family/Household causes the program to autoselect Truth-in-Lending

disclosures as required by Reg Z.

Complete all applicable fields.

Information that was preset in the setup sections of the program will appear when creating your loans.

Click Next at the bottom or select the Borrower item on the Navigator to continue.


Consumer Loans

One-Time Document Defaulting ARTA Lending defaults in forms prompting information collected during the loan origination process only once. Changes made to the collateral description will not be defaulted into the documents again since users may have made changes to the form prompts themselves and we do not want to overwrite them. For example, an automobile description on the criteria screen defaults to the security section of the note. If the criteria description is changed, the changes will not take effect on the note unless the note is removed and re-autoselected again on the documents screen.

Open End Credit By checking the open-end credit check box, you can specify an “Overdraft line,” a “Personal line” of credit, or “Home Equity’ if you have purchased the Home Equity module.

Make sure that the Repayment Methods were set up in the Lending Setup section. The repayment methods collect the repayment information that prints on consumer open-end notes.

NOTE: Refer to Lending Setup for details on setting up repayment methods.

Remember, when using templates, someone may have preset information in the templates. Some information can be changed during processing a loan, unless field properties were set during template creation.

The Profiles area displays preset information from Lender Setup and Policy Setup.


Consumer Loans

REMINDER: Save your work often.

Borrower

The Borrower section of the transaction Navigator provides borrower details such as name, location, and type of borrower.

Tips for Completing Borrower Information ARTA Lending allows up to six individual borrowers.

ZIP and postal codes are automatically formatted with hyphens if needed:

― Five-digit ZIP code = 01100 Nine-digit ZIP code = 01100-0001 Canadian postal code: T2T 2T2

Type “T” in the Note date field to insert today’s date.

Click the Details button to enter more borrower information, such as social security and tax ID numbers.

Click the Cosigners button to enter cosigner information.

Open-end credit options.


Consumer Loans

Tips for Completing Borrower Details The “Birth date” is required to document credit life and disability details on the promissory note.

Date of birth is also a requirement of Section 326 of the PATRIOT Act.

Use the scroll bar to move information up or down.

Telephone numbers are formatted accordingly:

― Ten-digit telephone number = (320)555-5555 Seven-digit telephone number = 555-5555

Information from these details will appear on the application documents.

The Details section contains a checkbox to indicate when the credit score affected a loan decision. Selecting this checkbox auto-selects the appropriate notification.

Click OK when you are finished.

Select the loan officer from the dropdown list. Loan officers should have been set up in the General Setup, User section.

Click this button to go to the next window or select Fees on the Navigator.


Consumer Loans

Complete as much information as possible.

SSN is formatted as nine-digits: 123-45-6789

If you enter an EIN with a single dash, it formats as 12-1234567.

If you enter an EIN with zero or two dashes, it formats as 123-45-6789.

Selecting this box auto-selects the notification document for the party, either risk-based pricing or notice of adverse action, based on the loan criteria.

Credit data from a credit report ordered in the Credit Bureau module will display here. The fields also can be edited.

Key factors from a credit report will be saved if the field is blank when the credit report is ordered.


Consumer Loans

Completing the Cosigner Information

Cosigner Details

Fees

The Fees section of the transaction Navigator lists the various fees required as part of loan transactions. The list of fees may differ from state-to-state.

Tips for Completing Fees The Value field is intended for a number.

Type the cosigners’ names and click the Details button to add detailed information about cosigner(s).

The information collected for a cosigner is similar to the information collected for the borrower.


Consumer Loans

The $/% field is for a symbol only.

Paid to: You can type the name of the fee recipient in the Paid to field, or choose from the available options by clicking the drop-down arrow: Public officials, Lender

ARTA Lending is a state-specific program. Fees vary from state to state. Specific fees for your state will appear in your program. Some state fees are processed during calculations.

Complete each field and continue to Calculations by clicking Next.

Completing Fees

This option allows you to define the fee as a fixed dollar amount ($) or as a percent of the loan amount (%).

Miscellaneous fees that do not affect the APR.

These fees are finance charges that affect the APR.

Add other fees. You can type the name of the fee recipient in the Paid to field, or choose from the available options by clicking the drop-down arrow.


Consumer Loans

Consumer Open-End Fees

Tips for Completing Consumer Open-End Fees Type column: The drop-down list offers a choice of the following:

Dollar amount Percent Less of percentage and dollar amount Greater of percentage and dollar amount

Third-Party Fee Type column: The drop-down list offers a choice of the following:

Dollar amount Cost/unit

% of column: The drop-down list is available if the fee is calculated as a percent. The choices are as follows:

Credit limit Outstanding Balance Advance amount

Complete each field and continue to the Calculations information by clicking Next.

Calculations

The Calculations section of the transaction Navigator lets you choose the repayment method, accrual method, and list the basic financial information for the loan transaction such as amount and rate.

Payment Frequencies

The following payment frequencies are available:

Weekly

FNMA Biweekly

Check this box if third-party fees apply.


Consumer Loans

Every other week

Semimonthly

Monthly

Quarterly

Semiannually

Annually

NOTE: When selecting Escrow Applies, a converted Monthly payment and Monthly amount appear for lines 1002-1009 when the payment frequency selected is other than Monthly.

Basic Calculations

Funding Date If using the system date as the funding date, you may use a shortcut and type in a 0 or a T, which results in the system date. You may also type in a number and get that many days from the system date, or type a number and M to get that many months from the system date.

NOTE: Remember these shortcuts: 0 = system date t or today = system date

First Payment Date You can take advantage of entering a number of days in the first payment date field. For example: enter 30 in the first payment date field; the program sets the first payment date to 30 days after the funding date. The date is set based on the funding date—not the system date.

Here are some shortcuts for the first payment date: first = first date of next month following the funding date 1m = one month from the funding date 3m = three months from the funding date 31 = 31 days from the funding date


Consumer Loans

Completing Calculations Information

NOTE: Descriptions of the standard loan repayment methods can be found in the Glossary. Definitions include amortized balloon, balloon/amortized balloon, custom, demand, installment, interest only, irregular payment, principal reduction, single payment, and two phase.

Calculation Options Button

Click to view the calculation options. The options will vary depending on the type of repayment method you choose.

Click this button to see the calculation results, which will show you the payment schedule.

If you check Skip payment months apply, check the months in which no payments are required—available only with installment loans.

These items can be preset as part of a Policy profile.


Consumer Loans

Multiple Advance Option

Multiple Advance Check Box The Multiple Advance check box is available for the following consumer loan types: single payment, interest only, and two phase.

NOTE: The consumer loan type uses Reg Z, Appendix D language.

Preferred Rate Options

Preferred Rate Lending is the ability of a financial institution to give a borrower a better interest rate (discount) on a loan because the borrower has a relationship with your institution.

The Preferred rate check box is only available if the loan has a fixed rate or fixed rate definition. Preferred Rate Lending is supported for the following repayment methods:

Installment

Amortized Balloon

Balloon

Single Payment

Interest Only

Principal Reductions

Preferred Rate Lending is not supported for the following repayment methods, when split-rate or precomputed interest accrual is specified, or when minimum interest and equivalent rate of interest calculations are specified for the loan:

Irregular

Here’s the multiple advance check box.


Consumer Loans

Demand

Custom

Two-Phase

NOTE: Only one preferred rate option may apply to a loan, and the loan must have an underlying fixed rate.

About Preferred Rate Relationships ARTA Lending supports three types of relationships for Preferred Rate Lending:

being an employee of the institution

having a qualifying account (CD or other account) with the institution (which may or may not specify a minimum deposit amount)

having the loan payment automatically deducted from an account with the institution.

Credit Insurance Option

Disability insurance is allowed on weekly, every other week, semimonthly, and monthly payment frequencies. The types of insurance offerings available at transaction time can be limited in Lending Setup. Or it may be more desirable to choose insurance on a case-by-case basis.

The Preferred rate section begins here.


Consumer Loans

Credit Insurance Applies Check Box The credit insurance applies check box is available for the following loan types:

Life Disability

installment installment balloon balloon amortized balloon amortized balloon single pay interest only principal reduction

State-Specific Fee Processing

Florida—A special Florida Fees check box appears in the Calculations screen when the loan policy’s applicable state law is Florida. This check box is used to add the Florida Doc Stamp, Intangible Tax, and Processing Fee to the transaction. Check the special Florida Fees check box in the Calculations screen when any of these fees apply to the transaction. You can choose which fees apply to the transaction, specify how they are to be collected, and indicate an exemption amount, if applicable, for the fee. The selected fees are then calculated when the loan is calculated.

Tennessee—The Tennessee Loan Fee calculation is available on installment and single payment transactions when the applicable state law is Tennessee. The Tennessee Loan Fee can be selected in the Calculations screens by checking the TN Loan fee applies check box. You can choose how the fee is to be collected, as well as an exclusion amount, if applicable. The Tennessee Loan Fee is then calculated when the loan is calculated.

Check this box to truncate disability insurance. Type the length of the term, in months, covered by disability insurance if less than the full term of the loan.

Check this box to truncate the credit life insurance. Type the length of the term, in months, covered by decreasing life insurance if less than the full term of the loan. Type the length of the term, in months, covered by level life insurance if less than the full term of the loan.


Consumer Loans

Georgia—The Georgia Industrial Loan Act (GILA); ARTA Lending calculates the GILA fee and maintenance charge based on the fee percentages and maintenance charge amounts specified in Policy Setup.

When creating a GILA loan, two additional payment methods are available: GILA Installment and GILA Single payment.

Loan Calculations

ARTA Lending lets you review the loan calculation results by clicking the Calculate Payments button.

GILA Installment and GILA Single payment are available in the Repayment method drop-down list.

Additional GILA details are requested in the Calculations window.


Consumer Loans

Click this button to preview and print the Amortization Schedule.

Click this button to preview and print the Calculation Summary.

The payment schedule presented on the Calculations Results window is in accordance with Regulation Z.

Click Print or Cancel to return to the Calculation Results.


Consumer Loans

Disbursements

The Disbursements section of the transaction Navigator lets you view disbursement information based on the loan information previously entered.

Completing the Disbursements Information

NOTE: In most cases, when you enter more than three parties to disburse to, ARTA Lending will add an embedded document titled “Additional Financed Itemization.” An embedded document will not appear in the Navigator, but will be printed automatically by ARTA Lending when it recognizes the need.

Complete the information and click Next to continue.

Type all payees to receive the disbursements and the amount of each disbursement.

Other fees that are added to the amount requested or subtracted from proceeds on the Fees screen will be supplied in this section.


Consumer Loans

Payments

Open-End Credit When you check the Open-end credit box when entering Criteria information, the Navigator replaces Calculations and Disbursements with Payments and Rates. This is necessary because ARTA Lending does not perform calculations for open-end credit loans, and the required rate information is different from other types of loans.

NOTE: Make sure you’ve set up repayment methods before beginning an open end transaction. Refer to the Lending Setup for details on setting up repayment methods.

Available plan types:

Draw period only

Draw period followed by repayment period

Evergreen----for overdraft line or personal credit line

Evergreen plans allow customers to take advances for an unlimited time period. In other words, this plan type has no maturity date.


Consumer Loans

Repayment methods with multiple items will insert “plus” language to the text.

You can choose multiple repayment methods with a single value, ARTA Lending will prompt you to use the greater or lesser value.

Select the appropriate text from the drop-down list.

Check all applicable boxes. Click Next when you are done.


Consumer Loans

Rates

When you check “Open-end credit” in the Criteria information, the Navigator replaces Calculations and Disbursements with Payments and Rates. The ability to calculate the APR and daily periodic rate for consumer open-end loans has been added to the program. This change affects all consumer open-end (HE, OL, and PL) Agreements. The Rates screen in a transaction (variable and fixed) will collect the data required for the calculations.

Use the “Rate definition” field to choose a rate for consumer open end entered during Lending Setup or complete the fields manually.


Consumer Loans

Documents

The Documents section of the transaction Navigator lets you view the documents autoselected by ARTA Lending. You can also add or remove documents.

Tips for Completing Documents Any document that appears in yellow or red on the Navigator indicates the document is either Not

Needed or is Invalid. Check the document status by right-clicking on the document name in the Navigator and choosing the Properties option.

Status shows if the document is suitable for this loan = (OK), whether it was autoselected = (OK Auto), whether it was manually selected = ( OK Manu). It may also indicate a document is either Not Needed or Invalid.

Select every form in the document list to complete the documents appropriately. If users do not select every document, the following may occur:

― incorrect information may appear

― missing data may result

Documents List

NOTE: If you are using a template where bypass autoselection has been chosen and then add a document, the status will show manually for all documents even if they are invalid.

Click this button to add documents to this loan.

Click this button to remove selected documents from the list.

The Document List shows all of the documents selected for this loan and also displays them on the Navigator.

Place a check mark in the box next to the documents you want to remove.

Here’s where you can make changes to the number of copies.


Consumer Loans

Adding Documents If you choose to add any documents to the loan, click the Add documents button. This brings up the following screen.

Removing Documents

NOTE: The autoselected documents you remove will be added back if you return to a page listed above Disbursements in the Navigator.

To complete all applicable document prompts, click Next. When you have completed all document prompts, click Validation.

Select the document you want to add to the loan. To select multiple documents, press the Ctrl key as you select each document.

Place a check mark in the box next to the documents you want to remove, then click the Remove selected documents button.

Displays the installed directory path containing the documents. Allows you to change to other state document sets by clicking the Browse button.


Consumer Loans

Completing the Document Prompts

Many documents require additional information be filled out. If a document does not have any fields to fill out, a brief description of the document is displayed followed by Next.

Validation

The validation process signals possible data entry errors. It checks the system for accuracy, consistency, and regulatory issues. It signals data entry errors for visual verification and lets you fix them before they become problems.

Click on a document name in the Navigator.

Prompts specific to the document and loan criteria are displayed. Complete all applicable document prompts.


Consumer Loans

Handling Validation Warnings and Notices ARTA Lending checks for missing or invalid data and displays Warnings and/or Notices as appropriate.

Warnings require correction or you may override warnings.

Notices are informational and do not require action.

To correct errors, click on the Navigator item where the error is occurring. Make the correction and return to Validation to verify that no additional warnings exist. Failing to correct a validation warning or to override the warning will result in having ‘INCOMPLETE’ watermarked on all of the documents for that transaction.

NOTE: Information on overriding validation warnings can be found in Processing Loans.

Print

From the Print section of the transaction Navigator you can preview and print all of the documents related to the transaction.

Click this button to print a copy of the validation report showing all validation warnings and notices.

Click this button to print a list of the documents along with their applicable status. The Document Checklist includes an explanation if the status is either Invalid or Not Needed.


Consumer Loans

Printing Your Loan Documents

Deselect all documents button—clicking this button clears all check marks. Check the applicable boxes for the documents you want to print or preview.

Print All Selected Documents button—clicking this button prints all of the documents that are checked.

Preview All Selected Documents button—clicking this button previews all of the selected documents online before printing the documents.

Print Document Checklist button—clicking this button prints a checklist of your documents.

Print Validation Report button—clicking this button prints the validation results.

Points to Remember You can change your Document Setup information: default number of copies, binding preference,

and “copy” watermark in the Lending setup section of the program. Reviewing the setupinformation will assure your documents print the way you want.

NOTE: Refer to Template and Report Setup for more in-depth information on document setup.

Save and close the loan.

NOTE: Refer to Processing Loans for more in-depth information on printing your loans.

Clicking Preview All Selected Documents lets you preview completed loan documentation.


Commercial/Ag Loans

Commercial/Ag Loans

Introduction

With ARTA Lending you can create a commercial or agricultural loan. The documents generated for commercial and agricultural loans are typically quite different from those created for consumer loans. ARTA Lending expands the document sets and includes unique repayment methods that can better accommodate the more complex needs of the business borrower.

Templates

You can create loans and applications by choosing the template that was created for your loans and applications and fill in the required information. This frees you from worrying about many of the details, improves the consistency of your work, and saves time. When using templates, remember that someone may have preset information in the templates. Information can be changed when processing a loan or application, unless field properties were set that do not allow a change to the field.

