Underwriting and Decision Making

Underwriting 293

Introduction
FLEXCUBE offers the Underwriting and Decision feature which helps you in
analyzing the application before approving it.

Underwriting and Decision making is a crosschecking mechanism that

FLEXCUBE offers. The application that the Loan Officers enter during the day
must be ‘authorized’ by the Underwriter at the end of the day.

This ensures that all the transactions that have been entered by tellers conform to
the parameters that have been defined for your branch.

The Underwriter of your branch performs certain operations during the day. The
following are the functions that the underwriter would perform:

 Primary and secondary applicant financial analysis.

 Credit and behavioral scoring.
 Defining the exposure, interest rate and tenor of the loan.
 Bureau score breakdown, analysis and request for re-scoring.

Features of the Underwriting screen

As part of the Underwriting, you need to select the application for which you
want define your parameters. You can use the Underwriting screen to search for
a particular application and begin the Underwriting process. Click on
Underwriting screen in the Application Browser to invoke a list of applications
for which you have rights. Choose respective tabs to approve or disapprove an
application.

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In this screen, you can access the basic information of all the applications using
the following tabs:

 Search
 Applicants
 Decision
 Bureau
 Collateral
 Comments
 Image
 Verification
 Calculator

Click on each of the tab to display the respective screens. Each tab is explained in
details in the following sections of this document.

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Application Search
You can authorize applications that have been entered for the day if the
following conditions are true:

 If you have the requisite right

 If the application does not exceed the authorization limits defined for you

To search for an application, choose Search Tab from the Underwriting screen.
You can search for the application at two levels

 Single Criterion or
 Multiple Criteria

The following fields are displayed in the screen:

 View All – select this to view all the applications entered in the system.
 Company – this is the company under whom the application is applied.
 Branch – This is the branch where the application has originated.
 Priority - The application priority is indicated.
 App # - The system generated number of the application.
 Date - The date on which the application was entered.
 Title – indicates the application title.
 Product – indicates the product under which the application is maintained.
 Status – indicates the status of the application.
 Producer – indicates the producer of the application.
 Queue Name – indicates the queue name for the application.
 Secured Application – choose this option to indicate that the applicant of
the application falls under the secured.
 Copy Application –this option allows you to make a copy of the application.

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Specifying the search criteria

Criteria

All the search criteria maintained in the system are displayed against which you
can enter the comparison operator and the value for the same.

Comparison Operator

The system will display the comparison operator for the search criteria for which
you need to maintain the value in the adjacent field.

Value

You need to enter the parameter value for the comparison operator and the
search criteria.

Reset Criteria

Click on this button in case you want to reset the search criteria for the
application.

Search

After entering all the search criteria, comparison operator and the parameter
value, you can click on this button to search for the application or the account.
The system will display the applications based on the search criteria’s.

Applicants of the application

Once you have clicked on the Applicants tab, the system defaults the details for
the application entry. Subsequently you need to validate the residential and
employment details for both Primary and Other type of applicants. In the
Applicants screen, the analysis of the applications is performed based on two
main areas:

 Financial Summary – This information allows you to analyze the

applicant’s financial status based on the details captured. You can also
choose to change or modify the information based on your assessment.

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 Behavioral Score – This section displays the behavioral score given to the
applicant which is based on the parameters you have defined at the product
category level. The system also displays the credit bureau ratings given
before the behavioral score.

The Applicants screen displays the information about the application you have
selected. In the Primary section, you can view/verify the personal information
about the Primary applicant such as the name of the applicant, license or email
address etc. In the Others section, you can view/verify information about other
applicants also, that is in case of joint applicants.

Address

In this tab you can view/verify the address of the applicant. Also you can
maintain the details of the monthly housing payment (actual) as opposed to the
amount the applicant has mentioned in the Stated/Actual section.

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Employment details

This tab allows you to view/verify the information relating to the applicant’s
place of employment. Also you can maintain the monthly income (actual) as
opposed to the amount mentioned by the applicant in the Stated/Actual section.

Telecom details

Here you can view/verify the telephone numbers provided by the applicant.

Financial details

This tab allows you to view/verify the information relating to the types and
financial source for additional income. This information will help you calculate
the net worth of the applicant.

Summary details

Here you can view/verify the details of the income and liability of the applicant.

Credit score
This tab allows you to view/verify the credit score determined by the scoring
models maintained in the system.

