How do I reverse and/or delete transactions?

Answer

If you have not closed and updated the Transaction Group, it is not necessary to reverse the transaction because the transaction is not part of the loan's history yet. Simply delete the transaction from the Transaction Group. Path (03.06), enter the group number, enter <D> for display, and press <F3> to delete the transaction. The <F3> option will ask for the sequence number. This number is to the left of the loan number. The program will ask if you want to delete. Press <Y> for yes. You have now deleted the transaction before it got posted. The erroneous transaction will never show on the borrower's history. Rerun the Transaction Proof Sheet report (03.06), then enter the group number and <P> to print to make sure you balance.

If the transaction does show on loan history (03.14), there are two ways to reverse the transaction:

1. Auto Reversals: Let the program reverse the transaction for you (this is the easiest way).
2. Operator-Entered Reversals: Gather details about the transaction and enter the transaction.

Auto Reversals
Although this is the easiest way to reverse transactions, there are a few transactions that cannot be reversed this way. They are transactions belonging to loans calculated on a 365-day year, any transactions associated with Multiple Transactions (Transaction Codes MP and MT), and transactions more than 12 items back. To mark the transactions to be reversed, access the Payment Entry screen (03.02). Open a group using the <F7> option. Select the group and enter the loan number. Select the <F3> option to signal the program for auto reversals. The selected loan history will display. All you have to do is enter an X by the transactions you want to reverse. Press <NL> to pass the transactions you do not want to reverse. When all the transactions have been marked that need reversed, press <F4> to have the program reverse them. The next screen displayed allows the operator an opportunity to have the program reapply the reversed transaction codes in the same order on the history with a different transaction code. If you do not need the transaction reapplied, press <ESC>. To reapply, enter the transaction code and amount. The program displays the total reversed, total reapplied, and the difference. <NL> to accept if correct.

Since mortgage loans split principal and interest according to the loan balance when the transaction is applied, the program will follow the last in, first out (LIFO) rule. To view your transactions, access the Proof screen (03.06.<GROUP>.<D>) to display. Close the group (03.06.<F8>) and update in (03.07).

Operator-Entered Reversals
Any transaction can be reversed this way. WHEN REVERSING PAYMENTS IN LOAN SERVICING, FOLLOW THE LIFO RULE. This means always reverse the last transaction on the history before the second to last. Follow this all the way up the history until you have reversed the transaction you need to reverse.

There are four pieces of information you must have before reversing payments:

• Account number
• Exact date of the transaction you are reversing
• Exact dollar amount of the transaction you are reversing
• The correct reversal code

The best place to get that information is from the History (03.01.<H>). The same information can be printed through (03.14).

Once you have gathered the information, open a Transaction Group (03.02.<F7>). Select the group added and post the transaction. Enter the account number and the appropriate Reversal Transaction Code.

Transaction Codes
Enter the exact dollar amount. This has to match the amount originally posted. The date of the original transaction needs to be entered in line four of the Posting screen (reversal date).

When reposting the transactions, open a separate Transaction Group from the reversals. It is recommended you close and update the reversal Transaction Group before you close and update the Transaction Group that reposts the transactions. A comment can be entered in the Comments section (03.23.11) or (03.01.<S>.<C>) explaining the reason why this reversal was done.