NOTE: Refer to the Setting Up ARTA Lending for details on creating templates.

Creating a New Loan

1. From the Navigator, expand Loans and select New.

2. Select the desired template to begin a new loan or select ***New loan without template*** tostart a loan without a template.

3. The Navigator changes, the first item being Criteria.


Commercial/Ag Loans

Criteria

Completing the Criteria Information Complete all applicable fields.

Authorization type options are: Corporation, Entity, Limited liability company, Organization,Partnership, Sole proprietorship, and Trust.

Click Next or select the Borrower item on the Navigator to continue after completing this screen.

Loan Agreement versus Universal Note The documents autoselected when Commercial/Agricultural is chosen as the loan purpose are dependent on which option is selected immediately after the collateral type. The table below shows the impact on document selection by ARTA Lending when Loan agreement is selected on the Criteria page instead of Universal note. This grid assumes the collateral is not Residential Real Estate and that multiple advance applies.

The Profiles area displays preset information from Lender Setup and Policy Setup.

Check this box for UCC perfected collateral.

Type a description of the collateral.

Check Application documents if you want the program to autoselect a Commercial Loan Application Summary (CLAS) and an authorization resolution. Click the arrow to display a drop-down list of authorization types to select.

Your selection here will determine the document set for autoselecting commercial documents.


Commercial/Ag Loans

Loan Agreement Universal Note

Application Phase

COMM-APP

Commercial Loan Application

CLAS

Commercial Loan Application Summary

Closing Documents Phase

COMM-AGREE Commercial Loan Agreement

COMM-NOTE Commercial Promissory Note

COMM-ADD-SA Commercial Security Agreement

MPN-CU Multi-Purpose Note

SA-BUS Security Agreement

LCA Line of Credit Agreement

Borrower

Commercial loans can also be used for individuals.

Click to go to the next window or select Fees on the Navigator.


Commercial/Ag Loans

Completing the Borrower Information The Borrower type selected will affect the formatting of the name and address data entry fields.

Only one business name borrower is allowed with up to six signers.

ZIP and postal codes are automatically formatted with hyphens if needed.


If your borrower has a business name, you must click the Details button to collect information regarding who will sign on behalf of the business.

Borrower Details

Check these boxes if you would like the Signers name(s) to appear on the loan documents.


Commercial/Ag Loans

Tips for Completing Borrower Details Use the scroll bar to move information up or down.

Remember to choose an Organization Type from the dropdown. This is very important for the printing of documents.



Information from these details will appear on the loan documents.

Click OK to return to the Borrower’s page and continue entering information, such as the note date, officer, processor, and loan number before clicking Next to continue on to Fees.

Fees

Tips for Completing Fees The Value field is intended for a number.

The $/% field is for a symbol only.

Paid to: You can type the name of the fee recipient in the Paid to field, or choose from the available options by clicking the drop-down arrow: Public officials, Lender.

Miscellaneous fees that do not

Add the other fees. You can type the name of the fee recipient in the “Paid to” field, or choose from the available options by clicking the drop-down arrow.

This option allows you to define the fee as a fixed dollar amount ($) or as a percent of the loan amount (%). The Value field is intended for a number. The $/% field is for a symbol only.


Commercial/Ag Loans

NOTE: ARTA Lending is a state-specific program. Fees vary from state to state. Specific fees for your state will appear in your program. Some state fees are processed during calculations.

Complete each field and continue to Calculations by clicking Next.

Calculations

Completing Calculations

Funding Date If using the system date as the funding date, you may use a shortcut and type in a 0 or a T, which results in the system date. You may also type in a number and get that many days from the system date, or type a number and M to get that many months from the system date.

First Payment Date You can take advantage of entering a number of days in the first payment date field. For example: enter 30 in the first payment date field; the program sets the first payment date to 30 days after the funding date. The date is set based on the funding date—not the system date.

First Payment Date Shortcuts first = first date of next month following the funding date 1m = one month from the funding date 3m = three months from the funding date 31 = 31 days from the funding date

Click to view the calculation options. The options will vary depending on the type of repayment method you choose.


Commercial/Ag Loans

Credit Insurance Applies Checkbox The Credit insurance applies check box is available for loans. Different types of insurance are available including disability, life, and unemployment insurance.

Repayment Methods

The following repayment methods are available, depending on the type of insurance selected:

Life Disability

installment installment balloon/amortized balloon balloon/amortized balloon single pay interest only principal reduction

Disability insurance will calculate in ARTA lending on weekly, every other week, semimonthly, and monthly payments. Please verify which are available from your credit insurance company.

Custom Repayment Method This repayment method is only available for commercial/agricultural loans. It allows you to customize your payment language for loans where other repayment types do not meet your needs; however, no


Check this box to truncate disability insurance. Type the length of the term, in months, covered by disability insurance if less than the full term of the loan,


Commercial/Ag Loans

calculations are performed. You will need to override validation and no Wolters Kluwer Financial Services warranty will be in effect.

NOTE: Descriptions of the standard loan repayment methods can be found in the Glossary.

Multiple Advance Check Box The Multiple Advance check box is only available for the following commercial loan types:

single payment

interest only

principal reduction

demand

two phase

irregular payment

custom repayment

Checking the Multiple Advance check box allows you to define if a commercial purpose, multiple advance loan is open end or closed end.

Calculation Options Button

State-Specific Fee Processing

Florida—A special Florida Fees check box appears in the Calculations screen when the loan policy’s applicable state law is Florida. This check box is used to add the Florida Doc Stamp, Intangible Tax, and Processing Fee to the transaction. Check the special Florida Fees check box in the Calculations screen when any of these fees apply to the transaction. You can choose which fees apply to the transaction, specify how they are to be collected, and indicate an exemption amount, if applicable, for the fee. The selected fees are then calculated when the loan is calculated.

Tennessee—The Tennessee Loan Fee calculation is available on installment and single payment transactions when the applicable state law is Tennessee. The Tennessee Loan Fee can be selected in




Commercial/Ag Loans

the Calculations screens by checking the TN Loan fee applies check box. You can choose how the fee is to be collected, as well as an exclusion amount, if applicable. The Tennessee Loan Fee is then calculated when the loan is calculated.

Georgia—Georgia Industrial Loan Act (GILA)—ARTA Lending calculates the GILA fee and maintenance charge based on the fee percentages and maintenance charge amounts specified in Policy Setup.

When creating a GILA loan, two additional payment methods are available: GILA Installment and GILA Single payment.

Calculations Results

ARTA Lending lets you review the loan calculation results.

GILA Installment and GILA Single payment are available on the Repayment method list.

Additional GILA details are requested in the Calculations window.

Click this button to preview or print the Amortization Schedule.

Click this button to print the Calculation Summary.

The payment schedule presented on the Calculations Results window is in accordance to Regulation Z.


Commercial/Ag Loans

Disbursements

Disbursement Authorization (DA) The disbursement information entered here will print on the Disbursement Authorization form, if manually selected. You can use the DA document to disclose the various disbursements being made at closing for transactions where a HUD settlement statement is not appropriate.


Other fees that are added to the amount requested or subtracted from proceeds on the Fees screen will be supplied in this section.


Commercial/Ag Loans

Documents


Needed or is Invalid.

Check the document status by right clicking on the document name in the Navigator and choosing Properties to view the explanation.

Status shows if the document is suitable for this loan = (OK), whether it was autoselected = (OK Auto), whether is was manually selected = (OK Manu). It may also indicate a document is either Not Needed or Invalid.

NOTE: If a document is added to a template that has Bypass auto-selection chosen, the status will display (Manually).



Here’s where you can make changes to the number of copies.


Click this button to remove selected documents from the list.


Commercial/Ag Loans

Adding Documents If you choose to add any documents to the loan or application, click the Add documents button. This brings us to the following screen.

Removing Documents

To complete all applicable document prompts, click Next. When you have completed all document prompts, click Validation.


Displays the installed directory path containing the documents. Allows you to change to other state documents sets by clicking the Browse button.



Commercial/Ag Loans

Validation





To correct errors, click on the Navigator item displaying the error. Make the correction and return to Validation to verify no additional warnings exist.

IMPORTANT: Failing to correct a validation warning or to override the warning will result in having the word INCOMPLETE watermarked on all of the documents for that transaction.

NOTE: More in-depth information about validation can be found in Processing Loans.

Click this button to print a report of the validation results.

You must have permission to override validation warnings.


Commercial/Ag Loans

Print

Print Buttons Deselect all documents— Clicking this button clears all check marks. Check the applicable boxes for the documents you want to print or preview.

Print All Selected Documents— Prints all of the documents that are checked.

Preview All Selected Documents — Previews all of the selected documents on-line before printing the documents. You can print from the preview.

Print Document Checklist — Prints a checklist of your documents.

Print Validation Report— Prints the validation results.

Tip for Printing your Loan Documents Make sure you have your Document Setup information completed before printing your loans. You can set the default number of copies, binding preference, and “copy” watermark. Setting up this information will assure your documents print the way you want.

NOTE: More in-depth information about printing can be found in Processing Loans.

Print your selected documents by clicking the Print All Selected Documents button.


Residential Real Estate Loans


Introduction

ARTA Lending guides you through each of the loan steps unique to real estate loans and selects the documents for you.

Prior to creating real estate loans or applications, you may find it beneficial to set up a template for processing residential real estate loans and applications. There are separate templates for Applications and Loans if the Application Module is installed. Also, remember to set up your Private Mortgage Insurance (PMI) plans in the Insurance setup section.

This chapter steps you through the process of creating residential loans secured by real estate.

Flood Hazard Determination

ARTA Lending provides the ability to obtain a flood hazard determination for your application or loan. Flood determinations through ARTA Lending integrate with Flood Determination Services. ARTA Lending customers using this integrated flood determination service will be billed a per-transaction fee by USDS for each determination obtained. For ordering information, click the Flood Determination Services icon

on the toolbar.

NOTE: See the Guide to Flood Certification on the ARTA Lending CD or on the Wolters Kluwer Financial Services web site for more detail about Flood Determination Services.

Templates

You can create a loan by choosing a template and fill in the required information. This frees you from worrying about many of the details, improving the consistency of your work and saving you time. When using templates, remember that someone may have preset information in the templates. Information can be changed when processing a loan, unless field properties were set during template creation that do not allow for a change to the field.

NOTE: Refer to the Template and Report Setup for details on creating templates.

To create a new loan 1. From the transaction Navigator, expand Loans and select New.

2. Choose an existing template to begin a new loan or select ***New loan without template*** to begin a loan without a template.

3. The Navigator menu changes, and you begin in Criteria.



Criteria

A real estate loan is a consumer loan secured by residential real estate. ARTA Lending is designed to help you automate your title and escrow processes from opening to closing.

Tips for Completing Criteria Information that was preset in the setup sections of the program will appear when creating your

loans.

If you have more than one lender set up, make sure you select the desired lender from the list when processing your loans.

Remember, when using templates, someone may have preset information in the templates. Preset template information can be changed during processing a loan, unless field properties were set to protected and cannot be changed or invisible.

For purchase money loans, the property address is for the property being purchased. This address prints on various application and closing documents. This should be completed even in cases where the property address is the same as the borrower’s address (e.g., Refinance).

Documents may differ from state-to-state.



IMPORTANT: The legal description entered on the Criteria screen has a one time default to the forms. This prints in the legal description area of the documents unless you change it at the document prompting level. If you make a change to the legal description on the Criteria screen after the initial default, the changes will not pull through to the documents. If you have changed the legal description text on a document but you want the legal description from the Criteria screen to print, remove the document from the Documents list and re-add it. This reapplies the one-time defaults.

Borrower

Type in the first letter of the loan officer’s name to select. Loan officers should have been entered in the General Setup, User section.

Click to go to the next window or select Fees on the Navigator.



Tips for Completing Borrower Information ARTA Lending allows up to six individual borrowers.

When entering a business name, up to six signers can be entered.

ZIP and postal codes are automatically formatted with hyphens if needed:


Click the Cosigners button to enter cosigner information.

Click the Details button to enter additional borrower information, such as social security and tax ID numbers.

Borrower Details

Tips for Completing Borrower Details The “Birth date” is required to document credit life and disability details for Truth-in-Lending

purposes. Date of birth is also a requirement of Section 326 of the USA PATRIOT Act.

Use the scroll bar to move information up or down.


Enter as much information as you can for best results.

SSN is formatted as nine-digits: 123-45-6789

If you enter an EIN with a single dash, it formats as 12-1234567.

If you enter an EIN with zero or two dashes, it formats as 123-45-6789.




Information from these details will appear on the application documents.

Completing the Cosigner Information

Cosigner Details

Click the Details button to add more information about cosigner(s).



Fees

The Fees screen for residential real estate follows the HUD Settlement Statement. Multiple columns exist for splitting of a fee between borrower, seller, and lender.

Select the POC check box if a fee is paid outside of closing.

Check the APR box if the fee is a finance charge and should affect the APR.



Line # 901 Line # 902 Line # 904 Line # 1000 series

Reserves Deposited with Lender

The amounts for these items cannot be entered into this window. These items are supplied from data entered in the Calculations area.



State-Specific Fees ARTA Lending is a state-specific program. Fees vary from state to state. Specific fees for your state will appear in ARTA Lending based on the information entered into Policy Setup and which policy was selected for a transaction. Some state fees are processed during calculations.

Mortgage/DOT is used to list the fee for recording a mortgage or deed of trust.

ARTA Lending will calculate your fee totals after you complete the Calculations information.



NOTE: See Lending Setup for more detail on setting up policies.

Calculate Totals Button If a loan is secured by residential real estate, the Calculate Totals button cannot calculate the total until all of the necessary information has been completed in the Calculations information.

Click Next to move to the Calculations section.

HOEPA Determination Feature In addition to the HOEPA determination, Wiz Sentinel Home Ownership and Equity Protection Act also performs multiple tests (HPML, ATR/QM) through the HOEPA Detminiation function.

The Home Ownership and Equity Protection Act (HOEPA) is a consumer protection statute that contains disclosure requirements and other transaction restrictions for home loans with high annual percentage rates or high fees. HOEPA is implemented by Regulation Z at 12 CFR 1026.31, .32, and .34. HOEPA covers consumer credit transactions that are secured by the consumer's principal dwelling, other than a reverse mortgage transaction; a transaction to finance the initial construction of a dwelling; a transaction originated by a Housing Finance Agency, where the Housing Finance Agency is the creditor for the transaction; and a transaction originated pursuant to the United States Department of Agriculture's Rural Development Section 502 Direct Loan Program.

The transaction will be covered under HOEPA if any of the following criteria is met.

Annual percentage rate threshold. A transaction will be covered by HOEPA if the annual percentage rate exceeds the average prime offer rate for a comparable transaction by more than:

― 6.5 percentage points for a first-lien transaction other than a first-lien transaction if the dwelling is personal property and the loan amount is less than $50,000.

― 8.5 percentage points for a first-lien transaction if the dwelling is personal property and the loan amount is less than $50,000.

― 8.5 percentage points for a subordinate-lien transaction.

Fee threshold. A transaction will be covered by HOEPA if the total points and fees paid by the consumer exceed the greater of a predefined percent of the total loan amount or a predefined dollar amount. See Comment #2 to Regulation Z 1026.32(a)(1)(ii) for the current thresholds.

Prepayment penalties. A transaction will be covered by HOEPA if, under the terms of the loan contract or open-end credit agreement, the creditor can charge a prepayment penalty, more than 36 months after consummation or account opening, or prepayment penalties that can exceed, in total, more than 2 percent of the amount prepaid.

The following documents have been created to support HOEPA:

VMP-763, HE-F-REGZ32, HE-V#-REGZ32, and HE-V#-Z32-WI (Mortgage Disclosure Regulation Z, Section 32): This disclosure is required by Regulation Z § 1026.32(c) and must be given at least 3 business days before closing. This form will be autoselected at the application, early disclosure, or closing stage if the consumer credit transaction secured by the consumer's principal dwelling is subject to HOEPA.

