A fee in Q2 Origination is a charge that is associated with an application, such as loan origination fees, tax verification fees, and maintenance fees. Financial institutions may charge fees to borrowers to recover expenses incurred during the origination process, such as credit reporting or title searches.
As part of fees management, you can do the following:
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View the fees applicable for the application.
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Apply a new fee to the application.
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Create ad-hoc fees from within the application to directly apply a charge.
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Override a fee amount.
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View the periodic fees payment schedule in the Payment Schedule window.
On selecting the application id, you can see the fees associated with the lending product for which the application is created.
From the Create Fee Using Definition window, you can select from the list of fees you have defined using the Origination Configuration page and add them to the application. When you elect to create fees from Fee Definitions, you are presented with a list of configured fee definitions, including their name, event, and amount.
Prerequisites
Before you proceed to view/apply the fees, ensure that the following prerequisites are met:
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A fee is defined and is associated with a lending product.
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An application is created for the above lending product.
Steps
To view/apply the fees:
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Log in to your Salesforce account.
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Go to
(App Launcher) > Applications.
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On the Applications tab, from the list of applications, select the required application.
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On the application details page, go to
> Fee.
All the fees associated with the lending product for which the application is created are displayed.
The fees with frequency One-Time are displayed under One-Time Fees, and other fees with a frequency different than One-Time are displayed under Periodic Fee.
For example, the following two fees are created and applied to the loan application of the requested loan amount of $20,000 and term 20:
User-Provided Values
Fee Definition Name
Documentation Fee
Maintenance Fee
Amount
10
1,000
Calculation Method
Amount calculated as % of borrowing amount
Fixed
Event
Loan Origination
Loan Origination
Frequency
One-Time
Monthly
Maximum Amount
800.00
Maximum Discount Amount
200.00
50
Minimum Amount
500.00
Fee Payment Method
Add to amount financed
Add to amount financed
Fee Payment Timing
Before Closing
Before Closing
Fee Paid By
Borrower
Borrower
Class
Income
Expense
Override Fee
Yes
Yes
Include in Dues
No
Yes
Include in APR
Yes
Yes
Taxable
Yes
Yes
VAT Rate
10%
10%
As the Documentation Fee is a One-Time fee, it is listed in the One-Time Fees section and the Maintenance Fee in the Periodic Fee section as highlighted in the following image:
Based on the user-provided values, Q2 Originate calculates the original fee amount (if the Calculation Method is Amount calculated as % of borrowing amount), the tax amount, and the total fee amount. See the following table to understand the computation:
System Generated Values
Fee Definition Name
Documentation Fee
Maintenance Fee
Original Amount
As per the Calculation Method, it is 10% of the borrowing amount = 10% of $20,000 = $2,000.
$2,000 is greater than the specified Maximum Amount. So the Original Amount defaults to the Maximum Amount that is $800.
As the Calculation Method is Fixed, the Original Amount is the same as the Amount specified while defining this fee that is $1,000.
Tax Amount
As per the specified VAT Rate, 10% is calculated on the Original Amount = 10% of $800 = $80.
As per the specified VAT Rate, 10% is calculated on the Original Amount = 10% of $1,000 = $100.
Total Fee Amount
= Original Amount + Tax Amount = $800 + $80 = $880.
= $1,000 + $100 = $1,100.
On the application details page, go to
All the fees associated with the lending product for which the application is created are displayed. The fees with frequency One-Time are displayed under One-Time Fees, and other fees with a frequency different than One-Time are displayed under Periodic Fee.
For example, the following two fees are created and applied to the loan application of the requested loan amount of $20,000 and term 20:
User-Provided Values
Fee Definition Name
Documentation Fee
Maintenance Fee
Amount
10
1,000
Calculation Method
Amount calculated as % of borrowing amount
Fixed
Event
Loan Origination
Loan Origination
Frequency
One-Time
Monthly
Maximum Amount
800.00
Maximum Discount Amount
200.00
50
Minimum Amount
500.00
Fee Payment Method
Add to amount financed
Add to amount financed
Fee Payment Timing
Before Closing
Before Closing
Fee Paid By
Borrower
Borrower
Class
Income
Expense
Override Fee
Yes
Yes
Include in Dues
No
Yes
Include in APR
Yes
Yes
Taxable
Yes
Yes
VAT Rate
10%
10%
As the Documentation Fee is a One-Time fee, it is listed in the One-Time Fees section and the Maintenance Fee in the Periodic Fee section as highlighted in the following image:
Based on the user-provided values, Q2 Origination calculates the original fee amount (if the Calculation Method is Amount calculated as % of borrowing amount), the tax amount, and the total fee amount. See the following table to understand the computation:
System Generated Values
Fee Definition Name
Documentation Fee
Maintenance Fee
Original Amount
As per the Calculation Method, it is 10% of the borrowing amount = 10% of $20,000 = $2,000.
$2,000 is greater than the specified Maximum Amount. So the Original Amount defaults to the Maximum Amount that is $800.
As the Calculation Method is Fixed, the Original Amount is the same as the Amount specified while defining this fee that is $1,000.
Tax Amount
As per the specified VAT Rate, 10% is calculated on the Original Amount = 10% of $800 = $80.
