FAS 166 Gain on Sale Model
Beginning in March, GLS has introduced a new Gain-On-Sale calculator incorporating the changes necessary for FAS 166 compliance.
The new FAS 166 GOS calculator, available with our 7a loan settlement service or as a stand-alone product, allows for the entry of up to 10 monthly borrower and Colson payments. While most loans will require only 3 months of input before the warranty expires, the calculator allows for additional entries if the warranty extends to 275 days.
Highlights of our FAS 166 GOS calculator are:
- Input of monthly borrower principal and interest for up to 10 months.
- Input of monthly principal and interest payments sent to Colson for up to 10 months.
- Calculates the IRR to the investor, which is utilized to calculate the amount of the secured borrowing and interest expense for each monthly period.
- Calculates the amount of the Secured Borrowing and the Interest Expense for each monthly period.
- Provides the accounting entries impacting the balance sheet and on-going borrower and Colson payments as they are input into the spreadsheet.
- Provides a FAS 157 Level 2 valuation, weighted average life, weighted average prepayment speed and discount rate for the net servicing right.
- Once the warranty has expired, the spreadsheet provides accounting entries to recognize the loan sale, including the servicing asset, the gain-on-sale and the discount on the un-guaranteed.
For further information on our loan settlement, gain-on-sale and valuation services, please contact Rob Herrick at 216-456-2480 ext. 144, or via e-mail at rob.herrick@glsolutions.us.