record transactions relating to this type of loan. These loans carry dual interest rates, with one interest rate applicable to the principal balance which will be amortized monthly and the other interest rate applicable to the principal balance which will be paid in a lump sum at maturity.
(2) Any adjustments to principal balances necessitated by advances or other charges or credits will be made to that portion of the principal balance which is being amortized monthly.
(3) All other general ledger accounts presently used for vendee accounts; i.e., interest income, [late charge income,] accrued interest, etc., will be used for this type of vendee account with no separation of data necessary.
(4) The account will be established in the following manner:
(a) Documents -VA Form 26-6714, Sales Closing Statement.
VA Form 26-8382A, Portfolio Loan Address Code Sheet (PLACE-ARS).
VA Form 26-8383A, Vendee-Acquired Loan Code Sheet (PLACE-ARS).
VA Form 4-8431, Portfolio Loan Accounting Code Sheet (PLACE-ARS).
(b) TT's Used - 001, 005, 020, 030, 035, 050, 060.
(c) All TT's outlined in subparagraph (2) above are required to be processed in the same updating cycle to establish a master record for a vendee account (special financing). Where a transaction is missing or rejected, all the transactions will be rejected [with Reject Code 98.]
(d) The accounting technician will complete VA Form 4-8431 using TT 001. The fields to be coded are shown in Appendix L, Section L-9, figure L.5 under TT 001. The data to be coded will be obtained from the VA Form 26-6714, Sales Closing Statement.
(e) Reversal or decrease of the TT 001 will require completion of the same code sheet and fields, using TT 101. [Adjust accrual segment(s) as required.]
(5) For these special financing loans containing two principal balances, the total amount of the loan (amortized and unamortized balances) will be shown on VA Form 4-8431 in field -VE [entitled "Principal amount"] and the unamortized balance will be shown the field -VF [entitled "Late charge/spec. fin. amt."
(6), The amount of the unamoritized balance (balloon payment) will always be shown in the block on the RPO entitled "Special Financing/balloon amount" adjacent to daily interest amount.]
(7) Where it becomes necessary to remove an account from the special financing category and include it as a regular account, the following action will be taken:
(a) [Accountants] will prepare VA Form 4-8431 using TT 101 to remove both principal amounts from 1167 series of accounts. [(Adjust accrual segments as required)].
(b) Loan Guaranty will prepare VA Form 26-8383A using TT 150 to chug special financing code from "1" to "0".
(c) Accounting will prepare [another] VA Form 4-8431 using TT 001 to insert principal and interest in regular 1161 series of accounts. [(See Note below about scheduling input)].
NOTE: TT 001 must be held and submitted the following day after the TT 101 and TT 150 process.
9N.10 DISBURSEMENTS
a. Scope
(1) This paragraph prescribes the procedures that will be followed in processing miscellaneous advance payments and Tax and Insurance escrow fund payments. Procedures for disbursement for new loans are contained in paragraph 9N.08.
(2) The detailed instructions provide for the following:
(a) Type of action.
(b) Transaction types used.
(c) Code sheet(s) or turnabout cards to be used.
(d) Adding machine tape totals.
(e) Posting allotment accounts, control accounts and Cash Disbursement Journal.
(f) Preparation of VA Form 4-5647, Transmittal Control Register (PLACE).
b. Disbursement Types
(1) Types of Payment
(a) Miscellaneous advance payments.
1. Repairs, improvements and alterations.
2. Installment payments (Servicement's Readjustment act, sec. 505 (a).)
3. Foreclosure costs.
(b) Tax and Insurance escrow fund payments.
1. Transfer to investors (sales) or refund to borrower.
2. Payment of taxes.
3. Payment of insurance.
4. Payment of special assessments.
(2) Disbursement Totals. Accountants will insure that coded input amounts equal amounts shown on the voucher(s) scheduled for payment by the Treasury Department. The Accounting activity will prepare adding machine tape totals of the coded documents to assure agreement of totals. These totals will be carried forward into batch transmittal control totals as follows:
(a) Teletype Input. Documents transmitted via teletype (ARS), will be compared to the station's batch transmittal control code sheet totals by the computer program at the DPC. If out-of-balance, the field station will be notified by teleprocessing error message, determine the reason for variance and take corrective action, where necessary. All transactions accepted by the computer will be forwarded for update processing.
(b) Hard Copy [Mailed] Input. Where documents are transmitted by mail, the field station will prepare a VA Form [45647,] Transmittal Control Register [ ] which will be mailed with the documents. After keypunching is completed, the input cards will be tabulated at the DPC so that item count and amount totals can be reconciled by the Analysis and Control Division, where required. If outofbalance, the Analysis and Control Division at the DPC will contact the field station to determine reason for the outofbalance condition. In this case, station totals will be brought into agreement before the input data are forwarded for updating.
3. Turnabout Cards. Updating master records for [volume] disbursements of taxes/insurance/special assessments will normally be completed through processing of computergenerated turnabout cards. These cards will be received by the field station prior to the payment date. [After processing is completed by the field station, the turnabout cards will be either mailed to the DPC for updating of the master records to record disbursement; or at local management's direction, the turnabout cards and/or code sheets will be locally keypunched and transaction disbursement data transmitted to the DPC through use of card reading equipment. See paragraph 9P.08 for mailing instructions and/or paragraph 9P.08.1 for instructions regarding card reader transmittals.]
NOTE: A VA Form [4 8472,] T&I Disbursement Code Sheet (PLACEARS), will be prepared to record a disbursement where a turnabout card is not received.
(4) Control Accounts. Field stations will use various general ledger "holding" accounts to control updating actions to record disbursements within the system, as follows:
(a) New loans and/or advances [4_1181.01]
(b) Tax, insurance and special assessments [4_2101.00]
(See par. 9N.13 for further details on control accounts.)
(5) [Allowance] Accounting. Field stations will maintain [allowance] accounts, as heretofore, for the recording of direct loan obligations, disbursements and [allowance;] and for the recording of loan guaranty accrued expenditures. At the present time, the [PLS] system will not create general ledger entries for these [budgetary] accounts.
(c) [Allowance] Procedures
(1) Posting to [Allowance] Ledgers. The accounting technician will receive the [SF 1166,] Voucher and Schedule of Payments, with supporting documents, and take the following action:
(a) Direct Loan Fund. Verify that an obligation or approval exists for all vouchers and invoices which will reflect a subsequent charge to general ledger account [441181.01.] After verification, the necessary accrued expenditure and liquidation action will be taken.
(b) Loan Guaranty Fund. Charge accrued expenditures for those voucher amounts where general ledger account [461181.01] will be debited.
NOTE: Those vouchers where the amounts will be charged to general ledger account [4_210100] will require no [allowance] action.
(2) After posting to the applicable [allowance] ledgers, the Accounting technician will forward the schedules and supporting documents to the General Ledger activity for further processing.
d. Release of Disbursement Schedule to the Treasury Department
(1) Posting Cash Disbursements Journal. The accounting technician will record the amount of the [SF 1166] as a credit to the cash account [(4.101200).] Undistributed disbursements applicable to subsidiary portfolio loan accounts maintained in the PLS system will be debited as follows:
(a) [4_1181.011 Disbursements for direct loans, acquired loans, and repurchased vendee loans (VA Regulation 4600); and disbursements made for advances to principal.
(b) 4_2101.001] Disbursements affecting T&I escrow deposits.
(2) Distribution of Schedules and Supporting Documents
(a) [SF 1166] (Original and copy #2). Release to Regional Disbursing Office, Treasury Department, along with inserts, if any to be mailed to payee.
(b) [SF 11661 (Copy #3). Release to loan accounts activity with listings, invoices, code sheets, prepunched cards, etc.
e. Coding Miscellaneous Advance Disbursements
(1) Types of Advance Payments
(a) Repairs, improvements and alternations (TT 022).
(b) Installment payments (Servicemen's Readjustment Act, sec. 505a) (TT 023).
(c) Foreclosure costs (TT 024).
(2) Processing Advance Payments
(a) Repairs, improvements and alterations
1. Documents-SF 1166,] Voucher and Schedule of Payment.
SF 1034, Public Voucher for Purchases and Services other than Personal.
VA Form [48431], Portfolio Loan Accounting Code Sheet (PLACEARS).
2. TT Used-022.
3. When [SF 1166] supported by SF 1034 is received which authorizes a payment for repairs, improvements and alterations, a VA Form [48431] will be prepared using TT 022. The fields to be coded are shown in appendix L, section L9, figure L.5 under TT 022. The data to be coded will be obtained from SF 1034, Public Voucher for Purchases and Services other than Personal.
4. Reversal or decrease of TT 022 will require preparing another VA Form [48431] and coding the same fields using TT 122.
(b) Installment Payments
1. Documents-[SF 1166,] Voucher and Schedule of Payment.
SF 1034, Public Voucher for Purchases and Services other than Personal.
VA Form [48431,] Portfolio Loan Accounting Code Sheet (PLACEARS).
2. TT Used-023.
3. When [SF 1166] (supported by SF 1034) is received which authorizes an installment payment on a [section 505(a), Servicemen's Readjustment Act,] an, a VA Form [4-8431] will be prepared using TT 023. The fields to be coded are shown in appendix L, section L9, figure L.5 under TT 023. The data to be coded will be obtained from SF 1034, Public Voucher for Purchases and Services other than Personal.
4. Reversal or decrease of TT 023 will require preparing another VA Form [48431] and coding the same fields using TT 123.
(c) Foreclosure Costs
1. Documents-[SF 1166], Voucher and Schedule of Payments.
SF 1034, Public Voucher for Purchases and Services other than Personal.
VA Form 48431, Portfolio Loan Accounting Code Sheet (PLACEARS).
2. TT Used-024.
3. When [SF 1166] (supported by SF 1034) is received which authorizes a payment for foreclosure costs, a VA Form 48431 will be prepared using TT 024. The fields to be coded are shown in Appendix L, sec. L9, fig. L.5 under TT 024. The data to be coded will be obtained from SF 1034, Public Voucher for Purchases and Services other than Personal.
4. Reversal or decrease of TT 024 will require preparing another VA Form 48431 and coding the same fields using TT 124.
5. Prior to submitting any TT 024's to record foreclosure expenses, station accountants will determine if the loan account has been terminated. If active (LSCC 5), the TT 024 will be coded and processed in the normal manner.
6. If the loan account has been terminated (LSCC is 7 or 9), the necessary general ledger account(s) will be charged when processing the [SF 1166], and TT 024 will not be used to update the master record.
(3) Reconciling Disbursement Amounts Coded on VA Form 4-8431 with Amounts Scheduled for Disbursement. The Accounting activity will prepare an adding machine tape of the amount coded in field VE, on VA Form 48431 and take a total. The total must be in agreement with [SF 1166] . In addition, the total must agree with the debits to control account 4_1181. After reconciliation, the code sheets will be forwarded to the CP (Control Point).
f. Coding Tax and Insurance Escrow Fund Disbursements
(1) Tax and Special Assessment Payments
(a) VA Form 248570, T&I Disbursement Input Card (PLACE) Computer generated VA Forms 248570, will be prepunched and interpreted with the following data:
1. Loan Identification.
2. Name Code.
3. Transaction Type (TT 027-Tax, or TT 029-Special Assessment).
4. Segment Number.
In addition, immediately below the "Face $ Value of Policy" data, a Collector Code number will be printed.
(b) When VA Forms 24-8570 are received from the CP the following action will be taken:
1. Check the VA Form 248570 to determine the collector code number(s).
2. Annotate an index separator card(s) with the collector code number.
3. Place the index separator card(s) in front of the first VA Form 248570 with the corresponding collector code number.
4. Maintain all cards in the sequence they were received and place them in a holding file by collector code number. The turnabout cards will be used when approved tax and special assessment disbursement vouchers are received.
