Re: Rembrandt Mortgage Function

Tech Tip: Click here to run a free scan for Windows Errors and optimize PC performance

Thank you very much for your comments. I had been thru the effects of using
various periods (days, weeks, quarters, etc..), but I always considered the
Rule of 78 to be an approximation. Anyway, none of them seemed to be what I
was looking for.

My reading of the Rembrandt issue was that it was imbedded in proprietary
software, and these 'adjustments" were required by other features of the
broader program of which this is just a part. Sounds like just an excuse to
shade things towards the lender. The issue came up when talking to a local
banker (clerk) who gave me the numbers I listed previously, but referred to
them as from the 'Home Office' and interestingly were not the numbers she
came up with on her desktop mortgage calculator. Not sure what to make of
that.

You mentioned -
the software implementation might be proprietary. But the methodology is
not; it is defined by US federal regulations.
What is the US regulation methodology?

Snip>
This leads me to speculate that perhaps you are looking at an ARM of
$30,000 with a 3-year initial term at 7.499% and index and margin
parameters such that the estimated adjusted rate is 8.75346%, and
somehow the latter percentage got associated with the computation for
the 3-year initial term

This is certainly probable. Really need to see the entire amortization
schedule.

Snip>
accumulates interest for a few days before the monthly payment
window begins, for example to align payments with some "nice" time of
the month like the 1st, 15th, or end of the month.

This is probably one of the better possibilities. Again, we need to see the
amortization schedule. BTW, how can I get it to you, since I believe
msnewsgroups does allow attachments? Can I just use joeu2004@xxxxxxxxxxx ?

Thanks again for your interest - it is good to kick it around a bit. I
appreciate your wide ranging thoughts.

Stay tuned - I'll let you know when the schedule arrives

Dave



<joeu2004@xxxxxxxxxxx> wrote in message
news:1160609307.906278.289500@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Dave wrote:
A simple example:a $30,000, 20 year mortgage at 7.499% yields monthly
payments (using the standard Excel PMT function, as well as just about
any
other mortgage calculator around) of $241.66. Looking at the resulting
amort schedule at say 36 months, shows the principle reduced to +/-
$27,887.50.

The Rembrandt calc yields monthly Payments of $241.77, and with the
principle reduced to only $28,059.74.

For what it's worth, a payment of $241.77 and a balance of $28,059.74
after 36 months corresponds to a 27-year loan of $30,000 at a nominal
annual rate of 8.75346%. (Sorry, but that precision is necessary to
get a payment amount that rounds to $241.77 __and__ a balance that
rounds to $28,059.74.)

This leads me to speculate that perhaps you are looking at an ARM of
$30,000 with a 3-year initial term at 7.499% and index and margin
parameters such that the estimated adjusted rate is 8.75346%, and
somehow the latter percentage got associated with the computation for
the 3-year initial term -- or some other human error along these lines
occurred

Does that ring any bells?

However, take a look at
http://www.bankerssystems.com/ARTA/BL_HMDA.htm
This is the parent company of CCH. They have indeed sold to the
financial
market place a very proprietary routine which does exactly as I said -
increases monthly payment and decreases principle reduction.

I do not see anything on that web page that discusses a "proprietary
routine" that has those objectives. Can you explain a little more
about where you are reading that claim?

That web page talks about software for aiding lenders in reporting HMDA
rate spreads. Of course, the software implementation might be
proprietary. But the methodology is not; it is defined by US federal
regulations.

In any case, I cannot find any mention of a loan calculator per se,
much less a loan calculator with unique goals.

The Rembrandt web page does refer to an HOEPA calculator, which might
encompass normal loan computations. And the purpose of recent HOEPA is
to modify (raise or lower) certain triggers (of lender requirements)
related to HOEPA loans. But I do not think that should affect the
normal loan computations. In any case, this methodology is not
proprietary either; rather it is defined by US federal regulations.

I wonder if you are confused and reading some of the HMDA and HOEPA
explanations as proprietary claims. In any case, I do not think that
would explain the numerical disparities in the loan computations that
you described.



.

Relevant Pages

  • Re: Rembrandt Mortgage Function
    ... The Rembrandt calc yields monthly Payments of $241.77, ... In any case, I cannot find any mention of a loan calculator per se, ... The Rembrandt web page does refer to an HOEPA calculator, ...
    (microsoft.public.excel.misc)
  • Re: Just in: People to be removed by force from New Orleans
    ... encouraged to return the most recent mortgage loan payments from people ... Freddie Mac made its recommendation to banks in an advisory letter. ... That letter was sent to 2,300 loan servicers, bank arms that collect ...
    (misc.survivalism)
  • How to avoid mortgage default
    ... Before the collectors call, try to work with a lender, explaining any ... Judy Thompson sees it when clients realize what their home loan really ... An Arden Arcade woman refinances the entire value of the house ... she's owned nine years and can't make the payments. ...
    (misc.consumers.house)
  • Re: Blindly Into the Bubble
    ... have enough money to be able to make the payments that are required when you borrow so much money. ... When a loan is made, the HUD guideline of 30% of gross income for principal, interest and taxes is typically used as a definition of "affordable." ... Either the property appreciates and everyone benefits or the homeowner is forced to increase the size of his payments in order to avoid losing the home. ... While the foreclosures get the headlines, there are vastly more homeowners who will make almost any sacrifice to keep their home. ...
    (soc.retirement)
  • Re: Browns budget bollox.
    ... loan period. ... implies the borrower has not been keeping up on the payments, ... *borrower* who has reneged. ... Why on earth should the lender pay a single penny of the interest they ...
    (uk.politics.misc)