Decision on the application

To avail the Decision feature present in FLEXCUBE, click on the Decision tab in
the Underwriting screen. The screen displays the basic information of the loan
like the amount requested, interest rate, tenor etc. you can choose to analyze the
loan based on few criteria’s discussed below:

 Pricing Selection – based on the product category specified, the

underwriter has the privileges to define a template for price that will suit
the exposure, credit, behavioral score and the tenor.
 Stipulations – at the time of decision making, you as a underwriter can
define specific conditions for the disbursement of the loan,

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 Itemizations – the system defaults the information for the exposure

maintained at the product level. However, you can choose to increase or
decrease the exposure for the specific item here.
 Checklist – the check list you have maintained at the product category level
will be defaulted here. You can choose the items that need to be checked for
the specific application. This will ensure that the particular check is carried
out for the application and in case it fails, the application will be logged in
the error table and you can edit the same through the Edits screen.

After you have identified the application you must supply the remaining
required information to make a decision regarding the application. Subsequently,
you need to select the appropriate pricing and validate. For this you need to
specify the following details for approving or rejecting the application:

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Requested section
 Advance – specify the advance amount that is requested
 Down % - specify the approximate down payment percentage requested
 Pmt – specify the requested payment amount
 Down Pmt – specify approximate down payment requested
 Rate – specify the requested rate of interest
 Approx Prc – specify the approximate cash price
 Term – specify the requested term
 Promotion – indicate the requested promotion

System Recommendation section

 Decision - the system displays the recommended decision for the
application
 Grade - the system displays the recommended grade for the application
 Score - the system displays the recommended score for the application

Pricing section
 Select Pricing - Choose this button to verify the pricing information
 Decision Dt - the system displays the decision date
 Status - the application status is displayed
 Sub Status - the application sub-status is displayed
 Underwriter - the underwriter identification is displayed

Approved section
 Term - the term for which you want to approve the application
 Rate - the rate which is to be applied to the application
 Pmt - the payment amount which is agreed upon
 Down Pmt (%) - the down payment percentage which is required
 Collateral Value - the collateral value is displayed
 Promotion - the pricing promotion which is approved is displayed

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 Max Advance (%) – specify the advance percentage you want to grant
 Max Advance (Amt) – specify the advance amount you want to grant
 LTV1 - the loan to value ratio for an financed amount is displayed
 (Maturity) Rate - the maturity rate of the loan is displayed
 Max Financed (%) - the maximum amount of the financed percentage is
displayed
 Max Financed (Amt) - the maximum financed amount is displayed
 LTV2 - the loan to value ratio for an advance amount is displayed
 Grade – choose the credit grade that is to be specified for the application
 Score – specify the credit score that is required

Stipulations details

In case you want to add any stipulation to the application, you can choose the
Stipulations section and specify the following fields:

 Type – specify the reason type from the option list.

 Code – specify the reason for the stipulations
 Comment – specify any comment for the stipulation

Itemizations details

Choose this tab if you want to add or verify any itemized amounts that is
associated with the application. This section displays the details of the amount
financed.

 Itemization - the itemization is displayed.

 +/- - indicates whether the itemization is added or subtracted.
 Requested Amt – specify the requested amount.
 Approved Amt – specify the approved amount.
 Comment – specify a comment for the itemization.

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Checklist details

In this section you can complete any remaining task in the decision making
process. The checklist helps you to cover all the procedures without fail while
approving the application. Use the buttons (Yes/No/NA) to indicate whether the
task is completed or not. Also, you can add your remarks in the Comment field
for any tasks in particular.

Collaterals linked to the application

For a product, you would have maintained the collateral for the application. The
system will default the collateral details for the application in the Collateral tab
of the Underwriting screen. You can choose to view or change the details through
this screen.

The collateral screen has three tabs – Vehicle, Home and Other. These tabs are
enabled based on the product you have specified for the application. For
example: if you have selected Amortized home loan for the application, both
Home and Vehicle tabs will be enabled and Other tab will be disabled.

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Once you choose the application, the collateral details for the application will be
defaulted by the application in this screen. You can choose to change the details
for the collateral (like the cost of the vehicle, wholesale value and retail value of
the vehicle etc) accordingly. You can also maintain the accessories, other add-ons
and the prices for each of the items.

Vehicle/Home/Other tab

In this section, depending on the type of collateral you have chosen, the system
displays the Vehicle, Home, or Other tab is displayed. You need to specify the
following details pertaining to the relevant collateral:

 Primary – choose this option to define the selected collateral as the primary
collateral
 Asset Class - The class of the asset is defaulted
 Asset Type - The type of the asset is defaulted
 Sub Type - The sub-type of the asset is defaulted
 Identification Number - The identification number of the vehicle
 Registration # - The registration number of the vehicle
 Status - The status of the asset
 Year - The year of the vehicle
 Make - The make of the vehicle
 Model - The model of the vehicle
 Body - The body of the vehicle
 Desc - The vehicle description
 Condition -The vehicle condition
 Address # - The building number of the applicant for correspondence
 Address - Address for Correspondence Line 1
 Address 2 - Address for Correspondence Line 2
 Zip - The zip code of the Address for Correspondence
 City - The city of the Address for Correspondence

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 St - The state of the Address for Correspondence

 Zip Extension - The Zip Extension of the Address for Correspondence
 Country – The Country of the Correspondence address
 County - The county of the applicant.