(c) "Tax Account" and "Special Assessment Account" listings when received from Loan Guaranty Division will contain information necessary to code the turnabout cards. The action to be taken by the Accounting activity follows:
1. The amount of each tax or special assessment bill shown will be the disbursement amount coded on the turnabout card.
2. If an interest amount is separately identified on the special assessment bill, and separately posted on the listing, it will be the interest paid amount, to be used for coding.
3. [Disbursement transactions will process against all record conditions without reject. Do not code freeze override. (Only the Sales Diary 110 will cause reject (reason JC), which is necessary to control any postfreeze disbursements. Refer to par. 9N.14 )]
4. "Term" will be shown for accounts which were paid in full or terminated. In these cases, remove the turnabout cards from the holding file and place them in the completed file.
5. Where a tax or special assessment bill is received and the account does not appear on the listing, Loan Guaranty Division will enter these items at the bottom of the list. In these cases, no turnabout cards will have been received; therefore, the Accounting activity will prepare VA Form 48472, T&I Disbursement Code Sheet (PLACEARS), and attach it to the VA Form 45647.
6. Item(s) shown with an "X" along side of the account(s) are not to be paid on this listing. The turnabout cards in these cases will be retained by the Accounting activity in a hold file.
(d) Where the tax or special assessment paying time for a taxing authority has passed, consult with the Loan Guaranty Division as to disposition of any turnabout cards remaining in the holding file.
(2) Processing Tax and Special Assessment Payments
(a) Documents-[SF 1166], Voucher and Schedule of Payments
Tax Account Listing Portfolio Loan
Special Assessment Account Listing Portfolio Loan
SF 1034, Public Voucher for Purchases and Services Other than Personal.
VA Form 48472, T&I Disbursement Code Sheet (PLACEARS).
(b) TT Used-027 (Tax) or 029 (Special Assessment)
(c) When [SF 1166], which authorizes the payment of taxes or special assessments, is received, the "Tax Account Listing" or "Special Assessment Account Listing" or "SF 1034" attached, will be used by the Accounting activity to select from the hold file, the corresponding group(s) of turnabout cards, with the same collector code(s) as shown on the listing(s) or SF 1034.
NOTE: Verify that collector code and segment number(s) pertain to T/A cards selected for processing.
(d) Select from the group of turnabout cards, by collector code, those cards that match the loan identifications on the listing(s) or SF 1034 by collector code which were authorized for payment. Complete the coding of the turnabout cards using appendix L, section L9, figure L.7 which shows the fields to be coded for TT 027 (Tax) and TT 029 (Special Assessment).
NOTE: The turnabout cards will be maintained in the same order as they were selected to match the listings by collector code. This is necessary in case an outof balance condition occurs.
(e) After coding of VA Form 48570 and/or VA Forms 48472 by collector code(s) is completed, an adding machine tape(s) will be prepared.
As the addingmachine tape(s) is prepared for large volume collectors, subtotals will be taken approximately every 500 cards and VA Form 3230, Reference Slip, (or other suitable marker) will be inserted into the T/A file to mark the point of subtotal. Amounts coded on VA Form 48472, if used, will be included in the addingmachine list and the amount circled for identification purposes. VA Forms 48472, if used, will he paper clipped and attached to the applicable VA Form 45647, Transmittal Control Register (PLACE) (see subpar. d).
The addingmachine tape(s) will be annotated with the station number, collector code, schedule number and transaction type immediately below the TT tape the disbursement amounts coded on VA Forms 48570 and/or 48472 and take a total. The total on the adding-machine tape(s) must agree with the total on the applicable SF 1166 and attached listing(s) or SF 1034. The addingmachine tape(s) will be forwarded with the input documents to the Control Point.
(f) VA Form 45647, Transmittal Control Register (PLACE), will be prepared by the Accounting activity to serve as a covering document for the VA Forms 48570 and 4-8472 mailed to DPC. VA Form 45647 will be prepared in triplicate as follows (see app. L, sec. L9, fig. L.25):
1. In item 1, enter the station number.
2. Item 2, transmission number and item 3, day number, leave blank. (CP will complete these items).
3. In column "C" on line 3, enter the total number of turnabout cards and/or code sheets.
4. In column "D" on line 3, enter the total disbursement amount.
5. In column "B" for line 3A, enter the last twodigits of the schedule number, amount of each schedule and total amount of all schedules on line designated "Total."
6. On line 4, designated "Batch Header Control Total," enter in columns "C" and "D" the transaction count and disbursement amount shown in these columns on line 3 above. Sufficient zeros will precede the totals so that the column "C" total becomes a fivedigit figure and the column "D" total becomes an elevendigit figure.
(g) The Accounting activity will forward to the CP all copies of the VA Form 45647 and attach applicable supporting documents: turnabout cards and/or code sheets (separated by collector code); addingmachine tape(s), VA Form 3230 for keypunching instructions, etc.
(h) A copy of VA Form 45647 will be returned by the CP after they have entered the transmission number in item 2 and the day number in item 3.
(i) The transmission and day number shown on VA Form 45647 will be entered on the applicable SF 1166. VA Form 45647 can then be disposed of in accordance with MP4, part X.
(j) Reversals. Where a prior Treasury check disbursement for taxes (TT 027) or special assessments (TT 029) has been canceled, or the wrong loan account updated, a TT 127 or 1 29 as applicable will be initiated by the Loan Guaranty Division using VA Form 48472, T&I Disbursement Code Sheet (PLACEARS). The code sheet will be coded as shown on the next page:
Coding by Loan Guaranty Coding by Finance
Mandatory Mandatory Optional
Taxes TT 127 -HB, -HG -HL, -HM -HN
Special Assessments TT 129 -KB, -KG -KR, -KS -KT
After coding of VA Form 48472 is complete, transmit the code sheet and applicable TT's 157 and/or 159 (used to update next due date and amount by model to the station CP for transmittal to the DPC via ARS. Reversal transactions, along with applicable TT's 157 or 159 will be forwarded to the Control Point for transmittal to the DPC in the same ARS batch. If the reversal involves a wrong loan account, Finance activity will prepare another VA Form 48472, coding TT 027 or 029 as applicable, to post the disbursement to the proper account.
(k) Refunds. Check for refund of taxes or special assessments paid will normally be deposited locally with an accounting entry of debit 4_1012 and credit to 4_2085.04. The Accounting activity will prepare and post to VA Form 46931, Suspended Credits Ledger Card to record and control these refunds. As soon as possible, the Accounting activity will prepare TT's 011 and 032 to credit borrower's T&I (42015) account. NOTE: TT's 011 and 032 can be transmitted in the same processing cycle. If the refund involves taxes, the Accounting activity will process TT 091 to reduce the taxes paid 1/1 to date field of the master record by the amount of the tax refund.
(3) Insurance Payments
(a) General
1. When insurance payments on portfolio loans are authorized by the Loan Guaranty Division, a computer generated VA Form 48570, T&I Disbursement Input Card (PLACE), will be received with each invoice or VA Form 268607, Portfolio Loan Insurance Print Out. The VA Form 48570 is prepunched and interpreted with the full identification data, name code, TT 028 and the segment number. In addition, the disbursement amount (card columns 3035) will already have been coded by Loan Guaranty Division. The VA Forms 48570 will be used by the Accounting activity to record the disbursements on the portfolio loan master records maintained by the system.
2. Occasionally, where a VA Form 48570 is not available. Loan Guaranty will prepare a VA Form(s) 48472,) T&I Disbursement Code Sheet (PLACEARS) and enter the disbursement amount.
3. Disbursement transactions will process against all record conditions without reject. Do not code freeze override.(Only the Sales Diary 110 will cause reject (reason JC), which is necessary to control any postfreeze disbursements. Refer to par. 9N.14.)
(b) Processing Insurance Payments
1. Documents- SF 1166, Voucher and Schedule of Payments.
VA Form 268607, Portfolio Loan Insurance Print Out (IPO). Insurance Invoices.
VA Form [48570], T&I Disbursement Input Card (PLACE).
VA Form 48472, T&I Disbursement Code Sheet (PLACEARS). Addingmachine tape(s).
2. TT Used-028
3. Upon receipt of SF 1166 with attached invoices and/or IPO's, turnabout cards and/or code sheets and adding machine tape, the Accounting activity will take the following action:
a. Verify that there is a turnabout card and/or code sheet for each invoice or IPO.
b. Complete coding of the turnabout card and/or code sheet using appendix L, section L9, figure L.7 under TT 028.
c. When coding action is completed, an adding machine tape will be prepared. Annotate the tape with the station No., last twodigits of the schedule No. and TT 028. Immediately below the annotation, tape the disbursement amounts shown in card columns 3035 of the turnabout card and in field JG of the code sheets and take a total.
d. Compare the total with the total on the SF 1166 and adding machine tape total received from Voucher Audit. If not in agreement, find and clear the discrepancy.
4. VA Form 45647, Transmittal Control Register (PLACE), will be prepared by the Accounting activity to serve as a covering document for the VA Forms 48570 and 48472 mailed to DPC. VA Form 45647 will be prepared in triplicate as follows (see app. L, sec. L9, fig. L.25a):
a. In item 1, enter the station number.
b. Item 2, transmission number, and item 3, "day number," leave blank. (CP will complete these items.)
c. In column "C" on line 3, enter the total number of turnabout cards and/or code sheets.
d. In column "D" on line 3, enter the total disbursement amount.
e. In column "B" for line 3A enter the last two digits of the schedule number, amount of each schedule and total amount of all schedules on line designated "Total."
f. On line 4, designated "Batch Header Control Total" enter in column "C" and "D" the transaction count and disbursement amount shown in these columns on line 3 above. Sufficient zeros will precede the totals so that the column "C" total becomes a fivedigit figure and the column "D" total becomes an elevendigit figure.
5. Accounting activity will forward the turnabout cards, code sheets, where applicable, adding machine tape(s) and all copies of VA Form 45647 to the CP.
6. A copy of VA Form 45647 will be returned to the Accounting activity by the CP after they have entered the transmission number in item 2 and the day number in item 3.
7. The transmission and day number shown on VA Form 45647 will he entered on the applicable SF 1166. VA Form 45647 can then be disposed of in accordance with MP4, part X.
8. Reversal. Where it is necessary to reverse a
TT 028 where a Treasury check has been canceled after the TT 028
has processed, or where the wrong account has been updated, Loan
Guaranty Division will initiate VA Form 48472, T&I Disbursement
Code Sheet (PLACEARS). Loan Guaranty will code fields JB (segment
member) and
JG (disbursement amount). After receipt of VA Form 48472, Finance
will code fields JN (last 2 digits of Schedule No.); JP (Transaction
Date); and field JQ (Freeze Override) if applicable. Reversal
transaction, along with applicable TT 158, will be forwarded
to the CP for transmittal to the DPC in the same ARS batch. If
the reversal involves a wrong loan account, Loan Guaranty Division
will prepare another VA Form 48472, coding TT 028, to post the
disbursement on the proper account.
9. Refund. Check for refund of insurance premiums will normally be deposited locally with a debit to 4_ 1012 and a credit to 4_ 2085.04. The Accounting activity will prepare and post VA Form 4_ 693l, Suspended Credits Ledger card to control the refund. As soon as possible, the Accounting activity will process TT's 011/032 to credit the borrower's T&I (4_ 2015) account.
(4) Processing Refund of T&I Escrow Funds to Borrower
(a) Documents-SF 1166, Voucher and Schedule of Payments.
