Charging and Distributing Mortgage Interest
To charge interest to a mortgagor, distribute the interest and commission, and pay the mortgagee their share, follow these steps:
- Charge the mortgage – Apply the interest charge to the mortgagor’s account.
- Receipt the interest – Record the receipt of interest payment from the mortgagor.
- Distribute interest and commission – Allocate the received interest between the mortgagee and any applicable firm commission.
- Pay the mortgagee – Process the payment of interest earned to the mortgagee.
Charge the mortgage
Charging a mortgage creates a record of interest due on a mortgage for a particular period. The interest and, if applicable commission, are charged using the rates held on the mortgagor file. For mortgagors in arrears, a penalty charge can be levied. A mortgage must be charged before the interest can be distributed and paid to the investors. You can charge multiple mortgages at once or select an individual mortgage. The charging process can also create an Interest Statement for the borrower.
To charge multiple mortgages, open the Mortgage Manager / Charging / Next Charge tab. Set the cut off date for which charging is being completed, the tab will then display all mortgages due to be charged up until the cut off date. Select the mortgages to be charged and click the Charge button.
To charge an individual mortgage, open Mortgage Manager / List / Mortgagor tab for the relevant mortgage. Use the right click context menu and select Charge Mortgage.
Receipt Interest from the Mortgagor
The mortgagor will be making regular payments to you for the interest due, and this needs to be receipted. To post a receipt read here Receipt Requests – LegalOffice User Guides
Distribute the interest and commission
The distribute process will create journal transactions on the mortgagor, mortgagee and firm ledgers, distributing the interest, commission and RWT to the relevant accounts.
To distribute multiple mortgages, open the Mortgage Manager / Charging / Charge History tab. Tick the Show Owing Only box to display undistributed charges, Select the mortgages to be distributed, then use the right click context menu to select ‘Pay Charge from Trust’.
To distribute an individual mortgage, open Mortgage Manager / List / Mortgage Charge History tab for the relevant mortgage. Use the right click context menu on the charge you wish to distribute and select ‘Pay Charge from Trust’.
Payment of interest to the Mortgagees
The mortgagee payment process will pay your mortgagee interest earned and create a statement of account.
To make a payment to a mortgagee open the Mortgage Manager / Investors / Payments tab. Displayed will be a list of mortgagees who have a balance due.
You can make payment directly to the mortgagee’s bank account or, reinvest the interest in an Interest Bearing deposit.
1 Pay interest to the Mortgagee
Open the Payment Request / Payment Print tab.
Select the payments to be processed and click the Process Direct Credit button. The statement will be produced and the selected payments are available for upload into your internet banking system. Send a Payment directly to your Bank – LegalOffice User Guides
2 Reinvest interest on a Interest Bearing Deposit
Open the IBD Manager / Request tab
Select the reinvestment to be processed and click the Generate button. The statement will be produced and the selected reinvestments are available for upload into your internet banking system. Send a Payment directly to your Bank – LegalOffice User Guides