Session 65
description
Transcript of Session 65
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Session 65
Guaranty Agency Financial
Report for Beginners(ED Form 2000)
Barbara Johnson
Sandra Simmons
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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)
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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
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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
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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
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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
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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.
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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.
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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
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MR-1, Claims Paid
• Reinsurance – Claim Categories
• Default
• Exempt/LLR
• Death/Disability
• Closed School/False Certification
• Bankruptcy
• Unpaid Refunds/ Discharges
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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
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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
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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)
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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
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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
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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
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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)
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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%)]
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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
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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
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Reinsurance Complement
GA Retention
Secretary’sFee
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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
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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
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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
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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%
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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..
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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
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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.
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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
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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
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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
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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.
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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