SF 1047, Public Voucher for Refunds.
VA Form 48431, Portfolio Loan Accounting Code Sheet (PLACEARS).
(b) TT Used-003.
(c) When SF 1166 (with supporting SF 1047) is received which authorizes a surplus in the T&I account to be refunded to the borrower, a VA Form 48431 will be prepared using TT 003. The applicable fields to be coded are shown in appendix L, section L9, figure L.5 under TT 003. The data to be coded will be obtained from the applicable documents.
(d) Reversal or decrease of TT 003 will require preparing another VA Form 48431, coding the same fields, using TT 13.
9N.11 [A]. DISBURSEMENT CANCELLATIONS
a. General. Where SF 1098, Schedule of Canceled Checks, contains checks involving portfolio loan accounts, action will be taken to (1) adjust the allotment accounts, where applicable, (2) post to the general ledger and control accounts and (3) prepare input to update the portfolio loan master records, maintained in the system.
b. Allotment Ledger Accounts. If general ledger account 4_1181 is involved as a result of the cancellation, the following action will be taken:
(1) Reverse accrued expenditures.
(2) If authorized by Loan Guaranty, reestablish obligation for Direct Loan accounts.
c. General Ledger Entries. The SF 1098 will be recorded in the applicable cash journal as a debit to 4_1012 and a credit to control account 4_1181 or 4_ 2101, as applicable. The following distribution of the SF 1098 will be made:
(1) Original and copy 1 Mail to Regional Disbursing Office,
. Treasury Department
(2) Copy 2 Forward to the loan accounts unit.
d. Preparation of Input To Update the Portfolio Loan Master Records. VA Form 48431, Portfolio Loan Accounting Code Sheet (PLACEARS) and/or VA Form 48472, T&I Disbursement Code Sheet (PLACEARS), will be prepared in original only for each master record affected by a canceled disbursement. Depending upon the transaction type, the fields to be coded are shown in appendix L, section L9, figure L.7. (See par. 9N.l0f(2)(j) and 9N.10f(3)(b)8.)
e. The SF 1098 will be annotated with the TT's used and the day number the input documents will be transmitted to DPC. The SF 1098 will be retained in a pending 4_1181 or 4_ 2101 file, as applicable. The VA Forms 48431 and/or 48472 will be forwarded to the CP.
f. SF 1098's retained in the pending 4_1181 or 4_2101 file will be cleared as outlined in paragraphs 9N.12 and 9N.13
[9N.11B. DISBURSEMENT RECERTIFICATIONS
a. General. Treasury has delegated to agencies the authority to recertify mortgage loan payments to affected payees in the event checks were mailed to but not received by the payee. In the VA, the implementation of these new procedures will closely parallel existing procedures for handling payee claims relating to nonreceipt, loss, theft, mutilation, destruction, or forgery of U.S. Treasury checks. A definitive discussion of the procedures for processing of the SF 1184, Unavailable Check Cancellation, is contained in MP4, part IV, chapter 7, and contains detailed instructions for completing the SF 1184, effect of recertification on different VA systems, Treasury processing of the SF 1184, Stop Reason Codes, Daily Advice of Status Messages, etc. Basic ground rules and decision tables are provided below to further assist field station personnel in dealing with mortgage loan transactions involving nonreceipt of Treasury checks.
b. Basic Ground Rules
(1) VA Administrative Error Present. If the VA has made an administrative error, and through no fault of the payee the payment was misdirected to the wrong payee or address, recertification is possible. The reissuing official must first be absolutely sure that the original check will be returned by postal service to Treasury as undeliverable. If possible, wait for cancellation and reissue. If not possible to wait, immediately reissue if type (1), (2), or (3) as shown in subparagraph c below. For others, forward SF 1184 to Treasury to verify original check status; if unpaid, process recertification.
(2) Unexplained Loss. Check mailed to correct payee at correct address. More than 15 days have elapsed since date of check and payee claims nonreceipt. If possible, forward SF 1184 to cancel original and upon receipt of proceeds from Treasury, reissue. If not possible to wait for cancellation, forward SF 1184 to verify original check status. This step is only valid for (1), (2), or (3) types as shown in subparagraph c below. Recertification is possible if unpaid and type (1), (2), or (3) as shown in subparagraph c below. All others must await cancellation.
(3) Recovered Theft or Mutilation. If payee presents mutilated original check or if original check which was stolen has been recovered but is being held by law enforcement authorities as evidence, immediate recertification is possible.
c. Decision Tables
Disbursement for
Payment to System/Comments
(1) Taxing Authorities PLSPMS / Recertify if tax sale is imminent.
(2)Insurance Companies PLS / Recertify if insurance policy lapse is imminent.
(3)Management PMSPLS / Normally do not recertify; however, if vendor
Brokers/Contractors is classified as small business and a hardship would
result from noncertification, the Finance Officer should
consult with Loan Guaranty to reach a decision regarding
possible recertification. Also, where future payments
are anticipated and offset of future disbursements can
be effected, then recertification may be in order.
(4)Sales Closing Brokers PMS / Same as (3) above.
(5)Financial LCS / Do not recertify.
Institutions (Claims and
Acquisitions)
(6) Refunds to Borrowers PLS / Do not recertify.
(7) Financial PLS / Do nor recertify.
Institutions
(Acquired/Repurchased
Loans)
(8) Construction Loan PLS / Do not recertify.
(Stage) Payment
(9) Private Investors PLS / Do not recertify.]
for remittances received
and deposited on loans
sold
9N.12 GENERAL LEDGER CONTROLLING ACCOUNTS
a. General. The following general ledger accounts are used as controlling accounts over various PLACE and LCS accounting actions:
4_1181 Undistributed Disbursements (ADP). This account shows the amount or
disbursements which have been made for new, repurchased or acquired
loans (PLACE) and/or claims or property acquisitions (LCS) and are
pending computer processing. Computer processing includes
establishment of the loan principle amount in the PLACE system or
distribution to veterans liability and property accounts in the LC
system.
4_1182 Asset Transfers Pending (ADP). This account shows amounts which are
pending transfer to or from subsidiary records which are not
maintained in the PLACE system (property, liability, receivables,
etc.) and portfolio loan records maintained in the PLACE system.
4_2084.01 Undistributed Collections (ADP). This account shows the amount of
collections which have been deposited and are pending distribution to
the master records maintained in the PLACE system. THIS ACCOUNT WILL
BE MAINTAINED AT AUSTIN DPC ONLY.
4_2085.09 Miscellaneous Suspended Credits (ADP). This account is used to show
amounts deposited for application to a loan account but were not
applied for various reasons and are pending disposition. This account
is also used for remittances which are to be applied to the master
record at a future date.
4_2101 Undistributed Disbursements (ADP)-Tax and Insurance Deposits. This
account shows the amount of disbursements which have been made and
are pending distribution to the T&I account maintained in the PLACE
system.
b. Control Account Procedures
(1) Undistributed Disbursements (ADP) (1181)
(a) The purpose of this account is to control both disbursements and canceled checks for mortgage loans and advances (PLACE system) and/or claims or property acquisitions (LC system) and to insure their proper processing.
(b) The accounting clerk will record the total of each SF 1166, SF 1098, etc., in the applicable journal as a debit of credit to account 1181, as necessary. The schedules, supporting vouchers and/or list will be furnished the loan accounting clerk for preparation of input media. After preparation of input media, the schedules and vouchers will be filed in a "Pending" file to support the outstanding balances in the control account.
(c) Upon receipt of the teletype (ARS) message containing the GLTJL and Accounting Transaction T/P Reject List, the pending items processed will be pulled and checked off. When all items have been cleared, the SF 1166, SF 1098, etc., will be filed in a "Posted" file until the end of the month reconciliations are completed. Code sheets will be prepared to reintroduce all rejected items into the system.
(d) It the completed transaction has been processed for an amount different from the amount shown on the schedule, voucher, etc., the Chief, Accounting Section will be advised so that necessary corrective action can be taken.
(e) The pending file of unprocessed items will be reconciled at least monthly to the related Undistributed Disbursements control account. Any difference will be identified and corrected immediately. Any items in the pending file, which have not been processed or cleared within 10 calendar days will be reported to the Chief, Accounting Section for necessary action.
(2) Asset Transfers Pending (ADP) (1182)
(a) The purpose of this account is to control transactions in which one part of the entry affects subsidiary accounts maintained in the PLACE Portfolio Loan System [and/or PMS (Property Management System)] while the contra entry is to subsidiary accounts maintained outside the system. For example: (a) the sale of VA property and a vendee account is established or (b) foreclosure cases where a portfolio loan is being terminated and transfer is made to VA property and/or liability accounts.
(b) After recording the applicable documents as a debit or credit to account 1182 as necessary, they will be filed in a "Pending" file to support the outstanding balances in the control account.
(c) Upon receipt of the message containing the GLTJL and Accounting Transaction T/P Reject List, the pending items processed will be pulled and noted. As documents are correctly processed, they will be filed in a "Posted" file until the end of the month reconciliations are completed. Rejected items will be reintroduced into the system.
(d) The pending file of unprocessed items will be reconciled at least monthly to the related asset transfers pending control account. Any difference will be identified and corrected immediately. Any items in the pending file, which have not been processed or cleared within 10 calendar days, will be reported to the Chief, Accounting Section for necessary action.
(3) Undistributed Collections (ADP)-(2084.01)
(a) The purpose of this account is to control the processing of collections which have been deposited by the DPC and the distribution thereof is pending to the applicable asset, liability and/or income account pertaining to portfolio loans maintained in the PLACE system. The PLACE system is so designed that each day's cash collections deposited at the DPC will be completely posted and fully distributed to the proper accounts within the same day. Those which, for various reasons, cannot be applied to a loan master record will be placed in suspended credits(4_2085 09) for further action. The processing of uncollectible checks will also be controlled as to charges to the applicable accounts previously credited.
(b) Collections which have been deposited, uncollectible checks processed and the GLTJL with related general ledger entries will be teleprocessed to the field station each day along with other output. At the completion of each day's posting, account 2084.01 should be zero. Any balance remaining must be identified and, if necessary, corrective action taken.
(4) Miscellaneous Suspended Credits (ADP) (4_2085.09)
(a) The purpose of this account is to control and insure disposition of those collections items which are only applicable to the portfolio loan master records in the PLACE system. The subsidiary accounting records to general ledger account (4_2085.09 will be maintained in the system.
(b) The PLACE system will automatically credit suspended cash collection transactions during the updating processing to the suspended credit subsidiary file. The system will also add money to or delete money from the suspended credit subsidiary file when processing TT's 011, 111, 032, 132, 042 and 142.
(c) The postings to the suspended credits control account will be from collection processing and/or station's file maintenance input. Stations will be advised daily by DPC of the additions and deletions to the file as well as summary totals of the amount balance in the file. If the situation warrants, the accounting clerk may reconcile the daily DPC totals with the control account balance. Any outofbalance situation will be analyzed and corrected, if necessary.
(d) At the end of each month, the DPC will produce and furnish each station a hard copy list of all active suspended credits under their jurisdiction (see app. L, sec. L9, fig. L.48). This list will be used to reconcile the balances in the suspended credit subsidiary file with the suspended credit (ADP) control account. The balances will be reconciled at least once each month. If any differences are found, they will be identified and reported to the Chief, Accounting Section. Corrective action will be taken immediately.
(e) The individual items on the list will be reviewed and appropriate action taken to clear the account. If the review indicates disposition instructions are required from the Loan Guaranty Division, the account will be followed up by memorandum to that division.
(5) Undistributed Disbursements (ADP)-Tax and Insurance Deposits (4_2101)
(a) The purpose of this account is to control both disbursements and canceled checks affecting the T&I escrow account.
