session 65 guaranty agency financial report for beginners (ed form 2000) barbara johnson sandra...
TRANSCRIPT
Session 65
Guaranty Agency Financial
Report for Beginners(ED Form 2000)
Barbara Johnson
Sandra Simmons
2
Agenda
• Introduction
• Insurance vs. Reinsurance
• “Secretary’s Share” How is it Calculated
• How Much Do I Get “GA Retention”
• GAFR Line-by-Line
• Statement of Account (SOA)
• Web Application Demo (Navigation and Running Reports)
3
Introduction
• What is the Guaranty
Agency Financial
Report
• FSA’s Role
• GA’s Role
Guaranty Agency Financial Report
(GAFR) ED Form 2000
Instruction Guide
Revised: June 2006
4
Insurance vs. Reinsurance
• Insurance
– Amount the GA Pays the Lender
– Based on 1st Disbursement of Loan
• Reinsurance
– Amount ED Pays the GA
• Based on 1st Disbursement of Loan
• Reinsurance Complement
5
Insurance vs. Reinsurance Rates
Description
Loan Amount/
Claim Amount
Reimburse-ment Rate
(GA to Lender)
Reimburse-
ment Amount to
Lender
Reimburse-ment Rate
(ED to GA)
Reimburse-
ment Amount to
GA Lender Insurance (Loan 1st Disbursed Before 10/1/93)
$1,000.00 100% $1,000.00 100% $1,000.00
Lender Insurance (Loan 1st Disbursed On/After 10/1/93 and Before 10/1/98)
$1,000.00 100% $1,000.00 98% $980.00
Lender Insurance (Loan 1st Disbursed On/After 10/1/98 and Before 7/1/06)
$1,000.00
98%
$980.00
95%
$931.00
6
Insurance vs. Reinsurance Rates
Description
Loan Amount/ Claim Amount
Reimburse- ment
Rate (GA to Lender)
Reimburse-ment
Amount to Lender
Reimburse- ment Rate
(ED to GA)
Reimburse- ment Amount
to GA
Lender Insurance (Loan 1st Disbursed On/After 7/1/06)
$1,000.00
97%
$970.00
95%
$921.50
Lender Insurance for Exempt Claims (Loan 1st Disbursed Before 7/1/06)
$1,000.00
98%
$980.00
95%
$931.00
Lender Insurance for Exempt Claims (Loan 1st Disbursed On/After 7/1/06)
$1,000.00
100%
$1,000.00
100%
$1,000.00
Exceptional Performer (Claim Submitted Before 7/1/06)
$1,000.00
100%
$1,000.00
95%
$950.00
Exceptional Performer (Claim Submitted On/After 7/1/06)
$1,000.00
99%
$990.00
95%
$940.50
7
Secretary’s Share
• The amount of the collections, which a guaranty agency must return to ED, is referred to as the “Secretary’s equitable share” of collections.
• The formula for calculating the Federal share of collections is:
Total Collected
less Reinsurance Complement
less GA Retention
= Secretary’s Share of Collections.
8
How Much Do I Get – GA Retention
• The guaranty agency is also allowed to retain—
– 30 percent of the amount of collections received prior
to October 1, 1993,
– 27 percent of the amount of collections received on or
after October 1, 1993 and before October 1, 1998,
– 24 percent of the amount of collections received on or
after October 1, 1998 and before October 1, 2003, and
– 23 percent of the amount of collections received on or
after October 1, 2003.
9
Statement of AccountRequested Amount
Due To/(From)Category Guarantor
1 Loans In Repayment 5,128,162,386.00
2 5% Trigger $256,408,119.303 9% Trigger $461,534,614.74
4 Amount Requested Fiscal Year to Date $23,433,672.505 Dollars Paid Fiscal Year to Date $23,043,226.706 Rehabilitated Loans Applied $1,581,819.437 Refunds Applied $818,499.798 Trigger Basis Amount $20,642,907.489 Percent of Request Paid 98%10 Trigger Rate 0.40%
11 Beginning Balance $999,999,999,999.9912 Outstanding Balance Interest $999,999,999,999.9913 Claims Paid Amount (All Claim Categories) $999,999,999,999.9914 Borrower Payment Returns $999,999,999,999.9915 Status Changes $999,999,999,999.9916 TOP Overpayments $999,999,999,999.9917 Repurchases/Refunds/Overpayments CFY -$999,999,999,999.99
18 Rehabilitated Loans -$999,999,999,999.9919 FFEL Consolidations -$999,999,999,999.9920 Default/Administrative Wage Garnishment Collections -$999,999,999,999.9921 Bankruptcy Collections -$999,999,999,999.9922 Default FFEL Consolidated by DL Fee #################
23 Total Due To/From Guarantor +/-$999,999,999.99
10
MR-1, Claims Paid
• Reinsurance – Claim Categories
• Default
• Exempt/LLR
• Death/Disability
• Closed School/False Certification
• Bankruptcy
• Unpaid Refunds/ Discharges
11
MR-1-A, Defaults
• Example: GA pays lender
claim $9,800, based on the
lender requested amount of
$10,000 on a default loan
first disbursed on or after
10/1/98 and before 7/1/06
(i.e., .95% Reinsurance
Reimbursement Rate. The
guaranty agency’s reporting
would look like this.