HOEPA-A, HOEPA-A-1, HOEPA-A-IA and HOEPA-A-WI (HOEPA Addendum): These addenda amend the default provisions of the Wolters Kluwer Financial Services promissory notes to bring them within the HOEPA limitations. The HOEPA-A is applicable to all states except IA, ID, KS, ME, MO, SC, and WI. The HOEPA-A-1 is applicable to the states of ID, KS, ME, MO and SC. The addenda will



be autoselected at closing if the consumer credit transaction secured by the consumer’s principal dwelling is subject to HOEPA.

HOEPA-R, HOEPA-R-1, HOEPA-R-IA, and HOEPA-R-WI (HOEPA Rider): These riders amend the default section of the Wolters Kluwer Financial Services security instruments to bring them within HOEPA limitations. The HOEPA-R is applicable to all states except IA, ID, KS, ME, MO, SC, and WI. The HOEPA-R-1 is applicable to the states of ID, KS, ME, MO, and SC. The riders will be autoselected at closing if the consumer credit transaction secured by the consumer’s principal dwelling is subject to HOEPA.

VMP-93 (Notice to Assignee): This notice is required to be given whenever a creditor sells or assigns a transaction that comes under HOEPA. The requirement for this notice can be found at 1026.34(a)(2). The notice is available as a manually selected document.

NOTE: The Fannie Mae and Freddie Mac documents do not need the HOEPA addenda or HOEPA riders. The default provisions within those documents do not conflict with the restrictions on default within HOEPA. Similarly, the MPFR-MN document (drafted by Wolters Kluwer Financial Services, but designed to work with Fannie Mae/Freddie Mac security instruments) does not require the addenda.

To determine the federal HOEPA status of a transaction, ARTA Lending integrates to Wiz Sentinel Home Ownership and Equity Protection Act to collect HOEPA data for a single application or loan transaction.

Obtain the HOEPA and Higher Priced Mortgage determination for a transaction.

Select appropriate federal disclosure documents for the transaction.

Where state or local high-cost lending laws apply, ARTA Lending also provides a means to:

Collect state/local data for a single application or loan transaction.

Obtain state/local determination for a transaction.

NOTE: State-specific high-cost lending documents are not supported by ARTA Lending. Only the determination is provided. You should consult with your legal counsel to determine the appropriate documents to provide based on the determination.

Higher-Priced Mortgage Loan Feature Regulation Z Section 35 defines a higher-priced mortgage loan as a consumer credit transaction secured by the consumer’s principal dwelling with an annual percentage rate (APR) exceeding a certain percentage. The classification as a higher-priced mortgage loan is based solely on the following APR thresholds:

Threshold for first liens – The APR exceeds the average prime offer rate for a comparable transaction as of the rate-lock date by 1.5% or more.

Threshold for subordinate liens – The APR exceeds the average prime offer rate for a comparable transaction as of the rate-lock date by 3.5% or more.

Higher-priced mortgage loans include closed-end purchase money as well as refinancings and home equities, but exclude HELOCs, reverse mortgages, construction only loans, and bridge loans with a term of no more than 12 months.



Borrower’s Ability to Repay(ATR)/Qualified Mortgage(QM)

Regulation Z, Section 43 defines requires creditors to determine the consumer's ability by either meeting the minimum Ability to Repay standards and/or meeting the Qualified Mortgage standards. The ATR/QM requirements apply to closed-end, consumer credit transactions secured by a dwelling. See Regulation Z 1026.43(a) for details pertaining to exempt transactions.

Setting Up to Use the Feature The federal HOEPA and Higher Priced Mortgage Determination feature of ARTA Lending is provided free of charge and without a separate license requirement. This arrangement allows Wolters Kluwer Financial Services to provide you with all of the necessary federal documents and the appropriate corresponding calculations.

Registration is required the first time you click the HOEPA icon only. You will be presented with information and instructions on how to register so that you may begin using the HOEPA determination feature in ARTA Lending. You will receive a user name and password that you will enter for each user in the general setup area (pictured below).

Using the HOEPA Determination Feature The Fees screens in ARTA Lending have been modified to allow you to specify if the fee will be considered by Wiz Sentinel Home Ownership and Equity Protection Act in its HOEPA calculations by checking the HOEPA check box. Where state/local determination applies, you also specify which fees are to be considered by Wiz Sentinel state/local high cost lending calculations by checking the State check box.



From within an open application or loan transaction, click the HOEPA icon on the Transaction Toolbar.

This displays the Request Determination screen.

Various transaction information defaults to this screen, but you may be required to enter some additional information. ARTA Lending transfers this data and your fee designations to Wiz Sentinel.

Wiz Sentinel performs the federal HOEPA determination calculations, and checks the transaction against federal HOEPA regulation thresholds and state/local laws (if appropriate). Wiz Sentinel returns the determination “HOEPA threshold met” or “HOEPA threshold not met”, indicating the transaction either does or does not fall under federal HOEPA regulation. Where you have contracted for state/local determination, a state/local high-cost lending determination is also returned.

NOTE: When applicable, the Higher-Priced Mortgage Determination is also returned.

HOEPA icon



After the HOEPA determination is returned from Wiz Sentinel, click the Print Preview button in the Request Determination view to display the HOEPA Determination Report Preview.

NOTE: The Higher Priced Mortgage Determination appears when applicable.



Calculations

Check this box if there are long days to the first payment, that is, more than a month on a monthly pay loan, and the odd days are prepaid.

Check this box if there are short days to the first payment, that is, less than a month on a monthly pay loan and to calculate a full unit, that is, a full month to the first payment. The extra days of interest will be refunded to the customer on Line 901 of the HUD Settlement Statement.

Check this box and complete the remaining PMI prompts that will appear.

Check this box if credit insurance applies.

Check this box to truncate the credit life insurance. Type the length of the term, in months, covered by decreasing life insurance if less than the full term of the loan. Type the length of the term, in months, covered by level life insurance if less than the full term of the loan.

Enter the date to lock in the rate.




Calculation Options Click the Calculation Options button to view the available options. The options will vary depending on the type of repayment method you choose.

Click OK to return to the Calculations information.

Credit Insurance Applies Check Box The credit insurance applies check box is available for the following loan types:

Credit Life Disability

installment installment balloon/amortized balloon balloon/amortized balloon single pay interest only principal reduction

Disability insurance will calculate in ARTA Lending on weekly, every other week, semimonthly, and monthly payments. Please verify which are available from your credit insurance company.

State-Specific Fee Processing Florida—A special Florida Fees check box appears in the Calculations screen when the loan policy’s applicable state law is Florida. This check box is used to add the Florida Doc Stamp, Intangible Tax, and Processing Fee to the transaction. Check the special Florida Fees check box in the Calculations screen when any of these fees apply to the transaction. You can choose which fees apply to the transaction, specify how they are to be collected, and indicate an exemption amount, if applicable, for the fee. The selected fees are then calculated when the loan is calculated.

Private Mortgage Insurance Applies If a loan carries private mortgage insurance, the lender may be subject to the Homeowners Protection Act of 1998 (HOPA). This act limits how long a borrower must pay PMI premiums for an individual mortgage or loan involved in a residential mortgage transaction.





PMI Setup Make sure that your PMI plans are entered into the Insurance setup section before processing your loans. This information is needed to calculate Private Mortgage Insurance.

How to Specify HOPA Information The HOPA prompts are located on the Calculations screen of a residential real estate transaction with PMI. General terms are prompted for, such as who pays the PMI premium, whether the loan is defined as a high-risk loan, and the original value of the property. These terms are used to calculate the (automatic) termination date and a (borrower-initiated) cancellation date when applicable. The termination date and cancellation date, along with other HOPA results, appear on the Calculations Summary Report.

Check this box if credit insurance applies.



Entering Escrow Information On the Calculations view for Residential real estate transactions, an Escrow applies checkbox will collect escrow information. Marking this checkbox will display prompts to enter escrow information.

The Calculate button will calculate an escrow payment based on the payment frequency selected in the payment options. Users can choose a cushion, for example, one or two month, or can manually enter a specific cushion amount.

The Update Escrow button should be used to update the escrow figures and initial escrow schedule.

The Calculate Payments button will do the regular loan calculation, displayed in Calculation Results.



Calculations Results ARTA Lending lets you review the loan calculation results.

Clicking Print Calculation Summary will allow you to preview and print the document.



Disbursements

Tips for Completing Disbursements Disbursement details typically appear only on closing documents, so you may choose to wait and

enter this information when processing closing documents.

If disbursements are not entered when processing early disclosure documents, Validation will display a notice that the loan is not fully disbursed.




Documents


Needed or is Invalid. Check the document status by right clicking on the document name in the Transaction Navigator and choosing Properties.

The status column will display one of four different statuses:

― OK Auto – Acceptable document, autoselected by ARTA Lending. OK Manu – Acceptable document, manually selected by the user. Not Needed – Previous selections indicate to ARTA Lending the document is not necessary for the given conditions. Invalid – Previous selections indicate to ARTA Lending that using the selected document may create compliance issues.

After completing all applicable document prompts, click Next.




Here’s where you can change the number of copies to print.



Adding Documents If you choose to add any documents to the loan, click the Add documents button. This brings us to the following screen.

Removing Documents

NOTE: The autoselected documents you remove will be added back if you return to a page listed above Disbursements in the Navigator.

To complete all applicable document prompts, click Next. When you have completed all document prompts, click Validation in the Transaction Navigator.



Displays the installed directory path containing the documents. Allows you to change to other state documents sets by clicking the Browse button.



Validation


Viewing Validation Results: Warnings and Notices Here are some examples of validation results.



NOTE: A user must have permission to override validation. Permissions are given in Group and User Setup.


To correct errors, click on the Navigator item where the error is occurring. Make the correction and return to Validation to verify no additional warnings exist.

Nothing Reported.

Displays warnings, invalid documents and notices.

Click this button to override the validation warnings (you must enter comments into the override validation pop-up text box). ARTA will process the loan as is; and the comments will print on the Validation Report. Notices do not require you to override.



IMPORTANT: Failing to correct a validation warning or to override the warning will result in having INCOMPLETE watermarked on all of the documents for that transaction.

More Information More in-depth validation information is presented in Processing Loans.

Print

Print Buttons Deselect all documents— Clears all check marks. Check the applicable boxes for the documents you want to print or preview.

Print All Selected Documents — Prints all of the documents that are checked.

Preview All Selected Documents — Previews all of the selected documents on-line before printing the documents.

Print Document Checklist— Prints a checklist of your documents.


Tip for Printing Your Loan Documents Make sure you have your Document Setup information completed before printing your loans. You can set the default number of copies, binding preference, and “copy” watermark. Setting up this information will assure your documents print the way you want.



Processing Loans

Processing Loans

Introduction

The Loans section allows you to process loans for multiple loan types. ARTA Lending automatically selects the documents for you and guides you through each of the loan steps, providing What’s This? Help for fields when you need assistance.


Recalling Loans

Validation

Using the Print Preview

Printing

Denying a Loan Request

Recalling Loans

ARTA Lending allows you to quickly gain access to your existing loans by selecting from the list or by searching for the loan by using a search function.

Recalling a Loan

1. From the Navigator, expand Loans.

2. Select Recall.

3. Select the existing loan from the list or use the Search criteria to search for the loan transaction.


Processing Loans

Searching for a Loan

The Search function, found below the list of loan applications, offers a quick method for locating your desired loan transaction. Enter the desired search criteria and click Update List.

TIP: In addition to filtering by name to search for a loan, you can also filter by the timeframe of the last edit of the transaction, loan amount, loan purpose, collateral type, and loan number. Use as many or as few filters as you need to narrow or expand your search.

After you have selected your loan, ARTA Lending brings you to the Criteria information—where you may continue to make changes and proceed with the loan process.

Validation

The validation process signals possible data entry errors by checking the system for accuracy, consistency, and regulatory issues. It signals data entry errors and lets you fix them before printing.

Viewing Validation Results: Warnings and Notices Here are some examples of validation results.

This field can be used to locate a particular transaction with a borrower name.

The Path contains the root level and subdirectory folders pointing to the location where the recalled loans can be found, within the hierarchy of folders on your computer. These folders can be expanded in a manner similar to that used with Windows Explorer.

Click this button to refresh the list of loan transactions according to the criteria specified for a loan search.


Processing Loans

Correcting Validation Warnings and Notices ARTA Lending checks for missing or invalid data and displays Warnings and/or Notices as appropriate.



To correct errors, click on the Navigator item where the error is occurring. Make the correction and return to Validation to verify no additional warnings exist.

Click this button to over-ride the validation warnings (you must enter comments into the override validation pop-up text box). ARTA will process the loan as is; and the comments will print on the Validation Report. Notices do not require you to override.

Click this button to print a report of the validation results.

Click this button to go to the Next item on the Navigator: Print.

Displays Warnings.

Nothing Reported.

Displays Warnings, including invalid documents and it displays Notices.


Processing Loans

Overriding Validation

If there are validation warnings, the documents will have an INCOMPLETE watermark printed on them. You can choose to override those warnings and print the documents.

If you choose to override validation—the watermark will not print, but the footer prints the letters VO (validation override) and the program version number to identify it as overridden.

Validation Buttons Override Validation— Overrides the validation results. The override validation comments will print on the Validation Report.

Print Document Checklist — Prints a list of the documents along with their applicable status. The Document Checklist includes an explanation if the status is either Invalid or Not Needed.

Print Validation Report—prints a copy of the validation report showing all validation warnings and notices.

Authorization to Override Validation Each user who works in ARTA Lending must be assigned a User ID and password. This is specified in each user’s profile.

The Security Group the user belongs to will dictate their permissions to perform a validation override. If a user does not have validation override permissions, another user with permission will need to enter their user ID and password if the Override Validation button is pressed.

If the user does not have permission and presses the Override Validation button, a request for User ID and password opens as shown below. To override, someone with the proper permissions must enter their user ID and password. The user’s name is saved on the Validation Report.


Processing Loans

NOTE: See Starting Setup for more security setup information.

Print

Print Buttons Deselect all documents — Clears all check marks. Check the applicable boxes for the documents you want to print or preview.

Print All Selected Documents— Prints all of the documents that are checked.

Preview All Selected Documents— Previews all of the selected documents on-line before printing the documents.

Print Document Checklist— Prints a checklist of your documents.


Tip for Printing your Documents Make sure you have your Document Setup information completed before printing your loans. You can set the default number of copies, binding preference, and “copy” watermark. Setting up this information will assure your documents print the way you want.

Using the Print Preview

Take advantage of the Print Preview function to view documents on-line in their entirety before you print them.



Processing Loans

Print Preview Toolbar

Toolbar Buttons Close Preview. If working with a group of forms, the next form displays for viewing.

Print the form.

Use the Hand tool to move the form.

Increase the magnification of the form.

Decrease the magnification of the form.

Display the form in the full width of the viewing area.

Tile multiple form pages within the viewing area.

Move to the first page of the form.

Move to a previous page of the form.

Move to the next page of the form.

Move to the last page of the form.

Exit the preview function.

Printing

We recommend that you go into Document Setup before printing any loans. You can set the default number of copies, duplex preference, print all data in uppercase, and “copy” watermark. Setting up this information will save you time.

The initial document setup configuration for binding type is “Default.” The default binding type is typically top duplex, but varies from document to document. This may be changed to Simplex, Top Duplex or Left Duplex on a per document basis. Some documents specifically programmed to print simplex, such as the UCC, will always print simplex.


Processing Loans

What Compatible Printers Work with ARTA? ARTA-supported output devices include page printers with a Windows 2000 or Windows XP device driver, as appropriate for your operating system.

Printer requirements are:

Must be PCL5 or PCL6 compatible

Must have two (not one multipurpose) programmable paper trays, one of which must be an 8 ½” X 14"paper tray

Minimum printer memory: 300dpi —8MB printer RAM 600dpi —16MB printer RAM 1200dpi —32MB printer RAM

Printer Drivers A print driver contains important information that Windows needs to know about your printer, such as details about printer hardware con-figuration and the printing interface, descriptions of fonts, definitions of character widths, print quality, and control sequences used by the printer to achieve various formats.

Verify the latest printer driver is installed on the computer. The latest version of most printer drivers can be downloaded from the printer manufacturer's web site. For instance, if you have a Hewlett-Packard printer, browse to their web site at www.hp.com and click to their Support & Drivers Section. For Lexmark printers, contact Lexmark International, Inc at www.lexmark.com and click to their Drivers and Downloads section.