(b) The accounting clerk will record the total of each SF 1166, SF 1098, etc., in the applicable cash journal as a debit or credit to account 4_2101 as necessary. The schedules, supporting invoices and input cards will be furnished the loan accounting clerk for processing to the DPC. The schedules and invoices will then be filed in a "Pending" file to support the outstanding balances in the control account.
(c) Upon receipt of the message containing the GLTJL and Accounting Transaction T/P Reject List, the pending items processed will be pulled and the cover SF 1166 will be annotated with the PDN and, if all items processed correctly, filed in a "Posted" file until the end of the month reconciliations are completed. The rejected items will be annotated "REJECTED, PDN________ ". These rejected items will be reviewed and any necessary action taken to clear these accounts, e.g., resubmission to DPC, etc. If items are resubmitted to the DPC, the SF 1166 will not be filed in the "Posted" file until all items have been correctly processed by the computer.
(d) If the completed transaction has been processed for an amount different from the amount shown on the individual voucher, invoice, etc., the Chief, Accounting Section will be advised so that necessary corrective action can be taken.
(e) The pending file of unprocessed items will be reconciled at least monthly to the related Undistributed Disbursements-T&I control account. Any difference will be identified and corrected immediately. Any items in the pending file, which have not been processed or cleared within 10 calendar days, will be reported to the Chief, Accounting Section for necessary action.
9N.13 RECONCILIATION OF GENERAL LEDGER CONTROL ACCOUNTS WITH RELATED
SUBSIDIARY PENDING FILES
a. General. The general ledger control accounts listed in paragraph 9N.12 require monthend reconciliations with the related "Pending" file. If considered necessary, the reconciliation may be performed more frequently.
b. Analytical Accounts. As of the close of business each month and after the control accounts have been reconciled with the GLTJL for the last workday PDN of the month, the "Pending" file of documents for account 4_1182 will be analyzed and the amounts distributed to the applicable analytical accounts listed below. The monthly trial balance will reflect these analytical accounts. A reversing entry will be made on the first day of the succeeding month to close the analytical accounts into the basic account.
4 1182 Asset Transfers Pending (ADP)
[4_1182.01 New Loans in Process
4_1182.02 NonCash Transactions
4_1182.03 In Process of Transfer to Property or Veterans Liability Account
4_1182.04] Vendee Accounts in Process of Writeoff
[4_1182.05 Direct Loans in Process of Writeoff
4_1182.06] Transfer to Miscellaneous Receivables
c. Reconciliation Reports. Reconciliation reports will be prepared for each control account using VA Form 48617, Reconciliation of Control Accounts With Pending File (PLACE), as shown in appendix L, section L9, figure L.80. Adding-machine tapes or machine listings will be prepared for each subsidiary record other than suspended credits, which is maintained by the PLACE system at the DPC. The term "tapes" or "listings" as used herein refers to a tape or list which identifies the individual pending item and indicates the amount of each item. Tapes and listings will be disposed of in accordance with MP4, part X, except those for September 30, which will be retained pending audit. Show in column "B" the monthend balance of the subsidiary file and related general ledger account plus or minus net adjustments, if any. (Adjustments will be listed in detail at the bottom of the worksheet.) The total of column "B" will be shown in column "C". The amounts shown in column "C" must be in agreement. Any account not reconciled will be reported to the Chief, Accounting Section.
9N.14 SALES TO PRIVATE INVESTORS-GENERAL
a. Initial Action-Sales Selection Run. When requested by the Central Office a sales selection run will be made by the DPC. The request will contain the necessary parameters for the selection. A deck of sales turnabout cards in the TT 080 format containing diary reason code 110 will be retained by DPC to freeze the accounts when authorized by Central Office.
b. DPC Computer Output. Based upon loan sales information furnished by Central Office, the DPC will schedule the loan sales run and produce the following output:
(1) VA Form 268543, Portfolio Loan-Statement of Settlement for each loan. (Original plus 1 copy)
(2) Portfolio Loan-Statement of Settlement List showing all loans being sold with totals for principal balance, interest, principal and interest, premium/discount, "Sale amount due VA," "T&I balance due purchaser" and "Net Proceeds due VA." (Original plus 5 copies)
(3) Three sets of VA Forms 48574, Accounting Input Card-Loans Sold, for transaction types 003, 034 and 070. (See par. 9N.15 for use of these cards to terminate the master record after sale.)
(4) Record Printouts.
c. Computer Output Distribution. Unless otherwise directed by Central Office sales computer output will be distributed in accordance with the chart shown in appendix L9 (fig. L.74). NOTE: The DPC Finance Division will maintain a pending file of T/A cards (TT's 003/034/070) along with a copy of the applicable Portfolio Loan Statement of Settlements List. The cards will be maintained in loan identification sequence for each station within each purchaser code for each sale number.
d. Central Office Notice to Field Stations. The Central Office Loan Guaranty Service will prepare and mail to participating stations the following:
(1) Letter of instruction regarding the sale.
(2) VA Form 268567(NR), Loan Sale Schedule, providing pertinent details regarding the sale, such as sale number, sale amount, type of loans, security instrument, purchaser (and servicer if involved) name and address, interest rate, price date of freeze, date settlement lists were produced, document shipping requirements, etc.
NOTE: The Finance activity will be provided copies of the loan sale schedule for their file.
e. Field Station Processing
(1) Distribution of Computer Output by Station Control Point. In accordance with appendix L, section L9, figure L.74, the station Control Point will distribute computer output as follows:
(a) To Finance Activity
1. VA Form 26-8543Original and duplicate.
2. Portfolio Loan-Statement of Settlement List-one copy.
(b) To Loan Guaranty Division. All other computer output relative to the sale.
(c) Removal of Loans From Sale. If the Loan Guaranty Division notifies the Finance activity that a particular loan(s) is to be removed from the sale, the following action will be taken.
(a) The account will be deleted from the Portfolio Loan-Statement of Settlement List, and totals adjusted accordingly.
(b) VA Form 268543. Destroy per MP-4, part X.
(c) DPC Finance Division will be advised via FTS to destroy TT's 003, 034 and 070 cards originally retained by them; to draw a line through accounts deleted; and to adjust all applicable totals. Confirm by teletype.
(d) Loan Guaranty Division will code TT-080 to delete sales diary "110" per M2611, paragraph 3.31c.
(3) T&I Disbursements [& Accounting Adjustments
(a) General. After the specific loan accounts are frozen for sale (Diary 110) and the statement of settlement list and other sales output are produced, there will be no T&I disbursements transacted against the frozen accounts or accounting adjustments made to them, unless specifically authorized by Central Office (26). Any T&I disbursement turnabout cards that are on hand for such frozen accounts shall be removed from the input control decks maintained in the Loan Guaranty and Finance divisions in order to prevent erroneous processing of disbursement transactions. Turnabout cards will be retained in a temporary holding file pending completion of sale. Procedures specified below provide for recoupment by VA of any actual T&I disbursements not reflected in the sales settlement figures which are based upon the records frozen for sale.
(b) Pending Disbursements. Disbursement transactions for taxes, insurance or special assessments (TT's 027, 028, 029) which were scheduled on SF 1166, Voucher and Schedule of Payments, released to Treasury, and were in transit before application of the sales diary freeze, will be rejected on frozen accounts in update processing. This is necessary to preserve the validity of the sales output. Finance activities must not override the freeze to record such pending disbursements. A separate request for reimbursement will be prepared by the Finance activity and delivered to the purchaser when the sale is closed.
(c) Postfreeze Disbursements
1. After the accounts are frozen for sale and prior to the sale closing, a disbursement for taxes or insurance on a frozen loan may be authorized by Loan Guaranty Division but only if tax penalties would accrue or insurance coverage would expire if not paid within 15 days after date of sale. These will be scheduled for disbursement and processed by the Finance activity as normal payments, but kept separate at each step. The disbursement transactions will not be processed in the PLACE system to update the loan accounts. Instead the disbursements will be controlled so that a request for reimbursement is made of the purchaser when the sale is closed as described in subparagraph (3) (d) below.
2. An authorized insurance disbursement for a loan frozen for sale will be identified by Loan Guaranty marking parts l and 3 of IPO (Insurance Printout), "Sale Purchaser xxxx" using the 4 digit purchaser code shown on the statement of settlement list. The insurance turnabout card will not be received with the voucher document. If a single disbursement schedule, SF 1166, includes loans frozen for sale among others, adding machine tapes will be prepared for turnabout cards being forwarded to DPC for update, as well as for disbursements on frozen loans being controlled separately for reimbursement. The two tapes will equal the schedule amount.
3. If practical, an authorized tax or special assessment disbursement for a loan frozen for sale will be handled as described above for insurance premiums, and Loan Guaranty will mark "Sale Purchaser xxxx" on the left margin of the tax account listing. If this is not feasible because of a high volume of tax payments within the time deadline, then all disbursement turnabout cards will be posted and forwarded to DPC for processing against master records in the usual manner. Note that the freeze override must not be coded for any disbursement transaction. The disbursements for loans frozen for sale will thus be rejected in update processing and they must not be reinput. This establishes the identity of such cases and serves as a control.
(d) Reimbursement. The following steps will be taken to effect reimbursement to VA for any actual T&I disbursements not reflected in the sales settlement documents:
1. A request for reimbursement prepared by the Finance activity will be presented to the purchaser at closing (or promptly thereafter), supported by a detailed listing of the name, loan number, amount of tax or special assessment or insurance paid for each borrower, date of disbursement by VA and total. A copy of each tax or special assessment bill and/or insurance voucher (or IPO) that was paid will also be furnished. (Reimbursement to VA will not be accomplished by netting out such monies from installment collections being forwarded by VA to new holders of the loan.)
2. In a multi-station sale, each participating station will send its reimbursement list and supporting vouchers to the closing station for presentation to the purchaser at sales closing. In the event the reimbursement data cannot be at the closing station in time for settlement, the participating station will request reimbursement directly from the purchaser no later than 5 workdays after the sale closing date.
3. Each field station should receive a check from the purchaser covering these disbursements within 2 weeks after sale closing. The amount of this check must equal the total amount of the "pending" T and I disbursement rejects caused by the sale freeze plus the "postfreeze" approved T&I disbursements as described in subparagraph (c)l. above. This check will be recorded as a credit to account 2101, which will clear station accounts. If the reimbursement check is not received within 30 days from date of sale, appropriate followup will be made to the Loan Guaranty Division for further action. If check has not been received after another 30 days, notify Central Office (047D3) by letter furnishing details of the case.
(e) Sales Output. No adjustments will be made to the Statement of Settlement List, individual Statements of Settlement nor turnabout cards maintained either at the local station, closing station or DPC, except for deletion of loans from the sale as authorized by Loan Guaranty for miscellaneous reasons.
(f) Unpaid Invoices: Tax all special assessment bills and insurance premium invoices applicable to sold loans which are not to be paid the VA, will be clearly identified, listed and expeditiously transmitted to the purchaser (or designated servicing agent) during the sales closing or immediately thereafter.
(g) Exception Procedure. In an exceptional circumstance Central Office (26) may authorize or direct that for a specific sale to a specific purchaser certain T&I disbursements will be transacted against accounts already frozen for sale and that necessary adjustment will be made to the sales output. If the "exception procedure" is authorized, field station accounting activity will take the following actions:
1. Code the rejected "pending" disbursement transactions and the authorized "postfreeze" disbursements on VA Form 48472, T&I Disbursement Code Sheet (PLACEARS) for prompt transmittal to DPC via ARS. On such transactions covered by the specified "exception procedure", the override fields (-HN, -JQ or -KT) will be coded.