Reinsurance Requested From ED
Amount Paid
to Lender
12
MR-2, Borrower Payment Return
• Refund of Default Collections to Borrower
– GA Refunds Borrower’s Collection
– GA Requests Reimbursement from ED
• Claim Originally Paid as Default
• Borrower Made Payments
• Subsequent Change in Status from Default to
– Closed School
– False Certification
13
MR-3, Status Changes
• Loan Status Changes from Default to:– Death/Disability
– Bankruptcy
– Closed School/False Certification
• GA is Entitled to Additional Reinsurance– If, Original Claim paid at < 100%
• Account Balance at Conversion (MR-20 through MR-23)
14
MR-4, TOP Overpayments
• GA Requests Reimbursement from ED
– After Treasury Offset Activity has occurred
– Which Results in a Refund to Borrower
– Where Offset Exceeds Balance Due on
Borrower Account
15
MR-5 & 6, Repurchases
• Full Refund of Reinsurance– Current and Prior Fiscal Year
• Reduced by Borrower Payments
• Refunded at Claim Reimbursement Rate
• Impact on “Trigger”
– Repurchase Agreement
– No Repurchase Agreement
16
MR-7 & 8, Partial Refunds• Partial Refund of Reinsurance
– Lender Refunds
– Current and Prior Fiscal Year
• Reduced by Borrower Payments
• Refunded at Claim Reimbursement Rate
• Impact on “Trigger”
– Repurchase Agreement
– No Repurchase Agreement
17
MR- 9, Overstated Claims
• Principal Amount = Decrease in Amounts for
Principal, Lender and GA Claim Interest
– Claim Categories
• MR-9-A Default
• MR-9-B Exempt/Lender of Last Resort
• MR-9-C Death/Disability
• MR-9-D Closed School/False Certification
• MR-9-E Bankruptcy (All chapters)
18
Example: Rehabilitation Loan Calculation
• Reinsurance Reimbursement Rate – 98%
• Outstanding Principal and Interest Balance at Time of Rehabilitation – $1,000.00 (Outstanding Principal Balance – $993.27; Accrued Interest – $6.73)
• Payoff Amount (for lender to purchase rehabilitated loan) – $1,185.00 [Outstanding Principal and Interest Balance of $1,000.00 plus Collection Cost of $185.00 ($1,000.00 * 18.5%)]
19
MR-10, Rehabilitated Loan Refund
Principal
Accrued Interest
Other
Charges
Total Payoff
Amount Payoff Amount
$993.27
$6.73
$185.00
$1,185.00
Secretary’s Share
$993.27 * 98% * 81.5% =
$793.32
GA Retention
$993.27 * 18.5% = $183.75
Complement (for informational purposes only)
$1,185.00 – $793.32 –
$183.75 – $6.73 – $185.00 = $16.20
20
21
MR-11, FFEL Consolidation Refund
Example: FFELP Loan Consolidation Reporting (Reinsurance Rate = 98%)
Payoff Amount
$30,000.00
Calculated Secretary’s
Share
Calculated GA Retention
Outstanding Principal
$20,000.00
$20,000.00 * 98% =
$19,600.00
Outstanding Accrued Interest
$10,000.00
$10,000.00 * 98% = $9,800.00
Other Charges
$30,000.00 * 8.5%=
$2,550.00
$30,000.00 x 10% = $3,000.00
22
Reinsurance Complement
GA Retention
Secretary’sFee
23
MR- 12, Wage Garnishment
Example: Wage Garnishment Collections (Reinsurance Reimbursement Rate = 95%, Collection Retention Rate – 24%)
Total Collected
Principal
Interest
Other
Charges $8,000.00 5,000.00 2,000.00 1,000.00 Secretary’s Share
($5000 * .95) - ($5000 *.