IMPORTANT: Make sure you know the exact model number of your printer and the version of Windows installed on your machine before choosing which driver to download from the manufacturer’s web site. Contact your IT department if you are unsure.

Troubleshooting Tips Here are some tips if you experience problems with the number of copies, page size, duplex binding, watermark, and illegible printing or illegal operation errors when printing.

If Windows has a printer driver for your printer, you probably installed it when you ran the Windows Setup program. Installing printer drivers is a function of the Windows operating system. The procedures for installing additional printers differ if you are connected to a local area network (LAN) or if you are using a stand-alone machine.

If you are connected to a LAN, installing printers may be a task for your network administrator. Consult with your administrator.

If you are not connected to a LAN, use the Control Panel to install a printer driver. For more information, see your Windows documentation.

In some cases, updating the printer driver with the latest version available is suggested. You can usually download the latest printer driver from your printer manufacturer’s web site.

In some cases installing the latest operating system service pack in conjunction with installing the latest printer driver is suggested.


http://www.hp.com/

http://www.lexmark.com/

Processing Loans

In other cases, fine-tuning the print quality in the printer driver improves printing performance. Remember that your printer must have the memory to support higher the quality.

If you should experience additional printing problems, contact SupportLine at 1-800-274-2711, ext. 1124021.

NOTE: See Using the Utilities for more information on using a printer other than the Windows default for printing from ARTA Lending.

Denying a Loan Request

To print a Notice of Action Taken Document

1. From the Navigator expand Loans and click New.

2. Click ***New loan without template***.

3. In the Criteria area, select the Loan purpose.

4. Clear the checkbox labeled Closing documents.

5. Select the Notice of Action Taken document only checkbox.


Processing Loans

6. Click Next.

7. In the Borrower area, type a name and address.

8. On the Navigator, click the Documents.

By selecting Notice of Action Taken document only, ARTA Lending will autoselect the form DN-FCRA-C. No validation will occur.

Click Next to display the document prompts for DN-FCRA-C.


Processing Loans

9. Click Next to complete prompts for the DN-FCRA-C (Notice of Action Taken).

10. When all document prompts are completed, click Print.

11. Save the transaction.

12. To display the document before printing, click Preview All Selected Documents.

13. Print the document and close the transaction.

NOTE: Wolters Kluwer Financial Services has chosen to autoselect the DN-FCRA-C document. If you want to use the REG-B-NAT document, you may manually add it to the documents page or create a template using the REG-B-NAT.


ARM Early Disclosure


Introduction

If you offer adjustable rate mortgages you must, at the time of application, provide a disclosure to the applicant informing them about the features of the product. The ARM early disclosure(s) can be created using a fixed rate, a user-defined variable rate, or any of 15 predefined, commonly used variable indexes.

NOTE: The Wolters Kluwer Financial Services-supplied index histories are updated on a regular basis. Updates are available on the Wolters Kluwer Financial Services support web site.

The early disclosures generated by ARM Early Disclosure are designed to be consistent with the regulations that implement the Truth-in-Lending Act. See 12 C.F.R. § 1026.1 et seq.

Key Features

ARM Early Disclosure guides you through the steps necessary to build your dynamic disclosures based on the ARM programs within your institution, and the requirements of Reg Z.

You can setup ARM Early Disclosure based on information in this chapter and print one or multiple disclosures. Note that you will not be able to print an ARM disclosure from within an application or loan transaction.

ARM Early Disclosure supports the ability to round payments up or down to the nearest penny, or round to the nearest penny.

Index options are built into the program and are updated periodically. The program also allows you to create your own unique indexes and update them when necessary.

ARM Early Disclosure supports Simple (US Rule) compounding.

ARM Early Disclosure supports interest only loans and FNMA biweekly amortized balloon loans.

A data validation function checks for possible data entry errors and allows you to correct them, which helps improve accuracy, consistency, and regulatory compliance.

A print preview function is available for viewing your documents before printing them.

ARM Early Disclosure allows you to email the final disclosure in an RTF format for viewing in Microsoft Word.

A data transfer function allows importing and exporting of data to and from your program.

The ability to restrict users to printing only for transactions or to restrict users to print and setup functions only.

What Documents Are Generated? The ARM Early Disclosure module provides three variations of the ARM Early Disclosure. Any one of these variations can be provided for an ARM transaction.

Simplified Disclosure — This is a version of the ARM Early Disclosure that does not include the 15-year historical example but does include the worst-case scenario paragraph.



Simplified 15-Year History Disclosure — This is a version of the ARM Early Disclosure that does not include the worst-case scenario paragraph, but does include the 15-year historical example.

15-Year Historical Example: This is an optional component of the ARM Early Disclosure. See 12 C.F.R. sec. 1026.19(b)(2)(viii)(A). The example is based on a hypothetical $10,000 loan, and illustrates how payments and the loan balance would have been affected by interest-rate changes implemented according to the terms of the program during a 15-year period. The example reflects all significant loan-program terms, such as negative amortization, interest-rate carryover, interest-rate discounts, and interest-rate and payment limitations. See 12 C.F.R. sec. 1026.19(b)(2)(viii)(A).

Combined — This is a version of the ARM Early Disclosure that includes both the 15-year historical example and worst-case scenario paragraph.

Worst-Case Scenario Paragraph: This is an optional component of the ARM Early Disclosure. See 12 C.F.R. sec. 1026.19(b)(2)(viii)(B). This is a paragraph that discloses the maximum interest rate and payment for a hypothetical $10,000 loan originated at the initial interest rate assuming the maximum periodic increases in rates and payments under the program.

ARM Programs Supported

When creating an ARM program, you must select a document on which to base your early disclosure. ARM Early Disclosure offers two categories: (1) FNMA/FHLMC and (2) Non-FNMA/FHLMC.

FNMA/FHLMC Documents National standards for mortgage loans are set by Fannie Mae, commonly abbreviated FNMA, the Federal National Mortgage Association. Together with Freddie Mac, commonly abbreviated FHLMC, the Federal Home Loan Mortgage Corporation, they buy mortgages from lenders for resale in the secondary market. As a result, your organization must use FNMA/FHLMC guidelines.

Wolters Kluwer Financial Services Documents (Non-FNMA/FHLMC) Wolters Kluwer Financial Services’ ARM documents fit into two categories:

CCLD (consumer commercial lending documents)

Other

CCLD — The dynamic promissory note (Consumer Commercial Lending Document).

Other — If you are not using Wolters Kluwer Financial Services or FNMA/FHLMC ARM documents, you may still generate an ARM early disclosure for your ARM program by selecting “Other” as the document.

Creating an ARM Program

To create an ARM program:

1. From the Navigator, expand Early Disclosure and select ARM Programs.



NOTE: You must have permissions to Early Disclosure to add or edit the contents.

2. Select ***Add New***.

3. The options on the Navigator change, displaying five new options as explained below:

Product Specifies the product information.

Payment Defines the payment information and the repayment method. Specifies information needed to disclose the terms of the repayment method.

Rate Defines the interest rate information. Specifies the index and margin used for determining the rate at which interest accrues.

Validation Shows a validation result of potential compliance concerns.

Print Previews and prints the early disclosure.

Product

Complete the information in the Product screen, selecting the type of loan documentation you are using for your ARM program.



NOTE: If you have a question at any point on any field, use What’s This Help to display further explanations as popups.

The Program name entered here will print at the top of the disclosure.



FNMA/FHLMC Documents

National standards for mortgage loans are set by Fannie Mae. Together with Freddie Mac, they buy mortgages from financial institutions for resale on the secondary market. As a result, your organization must use FNMA or FHLMC guidelines.

The FNMA/FHLMC forms are described below, each with a table of characteristics.

3506 - FNMA Adjustable Rate Note

3116 - FNMA Adjustable Rate Rider Monthly payments

Fully amortized (Installment Repayment Method)

Payment must occur on the first day of the month

3-Year Treasury Index

Periodic cap is 2%

Rates and payments change at the same time

Payment changes every 36th month (subsequent payment changes)

No interest rate floor

No negative amortization

No conversion to fixed rate is allowed

3129 - FNMA/FHLMC Adjustable Rate Rider Monthly payments





Periodic cap is 1%



Conversion to fixed rate is available

3513 - FHLMC Adjustable Rate Note

3130 - FHLMC Adjustable Rate Rider Monthly payments





No interest rate floor (minimum interest rate)







Interest rate may change once during the term of the loan





5536 - FNMA/FHLMC Adjustable Rate Note


Fully amortized (Two phase Repayment Method)

1 Year LIBOR Index









Interest rate may change during the term of the loan

1 Year Treasury Index

Periodic cap is 2%


Payment changes every 12 Months (subsequent payment changes)



No conversion to fixed rate is available







Periodic cap is 2%
































1 Year LIBOR Index






5206 - FNMA/FHLMC Fixed Note Monthly payments



1 Year LIBOR Index










6 Month LIBOR Index








6 Month LIBOR Index






Non-FNMA/FHLMC Forms and Wolters Kluwer Financial Services’ Documents

CCLD The CCLD is the dynamic promissory note.

Non-FNMA/FHLMC Forms and Non- Wolters Kluwer Financial Services Documents

Other If you are not using FNMA/FHLMC ARM documents, you may still produce an ARM early disclosure for your ARM program by selecting Other for the document.

Negative Amortization

Negative amortization occurs when the scheduled payment is not enough to pay all of the interest that has accrued.

Choose the Negative Amortization Method You’ll need to choose how the interest should be calculated if negative amortization occurs. A negative amortization method can only be selected if non FNMA/FHLMC documents are selected.

Two negative amortization methods are available:

Simple (U.S. Rule)—The interest not covered by the scheduled payment is not added to the account balance. In other words, interest does not then accrue on that interest.

Compound—The interest not covered by the scheduled payment is added to the account balance.



Negative Amortization Limits Negative amortization limits, if applicable, are set on the next screen, Payment, by selecting the Negative amortization limit checkbox.

If the negative amortization limit is reached, the loan will be re-amortized.

Payment

On the Payment screen, you can select define the payment structure including repayment methods and frequency.

Repayment Methods The following repayment methods are available. All FNMA/FHLMC programs have a repayment method of installment.



Balloon/Amortized Balloon Balloon: Used for payments at regular intervals, with a balloon payment due at the last payment of the term.

If you specify a regular payment amount, the balloon payment is calculated at the time the disclosure is printed.

If you specify a final payment, the regular payment is calculated at the time the disclosure is printed.

Amortized Balloon: Used when a regular payment is calculated on a long-term amortization, with a balloon payment due at a shorter term (call term).

Interest Only Used for interest payments due at regular intervals, with the final payment comprised of the principal and any remaining interest.

Installment Used when repaid in substantially equal periodic payments of principal and interest. Installment loans are fully amortized over the term of the note.



Rate

Choose the appropriate option to describe whether or how periodic rate caps are applied.

As you work through the program, you will notice that certain fields, options, buttons, and check boxes are gray (unavailable). The options may not available because: 1) the option is not logical with another option, or 2) the option is forced because of the form selected, that is, either FNMA/FHLMC or non-FNMA/FLMC, from the Payment screen.

After you select an index, the Index Details button can be used to view and print the rates for the previous 15 years.



Completing the Conversion Information A conversion option is a consumer’s right to convert a variable-rate loan to a fixed-rate loan. Note that:

If an ARM program has a conversion option, it must be disclosed in the ARM Early Disclosure. Official Staff Commentary to 12 C.F.R. § 1026.19(b)(2)(vii), Comment 3.

The conversion choices are only available if you have selected Other from the Non-FNMA/FHLMC list on the Product screen and for some FNMA/FHLMC programs.

Validation

ARM Early Disclosure is designed to signal potential errors during validation. It checks the system for data entry errors, accuracy, consistency, and some regulatory issues. The program allows you to fix the errors before printing.

Choose the index on which the conversion interest rate is based.

Type the percent of any margin that is added to the index rate to determine the interest rate after conversion.

If you do not have a margin, leave this field blank or enter “0”.

Check this box to specify that interest carryover can occur. Interest carryover means that interest rate increases or decreases can be carried over to subsequent periods, if a rate cap prevented a full implementation of the change.



Validation reports two conditions: Warnings and Notices

Warnings require correction; however, you may override warnings. Notices are informational and do not require action.

Correcting Errors To correct errors, click the item on the Navigator where the error is occurring. After you make the correction(s), return to Validation to verify no additional warnings exist.

Tips When Working in Validation Clicking the Override Validation button allows you to override the validation results by entering

required comments, then continuing to process the documentation with errors.

Clicking the Print Validation Report button prints a copy of the validation report, showing all warnings and notices.

If validation warnings exist, you can choose to override those warnings and print the documents as they are. However, they will be noncompliant and print with an overridden identification in the footer such as, V4.2, which represents the version of your program.

If you don’t override the warnings, you can still print the documents; however, they will have ‘incomplete’ watermarks printed on them.

Validation Override Authorization When you click the Override Validation button, if you do not have authorization to override validation, you will be requested to enter a user ID and password with authorization privileges. If you belong to the security group with permission to override validation, pressing the Override Validation button will immediately begin the overriding process.

Type your comments to explain the reason for overriding the validation results and click OK.



The comments that you type in the text box will print on the Validation Report.

Print

Remember to save your ARM program before printing or previewing your early disclosures.

Simplified Disclosure This version of the early disclosure does not include the 15-year historical example, but does include the worst-case scenario paragraph.

Simplified 15-Year History Disclosure This version of the early disclosure does not include the worst-case scenario paragraph, but does include the 15-year historical example.

Combined Disclosure This version of the early disclosure includes both the 15-year historical example and the worst-case scenario paragraph.

Worst-Case Scenario Paragraph The worst-case scenario paragraph is the paragraph disclosing the maximum interest rate and payment for a $10,000 loan originated at the initial interest rate, assuming the maximum periodic increases in rates and payments under the program. See 12 C.F.R. § 1026.19(b)(2)(viii).

Print Buttons Print Selected Documents— Prints all of the documents that are selected. Note that previewing and printing early disclosures will take a few seconds longer than ARTA Lending loan documents. This is due to the dynamic nature of the early disclosure documents.

In the Customer (optional) text box, type the applicant’s name(s) and address to personalize your disclosure.



Preview Selected Documents— Previews all of the selected documents before printing the documents.

Override Validation— Overrides the validation results and processes the documents as they are.

Print Validation Report — Prints the validation results.

Print Program Setup— Prints the ARM program information.

Print To File— Prints the early disclosure to a file, which can be saved as an RTF (Rich Text File format) file.

The Print-to-File function allows you to save a disclosure to a specified location. It can then be viewed and printed from any workstation using Microsoft Word—even if ARM Early Disclosure is not installed on that workstation.

The Save Disclosure screen appears allowing you to select the location folder. Type the file name and path to which the file is to be saved, and then click OK.

NOTE: The default path is C:\Program Files\bsiapps\ARTA Lending.

Type in a name that you’d like to save the disclosure as and click Save.


ARTA Lending Plus HE


Introduction

If you offer open-end Home Equity lines of credit, you must provide a disclosure to the applicant at the time of application about the features of the product. With the purchase and installation of the optional Home Equity module, ARTA Lending can produce this early disclosure. The open-end Home Equity early disclosure can be created using a fixed rate, a user-defined variable rate, or any of 12 predefined, commonly used variable indexes.

NOTE: The Wolters Kluwer Financial Services-supplied index histories are updated on a regular basis. Updates are available on the Wolters Kluwer Financial Services support web site.

Home equity lines are open-end, revolving lines of credit secured by the consumer’s dwelling. The Home Equity Early Disclosure module produces documents for open-end consumer lending (home equity loans).

Module Components include:

Home Equity Early Disclosures

Standard Open-End Home Equity Agreements

The optional Home Equity module must be purchased and installed to produce Home Equity early disclosures in ARTA Lending. The procedures in this lesson assume you have this optional module.