2. Make and initial necessary changes in ink on all affected entries on the Portfolio Loan Statement of Settlement List and on associated VA Forms 268543. Adjust station totals accordingly.
3. Notify the Loan Guaranty division, the Finance division at the closing station (if sale transmittal has been mailed) and the Austin DPC Finance division of details of all changes and adjustments to sales output. Use FTS and follow with confirming teletype.
(4) Notification to Borrower. The Accounting activity will prepare FL 26311, Advice That Borrower's Loan Was Sold. If adjustments to T&I and/or principal balance are made to statement(s) of settlement and settlement listings and the form letter has been prepared, remake the letter to show correct data. Do not release this form letter until after sale is completed. (See par. 9N.15g below.)
(5) Mortgage Loan Notice Cards. VA Form(s) 4242A, Mortgage Loan Payment Notice, produced for loans frozen for sale, will be forwarded in the normal manner for field station Finance activity review of suspended credits, accrual actions, etc., adjustments if necessary, and immediate release to borrowers. Such payment notices will be released daily to the borrower through close of business of the fifth day before the date of sale.
NOTE: If sale is consummated, payment notice cards received after cutoff date mentioned above will be disposed of in accordance with MP4, part X. If sale is not consummated, mail payment notice cards borrower if applicable.
f. Delayed Sales
(1) Where a scheduled sale is delayed, the DPC will schedule a new loan sales run and produce new output. This output will be distributed in the same manner as the original output.
(2) The DPC Finance Division will be advised by the Analysis and Control Division to replace prior turnabout cards and lists.
(3) Upon receipt of new output, field stations will replace the same forms previously received and take necessary action.
g. Closing the Sale
(1) VA sales closings will normally require the purchaser to pay proceeds via Department of Treasury's TFCS (Treasury Financial Communications System) as described in subparagraph 9N.14h(2)(i) below. However, in individual instances Central Office (26) may authorize or specify payment by certified funds or cashier check. Closings will generally be scheduled as early in the forenoon as possible so that settlement, deposit of funds, and termination of accounts will be accomplished on the same day.
(2)] The sale settlement will be based on the net amount owed the VA for principal balance and accrued interest to date of sale, plus premium income, less discount expense and less T&I escrow amounts. [ ]
h. Multistation Sales. Central Office may designate a particular station to settle the sale where numerous stations are involved. The following procedures will apply:
(1) Deleted by change 2.
(2) Transmittal of Documents to VA Station Processing the Sale. The field station will securely package and airmail the following documents to arrive at designated closing station no later than the date shown in item 1 of VA Form 268567(NR):
(a) VA Form 268543, Portfolio Loan-Statement of Settlement-Original signed copy for each loan to be sold.
(b) Statement of Settlement List, adjusted for all changes and/or deletions-original.
(c) Instruments of transfer and assignment-original.
(d) If direct loans are being sold, include VA Form(s) 261899, Loan Guaranty Certificate.
(e) Transmittal Form. VA Form 45223, Portfolio Loan Sales Transmittal Financial Data Recapitulation (see fig. L.85) will be prepared in original plus three copies by Office of Jurisdiction's Finance activity and used as a covering transmittal and control for documents being mailed to the station designated to close the sale. (See subpar. (f) below for disposition of form). This form will show a station recap of the financial data concerning the sale and the data will be secured from the Statement of Settlement list. The items on the form are selfexplanatory. The form will be signed by the Chief, Accounting Section or designee at both the station of jurisdiction and designated closing station. Any subsequent adjustment to sales totals will be relayed by FTS and confirming teletype to the closing station prior to sales closing.
(f) Disposition of Transmittals. Disposition of transmittals will be as follows:
Original To Finance activity at designated station (for filing).
Duplicate To Finance activity at designated station (to be receipted
and returned to originating station).
Triplicate To Loan Guaranty Division at designated station (for
filing).
Quadruplicate Retain in Finance activity at office of jurisdiction (to be
disposed of upon receipt of duplicate copy) .
(g) and (h) (Deleted by change 2).
(i) Recording Proceeds [of Sale
1. TFCS (Treasury Financial Communications System) is used to transfer sales proceeds. The VA field station handling settlement will advise the purchaser that TFCS is to be used to transfer sales proceeds directly to the U.S. Treasury. If the purchaser's bank is not a member of the Federal Reserve System or does not utilize the FRCS (Federal Reserve Communication System), the TFCS transfer of funds may be handled through a correspondent member bank. The purchaser will be requested to use its bank's wire service to transmit sales proceeds in the following telegraphic format early in the forenoon on the settlement date:
Line 1 - U.S. Treasury Department
Line 2 - 02103000-4
Line 3 - Code 10
Line 4 - $________(Amount of transfer)
Line 5 - TREAS NYC/ (36000XXX)
(NOTE: Closing station will provide purchaser with 3 digit PLACE station number of the station closing the sale which will be used in lieu of XXX. For example: "TREAS NYC/ (36000313)" for a sale closed by Baltimore, MD, regional office.)
Line 6-(Provide purchaser with agency name, station location, loan sale number and purchaser's name. For example: "Veterans Administration, Regional Office Baltimore, MD, Loan Sale SXXX, Metropolitan Mortgage Co.").
a. Deposit Ticket. Deposit will be made directly to Treasury's account without going through the closing station's local commercial depository bank. Treasury in Washington, D.C., will computer generate SF 215, Deposit Ticket, after receipt of wired funds and will mail memorandum and confirmed copies of SF 215 to closing station. Closing station will process and report TFCS deposit tickets in the same manner as other deposit documents. Closing station will record the TFCS deposit as a debit to account 4_1012 and a credit to 4_2085.04], and VA Form 46931, Suspended Credits Ledger, will be posted for the net sales proceeds. Both deposits and terminating transactions for sales closings must be recorded in the agency's accounting records in the same month as the sale is closed.
b. [Confirmation of Receipt of Funds. VA Central Office (047D3) will use inquiry into the Treasury Department's DMRS (Deposit Message Retrieval System) to confirm that proceeds of sale have been received. VA Central Office will then use FTS to relay to the closing station pertinent data regarding deposit of sales proceeds, including date and hour of receipt as well as net amount received. Field station accountants at the closing station will verify that the amount received by Treasury equals the correct net sales amount. After the telephone call is received from VA Central Office, the closing station will prepare report of contact for station records.]
Based upon data shown on the [report of contact], the following action will be taken by the closing station:
(1) Amount shown on the message equals the correct loan sales amount.
(a) Notify the Loan Guaranty Division the proceeds were received at U.S. Treasury.
(b) Notify Austin DPC via FTS that the sale has been completed and termination transactions should be processed.
(c) If applicable, prepare VA Form 44564, Transfer of Disbursing Authority, to transfer sales proceeds to participating field stations. After VA Form 44564 is prepared, use FTS to notify applicable field stations of pertinent data regarding funds to be transferred, including transferring document number.
(d) Mail copies of VA Form 44564 to applicable field station(s). (Mail point "24").
(2) Amount shown on the [report of contact] does not equal the correct sales proceed amount. Notify Loan Guaranty Division to have the purchaser and the purchaser's bank resolve the apparent discrepancy with U.S. Treasury's Deposit Reconciliation Section, Washington, D.C. (Telephone number: (202) 5666521.) Sales closing will not be completed until [the] FTS telephone call confirms receipt of the proper amount by U.S. Treasury and VA agency code "36000" as shown on line 5 of the telegraphic transfer has been recorded by Treasury.
c. Nonreceipt of Deposit Ticket. In the event that SF 215, Deposit Ticket, is not received by the closing station in the same month as loans were sold, the [ ] written report of telephone contact (subpar. b) will be used in lieu of the SF 215 as the source document to record the deposit. Transfer of sales proceeds to participating field stations will be accomplished even though the SF 215 has not yet been received by the closing station.
2. TFCS is not used to transmit sales proceeds. In the event Central Office (26) gives approval for TFCS not to be used to transmit sales proceeds, the VA Regional office handling settlement will request the purchaser to provide certified funds or cashier check at the closing. The certified funds or cashier check will be deposited locally at Federal depository on the same day along with SF 215, Deposit Ticket. The following accounting entries will be recorded: Debit 4_1012; Credit [4_2085.04.]. VA Form 46931, Suspended Credits Ledger, will be prepared and posted to record the suspended credit item.
(3) Notifying Field Stations After Sale Is Completed. The VA regional office handling settlement will notify field station(s) affected (by FTS) immediately upon completion of sale and furnish sales and proceeds data and VA Form 44564 number assigned. Hard copy VA Form 44564 will be airmailed the same date.
(4) VA Form 44564 Accounting entries. The following entries will be made from the VA Form 44564:
(a) VA Regional Office Handling Settlement
Dr [4_2085.04] Cr 4_1013
(b) Field Stations
1. To record receipt of VA Form 44564
Dr 4_1014
Cr [4_2085.04]
[2.] To record discount expense
Dr 4_4081.1 (Vendee)
or
444081.2 (Direct Loan)
Cr 4_2085.4
[3.] To record premium income
Dr 4_2085.4
Cr 4_3143.1 (Vendee)
443143.2 (Direct Loan)
[4.] To record prepaid interest involved in sale. (Item 14 of VA Form 268543.)
Dr 4_3225.1 (Vendees)
or
443223.1 (Mortgage Loans and Advances)
Cr 4_2085.4
[5.] To record amount of T&I funds netted at sale.
Dr 4_2101
Cr 4_2085.4
NOTE: The entries received from the GLTJL as a result of the TT 003 and TT 034 processing will charge the borrower's T&I account, credit principal and interest and clear accounts 2101 and 2085.4, [and terminate the master record.]
[(5)] Notifying the DPC After Sale Is Complete. On receipt of FTS notice from regional office handling the settlement that sale has been consummated, input cards TT003/034/070 [will be processed by Austin DPC for all sold loans from all participating stations. See paragraph 9N.15a.]
[(6)] For termination actions, refer to paragraph 9N.15.
[(7)] For applicable sales reports generated by the PLACE and AMIS systems, refer to paragraph 9N.16.
9N.15 LOANS SOLD-TERMINATION ACTIONS
a. Terminating Sold Loans. The goal is to terminate all sold loans on the same day as settlement is completed. The following procedures will be followed to achieve this objective:
(1) Prior to Settlement Day
(a) Closing Station Action. Call DPC Finance 48 hours prior to settlement and balance out final figures on settlement lists for each purchaser code in sale. Compare principal balance, T&I balance and number of loans. (The policy of "no adjustments to T&I after freeze" facilitates this step. Even authorized adjustments under the "exception procedure" described in para. 9N.14e(3)(g) above should be completed well before the day prior to settlement.) Any differences will be isolated to one or more specific loan accounts and resolved by contact with the supplying station.
(b) DPC Finance Austin. After "balancing out" with closing station in (a) above, "purify" decks of termination turnabout cards (TT 003, 034, 070) for each purchaser code in sale. Get EAM listing of totals of cards (counts and amounts) if deemed desirable. Totals of turnabout cards must equal totals on control copy of settlement list to assure proper termination. Also punch and verify batch header cards.
(2) Settlement Day
(a) Closing Station. Using FTS immediately contact DPC Finance after settlement and instruct as follows:
"Sale Number S-_________________ completed.
No changes. Terminate ________________ loans."
(Or alternately identify any last minute changes and provide new purchaser code totals.)
(b) DPC Finance. Transmit all ready, verified batches immediately to DPC Analysis and Control Division along with batch header control totals for processing in same day's main update run. (Include batches with last minute adjustments if time permits; otherwise process such adjusted batches no later than next processing cycle after verification of new totals.)
