Mortgage Loan Accounting FAQ

AMB™ provides a completely different system architecture than the “Modular” framework of older batch oriented systems. It is this architecture that allows AMB™ to track loan level detail without cluttering the general ledger. It is also this architecture that allows the system to match monies received from the borrower to those spent on his or her behalf. It would be extremely difficult with most modular systems to do this. Monies received would be entered through the Accounts receivable system where the borrower is treated as a customer. Payments made on behalf of the borrower would be done through the AP module to the Appraisal company or the Credit reporting company. Most modular systems would have no way to link these two transactions. We believe this architectural difference is the main reason AMB™ is the only system meeting the needs of Mortgage Bankers today.

How long it will take to convert your data will depend on two things, the accessibility of the data and the timeliness of the data. Clients who were able to provide us up to date information in a format suitable for import were converted quickly. Additional time is generally required when the necessary data cannot be extracted from the existing accounting system. Please call so that we can discuss the specific requirements of your implementation.

We believe the real-time nature of the system, as opposed to older “Batch” systems makes the system extremely easy to operate. Users need only learn how to enter the various transactions. There are no time consuming posting routines to memorize. There are prompts along the way. At almost every field, a description of the data being requested will be presented at the bottom left corner of the form. Transactions can be edited after being entered and even deleted if the period has not been closed and the person doing the editing or deleting has the authority to do so. The year end close is without consequence. You cannot hurt yourself with our year end closing process and you can close again and again if you like and you can still print prior year financial reports. The closing process simply creates an “Income Summary” entry that has the effect of closing each P&L account balance. The actual P&L detail is not purged as it is with many systems. When reporting on prior periods, the “Closing” entry is simply ignored, allowing you to do “Rolling P&Ls’ or even place fiscal and calendar year entities on par.

One of the major benefits of the AMB™ software is its ability to import loan related transactions, such as the Funding transaction. Doing so has allowed clients with growing loan volumes to not have to increase staff. Currently, the import functions are designed to work with comma delimited text files (.csv files) and many of the loan production systems available today have been able to create these exports.

Advantage Systems, Inc. was founded in 1986 to market an accounting and project management system called CONTRACK. CONTRACK had been designed for Real Estate developers. In 1991, Advantage Systems, Inc. was approached by a local mortgage company to modify the CONTRACK product to meet the client’s need to manage “Trust” deposits made by borrowers primarily for credit applications and appraisal fees. To do this meant providing the capability to record transactions at loan level. Once that initial project was completed, it was clear that other types of transactions would benefit from being recorded at loan level, such as Fundings, Advances, Purchases and Payoffs. Providing the capability to record transactions at a loan level along with the related reporting resulted in a new focus for Advantage Systems, Inc. and a new product called Accounting for Mortgage Bankers or AMB.

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