The loan participation tool simplifies loan management for lenders who service loans involving multiple investors or participants. This feature helps you easily manage accounts while providing each participant with the visibility they need. Using this tool, you can create child loans linked to a parent loan, automatically dividing ownership based on investor percentages. The system also updates repayment schedules, links customer accounts, and posts a summary note to the parent loan for clear tracking.

How loan participation works

The loan participation tool automates processes to align with your specific requirements. Here’s how it works:

1. First, you’ll define the conditions that trigger the tool. For example, you might trigger it when a loan is activated or limit it to loans within a specific portfolio. 

2. When the trigger is met, the loan management system (LMS) automatically:

• Creates child loans linked to the parent loan. 
• Apply schedule rolls based on investor percentages.
• Links customers to their respective loans. 
• Updates the appropriate custom fields.
• Posts a summary note on the parent loan, listing all linked child loans. 

3. Each participant gets access to their share of the loan without manual intervention, ensuring accurate, up-to-date information is always available. 

Loan participation example

Here's an example of what the the connection will look like inside the loan:

This automated connection between parent and child loans simplifies the process of managing shared ownership while maintaining transparency for all participants. 

Setting up loan participation

Loan participation is configured at the tenant level to match your operational needs. To enable this feature in your account, reach out to your regular LoanPro contact.