(c) DPC Analysis and Control Division. Assign transmittal numbers as necessary. Process through batch balance run.
1. If batches are in balance, for main update processing.
2. If any batch is out-of-balance, notify DPC Finance immediately. Isolate out-of-balance condition to the particular station and purchaser code. The remainder of that batch (containing valid termination turnabout cards) will be reprocessed through batch balance and the main update run.
3. The out-of-balance station will be contacted by DPC Finance and reconciliation complete. Adjusted turnabout cards will be processed under a separate batch balance procedure no later than the next processing cycle.
b. Effect of Transaction Type Processing
TT Purpose
0031 Zero T&I balance
0341 Zero principal balance and record interest income to date of sale
070 Record termination data
1112 Return suspended credits to the field station
1 See appendix L-8, for accounting entries generated.
2 Computer generated.
NOTE:
1. TT's 034/070 constitute a string transaction; and, if one rejects, the other also will reject.
2. If vendee sale is made and VA Regulation 4600 does not apply, prepare SF 1017G, Journal Voucher, to adjust principal balance credits (4_1161.11) as follows:
Debit 1161.11
Credit 1161.7
c. Correcting Transaction Type Rejects. Where turnabout card transactions (TT 003/034/070) are rejected in the main update run, a teleprocessing message will be generated. Field station Accounting activity will promptly determine reason for rejection and in the next processing cycle transmit new transaction type input using VA Form 248656, Portfolio Loan Sold Code Sheet (PLACEARS). (See app. L, sec. L9, fig. L.35.) Coding chart for TT's 003 and 034 is shown in appendix L, section L9, figure L.5. Coding instructions for TT 070 are as follows:
Field
Designator Direct Loans Vendee Loans
-MA Code 6-digit field of sales Code sales settlement date (6 digits for
settlement date month-day-year)
(month-day-year)
-MB Leave blank. Code field for principal balance of loan
at sale adjusted to include discount
expense or premium income. Show net
figure.
-MC Leave blank. Code 4-digit field to identify
purchaser.
-ME Code 1-digit field as "1." Normally code "2" indicating loan is
sold under VA Regulation 4600. If this
regulation does not apply, code as "1."
-MF Leave blank. Code method of sale with 3 or 4, as
follows:
3-Installment Contract
4-All other sales.
NOTE: If sale is not under VA Regulation
4600, leave-MF blank.
NOTE: It is imperative that all rejected transactions are corrected and TT 070 termination processed in [PLS] in the same month of the sale. If some unusual circumstances prevents this, follow the Journal Voucher procedure discussed in subpar. i below and explain circumstances in teletype to Central Office specified in subpar. j below.
d. Reversal of Termination Action. If the TT 034/070 has terminated the account in error, and it is determined that the account should be reinstated as an active loan, the following procedure will be used:
(1) Loan Account Has T&I Balance. The Accounting activity will use VA Form 48431 to prepare TT's 103/134, coding the same fields as originally coded to terminate the loan. The system, as it processes TT 103, will automatically generate TT 170 to cancel the termination action.
(2) Loan Account Does Not Have T&I Balance. In those cases where there is no T&I balance involved, it will be necessary for the Loan Guaranty Division to manually prepare a TT 170 to restore the account to the active file. The Accounting activity will prepare TT 134 using VA Form 48431 and will code the same fields originally coded on the TT 034.
(3) Master Record Termination After 3 Months Elapsed Time. No accounting reversal transaction(s) on a terminated account will be accepted by the computer after the end of the third month after the date of original termination. In this case, the following action will be taken:
(a) Reestablish the loan account, completing coding as for a new loan. (Coordinate this coding with the Loan Guaranty Division.)
(b) Loan Guaranty Division will prepare TT 170 (termination code "O") to delete the terminated loan from the inactive file.
(c) Manually prepare monthly billings, if required, until such time as the LSCC (Loan Status Control Character) changes from "9" to "5" at end of month.
(d) Adjust AMIS data bank totals by contacting VA Central Office [Reporting Systems Division (721B).]
e. Processing Record Printouts
(1) After TT's 003/034/070 are processed, the system will produce an RPO, reason code 43, for each sold account [The Accounting activity will initial and date the RPO and forward the RPO to the Loan Guaranty Division (26) for their use.]
(2) Prior to release of the RPO, Finance activity will verify that a RPO 43 was received for each loan sold, that the LSCC is "9", and that termination code is "1" (for a sold direct loan) or "2" (for a vendee account sold under VA Regulation 4600). If the term code is incorrect, determine the reason and coordinate corrective action (TT 070) with Loan Guaranty Division.
(Note that accrued late charges on sold loans are neither collected nor transferred to the purchaser. No action is necessary to clear the record of such charges prior to termination by sale.)
f. Borrower's Statement of Loan Account. The system will generate a borrower's statement for each sold loan at the end of the month in which the loan account was terminated, and the statements will be mailed direct to the borrowers by the DPC. [The system will also generate microfiche copies of the statement which will be mailed to the Finance activity (24) at the office of jurisdiction. In the event the borrower requests a replacement copy of the statement, Finance can secure this data from the microfiche, complete the VA Form 4-6495a and mail to the borrower.]
g. Notice to Borrowers Regarding Sale of Loans. FL 26-311, Advice That Borrower's Loan Was Sold, will be released to borrowers on the date of sale, after settlement is completed, informing [the borrower] that the loan has been sold and furnishing name and address of purchaser. This form letter will be prepared in original only by the Accounting activity for the signature of the Loan Guaranty Officer or designee. The name and address of the new holder (and servicing agent if any) are furnished on the VA Form 26-8567 (NR). Loan Sale Schedule. The date of the sale will be used as the date of the letter. The "freeze" date will always be used in the third paragraph in spaces after "Principal Balance as of ___________" and "Tax and Insurance Balance as of ___________". Balances, including any authorized adjustments thereto made after the settlement listing was produced, will be obtained from the PLACE Sales Settlement Listing.
h. Processing Remittances on Sold Loans
(1) Remittances received between "freeze date" and date master record is terminated will be placed into suspended credits (account [4_2085.04] and identified with name and address of purchaser, date of sale and any other information the station deems necessary to permit proper disbursement and identification of suspended credit amounts to purchaser.
(2) When the loans sold are terminated (TT 070), a TT 111 will be computer generated for each suspended credit in the file for these loans. This will transfer suspended credit amounts from general ledger account [4_2085.09 to 4_2085.04] via GLTJL. Subsidiary records will be established on VA Form 4-6931. Suspended Credit Ledger, for amounts added to account [4_2085.09]) during computer processing.
(3) An SF 1047, Public Voucher for Refunds, supported by a list showing loan number and amounts, will be prepared immediately to disburse the amounts in account [4_2085.04] to the purchaser. A copy of the list will be mailed with the check so that the [purchaser] can apply the remittances to the proper accounts. NOTE: Do not net (reduce) this transmittal by uncollectible checks or other disbursed amounts.
(4) Remittances received at the Austin DPC after [a sold loan is terminated by the processing of TT's 003/034/070 will be rejected with reject reason code 22. The Collection activity will identify the purchaser's name and address from the purchaser code shown on the RPO 22, and a list of purchasers provided by Central Office (26A3). The remittance will be endorsed without recourse as follows:
Pay to the order of (Purchaser's Name)
Without Recourse
Veterans Administration
Austin, Texas
_____________________________________
Signature of Chief, Fiscal Division or Designee
On a daily basis the rejected remittances and payment cards will be transmitted directly to the purchaser's mailing address provided by Central Office (26A3). A transmittal letter will list the remittances, showing loan identification, remitter's name and amount of remittance. A copy of the transmittal letter will be retained in the Collection activity files at Austin DPC. (For handling of remittances received on other terminated loans, refer to par. 9N.28c(7) below.)]
(5) Uncollectible remittances pertaining to sold loans will be forwarded to field stations for prompt handling after the TT 042's have rejected with reason code "22." As soon as the new holder has been identified, the uncollectible item will be transmitted to the purchaser, along with an explanatory demand letter for reimbursement prepared by the Finance activity. Field stations will establish adequate controls and follow up to assure timely and positive response from the purchaser.
i. Recording Accounting Entries for Sold Loans Not Terminated in Same Month as Sold
(1) Generally, the proceeds are distributed to principal, interest, discount expense or premium, in the same month in which subsidiary records are posted. However, where the proceeds are received so late in the month as to preclude distribution by the computer system, the Finance activity will prepare [OF] 1017G, Journal Voucher, distributing the total amount to appropriate accounts prior to closing their records for the month. Amounts to be distributed are available from copy of Portfolio Loan-Statement of Settlement List retained by the Accounting activity. The journal voucher will be reversed at the beginning of the following month and subsequent distribution made in normal manner in conjunction with the processing of sales input media. The journal voucher will be a reconciling item in monthend balancing.
(2) Stations should take the necessary steps to assure that sales proceeds checks are deposited and distributed to appropriate accounts in the same month in which received.
j. Notification to VA Central Office Re Termination of Loans. After all loans involved in the sale have been terminated and all applicable suspended credits transmitted to the purchaser, field stations will notify VA Central Office (047D3) via teletype of completed action. Identify name of purchaser by "S" number. The following example is provided:
"047D3 Re S27 Lincoln Mutual Savings Bank. All loan accounts terminated. All suspended credits
transmitted to purchaser."
NOTE: This teletype should be transmitted no later than sale day plus 3 workdays.
k. For a discussion of sales reports generated by the AIMS AND PLS systems and required reconciliations, see paragraph 9N.16.
9N.16 SALES REPORTS
a. AMIS Reports
(1) The AMIS system, through PLACEMIS linkage, produces reports monthly which include direct loans sold and vendee accounts sold and repurchased. Monthly Report on Direct Loans (RCS 24314, 34Al) includes current month and cumulative number of sold direct loans. Monthly Activity Report on Vendee Accounts and Acquired Loans (RCS 24355, 34N1); and Cumulative Report on Vendee Accounts and Acquired Loans (RCS 243-55, 34O1) include the number of sold and repurchased vendee accounts. The reports much reflect the actual sales and repurchases for the month and cumulative totals.
(2) The PLACE-AMIS linkage counts sold loans when the terminations are processed in PLACE (TT 070). The repurchased vendee accounts are counted when the loan is fully established, including the TT 060. Therefore, it is imperative that any rejects of the establishments or terminations be cleared immediately.
(3) Discrepancies between these reports and actual sales and repurchases will be researched an corrected. Problems encountered in reconciliation should be brought to the attention of Central Office (047D3).
b. PLACE Reports. The Quarterly Report on Vendee Accounts Sold Repurchased and Paid in Full (RCS 26-40) and the Quarterly Register (RCS 26-41) are produced quarterly, at the end of March, June, September and December. These reports will be reconciled with he trial balance and the AMIS reports as follows:
(1) The cumulative number of loans sold and repurchased should equal the totals on RCS 243-55 3401 for direct loan and loan guarantee funds.
(2) The cumulative principal balances for sales and repurchases should equal the balance in accounts 1161.11 and 1161.12 respectively of both funds.
(3) Discrepancies will be researched and corrected. Problems encountered in reconciliation should be brought to the attention of Central Office (047D3).
c. Station Report-FTS. Loan Guaranty Service, Central Office, requires certain sales data to be reported via FTS; therefore, after the sale is completed, the Finance activity will provide required data on the Loan Guaranty Division for their action.