As per the specified VAT Rate, 10% is calculated on the Original Amount = 10% of $1,000 = $100.
Total Fee Amount
= Original Amount + Tax Amount = $800 + $80 = $880.
= $1,000 + $100 = $1,100.
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To apply a new One-Time Fees or Periodic Fee from the defined fees, in the respective section, select Create Fee Using Definition.
For One-Time Fees, it displays the fees with frequency as One-Time or Null, and for Periodic Fee, it displays the fees with frequency as Daily, Weekly, Monthly, Yearly.
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Select the fee definition you want to add.
The Next Step button is enabled.
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Select Next Step > Save.
The fee is added to the application. If it is a One-Time Fees, it gets added to the section else to the Periodic Fee section.
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To edit a fee, select
.
Note
You can edit Revised Original Amount if the Override Fee flag is enabled. For the Ad-hoc fee, there is no need to enable the Override Fee flag to edit Revised Original Amount. For more information on Override Fee, see Override a Fee Amount.
You can create an Ad-hoc fee at the application level when a fee is not defined. For example, if a re-appraisal is required for equipment pledged to a loan, you can create an Ad-hoc re-appraisal fee for the application. Or, if the guarantor on the loan application is changed, you may charge a fee for re-validation of the guarantor details.
Prerequisites
Before you proceed to create an Ad-hoc fee, ensure that the following prerequisites are met:
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An application is created.
Steps
To create an Ad-hoc fee for an application:
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Log in to your Salesforce account.
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Go to
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On the Applications tab, from the list of applications, select the required application.
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On the application details page, go to
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To create a One-Time Ad-hoc fee, select Create Ad-hoc Fee.
The Create Ad-hoc Fee window is displayed.
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In the Create Ad-hoc Feewindow, provide the details as described in the following table, and then select Save:
Field Name
Action and Information
Type
Select the type of Ad-hoc fee.
Original Amount
Specify the amount.
This is a fixed amount to be charged to the borrower
Fee Payment Method
Select the method in which the fee will be collected.
The supported options are:
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Borrowers funds brought to closing.
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Subtract from loan proceeds
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Add to amount financed - If this option is selected, the fee amount is added to the Requested Loan Amount/Requested Credit Limit.
Loan Amount = Requested Loan Amount(original loan amount) + Total Fee Amount
Credit Limit = Requested Credit Limit + Total Fee Amount
Note
This applies to non periodic fees where the Frequency is One-Time, and the Include In Dues flag is disabled.
Fee Payment Timing
Select the Fee Payment Timing as Before Closing or At Closing.
This field identifies when to collect the fee.
Fee Paid By
Select the party who is responsible for paying the fee.
The supported options are:
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Borrower
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Lender
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Third Party
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Seller
Note
This field is used for information capture only in Q2 Origination.
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The fee amount can be updated if the Override Fee flag is enabled for the fee definition. Whereas, for the Ad-hoc fee, you can update the Revised Original Amount field with the changed value irrespective of whether the Override Fee flag is enabled.
Note
While updating the fee:
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You can update the Revised Original Amount field with the changed value.
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The Revised Original Amount should be between the minimum amount and the maximum amount.
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The difference between the Revised Original Amount and the Original Amount should be <= Maximum Discount Amount.
When the discount given on the Revised Original Amount is greater than the Maximum Discount Amount, the system throws a warning stating, Fee amount has been modified. The discount should be a maximum of 50.
The Revised Original Amount is revised to Revised Original Amount - Maximum Discount Amount.
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50 is the Maximum Discount Amount defined for the Maintenance fee in the above example.
For periodic fees, the repayment schedule is generated on the Payment Schedule page.
Prerequisites
Before you proceed to view the periodic fee schedule, ensure that the following prerequisites are met:
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An application is created.
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A fee is set up with frequency other than One-Time or Null, and the Include In Dues flag is enabled.
Steps
To view the periodic fee schedule:
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Log in to your Salesforce account.
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Go to
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On the Applications tab, from the list of applications, select the required application.
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On the application details page, go to
The Payment Schedule window is displayed. The Fee Schedule tab displays the details of the fee and the loan's repayment schedule, including the fees.
Note
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The Start Date defaults to the first Due Date.
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Any updates to the fees on the Fee page, the same should reflect here on the Payment Schedule.
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Any fee schedule added on the Payment Schedule page is not displayed on the Fee page.
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To add a fee schedule on the Payment Schedule page, select
next to Sequence.
A new row is added with no values.
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Provide the details as described in the following table, and then select Generate Schedule:
Field Name
Action and Information
Sequence
Specify the Sequence.
It is an integer value.
Fee Schedule Name
Specify a name for the Fee.
For example, Late Fee.
Start Date
Specify the date from when the fee is to be collected.
It defaults to the first Due Date.
Amount
Specify the total fee amount to be collected from the borrower.
It is a fixed amount.
Frequency
Select a frequency.
It can be any option other than One-Time.
Include In EMI
Select this checkbox to include the fee in EMI.
The Late Fee is created on the Payment Schedule page as highlighted in the following image:
The same Late Fee is not displayed on the Fee page as highlighted in the following image: