Originator commission business rule

Originator commission business rule

A business rule exists against each originator group and product combination that controls how and when the originator commission is applied. This allows for different rules to be applied to originators for each combination of originator group and product.


1. Navigate to the Originator Group Product and go to Actions -> Business Rules -> Originator Commission 




2. The following details will need to be supplied



Originator Commission -  2 options exist namely:
a) Include in total interest rate - the interest rate on the application / finance agreement will be base rate + commission rate. The base rate will be determined by either a rate card or risk based pricing depending on what is being used. The commission rate comes from the commission rate cards for the originator.
            
b) Amortised to calculate total interest rate - the interest rate on the application is calculated as follows:

Amount $15000, base rate 8.49%, payment frequency monthly, commission rate 6%, term 36 months
- Commission Amount is calculated using finance amount and commission rate.
- Finance Amount       $15000
- Commission rate       6%
- Commission Amount       ($15000 * 6%) = $900
- Commission Amount is then added to the finance amount 
- $15000 + $900 = $15900
- The repayments are then calculated using the total amount and the base interest rate
- Base interest Rate       8.49%
- Repayment                    498.20
- The Total Interest Rate is then calculated using the Repayment amount, the loan amount
- Repayment Amount       $498.20
- Finance amount       $15000
- Total Interest Rate =       12.5%

Originator Commission Paid Time
Indicates when commission will be paid to the originator commission control accounts. i.e.
a) a once off payment of full commission amount at finance agreement draw down  / purchase
b) portioned at time of borrower payments received.

For Each Additional X Add to Rate Card Base Rate Y
When an application is created, the originator commission rate is determined from the rate card based on the term and amount of the application.  If the commission rate is adjusted by the originator or by staff members while editing the application,  to more than the commission rate on the rate card by the value defined in X “For each additional", the base rate will automatically be increased by Y “Add to rate card base rate”.

Example: Values on Rate Card
Base Rate 10%
Commission Rate 5%

Value in business rule - For each additional 1% additional 0.5% to base rate

If the originator increases the commission to 6% which is 1% more than the commission rate on the rate card, the base rate will therefore be increased by 0.5% so will change to 10.5%
If the originator decreases the commission back to 5% and the base rate will change back to 10%
If the originator decreases the commission to 4% the base rate will not be adjusted and remain on 10%
If the originator increases the commission to 7% which is 2% more than the commission rate on the rate card, the base rate will therefore be increased by 0.5% * 2 so will change to 11%


    • Related Articles

    • Finance agreement business rule

      Business rules exist at originator group product level, allowing finance companies to set rules and settings that are specific to each combination of originator group and product. The finance agreement business rule contains the the rules for ...

    • Originator group - product settings business rule

      Business rules exist at originator group product level, allowing finance companies to set rules and settings that are specific to each combination of originator group and product. The product settings business rule contains the the primary rules for ...

    • Listing and application business rule

      Business rules exist at originator group product level, allowing finance companies to set rules and settings that are specific to each combination of originator group and product. The listing and applications business rule contains the the rules for ...

    • Fees business rule

      Business rules exist at originator group product level, allowing finance companies to set rules and settings that are specific to each combination of originator group and product. The fees business rule contains the rules that will be used for ...

    • Cost of living business rule

      Business rules exist at originator group product level, allowing finance companies to set rules and settings that are specific to each combination of originator group and product. The cost of living business rule contains the the rules for ...