9N.17 DOES NOT EXIST
9N.18 DOES NOT EXIST
9N.19 DOES NOT EXIST
9N.20 MORTGAGE TRUSTS-GENERAL
a. All disbursements and collections involving mortgage trust loans, except certain administrative expenses which are paid from General Operating Expense Appropriations, will be recorded within the applicable funds, 36X4024 or 36X4025.
b. General ledger analytical accounts are provided to separate cash and noncash transactions for managerial and budget purposes. Care should be taken to assure that the general ledger and analytical accounts used for individual transactions properly classify the cash or noncash nature of the transactions.
c. A separate monthly report for each trust is required and will be prepared by the [Austin DPC] and submitted to Central Office in accordance with paragraph [9N.23] herein.
9N.21 MORTGAGE TRUST-INITIAL SET ASIDE
a. Initial Assignment of Loans to Trust
(1) When directed by Central Office, specific loan accounts of a field station will be set aside for a particular trust. The Central Office advice will specify the parameters for the setaside and furnish a specific effective date. The setaside will, in most cases, be from the records as they stand at the end of the month. A copy of the advice sent DPC will be furnished the field station by Central Office.
(2) A listing of all loan accounts set aside for a mortgage trust will be prepared by the DPC as of the effective date directed by Central Office and will include VA loan number, city, street address, interest rate, original loan amount, maturity date, current principal balance, accrued unpaid interest and such other information as Central Office may direct. [One] copy of the listing will be furnished the field station. [ ]
b. Field Station Action
(1) As a part of the trust selection process the computer will generate accounting entries as follows:
(a) Principal balances will be recorded as a debit to .16 analytical account in the 1165, 1166, 1171, or 1172 series, as applicable, for the amounts added to trust; and as a credit to .16 analytical account in the 1161 or 1163 series for the amounts withdrawn from nontrust accounts.
(b) Accrued interest on loans being set-aside will be recorded as a debit to [.05] analytical account in the 3226, 3227, 3231 or 3232 series and as a credit to [.04] analytical account in the 3223, or 3225 series.
(2) Entries shown above will appear on the GLTJL (General Ledger Totals Journal List) for the first processing day on which trust selection is made. [These entries will be posted automatically to the GLS (General Ledger System).]
c. DPC Processing Action. The TT070 cards are generated as a result of the set aside action and will be used by the DPC to automatically change the trust identification in the master record for those loans added to the trust.
9N.22 MORTGAGE TRUSTS-SUBSTITUTIONS
a. Substitution of Loans in Trust
(1) Instructions contained in this section regarding substitution of loans are applicable to all mortgage trusts.
(2) Substitution of nontrust loans for trust loans which have been referred for foreclosure will be computer generated after the last updating cycle for the month has been completed and before the first updating run for the next month is started. Substitution will be made on a nationwide basis rather than on a station basis. It is possible, therefore, that a greater amount will be added to a trust for a particular station than was withdrawn from the same station. Withdrawn and substituted loans will be identified in the PLACE system with their proper trust identification as of the first day of the new month.
(3) It is also possible that nontrust loans at station may be transferred to a trust even though that station may not previously have had any loans in that particular trust. Affected stations will be notified in advance that their loans are subject to such transfer.
(4) [A] listing [of] individual loans added and withdrawn from the trusts, will be furnished field stations [and Central Office (047B1).] Accounting entries for these additions and withdrawals will be computergenerated and will be shown on the GLTJL for the processing day in which the transfers were accomplished.
(5) [RCS 04729, Report of Activity on Mortgages in Participation Pool,] will be computer generated and furnished field stations [and Central Office (047B1).] This report will show changes in number of loans and principal balances as a result of the trust substitutions.
b. DPC Processing Action
(1) The master records are screened at the end of the month in run 1788 and records which are in trust and contain an "X4" record condition (referred for foreclosure) are selected for withdrawal from the applicable trust. Totals are accumulated by type of loan and trust; i.e., GMLTDL, FAFT-Vendee, etc. TT 170 cards are generated for updating master record with regard to the trust withdrawal action.
(2) Prior to the screening action outlined in the preceding subparagraph, the Office of the Controller, Central Office, [(047B1)] will have forwarded VA Form [48516(NR)], Additional Mortgage Trust Substitution Code Sheet (PLACE), to the DPC with additional amounts to be put in trust. These amounts will compensate for those loans in trust which are instantaneously terminated (e.g., installment contracts and voluntary conveyances) during the prior period.
(3) The amounts submitted by Central Office will be added to the totals accumulated by the computer during the screening run for withdrawals to arrive at totals required for substitution.
(4) Run 1788 will also select nontrust loans to replace the trust loans previously withdrawn. TT 070 cards are generated for updating the master records with regard to the trust addition action.
c. Field Station Processing Action
(1) [Central Office (047B1) and] the Accounting activity will receive [one] copy of Automatic Transfer of Trusts Report, RCS [04729], and [one copy] of Loans in Trust Totals Report, [RCS 04729]. Each report will be retained at the field station for their records. [ ] These reports will be received in the following format:
(a) Automatic Transfer for Trusts Report (RCS [04729]) 930[80]
Station Number 18 GMLT-Direct Loans Withdrawn
Trust Type Loan Loan Principal Int. Accrued
ID Loan Count No. Bal. Rate Int.
1 1 140161 14015.41 450 35.61
1 1 141860 10018.31 450 48.81
1 1 143810 10401.50 500 81.63
TOTALS 0003 34435.22 166.05
GMLT-Direct Loans Added
Trust Type Loan Loan Principal Int. Accrued
ID Loan Count No. Bal. Rate Int.
1 1 104112 12401.16 550 31.12
1 1 104118 10412.13 550 81.12
TOTALS 0002 22813.19 112.24
NOTE:
1. The same format will be used to detail other trust withdrawals and additions for FAFT-Direct Loans, FAFT-Vendee, etc.
2. In the event there are no additions or withdrawals for a station, the following message will be printed on the report:
"There were no additions (or withdrawals) to (or from) trust for this station on this date."
3. Although the report is dated as of the end of the month, accounting entries received via separate GLTJL will be posted as subsequent month's business. Example for report dated 930[80]: [The GLS will post these entries as October l980 business.]
(b) Loans in Trust Totals Report
Station No. 18 Loans In Trust Totals Report (RCS [04729) 93080]
GMLT-Direct Loan Totals Loan Count Prin Bal Net Chg.
BEGINNING THIS DATE 1488 14100141.12
ADDED THIS DATE 0002 22813.29
WITHDRAWN THIS DATE 0003 34435.22
ENDING THIS DATE 1487 14088519.19 -11621.93
(2) In the event a station's loans are transferred to a trust even though that station may not previously have had any loans in that particular trust, the loans transferred will be considered "additions" to the trust rather than an initial set-aside. Such additions will be reported on line [3] of the monthly report.
(3) Accounting activity will verify that VA Form 20235A, Portfolio Loan Record printout, is received for each loan listed on the Automatic Transfer of Trusts Report, and will verify that the "Mortgage Pool" indicator reflects the current trust status. As a result of TT 070 processing, RPO reason code 54 will be generated for additions to trust. RPO reason code 55 will be generated for TT 170 withdrawals from trust. Annotations will be made on retained original copy of Automatic Transfer of Trusts Report to show that this verification was made.
(4) Accounting entries to record transfer of loan account principal balances and accrued interest amounts between applicable general ledger accounts as shown on the Automatic Transfer of Trusts Report will be computergenerated and w ill appear on GLTJL for the first processing day of the month.
d. Central Office Action
(1) As a part of the trust substitution procedures, it is necessary to add amounts to each trust to compensate for those loans which are actually terminated in the same month in which they are referred for foreclosure. This includes installment contract terminations and loans terminated by voluntary conveyance. These additional amounts are to be added by Central Office based on certain data appearing on RCS [04729], Report of Activity on Mortgages in Participation Pools.
(2) VA Form [48516(NR),] Additional Mortgage Trust Substitution Code Sheet (PLACE), has been developed to code in the additional trust amounts.
(3) The Reports Division, Finance Service, Office of the Controller, Central Office, [(047B1)] will prepare and send a monthly report of the amounts of substitutions required for instantaneous terminations to the DPC.
(4) The amounts will be determined by [referring to] "foreclosures" [as shown on the prior nationwide] monthly report [ ] for each trust and type of loan.
(5) Totals will then be transcribed to VA Form [48516(NR)] which will be prepared in duplicate. The original will be mailed to the Austin DPC and the duplicate retained by the Reports Division. Original code sheet will be mailed to the following address:
"ANALYSIS & CONTROL DIVISION [(200/325B)]
VETERANS ADMINISTRATION
DATA PROCESSING CENTER
1615 EAST WOODWARD STREET
AUSTIN, TEXAS 78772"
(AUTOMATIC TRUST SUBSTITUTION)
(6) VA Form [48516(NR)] will be released not later than the 15th workday of each month. A negative report will be transmitted to the DPC if no additional substitutions are to be made for the appropriate reporting month.
9N.23 MORTGAGE TRUSTS-REPORTING REQUIREMENTS
a. [General. RCS 04729, Report of Activity on Mortgages in Participation Pool will be prepared by the Austin DPC monthly and will be used by the Agency as a monthly recurring report to the GNMA (Government National Mortgage Association) which acts as trustee for VA loans pledged to GMLT (Government Mortgage Liquidation Trust) and/or FAFT (Federal Assets Financing Trust). This report will be prepared by the Austin DPC and released to Central Office, Office of the Controller (047B1), not later than close of business of the 7th workday following the end of the month. The report will be separated by trust and will include station totals as well as nationwide totals. Within each trust report, totals will be shown for "Total Loans"; "Direct Loans"; and "GI Vendee Accounts." See subparagraph b, below for report format.
b. Report Format and Source of Data. Report format as well as source of data used in RCS 04729 computation is provided below:
RCS 04729
(Trust Identification)
(Month being reported)
Line Description Number of Mortgages Amount of Mortgages
1 In portfolio-Beginning (Lines 9+6+7+8+3)** (Lines 9+6+7+8-3)
of Month
2 Additions-Initial Set - 1165/1166/1171/1172.16
Aside
3 Additions-Other - 1165/1166/1171/1172.17
4 Miscellaneous Advances - 1165/1166/1171/1172.04-.06
etc. inclusive
5 Repayments of - 1165/1166/1171/1172.13
Principal-Other
6 Paid in Full LSCC 9 (Term Code 1165/1166/1171/1172.14 & .15
3,4)
7 Foreclosures LSCC 9 (Term Code 1165/1166/1171/1172.08.10
5, 6, 7) inclusive
8 Withdrawals - 1165/1166/1171/1172.18
9 In portfolio-End of LSCC 5 1165/1166/1171/1172-Prin.
Month Balance (Net)
COLLECTIONS AND EXPENDITURES
10 Collections-interest - 3226/3227/3231/3232.01
(gross)
11 VA Credit Servicing - (Line 10 x Service Charge
Charge Factor)*
12 Collections-Interest - (Line 10 minus 11)
(Net)
DUE TRUSTEE:
l3 Collections-Repayments - (Lines 5 + 6)
of Principal
14 Collections-(Net) - (Same as Line 12)
15 Amount To Be Remitted - (Line 13 plus 14)
*Servicing factor changes every quarter and will be controlled by VA Central Office (047B1). Teletype to Austin DPC A&C (325B) will provide the new factor to be used.
**Will equal Line 9 of prior month's report.]
[c.] Submission of Reports. Separate reports are to be submitted for each trust, loan program, and where applicable, for each type of loan within a program; i.e., separate reports for direct loans and direct loan vendee accounts. Reports will be appropriately identified by code to include name of trust, fund symbol, type of loan and trust code as follows:
Trust Revolving Fund Type of Loan Code
GMLT 36X4024 Direct Loan 41
FAFT 36X4024 Direct Loan 43
FAFT 36X4024 Vendee 45
GMLT 36X4025 Vendee 51
FAFT 36X4025 Vendee 53
[d.] Verification of Trust Amounts. [After receipt of RCS 04729 and supporting lists for addition and/or withdrawal of loans in trust, station accountants will verify correctness of the RCS 04729 report, as follows:
(1) Line l should equal line 9 of prior month's report.
