Out of order reversal
Overview
All the transactions done on a CL contract are recorded as events. You can reverse and reapply these events. This is called out of order reversal. The system automatically reverses the events listed in the return ACH file and all the events recorded after those. Out of the events reversed in the return ACH file, the system automatically reapplies the latest ones. When a loan event is reversed and reapplied, the corresponding investor event is also reversed and reapplied.
Events Allowed
The following events are allowed for the out of order reversals:
Payment
Rate Change
Principal Add (Principal Adjustment - Add)
Principal Sub (Principal Adjustment -Sub)
Redraw
Redraw Balance Reduction
Additional Interest Rate Change
Interest Waiver
Charge Waiver
Events Not Supported
The following events are not supported for the out of order reversals:
Due Day Change
Payment Amount Change
Index Rate Change
Payment Plan Change
Manual Reschedule
Disbursal
Reversing and Reapplying Events
Prerequisites
The value of the Setup > Custom Settings > OrgParameters > Event Reversal Count field is greater than zero.
Steps
To reverse and reapply the events of a contract:
On the CL Contract page, click Event Reversal.
Important
If you select an event to be reversed, all the other events after this event up till the most recent one in the list must also be selected for reversal. This is mandatory. For example, let us say we have the following events: Event 1 on March 1, Event 2 on March 2, and Event 3 on March 3. If we want to reverse Event 1, then we must also select Event 2 and Event 3 for reversals. Additionally, you can also select all the events after the intended event to be reapplied. Reapplication is optional. However, when you select the events for reapplication, you cannot select the event that was intended to be reversed. For example, considering the same example, after selecting Event 1, Event 2, and Event 3 for reversal, you can also select Event 2 and Event 3 for reapplication, and then click Save. However, you cannot select Event 1 for reapplication as that was the one to be reversed in the first place.
Select the events to reverse and reapply by selecting the respective check box, and then click Save.
Important Information on Jobs
Once you have performed the event reversal as explained in the preceding steps, the system internally triggers a job to perform this reversal. This job is LoanEventStackProcessingJob. Once this job is triggered, the system triggers the instances of this job to perform each reversal and each reapplication.
For example, the system triggers three instances for reversing Event 1, Event 2, and Event 3, respectively, sequentially in that order. And then if reapplication is selected, the system triggers two more instances for reapplication of Event 2 and then Event 3 respectively, sequentially in that order.
Thus, you will see a total of six jobs in the system: one main job and then five instances of that job.Once all the six jobs have completed running, the event reversal action is said to have then been completed.
Frequently Asked Questions on Out of Order Reversal of Events
| Question | How it works in Q2 Loan Servicing |
|---|---|
| Can the reversal be done manually or automatically? | The events can be reversed by you (manually) and also by the system (automatically). |
| How many events can be reversed at a time? | Any number of events can be reversed at a time. The default is 5 events. |
| What is the maximum number of events that can be reversed at a time? | The maximum number can be set under Setup > Custom Settings > Org Parameters > Event Reversal Count field. |
| In which order the events are reversed? | The events are revered in reverse chronological order. The most recent is reversed the first. |
| Which reversed events can be reapplied? | All the reversed events can be reapplied except the most recent one. |
| Can the events that occurred before an unsupported event cannot be reversed? | No, all the events that occurred before an unsupported event cannot be reversed. |
| Are the corresponding investor events also reversed? | Yes, the investor events corresponding to the reversed loan events are also reversed, and the investor events corresponding to the reapplied loan events are also reapplied. |
| What happens if there is a failure in reversal or failure in reapplication? | Let us say you have 3 LPTs, LPT1, LPT2, and LPT3 in the system. If you initiate a reversal of LPT1, the system first reverses LPT2 and LPT3 and then reapplies LPT2 and LPT3. Now during the reapplication of LPT2, if it fails for some reason, then LPT3 will not be reapplied. It will remain in the reversed state. In that case, you have to manually reverse LPT3. |
| Can you reverse an LDT (Loan Disbursal Transaction) with out of order event reversal? | No. From the Mercury release, the feature to reverse disbursal from the Event Reversal page is being restricted, and only the manual disbursal reversal is supported. Hence, if you try to reverse a Disbursal event (LDT), the system will display the following error message: "LDT reversal is not allowed through out of order. Please reverse LDT manually." |
Example: Reversing and Reapplying Events
As displayed in the next 2 images, there are 6 transactions done on a contract. All the transactions are recorded as events.
The following image displays the 4 out of 6 payment transactions done on the contract.
The following image displays the 2 out of 6 other transactions done on contract.
Upon clicking the Event Reversal button, only 3 out of 6 events are listed for reversal because the Due Day Change event is an unsupported event and so cannot be reversed. All the events that were done before the unsupported event cannot be reversed.