Documents generated include:

Home Equity Early Disclosures

List of Conditions

Third-Party Fees

The home equity early disclosures generated by HE Early Disclosure are designed to be consistent with the regulations implementing the Home Equity Loan Consumer Protection Act of 1988. See 12 C.F.R. § 1026.1 et. seq.

Key Features

HE Early Disclosure features include:

Ease of use – The setup section is brief and direct, using information collected during loan application transactions.

Policy Setup – HE Early Disclosure guides you through the steps necessary to build your disclosures based on the plans within your institution, and the requirements of Reg Z.

Index options – Shipped indexes are updated periodically. You can also enter your own unique indexes and update them when necessary.

Data validation – This function checks for possible data entry errors, which helps improve accuracy, consistency, and regulatory compliance.



Print preview – This function is available for viewing your documents before printing them.

Data transfer – This function allows importing and exporting of data to and from other programs.

State-specific information – The program contains documents for 51 jurisdictions. You have access to early disclosure documents from every state/jurisdiction. This makes expanding your operations across state lines easier, and saves you the expense of purchasing multiple single-state versions.

User access – The ability to restrict users to only print the disclosure or to access both print and setup functions.

Before Processing Your HE Plans

Recommended Setup: Lender, Repayment Methods, and Index To get the most from the program, setup is recommended, including policy setup and Lending Setup. You’ll need to invest some time to complete the General Setup information at the onset, but you’ll quickly make it up as you complete formerly time-consuming tasks in seconds. You will also find the results are consistent.

Note that at least one repayment method must be specified in Lender, Repayment Methods, and Index Setup in order to print the repayment information on your early disclosures.

Setting Up the Repayment Methods These are the repayment method options available for computing the minimum payment during the draw period and repayment period.

Select the repayment methods that will be used by your institution. Check all of the repayments that you want available for all of your HE plans. Any selected repayment methods will be available during creation of the home equity plan.

Creating a Home Equity Plan

Interest Rate Charges and Plan Features Home equity plans typically involve variable interest rates rather than fixed rates. A variable rate must be based on a publicly available variable index (such as the prime rate published in some major daily newspapers or a U.S. Treasury bill rate); the interest rate will change, mirroring fluctuations in the index. To figure the interest rate that the consumer will pay, most lenders add a margin which results in the variable rate for the loan. Because the cost of borrowing is tied directly to the index rate, it is important to find out what index and margin is used, how often the index changes, and how high it has risen in the past.

Variable rate plans secured by a dwelling must have a ceiling (or cap) on how high the interest rate can climb over the life of the plan.

Some lenders permit consumers to convert a variable rate to a fixed interest rate during the life of the plan, or to covert all or a portion of the line to a fixed–term installment loan.



To Create an HE Plan

NOTE: You must have permission for HE Plans to add or edit disclosures. See Starting Setup for details on security setup.

1. From the Navigator, expand Early Disclosure and select HE Plans.

2. Select ***Add New***.

3. The Navigator changes and the following options are now available:

Product Specifies the product information.

Payment Defines the payment information and the repayment method. Specifies information needed to disclose the terms of the repayment method.

Rate Defines the interest rate information. Specifies the index and margin used for determining the rate at which interest accrues.

Fees Defines the fee information.

Validation Shows a validation result of potential compliance concerns.

Print Previews and prints the early disclosure.



Product

The entered Plan name will print at the top of your disclosure.

What is Negative Amortization? Negative amortization occurs when the scheduled payment is not enough to pay all the interest that has accrued on a line. You’ll need to choose how the interest should be calculated if negative amortization occurs.

Simple (U.S. Rule) — The interest not covered by the scheduled payment is NOT added to the account balance. In other words, interest does not then accrue on that interest.

Compound — The interest not covered by the scheduled payment is added to the account balance.

Payment

Repayment period options are available for computing the minimum payment during this phase of the HE plan.

As you enter data, use What’s This? Help as needed.

Negative amortization method



Stepping Through the Repayment Period Options In an open-end loan, draws can be taken while payments are made. Two loan repayment designations further distinguish the loan.

Draw Period Only—A Draw period only designation indicates that the loan does not have a separate repayment period. Periodic payments are made and a borrower can take advances throughout the loan term. In a loan with a draw period only, the borrower must pay off the loan at the end of the draw period.

Draw Period Followed by Repayment Period—A repayment period followed by the repayment period designation indicates that the loan has a separate repayment-only period. The loan has a period of time in which periodic payments are made, and the borrower can take advances, but there is also a separate period in which the borrower can no longer take advances but must continue to make periodic payments on the loan. In a loan with draw and repayment periods, a borrower does not have to pay off the outstanding balance at the end of the draw period.

Draw Period Only Repayment Method (Select up to 3) You may select up to a maximum of three repayment methods, and then specify Use the greater or Use the lesser of the specified dollar amount or percentage amount.

Remember that you are creating the early disclosure for a single plan. While other plans may have different repayment methods, you should only be selecting multiple repayment methods if they are applicable to this plan.

Select how often payments will be made under this plan.

Select a second payment frequency if you want to disclose two-payment frequency options on one disclosure; for example, monthly or quarterly payments. This additional payment frequency is optional.



Draw Period Followed by Repayment Period

If you choose more than one repayment method you are indicating that the minimum payment under the plan is the greater or lesser (which you will indicate later) of the repayment methods chosen.

To put it simply, if you select more than one repayment method you are doing a comparison of the repayment methods chosen. For example, if your plan provides that the minimum payment equals the amount of accrued finance charges on the last day of the billing cycle OR $50, whichever is greater, you will notice that no single repayment method provides this exact text. However, you can build this repayment method by selecting: (1) Amount of accrued finance charges on the last day of the billing cycle; and (2) Dollar Amount $(and inserting 50), and indicating use the greater.

You may find that the method by which you compute your minimum payment matches exactly a single repayment method. Or, you may have to combine two or three repayment methods to build a repayment method that matches what you do under your plan. As previously noted, however, you may not select more than three repayment methods.

You may select up to 3 repayment methods, and then specify “Use the greater” or “Use the lesser” of the repayment methods selected.

Specify “Use the greater” or “Use the lesser” of the repayment methods selected when more than one repayment method is selected.



Repayment Period Following the Draw Period You may select up to a maximum of three repayment methods, and then specify Use the greater or Use the lesser of the repayment methods selected.

The Repayment Period information appears after the Draw Period information.

Remember that you are creating the early disclosure for a single plan. While other plans may have different repayment methods, you should only be selecting multiple repayment methods if they are applicable to this plan.



Rate

Select Fixed rate or Variable rate.

Choose the index on which the interest rate is based.

Type the percent of any margin that is added to the index rate to determine the interest rate.

If you do not have a margin, leave this field blank.

Check this box to convert from a variable rate to a fixed rate.

Check this box if the plan contains a preferred rate feature.



Completing the Conversion Information A conversion option is a consumer’s right to convert a variable rate loan to a fixed rate loan.

If an HE plan has a conversion option, it must be disclosed in the HE early disclosure. Official Staff Commentary to 12 C.F.R. § 1026.40 (d)(5)(ii), Comment 2.

Any information entered into these fields will be printed on the HE Plan documents.



Completing the Preferred Rates Information

Notes about Preferred Rates

If a plan has a preferred rate provision, it must be disclosed in the early disclosure. 12 C.F.R. §§ 1026.40(d)(6) & 1026.40(d)(12)(viii)

If you offer a preferred rate to employees, enter the amount of this discount. This is the amount the rate will increase if the consumer leaves your employment.

If you offer a preferred rate to deposit account holders or to consumers who agree to maintain a qualifying minimum balance enter the amount of this discount. This is the amount the rate will increase if the deposit account is closed or if the consumer fails to maintain the qualifying minimum balance.

If you offer a preferred rate to consumer’s who agree to make payments under the plan via automatic withdrawal, enter the amount of this discount. This is the amount the rate will increase if the consumer terminates the automatic withdrawal agreement.

If you offer a preferred rate to consumer’s who agree to maintain a qualifying minimum balance enter the qualifying minimum balance amount.

Do not enter anything, if you offer a preferred rate to deposit account holders, and the rate increases only if the deposit account is closed.

Check this box if the plan contains a preferred rate feature; for example, a lower rate for employees, deposit account holders, or consumers who agree to pay via automatic withdrawal or maintain a qualifying minimum balance.



Fees

Check this box if you choose to disclose fees paid to third parties on this disclosure.

You are required to include in the early disclosure a good faith estimate of the total amount of third-party fees, stated as a single dollar amount or range. 12 C.F.R. § 1026.40(d) (8).

Choose how you will make this good faith estimate.

The program cannot add the individual itemized third-party fees to the good faith estimate, because you have entered fees on a cost/unit basis. Again this is a good faith estimate and it need not match exactly the total amount of third-party fees that you charge to each customer.



Cost/Unit Information Type the cost/unit basis of the third-party fee. Whatever you type in this field will appear exactly as entered in your itemized estimate of third-party fees for how you calculate this fee; for example, you could enter the following:

$5 per $1,000 of credit; $5/$1,000 of the credit limit; $15 per recorded document; or $.25 per acre.

Validation

The Validation function checks the system for data entry errors, accuracy, consistency, and some regulatory issues. The program allows you to fix the errors before printing. Validation reports two conditions: Warnings and Notices.

Warnings require correction; however, you may override warnings. Notices are informational and do not require action.

Correcting Errors To correct errors, click the item on the Navigator where the error is occurring. After you make the correction(s), return to Validation to verify no additional warnings exist.

Notes about Validation If validation warnings exist, you can choose to override those warnings and print the documents as

they are. However, they will be in noncompliance and will print an overridden identification in the footer such as V5.0 representing the version of your program.

Clicking this button prints a copy of the validation report showing all warnings and notices.



If you don’t override the warnings, you can still print the documents, however, they will have the word ‘Incomplete’ as a watermark on them.

Validation Override Authorization When you click the Override Validation button, if you do not have authorization to override validation, you will be requested to enter a user ID and password with authorization privileges. If you belong to the security group with permission to override validation, pressing the Override Validation button will immediately begin the overriding process.

The comments that you type in the text box will print on the Validation Report.

When you override the validation results, you are required to enter comments explaining the reason for your actions. The comments will print on the Validation Report.

Print

NOTE: Remember to save your HE plan before printing or previewing your early disclosures.

Print Buttons Print Selected Documents— Prints all of the documents that are selected. Note that previewing and printing early disclosures will take a few seconds longer than ARTA Lending loan documents. This is due to the dynamic nature of the early disclosure documents.

In the Customer text box, type the applicant’s name(s) and address to personalize your disclosure.

Type your comments to explain the reason for overriding the validation results and click OK.



Preview Selected Documents— Previews all of the selected documents online before printing the documents.

Override Validation— Overrides the validation results and processes the documents as they are.

Print Validation Report — Prints the validation results.

Print Program Setup— Prints the ARM program information.

Print To File— Prints the early disclosure to a file, which can be saved as an RTF (Rich Text File format) file.

The Print-to-File function allows you to save a disclosure to a specified location. It can then be viewed and printed from any workstation using Microsoft Word—even if ARM Early Disclosure is not installed on that workstation.

The Save Disclosure screen appears allowing you to select the location folder. Type the file name and path to which the file is to be saved, and then click OK.

NOTE: The default path is C:\Program Files\bsiapps\ARTA Lending.

Type in a name that you’d like to save the disclosure as and click Save.


Using the Utilities

Using the Utilities

Introduction

This chapter discusses each of the options available from Utilities, located on the Main Menu for quick and easy access.

NOTE: You must have permissions to add or edit information in Utilities. See Starting Setup for more information on security setup.

Backup and Restore

Backup and Restore utilities are built into ARTA Lending to allow you to back up and/or restore your data files.

Backup Guidelines

Your security administrator may provide a unique method for backing up ARTA Lending on your network. If so, follow those procedures. Otherwise, the Backup and Restore option is available on the Utilities menu.

A full backup should be performed after the initial installation and setup, as well as immediately before and after installing each update you receive. Backing up your files safeguards them against loss if your hard disk fails or you accidentally overwrite or delete data.

Because it is important to perform regular backups of your data files, we recommend you establish a frequent, routine data backup program to ensure your data files are always protected.

Your backup disks are typically your only protection against data loss. If you lose or misplace backup disks, you cannot recover your files. Be sure to keep backup disks in a safe place.


Using the Utilities

Backing Up Your Data Files

1. From the Utilities menu, select the Backup and Restore option. The following warning message appears:

IMPORTANT: Make sure there are no other users working in ARTA Lending before beginning backup.

2. The main ARTA Lending screen closes; the ARTA Lending Data Backup and Restore dialog box appears when you click OK. Click Cancel to stop the operation.

3. Set the Archive path to point to your backup location. This can be another directory on your local machine, a network share, an external drive or tape drive, or a floppy drive. You can type the path in directly or Browse to it.

4. Choose which Global paths from the list of checkboxes you want to backup. These paths are preset when ARTA Lending is installed. Note that the Global paths available for backup will be dependent on which ARTA Lending modules, if any, are installed.

5. Choose any Client paths you wish to back up. Client paths only apply to the client workstation where they are set. For a local installation of ARTA Lending, the client paths and the global paths will be the same.


Using the Utilities

6. When you’re satisfied with your path choices, click the BACKUP selected paths button. ARTA Lending begins the backup and displays a dialog box when it is complete.

NOTE: If you are using floppy diskettes for backup, label the first disk with the ARTA Lending version number and the series number of the diskette. For instance, the first floppy used to backup ARTA Lending 4.2 would be labeled 42.1. The second diskette would be labeled 42.2 and so on.

Restoring Your Data Files

Some events, such as a hard drive failure, will require that you restore files previously saved in a backup operation.

Restore Guidelines The restore function works only with files that were created with the backup option in ARTA Lending.

Data must be restored to the same version of ARTA Lending that was backed up.

The entire ARTA Lending program cannot be restored but must be reinstalled from the product CD-ROM to create the proper registry entries to restore to a stand-alone system or server.

1. From the Utilities menu, select the Backup and Restore option. The following warning message appears:

IMPORTANT: Verify no other users are working in ARTA Lending before beginning the restore operation.

2. The main ARTA Lending screen closes; the ARTA Lending Data Backup and Restore dialog box appears if you click OK. Click Cancel to stop the operation.


Using the Utilities

3. Set the Archive path to point to location of your last backup. This can be another directory on your local machine, a network share, an external drive or tape drive, or a floppy drive. You can type the path in directly or Browse to it.

4. Choose which Global paths from the list of checkboxes you wish to restore. These paths are preset when ARTA Lending is installed. Note that the Global paths available for backup will be dependent on which ARTA Lending modules, if any, are installed.

5. Choose any Client paths you wish to restore. Client paths only apply to the client workstation where they are set. For a local installation of ARTA Lending, the client paths and the global paths will be the same.

6. When you’re satisfied with your path choices, click the RESTORE selected paths button. ARTA Lending will begin the restore operation and display a dialog box when it is complete.

NOTE: When restoring from a floppy drive, make sure the diskette is in the drive specified in Archive path. If the backup used multiple diskettes, place the last diskette into the drive first. ARTA Lending will prompt you to insert each of the remaining diskettes.

File Operations

From Utilities, File Operations on the Main Menu, you can delete transaction files. The process of finding transactions to delete is simplified by using search and filtering criteria to select only a specific subset of transactions.

You can also export existing transaction files to XML (eXtensible Markup Language) files.


Using the Utilities

Searching for and Deleting Transaction Files

To begin working in File Operations choose Utilities, File Operations from the Main Menu.

NOTE: The filters available for searching may vary from the figure above depending on which ARTA Lending modules are installed, that is, Applications or Credit Bureau.

Searching for Loans The Search function offers a quick method for locating a desired loan transaction. Enter the desired search criteria and click Update List. The list of loan transactions will be updated according to the criteria specified for the search.

Deleting Loans Once the file list has been filtered, based on your search criteria, you can now delete loan files. To delete a file, select it with your mouse and click the Delete button. A delete confirmation box will appear. Click Yes to confirm the deletion.


Using the Utilities

To select a sequential group of loans, click on the first loan, then press the Shift key and click on the last loan in the group. Clicking Delete will remove all the loans in the highlighted group.