(2) Line 3 should equal total of the loans shown on "Loans added" listing.
(3) Line 8 should equal total of the loans shown on "Loans withdrawn" listing.
(4) Line 9 should equal the net principal balance as shown in applicable general ledger accounts (1165/1166/1171/1172) in the GLS.
(5) Line 10 should equal total trust interest collected for the month as shown in GLS for applicable general ledger accounts 3226/3227/3231/3232.01.
(6) Line 10 plus line 13 will agree with the net change for the month in accounts 4_102400 and/or 4_102800, as applicable .
NOTE: If station's analysis shows incorrect report data, FTS will be used to immediately notify VA Central Office (047D3 FTS 3893442) so that corrective action can be taken.]
9N.24 MORTGAGE TRUSTS-MISCELLANEOUS ACCOUNTING PROCEDURES
a. Monthend Accounting Entries[.] At the end of each month, prepare SF 1017G [and GI S TT 901(S)] transferring amounts recorded in .13, .14 and .15 analytical accounts of 1165, 1166, 1171, and 1172 series and [.01] analytical account 3226, 3227, 3231 and 3232 series from account 4_101200 to account [4_102400, and/or 4_102800] depending on mortgage trust involved.
[ ]
b. Miscellaneous Instructions
(1) New vendee accounts will continue to be recorded in account [4_1161.01].
(2) New direct loans will continue to be recorded in accounts [441163.01] and 441163.11.
9N.25 RECORD CONDITIONS
a. Description
(1) Record condition is a twodigit code contained in the master record. Insertion of a record condition will "freeze" that record and will not permit the processing of any accounting transactions without some action on
the part of the field station. Therefore, any processing should take into consideration the existence of a record condition.
(2) A record condition may be inserted, deleted or changed by
the field station by preparation of VA Form 268381A or 268383A
using TT 160 and completing field -GA, Record Condition, with
new record condition. Field
-GQ, Freeze Override, will also need to be coded with a "O"
to override an existing record condition if one exists. In addition,
certain record conditions will be inserted automatically by the
computer as the account is updated.
(3) While the computer will automatically insert record conditions 1X, 2X, 3X, 4X, 6X and 7X, it is the responsibility of the field station to maintain control over the record condition segment in the master record. Record conditions "1X" and "4X" will be automatically deleted by the computer system upon processing a subsequent accounting transaction. All other record conditions must be manually cleared by the field station. Stations should assure themselves that these record conditions do not exist unnecessarily since the existence of a record condition on a loan account will require special handling, cause a delay in processing collections and file maintenance transactions, and cause rejects due to overlooking the existence of record conditions when processing current work.
(4) Since the system has been designed to reject all accounting transactions on accounts containing a record condition, it will be necessary for the station to perform a specific coding action if they wish to process an accounting transaction on the account. This specific coding action is the insertion of a zero in field VN, Freeze Override, of VA Form 4-8431. For example, it may be necessary to apply suspended credits amount against an account in foreclosure (record condition X4). In this case the insertion of a zero in the field VN will permit the processing of the suspended credits transaction without removing the record condition.
(5) The various record conditions are outlined in subparagraph b.
b. Record Condition Codes
(1) Following are the twodigit codes used for record conditions:
RC Code Description
00 No record condition existing in master record. (This code is
also used to remove any existing record condition.)
X2 Collection must be other than by noncertified personal check (to
assure acceptability).
X4 Loan account has been referred for foreclosure.
1X Accounting transaction has been rejected. (Excludes TT's
003/103, 027/127, 028/128, 029/129.)
2X Termination transaction (TT 070 or TT 170) has been rejected.
3X Accrual has been made on an account for which installment
payment is due other than monthly and has caused account to go
into default.
4X An inconsistency exists in the relationship of the master record
accrual month and year, last unpaid installment date and total
delinquent amount(s).
5X Not used.
6X The principal installment amount being accrued plus any
delinquent principal amount is greater than the current unpaid
principal balance.
7X An advance has been made and the amount added to the principal
balance on (1) accounts where the installment is paid other than
monthly or (2) the account is paid ahead (transaction date plus
30 days is later than accrual date) or (3) accounts containing
record conditions [ ], 3X, 4X, 6X, 7X, which all preclude
accrual action.
(2) The "X" in the record conditions listed above represents any digit 0 through 9 that may appear in that position. Record conditions X2 and X4 may only be inserted, changed or deleted by the Loan Guaranty Division at the field station through file maintenance input. Record conditions 1X, 2X, 3X, 4X, 6X and 7X are established by computer processing. Since the two digits operate independently, the record condition serves as a multirecord condition account. Record condition "2" or "4" in units position can only be inserted, changed or deleted by Loan Guaranty. Therefore when any action is taken on a record condition having "2" or "4" in units position, extreme care must be exercised to assure that the "2" or "4" remains in the master record after the normal processing action is taken. For example, record condition "24" would indicate that a termination transaction (TT 070/170) has rejected on an account in a foreclosed status. Therefore, when clearing "2" in tens position, "04" must be coded to assure that "4" in units position remains in the system.
c. Effect of Record Conditions on Accruals
(1) Installment accruals will be made on the installment due date for unpaid accounts except those accounts having the following record conditions: 3X, 4X, 6X, 7X.]
[(1.1) Late charge accruals will be effected if payment is received more than 18 days after date due. Above record conditions will also preclude late charge accruals.]
(2) Record printout with reason code 63 will be generated for each account which is not accrued because one of the above record conditions exist in the master record. These RPO's will be reviewed by field action Accounting and Loan Guaranty personnel to determine what action is necessary. Following guidelines are provided to assist in the further processing of the accounts:
(a) [Deleted by Change 2.]
(b) Record Condition 3X. Determination needs to be made as to whether the accrual [segments] should be manually computed and [ ] updated with [TT 096(s)] .
(c) Record Condition 4X. The account needs to be reviewed to determine if account is in order, particularly as to correctness of unpaid installment date, accrual month and year, and total amount of delinquency/shortage/advance [shown in accrual segments.] Also, insertion of this record condition may indicate account is prepaid.
(d) Record Condition 6X. The account needs to be reviewed since it appears that the account is close to being paid off and some advice furnished borrower to that effect.
(e) Record Condition 7X. [The following actions will be taken to update the master record accrual segment and the advance field, using VA Forms 48431, Portfolio Loan Accounting Code Sheet (PLACEARS) as follows:
(1) Insert advance date (TT 156). Code only fields WF (Advance) and WM (Freeze Override). This will insert data into advance #l or advance #2 to provide memorandum and basis for special billing paragraph on the next payment notice.
(2) Update accrual segment data (TT 096). Record advance and applicable interest on the advance from date of disbursement to the next cycle day as follows: Code WB (segment date) with the same month and year as the current accrual date existing in the master record. (Code fields WB, WD, WF and WM.) NOTE: Do not automatically remove record condition as it may be desirable to have billing and accrual actions monitored for these accounts.
(3) If account is erroneously not accrued to date, prepare additional TT 096(s), using VA Form 48431 for each installment accrual segment involved.]
(4) Review of RPO with reason code 63 may indicate that the record condition needs to be changed or deleted.
d. Effect of Record Conditions and Suspended Credits on Billings
(1) Accounts containing record condition X4; account has been referred for foreclosure; will not be billed.
(2) All other accounts containing no [ ] record conditions other than X4 will be billed.
(3) For accounts having record conditions other than X4, the following distribution will be made by the DPC:
(a) Bills for accounts containing record conditions 00 and X2, will be mailed directly to the borrower by the DPC.
(b) Bills for accounts containing record conditions 1X, 2X, 3X, 4X, 6X, 7X and diary reason codes 110 and 114 will be mailed to the field station for review and disposition.
(c) Bills for accounts containing moneys in suspended credits will also be mailed to field station for review and adjustment.
(d) It is most important that bills mailed to the field station be promptly reviewed, corrected and, where applicable, mailed to the borrower. Time is of the essence as the borrower is awaiting receipt of the billing notice card, and the Austin DPC return envelope, in order to submit his remittance for payment on his loan.
e. Effect of Record Conditions on Collections Processing
(1) Loan accounts will be screened during the Daytime Analysis processing at the DPC to select "no deposit" accounts; i.e., those accounts containing record conditions X2 and X4. Collections received on accounts having these record conditions require special processing prior to deposit.
(2) Collections on loan accounts containing record conditions 1X, 2X, 3X, 4X, 6X and 7X will be accepted by the computer and the amounts placed in suspended credits during the main update run. Where a collection is accepted in the analysis run and deposited, any transaction or computer action in that cycle which causes a record condition to be inserted on the account will cause the computer program to place the collection amount in suspended credits.
f. Frozen Record Report
(1) At the end of each month a frozen record report will be produced for each station. The report will show for each type of loan the number of frozen records by record condition code. The report will be received in duplicate, one copy for the Finance activity and one copy for the Loan Guaranty Division.
(2) The report will be reviewed for the purpose of determining whether the number of record conditions are excessive for a particular type of frozen record. Stations are expected to keep the number of frozen records to the minimum, consistent with their needs. Existence of record conditions on loan accounts requires special handling of collections, sometimes causes delays in depositing funds, and requires special coding to accomplish transactions affecting the accounts.
(3) Where the number of record conditions existing for a specific type of loan are deemed excessive, the station should review their monthly alphabetic or numeric listing to identify the individual accounts involved and take appropriate action.
g. Effect of Record Condition and Suspended Credits on Late Charge Assessment
(1) Record Conditions which prevent accruals for installment amounts will thereby prevent late charge accruals. When the record condition is cleared, the system will make necessary installment accruals in the accrual segment(s) of the master record and will assess applicable late charges.
NOTE: If installment accrual segments already exist, late charge assessment will be processed regardless of any record condition on the master record.
(2) Suspended Credits which are applied to an installment after the late charge is accrued which carry a receipt date equal to or prior to the date of late charge accrual indicate that the late charge accrual should be reduced or eliminated.
(a) This adjustment of late charges assessed is automatic if TT 032 is used to let the system apply the suspended credit amount as a TT 406 (fields VC through VF are not coded). The system will compare receipt date and accrual date and automatically generate TT 196 for such adjustment where necessary.
(b) If TT 032 is used to manually spread the suspended credit amount (fields VC through VF coded for specific distribution), the late charge accrued amount is not automatically adjusted. Loan accountants as required should process VA Form 48431 using TT 196 to adjust the accrued late charge amount to equal 4 percent of any unpaid installment amount in the particular accrual segment.
9N.26 ACCRUAL PROCEDURES
a. Regular Accruals
[(1) Installment Accruals.] All unpaid accounts will be accrued on the cycle due date except those accounts containing record conditions [ ]3X, 4X, 6X and 7X. Accounts for which installment payments are due monthly will be accrued monthly; those due quarterly will be accrued quarterly, etc. [The system on the accrual date will generate TT 096's to update the delinquent/shortage segment and to generate a separate accrual segment for the applicable installment unpaid (T&I, interest, principal). Subsequent advances and late charge accruals will also be included in this segment. These TT 096's will not appear on the transaction registers if the account is current; however, if a default account, the transactions will appear on the transaction register. The system maintains a maximum of l2 accrualdistribution segments for each account. These segments are available for field station review (using the master record writeout). The installment accrual segment(s)