24) = $3,550.00
($2000 *. 95) - ($2000
*. 24) = $1,420.00
($1000 * .95) - ($1000 * .24)
= $710.00
GA Retention
$5000 * .24% = $1,200
$2000 * .24% = $480
$1000 *.24% = $240
24
25
MR-13, Default Collections
Sample Default Collections: (Reinsurance Reimbursement Rate = 98%, Collection Retention Rate – 24%)
Total Collected
Principal Interest Other Charges
$38,000.00 15,000.00 12,000.00 11,000.00 Secretary’s Share
($15000 *. 98)
- ($15000 * .24)= $11,100
($12000 *. 98) - ($12000 * .24)
= $8,880.00
($11000 * .98) - ($11000 * .24)
= $8,140.00 GA Retention
$15000 * .24%
= $3,600
$12000 * .24%
= $2880.00
$11000 * .24%
= $2,640.00
26
27
MR-14, Bankruptcy Collections
– All Chapters (7, 11, 12 & 13)
• Principal Amount = Amount Applied to Principal
and Purchased Interest
• Interest Amount = Amount Applied to Accrued
Interest
• Other Amounts =Other Charges, if any
28
MR-15, Default FFEL Consolidated by DL Fee
• Secretary’s fee on defaulted
FFEL Loans Consolidated by DL
– GA Collection Cost 18.5%
– Up to 8.5% due to the
Secretary
• This fee is effective for
defaulted loans consolidated
on or after October 1, 2006.
• No collection costs no fee
due,
• Any collection costs the
Secretary is due up to 8.5%
29
MR 16, Total
• Amount Due To/From Guarantor – Total equals the sum of amounts reported in
MR-1 through MR-15.
– The total will be displayed as a positive or negative amount
• Positive represents the amount due to the guarantor.
• Negative represents amount due ED.
– Amounts due ED from monthly processing may be offset by pending Account Maintenance Fee or Loan Processing and Issuance Fee payments..
30
MR-17 - MR-23, Non Payment Activity
– Must be submitted Monthly
– Adjustments to the Federal Receivable Balance
– MR-17 - MR-19
• Treasury Offset Transactions
– MR-20 - MR -23
• Status Changes - Account Balance at Conversion
• Include Exempt Claims in MR-20 through MR-22
31
MR 24 through MR 31, Agency Accruals
• Report Fiscal Year-To-Date
• Report Principal, Interest and Other Charges
– MR-24 Collection Terminations
– MR-25 Compromises
– MR-26 Agency’s Accruals
• Accrued Interest calculated by the GA on the loan
principal of a claim for collection from the borrower
during the fiscal year.
32
MR 24 through MR 31, Agency Accruals• Other Charges including the the total amount of fees,
penalties, collection charges, and any other charges which have accrued for any loan.
• MR-27 Default FFEL Consolidated by DLP
• MR-28 Subrogated Loans (Assignments)
– Loans accepted into the Debt Collection Management System
• MR-29 Default Loans Transferred Out
• MR-30 Default Loans Transferred In
• MR-31 Other Transactions Affecting the Federal Receivable
33
MR-32 – MR-40, Delinquency by Debt
• MR-32 Ending Balance
• MR-33 through MR-40: Delinquency by Debt
– Cumulative from inception of the FFELP Program
Delinquency by Debt
• MR-33: Not Delinquent (Current Loans)
• MR-34: 1 - 90 Days Delinquent
• MR-35: 91 - 180 Days Delinquent
34
MR-33 - MR-40, Delinquency by Debt (Continued)
• MR-36: 181 - 365 Days Delinquent
• MR-37: 1 - 2 Years Delinquent
• MR-38: 2 - 6 Years Delinquent
• MR-39: 6 - 10 Years Delinquent
• MR-40: Over 10 Years Delinquent
35
MR-41 & 42, Bankruptcy
• Bankruptcy
– MR-41 Ending Balance on Bankruptcies
• Balance is reported fiscal year-to-date.
– MR-42 Bankruptcies Transferred
• Dollar amount of bankruptcies transferred to ECMC
fiscal year-to-date.
36
Technical Slide
We appreciate your feedback and comments.
Barbara Johnson Sandra Simmons
202.377.3327 202.377.3332
[email protected] [email protected]
202.275.3481 202.275.3481