To select a nonsequential group of loans, click on one loan, then press the Ctrl key and click on another loan. Continue until all the loans you wish to delete are selected, continually holding down the Ctrl key during this process. Clicking Delete will remove all the loans in the highlighted group.

Click Cancel when you have finished deleting loans to return to the ARTA Lending main screen.

Exporting Loans to XML

Any loan application selected can be exported as an XML file simply by clicking the Export XML button. You can find the resulting XML file in a sub folder named XMLOut under the main loan storage folder. Each application will be stored in a separate file, named starting with the primary borrowers name. Other key information, such as loan type and date of loan are also included in the XML filename.

Autoselection Defaults

The Autoselection Defaults allow you to select the forms that you want the program to automatically select for processing loans. Three tabs exist: Application, Residential RE, and Other. Check the appropriate documents for your autoselection defaults.

Application tab

Flood Insurance Notice (FIN)

Notice of Reporting Address

Shared Information Disclosure


Using the Utilities

Checking Autoselection defaults allows you increased control over documents. You select the forms that you want the program to automatically select for processing loans.

Residential RE tab

Other tab

Check this box for the agreement to provide insurance document used for loans secured by auto, personal property perfected by UCC, mobile home, equipment accounts receivable, inventory, general intangibles, and farm products.


Using the Utilities

Documents not chosen for autoselection can still be manually selected during loan creation. The document status will display Not Needed with the explanation option not selected under utilities – autoselection defaults.

NOTE: For more information on ordering a customized privacy policy for ARTA, call your Wolters Kluwer Financial Services sales representative at 1-800-553-9410.

Font Settings

In ARTA Lending you can change the size of the font for user-entered text.

NOTE: The default font size is 9-point condensed.

To change the font size: 1. From the menu bar, choose Utilities, Font Settings.

2. Change the point size. Always leave the Condensed option checked regardless of the font size chosen.

3. Click OK.

IMPORTANT: Changing the font size will only affect user-entered text. The larger the font size the greater the chance that text may overflow into other fields, so it is important to review your documents after the font size is changed.

Client Directories

Client Directories information is stored in the client registry and only affects that client workstation in a thin client LAN configuration. Client Directories contain the file storage paths specified during ARTA Lending installation.

NOTE: A thin client local area network may have been installed by your IT department. If in doubt, do not change any directory paths without consulting the technically responsible personnel.

Changing Client Directories

To change the custom default storage paths:

1. From the menu bar, choose Utilities, Client Directories.


Using the Utilities

2. Click Browse to change the path to a new location.


Using the Utilities

Customer Number

The Customer Number option on the Utilities menu allows you to change or add your Wolters Kluwer Financial Services customer number. To input your customer number:

1. Choose Customer Number from the Utilities menu.

2. Type your customer number.

3. Click OK to save the information.

NOTE: Your customer number information is available from the Help, About option in the Main Menu. This information is required when calling Wolters Kluwer Financial Services for assistance.

TRID Effective Date

Selecting this menu option gives you the date field to edit. The default is 10/3/15. This field is editable and determines document autoselection for TILA/RESPA.


Using the Utilities

Consumer, closed-end, real estate transactions with an application date before the entered TRID Effective Date will still be completed using the RESPA-GFE and the HUD.


Appendix A: Glossary


This glossary contains an alphabetical listing of common terms, banking terms, software terms, data items, and their definitions, as used with ARTA Lending.

30/360 accrual method See periodic accrual method.

32-bit Windows As a certified Microsoft Solution Provider partner, Wolters Kluwer Financial Services has special access to Microsoft technology. ARTA Lending is a true Windows solution.

ABA number See also transit number.

accrual method The method used by a lender when applying the interest rate to the outstanding balance to determine how much interest has been earned over a given time period. Different methods vary, for example, in the way in which the days in the period are counted and how many days are assumed to be in a year.

ARTA Lending supports the following accrual methods: actual/360, actual/365, actual/actual, periodic, precomputed simple, precomputed add-on, precomputed discount, split rate simple, split rate add-on.

accrued interest See interest.

actual/360 accrual method The actual/360 accrual method used to calculate simple interest loans. The word actual refers to the actual days in each month that are counted in charging interest. With this method, daily interest is calculated based on 360 days per year. The resulting daily factor is multiplied by the actual number of days in the period over which dividends or interest are being calculated.

See also accrual method, simple interest.

actual/365 accrual method The actual/365 accrual method used to calculate simple interest loans. The word actual refers to the actual days in each month that are counted in charging interest. With this method, daily interest is calculated based on 365 days per year. The resulting daily factor is multiplied by the actual number of days in the period over which dividends or interest are being calculated.


actual/actual accrual method The actual/actual accrual method used to calculate simple interest loans. The word actual refers to the actual days in each month that are counted in charging interest. With this method, daily interest is calculated based on the actual number of days in the year (365 days for nonleap years and 366 days for leap years). The resulting daily factor is multiplied by the actual number of days in the period over which dividends or interest are being calculated.




add-on interest See precomputed, add-on accrual method; split rate, add-on accrual method.

adjustable rate mortgage (ARM) An ARM is a closed-end, variable rate loan secured by a consumer’s principal dwelling with a term greater than one year. See 12 C.F.R. § 1026.19 (b).

amortization The gradual reduction of a loan balance or other obligation by making periodic payments of principal and interest in substantially equal amounts.

amortization period The period of time in which the loan balance will be reduced to zero.

amortization schedule A schedule indicating the reduction in the loan balance and the amount of the principal and interest for each scheduled payment on a loan.

amortized balloon repayment method See balloon/amortized balloon repayment method.

amount financed Under the regulation implementing the Truth-in-Lending Act, the amount calculated by determining the principal loan amount or cash price (subtracting any down payment); adding any other amounts that are financed by the creditor and are not part of the finance charge; and subtracting any prepaid finance charge.

annual percentage rate (APR) Under the regulation implementing the Truth-in-Lending Act, the measure of the cost of credit, expressed as a yearly rate, that relates the amount and timing of value received by the consumer to the amount and timing of payments.

application fee A fee that is charged at application time. An application fee may include charges for property appraisal and a credit report.

ARM early disclosure This is the program disclosure that a creditor must provide for ARM loans pursuant to 12 C.F.R. sec. 1026.19(b)(2). The disclosure must be provided at the time an application form is provided or before the consumer pays a nonrefundable fee, whichever is earlier. However, the disclosure may be delivered or placed in the mail not later than three business days following receipt of a consumer's application when the application reaches the creditor by telephone, or through an intermediary agent or broker. 12 C.F.R. sec. 1026.19(b). See Official Staff Commentary to 12 C.F.R. sec. 1026.19(b), Comment 2.

“as of” wording The “as of” verbiage is the period of time for which the index values are obtained, such as “the first week ending in.” The program merges this wording with the month you select when you build a disclosure.

autoselection The process by which ARTA Lending determines which forms are recommended for use with a particular transaction.



balloon payment The final lump-sum payment of unpaid principal and interest that you may be required to make under a plan when the plan ends.

balloon/amortized balloon repayment method Balloon: Used for payments at regular intervals with a balloon payment due at the last payment of the term.

If you specify a regular payment amount, the balloon payment is calculated.

If you specify a final payment, the regular payment is calculated.

Amortized balloon: Used when a regular payment is calculated on a long-term amortization, with a balloon payment due at a shorter term (call term).

borrower Any natural person or legal entity obtaining funds from another, called a lender, normally repayable with interest at a future date.

business day Day on which a financial institution is open for business, ordinarily most calendar days other than Sundays and legal public holidays. Business days are used in different contexts by various regulations. The following definitions apply by regulation.

1. Truth-in-Lending Act (Reg Z) — A day on which a creditor’s offices are open to the public for carrying on substantially all of its business functions. However, for purposes of counting days in the time period in which a consumer can rescind a transaction, a business day is all calendar days except Sundays and any of the legal public holidays specified in 5 USC 6103 (a).

2. Real Estate Settlement Procedures Act (RESPA) — A business day is a day on which the offices of the business entity are open to the public for carrying on substantially all of the organization’s business functions.

call term The period of time allowed for repayment of an amortized balloon loan.

cap A limit on how much the interest rate can change for a given period, or how much the payment can change from one payment to the next.

ceiling See rate ceiling.

certificate of deposit (CD) A classification of collateral that is a formal receipt for funds left with a financial institution as a deposit. Such deposits may bear interest, in which case they are payable at a definite date in the future or after a specified minimum notice of withdrawal.

See also collateral.

change date The date (for example, day of month) on which the interest rate may be changed for a given loan. In FNMA and FHLMC adjustable rate notes and riders, each date on which the adjustable interest rate could change.



See also initial rate hold date.

charter A legal document, issued by a federal or state regulator, granting a financial institution such as a bank, savings association, or credit union, the right to do business.

closed-end credit Under the regulation implementing Truth in Lending, closed-end credit means consumer credit other than open-end credit. For example, a loan to purchase a motor vehicle in which all loan proceeds are distributed at loan closing and the borrower pays back that money with interest over a set period of time. No future draws under that loan will occur.

Contrast with open-end credit.

closing cost Costs and fees associated with the change in ownership of a property and with a mortgage that are assessed at the legal closing, or settlement. Closing costs include required certification, insurance, taxes and other fees, and typically total 3 percent to 6 percent of the mortgage amount.

collateral Something of value pledged as security for a loan or guaranty by the owner. The ownership can be transferred to the lender in the event of default on the loan, subject to applicable foreclosure and sale laws of the state or federal government.

commercial/ agricultural purpose One of two loan purposes in ARTA Lending, it designates a loan made to a natural person or legal entity to facilitate business purposes or agricultural loans made to facilitate agricultural purposes, as opposed to consumer loans made to facilitate personal, family, or household purposes.

Contrast with consumer/family/household purpose.

community number A map locator designation by the National Flood Insurance Program (NFIP) for purposes of identifying real estate within the boundaries of a flood hazard area. The number is six digits and is listed for all participating communities either on the NFIP map or in the NFIP Eligibility Book.

community panel number A map locator designation by the National Flood Insurance Program (NFIP) for purposes of identifying real estate within the boundaries of a flood hazard area. The number is eleven digits and the first six digits match the community number when the NFIP map is not in countywide format.

compliance Conformance to lender policies, state and federal laws, and regulations.

confession of judgment An agreement included in a loan contract whereby the borrower voluntarily consents to have a court declare judgment against him or her upon default of payment. This type of agreement is not permitted for some types of transactions or in some jurisdictions.

consumer/family/household purpose One of two loan purposes in ARTA Lending, it designates a loan made to an individual for personal, family, or household purposes according to the regulation implementing the Truth-in-Lending Act. Each state may also have its own definition of what constitutes a consumer loan.



Contrast with commercial/agricultural purpose.

cosigner An individual or entity who signs a promissory note along with the borrower, and who is equally responsible for making payments on a loan if the borrower does not.

Contrast with guarantor.

construction loan Most construction loans combine the construction phase and permanent loan into one package. The builder, with prior consent, will draw money against the construction loan as work progresses. However, the customer is charged interest only on the money used for the number and days it is used each month. Most construction loans are ARM loans with the initial rate locked for 1-5 years depending on the program selected. When the construction is completed, the customer has the option: to remain on the ARM or, for a small fee, convert to a fixed rate within a certain time frame.

conversion ARM Early Disclosure contains a conversion option. Convertibility allows you to change the ARM to a fixed-rate loan at some designated time in the future.

coverage A description of the amount which will be paid by an insurance company as the result of a claim made against an insurance policy.

credit disability insurance Insurance that protects the creditor in the event that the borrower becomes disabled before the debt is repaid. Payments are made by the insurance company while the borrower is disabled.

See also credit life insurance.

credit life insurance Generally, insurance that satisfies the borrower’s obligation to the creditor in the event that the borrower dies before the debt is repaid.

See also credit disability insurance.

credit limit The maximum amount that you can borrow under the home equity plan.

critical period The maximum length of time benefits will be paid for a given disability covered by an insurance policy with a critical period feature.

CUNA Mutual straight net credit life insurance coverage A credit insurance coverage type which provides coverage according to the straight net formula, with further modifications as required by CUNA Mutual. This formula divides the loan amount by the number of payments and reduces the amount of coverage by this amount with each payment. Premiums for this type of coverage are collected as a single premium at loan closing.

current index The value of an index available before each change date. The current index value is used in determining whether there is any change in the interest rate on each change date. For FNMA/FHLMC



loans, the current index is the most recent index figure available 45 days before each change date. (The 45 days is referred to as the Current Index Determination Period.)

custom repayment method A repayment method restricted to commercial/agricultural loans only. This repayment method allows you to customize your payment language for loans where other repayment types do not meet your needs.

data exchange The process of exchanging data between ARTA Lending and other external systems or software applications. Data can be exported from and imported into ARTA Lending, using a flexible set of data conversion and formatting techniques.

decreasing life insurance A credit insurance coverage type generally used for payments at a frequency of monthly or more often. The amount of insurance decreases as payments are made over the term of the loan. The five types of decreasing coverage are Gross, Net Payoff, Straight Net, CUNA Mutual Straight Net, and Outstanding Balance.

See also gross credit life insurance coverage; net payoff credit life insurance coverage; straight net credit life insurance coverage; outstanding balance credit life insurance coverage.

decreasing rates See decreasing life insurance.

default System: A system-supplied value provided for data items such that the user can accept the value, rather than entering a value.

Lending: Describes the state of a loan, which indicates that the borrower has failed some duty under the loan agreement (the loan/borrower is in “default”). For example, the borrower has not made a payment when due or the borrower has failed to maintain insurance on collateral as required in the security agreement.

demand feature A clause placed on a loan with a maturity date allowing the lender to call the loan at any time before the maturity date. To be distinguished from an acceleration clause in that the loan can be called before the occurrence of an event of default.

See also demand repayment method.

demand repayment method A loan repayment method that calculates interest payments due on a regular basis. The principal and remaining interest is payable when the lending institution demands payment. The calculations assume a one-year maturity.

See also demand feature.

denial The process of rejecting a loan application which may require a formal notification to the applicant.

disbursement 1. Funds paid out; a payment in cash, by check, or wire transfer.



2. In ARTA Lending, an action taken by an organization to distribute funds to others. For example, an organization may make a disbursement to a government entity for a filing fee, or to the borrower for the cash proceeds of a loan.

disclosure A summary of important terms that the lender gives the borrower and is required by law. For example, by the regulation implementing the Truth-in-Lending Act. Disclosure transactions are commonly required in consumer loans and residential mortgages.

discount A value subtracted from the index plus margin to determine the initial rate on a variable rate loan.

Contrast with premium.

draw loan See multiple advance loan.

draw period In an open-end loan, a period in which draws can be taken, but also payments may be made. Two loan repayment designations further distinguish the loan.

draw period only — A repayment period designation indicating that the loan does not have a separate repayment period. Periodic payments are made and a borrower can take advances throughout the loan term. In a loan with a draw period only, the borrower must pay off the loan at the end of the draw period.

draw and repayment period — A repayment period designation indicating that the loan has a separate repayment-only period. The loan has a period of time in which periodic payments are made, and the borrower can take advances, but there is also a separate period in which the borrower can no longer take advances but must continue to make periodic payments on the loan. In a loan with draw and repayment periods, a borrower does not have to pay off the outstanding balance at the end of the draw period.

employer identification number (EIN) A taxpayer identification number generally assigned to a business entity. Comprised of numeric characters 0-9, formatted as xx-xxxxxxx.

See also taxpayer identification number (TIN) and individual taxpayer identification number (ITIN).

Equal Credit Opportunity Act (ECOA) Federal law enacted in 1974 requiring lenders to give consumers and small businesses equal access to credit. The act is implemented by Federal Reserve Regulation B.

equivalent rate of interest (ERI) An APR-based rate, but without prepaid fees figured into the calculation.

error message A message appearing on the screen when a system or user error occurs.

See also warning message.



escrow A written agreement authorizing the holding of funds by a third party, usually a financial institution or trust company. These funds are to be used to pay specific expenses. A typical example of an escrow account is one for real estate taxes or property insurance due on mortgaged property.