Valuation tab

In this section, you can view the value of the asset and also allows you to enter
the value of the asset and any other add-ons associated with the collateral. You
need to provide the following details:

 Get value – click on this button to valuate the asset

 Current – choose this option and click on Get value to get the current value
of the collateral. The system has the ability to fetch the information from
external agencies
 Valuation Date - The date on which the valuation is done
 Source - The system performs the validation based on the source or the
reference specified here
 Supplement – indicate the valuation supplement
 Edition – indicate the valuation edition
 Base (Wholesale) - The wholesale base value
 Usage (Wholesale) - The wholesale usage value
 Base (Retail) - The retail base value
 Add-ons + (Retail) - The add-on value, if any, on the asset
 Usage Value + (Retail) – indicate any additional retail usage value for the
asset
 Total Value (Retail) – the total value of the applicant’s collateral

Once you have made the verification or changes to the value of the asset, you can
save the application with the relevant changes.

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Adding Comments
In addition to the above facilities provided by the underwriting screen, you can
also add your expert comment to any application, if required, during the
Underwriting process. The comments you add here are used by the relevant
departments for information purpose.

Click on the Comments tab in the Underwriting screen to add your comments.

To add a comment to an application you need to provide the following

specifications:

Alert

Choose this option in case you want to classify the comment as an alert. The
system will treat this comment as an alert and the message will pop up when
ever the application is accessed by the relevant department.

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Type

You can enter the type of comment to classify the comment into various levels.

Sub Type

In case you want to maintain a comment as a sub-type to a main comment, you

can specify the sub type in this field.

Comment

The system displays the comment that was entered by the creator of the
application. You can add a new comment or modify the existing comment.

User

This field displays the name of the person who originally maintained the
comment for the application.

Date

All the comments bear the date and time when it was created. This field displays
the date and time of creation of the comment.

Verification of the application

While defining a product category, you would have defined the overrides and
error message that are to be displayed in case of a status change. You can assign
these override messages to each application in case of a status change. To do this,
the Underwriting screen provides you with two options - Warning or Error
messages. In case of Warning message, the system will ask you for an override
before proceeding to change the status of the application without any
modification. However, for all Error messages, you need to correct the message
before proceeding any further. Until then the system will not allow you to change
the status of the application.

Click on Verification tab in the Underwriting screen invoked from the

Application Browser.

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In the Edits tab, you need to specify the following details for verification under
the following two sections:

Edit Type section

Here you need to select the edit type that you want to correct:

 Date – this is the edit run date i.e. the date on which the validation is
required
 Edit Type – this is the edit type that you want to verify
 Edit Type - the edit type can be No Edits, Application Entry Edits, and Pre-
screening Edits etc.
 Check Edits - choose this button to indicate that the selected edits should be
validated by the system.

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Edit Details section

Here you can edit the following details:

 Edit name – this is the name of the edit which needs to be validated
 Result – this is the result which can be override, error or warning
 Expected Value – this is the expected value
 Actual Value – this is the actual value
 Override responsibility – this is the override responsibility, in case of an
override is required for further processing

Using the Calculator

You can access the Calculator tab in the Underwriting screen to calculate either a
payment or an interest rate. The Calculator screen provides you an option to
calculate the requested exposure and repayment period for a specific rate. You
are allowed to copy this information onto the Decision tab. In addition to this,
you can also view the amortization schedule.

Click on the Calculator tab in the Underwriting screen to calculate payment or

interest rate.

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In this screen you have two options:

 Calculate Payment
 Calculate Interest Rate

Calculate Payment

In order to calculate the Payment, you need to click on the option Calculate
Payment and then use the available table to calculate the standard payment of
the loan by providing the basic information of the loan.

Calculate Interest Rate

In order to calculate the interest rates for the loan, you need to click on the option
Calculate Interest Rate and then use the available table to calculate the interest
rate and APR by providing the basic information of the loan.

Calculator screen provides the following buttons:

 Calculate: After providing the basic information such as amount financed,

terms, interest rate etc, click on this button to calculate the Payment or
Interest rates.

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 Amortize: Click on this button to generate the amortized schedules.

 Initialize: click on this button if you want to start or reset the loan
calculator at any time.
 Copy to Decision: Click on this button to copy the results to the Decision
tab of the underwriting screen.
 Copy to Contract: Click on this button to copy the results to the contract.
 Print Report: Click on this button if you want to print the results of the
calculation.

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