Business Processes

Loan Assumption

Credit Bureau Extract Metro 2 Format users.

When a new lessee assumes a lease or loan from the original lessee, possibly due to death of the original lessee or other circumstances.

LeasePak Updates/Processes

• U0240 Credit Bureau Client/API
• U0462 Credit Bureau Extract

Relevant LeasePak Interface Fields

• U0240 Credit Bureau Client/API
  • "Relationships"
  • "Reason Code"
  • "Lessee"
  • "Report as Assumed"
  • "Assumed Date"
  • "Assumed Amount"
  • "Assumed Term"

Process Overview

This is different from a lease assumption from bankruptcy, where a client in Chapter 7 or 11 bankruptcy assumes a lease they might otherwise cease making payment for. Refer to process for Lease Assumption (from bankruptcy) under Bankruptcy for more information.

When the User detaches the main lessee (as opposed to a co-lessee or guarantor) from an account, replaces it with another through U0240 Credit Bureau Client/API, and calculates or adjusts values for Assumed Date, Assumed Amount, and Assumed Term, LP reports this action as a lease assumption.

Lease assumption reporting takes place over two reporting periods: the current month and the following month.

In the current month, U0462 Credit Bureau Extract reports:

• SCC as H
• ECOA for all clients on the lease as T or X, depending on the circumstances
• Current Balance as 0
• Date Opened, Terms Duration, and PHP as normal
• All other information for the main lessee as pertains to the detached lessee

In the following month, U0462 Credit Bureau Extract reports:

• SCC as blank
• ECOA for the new lessee as:
  • 1 if the only lessee on the account and not a business
  • 2 if multiple lessee/co-lessee(s) and not a business
  • W if business/commercial
• ECOA for co-lessees and guarantors as:
  • 2 if multiple lessee/co-lessee(s) and not a business
  • 5 if guarantor and not a business
  • W if business/commercial
• Current Balance as normal
• Terms Duration as pertains to the assumed portion of the lease
• Date Opened as the assumption date
• PHP with all positions prior to assumption date as B and Next Payment History Status as 0
• DOFD: use Freeze/Unfreeze to determine if DOFD still needs to be set and frozen. If not, clear (set to blank or NULL)
• All other information for the main lessee as pertains to the new lessee

Thereafter, the account and client will be reported as normal, taking into account any adjustments made to the lease.

If the lease is later extended, LP will clear values for lease assumption date and remaining term.

LeasePak User Process

Use interactive U0240 Credit Bureau Client or third-party interface via API to perform a lease assumption:

1. From the "Relationships" list, select the client having the Lessee relationship
2. Click Drop Relationship to detach the main lessee
3. The Reason Deleted window will require selecting a reason for detaching the client; select 'TERM' for 'Terminated' or 'DECD' for Deceased and click Save
4. In "Lessee", type the new client number or use to search
5. Click Attach Lessee to attach the new main lessee to the lease
6. On the Assumption Tab, change the "Activity Status" to 'AASM' (Active Assumed) if desired (optional)
7. Select/check (set to 'Y') "Report as Assumed"
8. Click Calculate Assumed Values to populate "Assumed Date", "Assumed Amount", and "Assumed Term", then adjust as needed. All three values are required for a lease assumption
9. Click Save to complete the lease assumption

Additional note:

• Whenever a client is detached from a lease, any CII for that client/lease relationship is lost. If the client is later reattached, the User must update the CII accordingly through U0241 Client Bureau Bankruptcy/API.