Expere The collective compliance knowledge and experience that’s embedded into ARTA Lending.

export The data exchange function of sending data from ARTA Lending to another computer or other software application. Sending data to another computer is sometimes called uploading.

Contrast with import.

extension agreement Agreement by a lender to extend the due date on a loan into the future.

face value The principal of a security, insurance policy, unit of currency, or certificate expressed in a monetary sum and somehow marked on the item. (For securities, the face value and market value differ until maturity.) Also referred to as face amount.

Federal Home Loan Mortgage Corporation (FHLMC) A corporation, also known as Freddie Mac, authorized by Congress in 1970 as a secondary market conduit for residential mortgages. This quasi-government body buys mortgage loans from institutions to resell to investors, and is associated with the Federal National Mortgage Association (FNMA) in many cases. FHLMC has its own rules for loans it will purchase.

Federal National Mortgage Association (FNMA) Also called Fannie Mae, this is a quasi-government body that buys mortgage loans from institutions to resell to investors. Fannie Mae guarantees timely payment of principal and interest on mortgage-backed securities issued by the corporation. They are associated with the Federal Home Loan Mortgage Corporation (FHLMC) in many cases, and have their own rules for loans they will purchase.

fee The income earned by a lender for the setup and servicing of a loan; for example, a commitment fee. Also, charges for noncredit services, such as a trust department’s allowance or commission.

finance charge The cost of credit, as defined by the Truth-in-Lending Act, expressed in dollars and cents.

financial institution An organization that is either a holding company (owns a bank or savings and loan) or one of these types of institutions:

state and national commercial banks

state and federal savings banks

state and federal savings and loans; savings associations

state and federal credit unions



first period accrual method The accrual method that is applied to the loan balance from the date interest begins to accrue until the first scheduled payment date.

See also accrual method.

fixed rate loan A loan with an interest rate that does not vary over the term of the loan.

Contrast with adjustable rate mortgage (ARM), variable rate loan.

fixed rate mortgage The interest rate and payment of principal will remain the same for the length of your loan. However, if taxes and insurance are included in the house payment, the payment may change from year to year. A rate can be fixed for any length of time, with 10-, 15-, 20-, or 30-year fixed rate mortgages being some of the more common.

floor See rate floor.

FNMA/FHLMC forms Forms based on the Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC) guidelines.

See also Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA).

funding date The date when the funds or proceeds of a loan are available to the borrower and other parties to the loan.

good faith estimate A listing of each service for which the borrower will be charged in connection with a loan subject to RESPA, and the estimated cost of each. RESPA generally applies to consumer, residential real estate loans.

grace period Time extended beyond a due date or maturity date. Commonly used in contract provisions regarding late charges.

grantor 1. Person conveying interest in real property.

2. The creator of a living trust, also called settlor, trustor, or donor.

gross collateral value The value of collateral based on third-party information or borrower financial information without regard to advance rates and superior or prior liens.

gross credit life insurance coverage A credit insurance coverage type which covers the total of payments. Generally, benefits under this type of coverage will pay for the remaining payments at the time of the claim. This may vary depending on the repayment method of the loan.



guarantor 1. The individual or entity that makes a guaranty. A guarantor can become liable in event of default.

2. Corporation that provides assurances, either through a letter of credit or the strength of its own balance sheet, to step in and pay the outstanding obligation of, for example, a municipal bond issuer.

guaranty An agreement to pay the debt or perform the obligation of another in the event the debt is not paid or obligation not performed. The guaranty (also spelled guarantee) is a contingent liability of the guarantor.

holding company A company that owns or controls a bank or savings institution.

Home equity line A consumer purpose open-end, revolving line of credit secured by a consumer’s dwelling. See 12 C.F.R. § 1026.40.

Home Mortgage Disclosure Act (HMDA) Provides loan data that can be used to help determine whether lenders are serving the housing needs of their communities and to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.

homestead A structure occupied by the owner as a home. In most states, protected to some extent by statute against the claims of creditors.

host ID Refers to the identification of a specific host computer.

import The data exchange function of receiving data in ARTA Lending from another computer or other software application. Receiving data from another location is sometimes called downloading.

Contrast with export.

index See index rate.

index rate A rate on which variable rate loans and adjustable rate mortgages are based. The standard index rates are periodically published in newspapers and refer to a prime rate, U.S. Treasury bill, or note rate.

See also variable rate loan.

individual A natural person as opposed to an entity.

individual taxpayer identification number (ITIN) A nine-digit number that the IRS assigns in the following format: 900-00-0000. The IRS uses the number to identify taxpayers, dependents or spouses (resident or nonresident alien individuals) who are required to or wish to file a U.S. tax return, but are unable to obtain a social security number (SSN).



The ITIN is for tax purposes only. It does not entitle the recipient to social security benefits, and creates no inference regarding immigration status or the right to work in the United States.

initial advance The amount a borrower will draw on a consumer open-end plan or commercial revolving credit plan at account opening. It may be an amount required by state law, an amount that the lender requires, or it might be an amount left to the borrower's discretion. If any such amount exists, it is required to be disclosed for home equity plans.

initial rate The starting interest rate for the loan. This will be the same as the market rate if the loan is not discounted or at a premium. The initial rate can be greater than, equal to, or less than the market rate.

See also variable rate loan, periodic rate.

initial rate hold date The date through which an initial rate is effective.

See also initial rate.

initial rate hold term The period of time through which an initial rate is effective.

See also initial rate.

insider For lending purposes, defined by Federal Reserve’s Regulation O as an executive officer, director, principal shareholder, or their related interests of either the principal institution or any of their affiliates (referred to as correspondents). Insiders have special rules, regulations, and lending limits associated with them.

See also Regulation O.

installment repayment method A loan that calculates fully amortized loans with a regular schedule of principal and interest payments. The Skip Payment option can be used as part of an installment loan. Skip Payment calculates a series of monthly payments, then a period where one or more payments are skipped, then continues the series of payments again. ARTA Lending does not require skipped payments to run consecutively. The same period is skipped each year for the term of the loan. Interest is not capitalized (added back into the loan balance) for the skipped month(s).

institution See financial institution.

insurance rate The rate used to calculate the premium for credit insurance. These rates are established by insurance companies in accordance with the pertinent state or jurisdictional laws and regulations. Insurance rates are maintained in the Lending Policy section of ARTA Lending.

insured An individual covered by an insurance policy.

interest Generally, a charge for the use of money over time.



interest only repayment method A loan that calculates interest payments due on a regular basis with a final payment comprised of the principal and any remaining interest.

interest rate The periodic charge, normally expressed on a per annum basis, for the borrowing of money from a lender.

interest rate cap A limit on interest rate charges imposed on a variable rate loan.

See also life of loan cap, periodic cap.

Interest rate carryover Interest rate carryover means that interest rate increases or decreases can be carried over to subsequent periods if a full implementation of the change was prevented by a rate cap.

irregular payment repayment method A loan that calculates interest payments for one- and two-phase loans. You can create irregular payment streams and, where appropriate, calculate an APR for loans with irregular payments. For example, some users want to document “installment” type loans for a teacher who would like to make $250.00 payments for the months of June, July and August but can afford to make larger payments during the school year. The irregular payment feature will let you create a series of payment streams to document this loan and then repeat the schedule for as many years as necessary to complete the loan.

jurisdiction The state under whose laws a lender will loan money; for example, when the lender is located in one state, but lends money under the laws of another state.

lease A contract giving the right of possession and use of an asset for a specified period in exchange for payments. The party owning the property is the lessor and the party using it is the lessee, and the payments are rents.

leasehold interest A classification of collateral that is the property interest in real estate of a tenant or lessee. This definition may vary from state to state.


legal entity A party who, in the eyes of the law, has the capacity to make a contract or an agreement, the ability to assume an obligation, and to discharge an indebtedness. A legal entity can be sued for damages if the performance of a contract or agreement is not met. Two examples are an individual or a corporation.

lender The financial institution providing funds to the borrower.

level life insurance A credit insurance coverage type generally used for seasonal payments (quarterly, semiannual, annual), for the balloon payment of a loan, for single payment loans, for the principal payment of interest only



loans, and for the final payment of principal reduction loans. The amount of insurance remains constant throughout the loan.

level rates See level life insurance.

lien A creditor’s legal claim or attachment against property, as security for the payment of an obligation. A lien encumbers the property to the extent of the debt.

lien perfection See perfect.

lien position A lien holder’s claim in relation to other liens against a piece of property. For example, a lender may have first lien position for a piece of real estate via the mortgage granted, while a different lender making a subsequent loan may take a second position, subordinate to the first lien holder’s claim. When property encumbered by multiple liens is foreclosed (or sold to satisfy creditors), the proceeds of the sale go first to satisfy the first lien holder, next to satisfy the second lien holder, and so on.

See also lien.

lien holder One who holds legal claim against property.

See also lien.

life of loan cap Contractual provision in a variable rate loan limiting the interest rate in-crease over the term of the loan. For example, a 10% initial interest rate with a 5 percentage point life of loan cap may not increase more than 5 percentage points while the loan is outstanding. Sometimes called a lifetime cap.

See also interest rate cap, periodic cap, rate ceiling, rate floor.

loan A contract to advance money to be repaid at a later date, usually with interest.

loan act A reference to a lending law or regulation specific to your organization’s chosen jurisdiction.

loan amount Generally, the amount on which interest is charged.

loan origination fee The fee charged by a lender to prepare the documents associated with a mortgage.

loan purpose A simple statement of the primary purpose of the loan; either consumer, commercial, or agricultural.

See also commercial/agricultural purpose, consumer/family/household purpose.



margin A number of percentage points added to or subtracted from the index rate to compute the variable interest rate on a variable rate loan. In the system, a margin may be a specific number of points above or below the index rate, a percentage of the index rate, or both.

See also index rate, variable rate loan.

market rate 1. The interest rate determined by demand and supply of funds in the money market. Market rates move up or down, depending on demand for funds, economic conditions, and Federal Reserve monetary policy.

2. The rate a lender offers to attract loans or deposits, which may match or exceed rates offered by competitors.

3. In ARTA Lending, the market rate is derived from the index rate and margin.

maturity date Date on which the principal balance of a loan plus accrued interest, debt security, or other financial instrument is due or payable.

minimum payment The minimum amount that a borrower must pay (usually monthly) on the borrower’s account. In some plans, the minimum payment may be “interest only.” In other plans, the minimum payment may include principal and interest.

monthly outstanding balance (MOB) insurance See outstanding balance credit insurance.

mortgage An instrument in which a borrower (mortgagor) gives the lender (mortgagee) a lien on property (most often real) as security for payment of an obligation. In some jurisdictions, known as a deed of trust or a deed to secure debt.

mortgage insurance premium See private mortgage insurance (PMI).

multiple advance loan A type of loan where the principal is advanced over a period of time in varying amounts at varying times. A multiple advance loan can either have a drawdown feature (for example, closed end) or a revolving draw feature (for example, line of credit). A drawdown feature allows the borrower to draw up to the maximum credit line only once and then must repay the loan. A revolving draw feature allows the borrower to draw on the credit line, repay all or part and continue to draw to the extent that the credit line is not exceeded.

National Flood Insurance Program (NFIP) National program offered to local communities to enable them to participate in a national flood insurance program.

negative amortization Occurs when the periodic payment is not enough to pay all of the interest that has accrued under the agreement since the last payment. Instead of the balance being paid off, or amortizing, the balance grows, and amortization is then negative.



An example is negative amortization can occur when an ARM has a payment cap that results in monthly payments that are not high enough to cover the interest due.

net payoff credit life insurance coverage A credit insurance coverage type that covers the current loan balance. Generally, benefits under this type of coverage will pay for the scheduled outstanding balance at the time of the claim. Premiums for this type of coverage are collected as a single premium at loan closing.

net proceeds The amount of a loan remaining to be disbursed to the entity after all fees and charges have been deducted.

note A written promise to pay a certain sum of money to another on demand or at a future date.

See also collateral, payee.

note date The date on which the promissory note is signed.

odd-days prepaid interest The interest collected in advance for days greater than the unit period to the first payment. The unit period is the length of time between payments. For example, if the payment interval is weekly, the unit period is one week (seven days), if the payment interval is every other week, the unit period is two weeks (14 days), and so on.

offset See right of set-off.

one-phase loan A repayment phase designation that includes both interest and principal payments on the loan. For example, an installment loan or balloon loan.

Contrast with two-phase repayment method.

open-end credit Under the regulation implementing the Truth-in-Lending Act, consumer credit extended under a plan in which the creditor reasonably contemplates repeated transactions; the creditor may impose a finance charge from time to time on an outstanding balance; and the amount of credit that may be extended to the consumer during the term of the plan (up to anytime set by the creditor) is generally made available to the extent that any outstanding balance is repaid.

Contrast with closed-end credit.

operating system Refers to the underlying software system that makes computer operation possible. ARTA Lending can be installed on computers, workstations, or networks running either the Windows 98, or Windows NT operating systems.

outstanding balance credit insurance A credit insurance coverage type, which covers the outstanding loan, balance. Benefits under this type of coverage will pay for the outstanding balance at the time of the claim. Premiums for this type of coverage are collected with each payment over the term of the loan and are not financed.



owner One who owns or has the right to property whether real or personal (tangible or intangible).


page setup In Windows, this utility is used to specify how pages will print (e.g., paper size, page position, color).

paid outside of closing (POC) A term used in the real estate industry to indicate those fees and charges that were paid before closing. All charges must be accounted for at closing—even POC charges. POC charges may be paid back to the applicant upon closing if the amounts are financed.

participation The acquisition by a third party, from the lender, of an interest in a loan. The acquisition of this interest can occur concurrently or subsequent to the making of the loan. The participation may be disclosed to the borrower or it may occur without the borrower’s knowledge or consent.

The lender is referred to as the lead and the third party acquiring the interest is referred to as the participant. The participant generally acquires an undivided interest in the loan and is dependent on the lead financial institution for protection of its interest in the loan.

payee In a financial instrument, the person named as the recipient of the sum shown.

payment frequency Describes how often a loan payment is due; for example, weekly, monthly, and so on.

payor The person obligated to pay under the terms of a payment instrument, such as a check, draft, or promissory note.

perfect The process a creditor undertakes to properly protect the creditor’s claims against the collateral.

periodic accrual method The periodic accrual method used to calculate simple interest loans. The daily interest factor is calculated based on equal-length periods. For example, every month has 30 days, every quarter has 90 days, and so on.


periodic cap Periodic rate caps are limits on the amount that the interest rate can increase and/or decrease in any one-year period, or in any interest rate adjustment period.

See also interest rate cap, life of loan cap.

periodic rate Finance charge on consumer credit loan balances, expressed as a percentage. The rate is applied daily, monthly, or at other regular intervals. For example, a credit card account may have a rate of 1.5% on unpaid balances in each billing cycle. Compare to an annual percentage rate (APR) of 18% for a credit card account with a periodic rate of 1.5% and 12 billing periods. The periodic rate must be disclosed in consumer credit applications and borrowing agreements.



See also variable rate loan, initial rate.

policy profile A policy profile is created in the Setup section of ARTA Lending. A user can select it when creating a loan or template. At least one policy is required for loan processing. The policy profile designates which state’s document set to use for the transaction along with other optional policy issues (such as default values for late charges and available accrual methods).

precomputed, add-on accrual method The interest of the loan is calculated at the beginning of the transaction and added to the principal. When add-on interest is used to calculate a loan, an add-on rate is used instead of a simple interest rate.

The APR is higher than the rate stated in the loan agreement because the add-on method does not take into consideration the reduction of principal as installment payments are made.

See also accrual method, precomputed interest.

precomputed, discount accrual method The interest of the loan is calculated at the beginning of the transaction and deducted in advance from the face value of the loan. The borrower receives the face value less the interest.

See also accrual method, precomputed interest.

precomputed interest Finance charge on installment loans that is computed in advance, and added to the outstanding balance owed by the borrower.

Contrast with simple interest.

precomputed, simple accrual method The simple rate is considered an equivalent rate of interest (ERI). The payment is calculated such that the ERI is not exceeded.

