Payment Waterfall Application
Payment Waterfall Application refers to the order in which a payment applies to the various components of a loan. The most typical payment waterfall application is Fees, Interest, Principal. In LoanPro, this is the Regular payment waterfall application, and is the default for payments. In this application, a payment would apply to all due standard fees, then due interest, and finally due principal. If the payment amount is greater than the amount due on the loan, any additional portion will be applied based on the extra towards setting. The payment waterfall application is determined by the Payment Type, which can be selected for each payment.
Currently the loan components supported for payment type include:
- Due Principal - Principal that has come due so far on the loan that has not yet been paid.
- Due Interest - Interest that has come due so far on the loan that has not yet been paid.
- Due Fees - Fees that has come due so far on the loan that has not yet been paid.
- Payoff Fees - Unpaid payoff fees on the loan. These have not come due yet, and only come due at payoff. Adding them to the waterfall application will let payments apply to them earlier.
- Principal Balance - The unpaid portion of the loan principal. This is not a due amount of principal, but will let payments apply to principal before they apply to any other portion of the loan.
- Due Discount - Discount that has come due so far on the loan that has not yet been paid. Discount is a revenue portion of the loan principal.
- Due Escrow - The total escrow that has come due so far on the loan that has not yet been paid. This is the total for all escrow buckets.
- Due Amounts for Individual Escrow Buckets - A separate item will be available for each escrow bucket. This lets payments apply to buckets that are higher priority than others.