See also accrual method, equivalent rate of interest, precomputed interest.

pre-existing conditions A set of circumstances, which would normally be covered by an insurance policy, but for their existence before and at the time of the initiation of the policy.

premium 1. The payment made for an insurance policy. Also called insurance premium.

2. A value added to the index plus margin to determine the initial rate of a variable rate loan.

prepaid finance charge Under the regulation implementing the Truth-in-Lending Act, any finance charge paid separately in cash or by check before or at consummation of a transaction, or withheld from the proceeds of the credit.

See also finance charge.

prepaid insurance Insurance paid for in advance of the time the insurance becomes effective.



prepaid interest See odd days prepaid interest.

principal 1. Face amount of a loan evidencing the amount repayable, exclusive of interest, according to theterms of the note securing the obligation. The principal is the amount on which interest accrues, or the amount to which a periodic rate is applied to calculate interest.

2. Original amount of a time deposit or savings account on which interest is paid daily, monthly,or at other intervals.

3. Primary borrower in a loan, as distinguished from the guarantor or co maker.

4. Person who has controlling interest in a joint venture, corporation, or partnership.

5. Person who appoints another to act on his behalf as agent or attorney in fact.

6. Property of an estate or investment trust, exclusive of income.

principal dwelling The principal residential structure of an owner.

principal reduction repayment method A loan that calculates interest payments at regular intervals and principal payments at the same or different intervals. The ARTA Lending user can specify the principal payment amount or it can be calculated by ARTA Lending.

prior lien The existence of a previous security interest in a piece of (potential) collateral.

See also lien, lien holder, lien position.

private mortgage insurance (PMI) Collected on real estate loans to protect the lender’s interest in the event of default.

pro rata A collection method for some loan fees. The total amount of the fee is divided into substantially equal portions to be collected with each payment.

proceeds See net proceeds.

purchase money security interest A UCC term (9-107) for a security interest created when all or part of the proceeds of a loan are used to purchase all or part of the collateral, which is securing the loan.

rate ceiling The highest value that the lender may charge on a variable rate loan.

See also life of loan cap, rate floor.

rate floor The lowest value that the lender may charge on a variable rate loan.

See also life of loan cap, rate ceiling.



real estate A general collateral classification including agricultural land, condominium, multifamily dwelling (5+), non-residential real estate, raw land-real estate, 1-4 family dwelling, town home (PUD), or leasehold.

See also real estate related.

real estate index The system of indexing documents relating to parcels of real estate that enables a title search to be performed.

real estate related A collateral classification (of real estate) which concerns mineral, oil, gas, and timber rights, as well as fixtures and partial interests.

Real Estate Settlement Procedures Act (RESPA) A federal statute requiring disclosure of certain costs in the sale of residential (one to four family) improved property which is to be financed.

RESPA puts limits on the size of escrow payments for taxes and insurance, prohibits fees or kickbacks in connection with referring a borrower to someone providing settlement services, and requires disclosures concerning the likelihood that the servicing on a borrower’s loan will be transferred.

RESPA is administered by the Department of Housing and Urban Development, and is enforced by the lender’s primary regulator.

refinance An agreement between the lender and the borrower to change the terms of an existing loan agreement between the two parties and substitute the new loan documents that set out the terms of the new agreement.

Reg B See Regulation B.

Reg B address The address of the regulating agency to which questions or complaints regarding notices of adverse action taken on a loan application are sent.

Reg O See Regulation O.

Reg Z See Regulation Z.

Regulation B The Federal regulation which implements the Equal Credit Opportunity Act which prohibits creditors from discriminating on the basis of age, sex, race, color, religion, national origin, marital status, or receipt of public assistance. The regulation also requires creditors to give written notification of rejection, a statement of the applicant’s rights under the Equal Credit Opportunity Act, and a statement listing reasons for rejection, or the applicant has the right to request the reason.

Regulation O The Federal regulation that places limits on loans to directors, executive officers, and principal shareholders of financial institutions and their affiliates. There are also disclosure requirements for



loans to these individuals as well as to executive officers and principal shareholders of correspondent institutions.

See also insider.

Regulation Z The Federal regulation which implements the Truth-in-Lending Act. The purpose of Reg Z is to help assure that every borrower who has a need for consumer credit, is given meaningful information with respect to the cost of that credit. The regulation requires creditors to inform borrowers of all direct and indirect costs, terms, and conditions of the credit arrangement.

See also Truth-in-Lending Act (TILA).

repayment method The manner in which periodic payments of the loan are made. For example, installment, balloon, amortized balloon, single pay, interest only, demand, principal reduction, irregular payment, and custom payment.

required deposit A deposit account that is required to be maintained by the borrower as a condition of credit.

For example, if a deposit account is being assigned as collateral for a loan, the lender usually requires that the borrower maintain that account as a condition of making the loan. Another example is if a lender is giving a borrower a preferred rate because they have a deposit account with their institution. In this case, one of the terms of the loan is contingent upon the existence of a deposit account.

residential real estate Improved real estate used or intended to be used for residential purposes, including single-family homes, dwellings for two to four families, and individual units of condominiums or town homes.

See also real estate.

revolving draw loan See multiple advance loan.

right of set-off The common law or contractual right of a lender to use the balances in any of the borrower’s accounts as payment for a loan in the event of default.

rounding The process of adjusting numeric values to represent them in a consistent manner. For example, most loan payment amounts are expressed in dollars and cents, rounded to the nearest cent.

See also rounding factor, rounding method.

rounding factor Specifies the numeric precision to which a given value will be rounded. For example, money rounded to the nearest cent would be $0.01, while rounding a percentage might be done to the nearest eighth of a percent.

See also rounding, rounding method.



rounding method Specifies the method used to adjust a given value to the precision specified by the rounding factor. Values can be rounded up, down, or to the nearest appropriate rounding factor. For example, assume the amount $155.24337 is to be rounded to the cent.

If the value is rounded up, the result is $155.25.

If the value is rounded down, the result is $155.24.

If the value is rounded to the nearest cent, the result is $155.24.

See also rounding, rounding factor.

secured loan A loan against which collateral is held.

security instrument A document setting forth the rights and responsibilities of the borrower and the lender in regard to the collateral used to secure a loan. The term refers to a broad spectrum of rights in collateral. Some specific terms are a mortgage, deed of trust, security agreement (personal property under the UCC), and an assignment.

security interest Any interest in property that secures performance of a credit obligation.

seller One who exchanges goods or services for money.

servicer The organization that maintains an outstanding loan.

set-off See right of set-off.

settlement Generally, the process of executing legally binding documents regarding a lien on real property. May also be called closing or escrow.

simple interest Interest computed on the outstanding balance.

See also accrual method.

single advance loan A loan where the entire principal is advanced at one time, allowing one immediate disbursement of the net proceeds.

single payment repayment method A loan that calculates a single payment of principal and interest due at maturity. The payment date is also the maturity date of the loan. If the loan purpose is consumer and Multiple Advance is selected, ARTA Lending uses Appendix D calculations and the interest will be estimated.

skip pay feature A feature for certain loans which allows borrowers to skip payments for given months over the term of the loan. Skip pay is only available on installment loans (consumer and commercial/agricultural).



social security number (SSN) A taxpayer identification number assigned to an individual or non-business entity. Comprised of numeric characters 0-9, formatted as xxx-xx-xxxx.

See also taxpayer identification number (TIN) and individual taxpayer identification number (ITIN).

sole proprietor The individual owning and operating an unincorporated, single-owner business.

split rate add-on accrual method This method of accruing split rate interest assigns an add-on interest rate to two or three different tiers. The tiers can be based either on the loan amount or on a number of months. If the tiers are based on the loan amount, the interest rate for each tier is applied to that portion of the loan balance, which falls within that tier. If the tiers are based on a number of months, the interest rate is determined by a formula which weights the interest rate for each tier according to the number of months in the loan term which are contained in that tier.

See also split rate interest.

split rate interest An accrual method that provides calculations for loans written under small loan laws in your state which require one rate to be applied to the principal up to a certain dollar maximum and another rate or series of rates to be applied to any balance above that amount.

When split rate interest is used to calculate a loan, an interest rate is not entered because interest is always calculated based on the rates entered in the Lending Policy section (using the General Calculations Options feature).

See also accrual method; split rate simple accrual method; split rate add-on accrual method.

split rate simple accrual method This method of accruing split rate interest assigns a simple interest rate to two or three different loan amount tiers. The interest rate for each tier is applied to that portion of the loan balance, which falls within that tier.

See also split rate interest.

stock A general term for equity securities including common stock, preferred stock, and stock certificates.

straight net credit life insurance coverage A credit insurance coverage type which provides coverage according to the straight net formula. This formula divides the loan amount by the number of payments and reduces the amount of coverage by this amount with each payment. Premiums for this type of coverage are collected as a single premium at loan closing.

taxpayer identification number (TIN) A number issued by the federal government to identify an entity or a natural person. For businesses, the TIN is referred to as an employer identification number (EIN). For an individual, the TIN is identified as a social security number (SSN). Comprised of numeric characters 0-9, formatted as xx-xxxxxxx. For example, 12-1234567.



See also individual taxpayer identification number (ITIN) and social security number (SSN).

template (loan) A transaction (loan) that has many common features and that can be used to create new transactions by adding or changing the information that varies on a loan-by-loan basis. This type of transaction allows the organization to define specific types of loans that contain specific policies thereby helping to ensure that all users are starting with the same basic set of information for a particular transaction.

third party Any party other than the lender or the borrower.

See also borrower, lender.

title The legal right to ownership of property, real or personal. Some personal property requires a document of title to transfer ownership.

transaction Any sale, assignment, lease, loan, or other transfer of any interest in or right to use any property (whether tangible or intangible) or money.

transaction fee A fee charged each time the customer draws on their credit line.

transit number A 9-digit number, identifying the paying institution, which appears on checks and share drafts to aid sorting and processing. The number usually appears in two places: the upper-right corner in fractional form or at the bottom in the magnetic encoding strip.

Sometimes referred to as the ABA number or routing number.

transmitting utility Any person primarily engaged in the railroad, street railway or trolley bus business, the electric or electronics communications transmission business, the transmission of goods by pipeline, or the transmission or the production and transmission of electricity, steam, gas or water or the provision of sewer service. A type of debtor defined by the Uniform Commercial Code.

trustee The holder of legal title in a trust. With regard to a deed of trust, the trustee is one who holds legal title to real property to secure repayment of a loan.

Truth-in-Lending Act (TILA) Consumer Credit Protection Act passed in 1969.

See also Regulation Z.

two-phase repayment method A repayment phase designation that calculates a two-part loan repayment with Phase I being interest only and Phase II allowing a choice of installment, balloon, amortized balloon, or irregular payment.

If the loan purpose is consumer, and Multiple Advance is selected, ARTA Lending calculates the loan using Appendix D with the following assumptions:



Phase I (Construction Phase)—Truth-in-Lending information is estimated. ARTA Lending assumes this phase is interest only.

Phase II (Permanent)—ARTA Lending allows your choice of installment, balloon, amortized balloon, or irregular payment.

Contrast with one-phase loan.

Uniform Commercial Code (UCC) The UCC is a set of commercial laws drafted by a national commission to promote uniformity in the area of commercial law.

Uniform Consumer Credit Code (UCCC) The UCCC is a set of consumer protection laws drafted by a national commission and adopted, at least partially, by roughly 20% of the jurisdictions in the United States.

unsecured loan A loan against which no collateral is pledged.

Contrast with secured loan.

use of proceeds The specifically designated use for the net proceeds of a loan. Some examples include purchase collateral, real estate construction, and debt consolidation.

See also net proceeds.

user 1. An individual who has rights to access information and functions of ARTA Lending.

2. Generally, someone who has access to a computer system or program. In this context, a network user may not be an ARTA Lending user. The network user has access to a computer or workstation, but may not have been identified as an ARTA Lending user, and granted necessary rights to use portions of the system.

user-defined field Any information item added to the program, in addition to those provided by the system, to gather data that ARTA Lending does not normally collect as part of a transaction.

user network rights The rights, or permissions, given to a user to access directories and files on a computer network. These rights or permissions allow the network user access to the directory or directories where ARTA Lending and associated databases reside, but do not enroll the network user as an ARTA Lending user.

variable rate loan A loan carrying an interest rate that fluctuates according to changes in an index rate. The rate paid by the borrower may rise or fall, depending on changes in the index, such as the 1-Year Treasury Index.

See also index, initial rate, interest rate, margin, market rate, and periodic rate.

vehicle identification number (VIN) A unique number used in the identification of motor vehicles.



vendors single interest insurance (VSI) Defined in the commentary to Reg Z (section 1026.4(d) #10) as “protection of tangible property against normal property damage, concealment, confiscation, conversion, embezzlement and skip.”

waiting period The length of time an insured person must be disabled before receiving benefits.

waiver of jury trial An agreement included in a loan contract whereby the borrower voluntarily gives up their right to a trial by jury, which may otherwise be granted by state or federal law. This type of agreement is not permitted for some types of transactions or in some jurisdictions.

warning message ARTA Lending is designed to signal potential errors when processing loans. It checks the system for data entry errors, accuracy, consistency, and regulatory compliance issues. Two levels of validation messages exist: Notices and Warnings. Notices are informational and do not require action. Warnings require correction, or you may override warnings.

See also error message.

Wolters Kluwer Financial Services form All forms printed by ARTA Lending for which Wolters Kluwer Financial Services maintains a copyright. This excludes FNMA/FHLMC forms and other forms, such as UCC-1 forms.

See also Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC).

Wolters Kluwer Financial Services-supplied Refers to Wolters Kluwer Financial Services-supplied indexes that are provided with the program. Any information on Wolters Kluwer Financial Services-supplied indexes can be changed. Once it is changed, it is no longer considered a Wolters Kluwer Financial Services-supplied index.

worst-case scenario paragraph This is a paragraph that discloses the maximum interest rate and payment for a hypothetical $10,000 loan originated at the initial interest rate assuming the maximum periodic increases in rates and payments under the program. See 12 C.F.R. sec. 1026.19(b)(2)(viii)(B).

See also ARM Early Disclosure.


How to Contact Wolters Kluwer Financial Services Support


Technical Support

Toll-Free SupportLine: 1-800-274-2711, ext. 1124021

At Wolters Kluwer Financial Services, we take pride in the superior support we provide our customers. Our support staff is available Monday through Friday, 7 A.M. to 7 P.M. CST. Voice mail operates continually, allowing you to leave a message after hours and on weekends. Calls will be returned between 8 A.M. and 5 P.M. CST Monday through Friday.

Before You Call In many cases, a problem can be a one-time occurrence or one that after you address these items becomes resolved, eliminating the need for the call. While we want you to call without hesitation rather than become frustrated, going through these items will often solve the problem, or at least disclose specific information, helpful for quicker solutions. Before calling, please run through the following items:

Try to recreate the problem before calling. If the problem recurs on demand, we can oftendiagnose and correct it much faster.

Write down the specific steps and circumstances leading up to the problem, especially if a warningor an error message was involved.

If you receive a warning or error message, write it down or print the screen while the message isdisplayed.

If a series of warnings or error messages are displayed, pay most attention to the first. Ordinarilysuccessive messages are related enough that knowing the first one will be enough to go on, andoften explain the following ones.

When You Call Be at your computer so that the Wolters Kluwer Financial Services support individual can walk you

through the task step by step.

If you were about to repeat the problem on demand, reside at the starting point so that you can gothrough your steps over the phone with us.

If you received a warning or an error message, either have it displayed on screen when you call, orif you have written it down or printed, be at the starting point of the steps leading up to it.

Have the following information available: your customer number, product name and version(displayed in the Help, About ARTA), Windows version, and type of network—if any.

Fax You may fax us at 1-800-860-3595.

E-Mail Address [email protected]


mailto:[email protected]


Write If you prefer, write a letter detailing your question and send it to:

SupportLine Wolters Kluwer Financial Services P.O. Box 1457 St. Cloud, MN 56302-1457

Internet Visit us on the World Wide Web at http://www.wolterskluwerfs.com.

Also, visit us at http://support.wolterskluwerfs.com for accessible and in-depth software support anytime.


http://www.wolterskluwerfs.com/


Wolters Kluwer Financial Services

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