Borrower Change 
Use
You can use the Borrower Change function within the position processing of loans to change the main borrower in an existing contract, without having to assign a new contract number. Unlike in cases of capital transfer the loan contract stays the same and all of the data and the history are retained. You can implement the Borrower Change for loans given that are managed on the basis of customer accounts but you cannot enter this function using batch input. For all other forms of loan you use the existing
Capital Transfer function. However, when you use this function the system does not retain the original contract but creates a new one.
Integration
You can use the borrower change function in the Workplace for Business Operations. This involves the back office processing of the business operation with integration in the status concept, (possible status are entered, or executed) and is linked to the release procedure.
Prerequisites
In the IMG activity Company Code-Dependent Settings for Product Type under Reversal, you enter the payment information for the reactivated open items, such as the payment method and payment block, for each company code and product type.
In the activity Define General Control Data, you need to define tab pages, for each company code and product type, in which you can make entries later in the system, for example for basic data or additional flows.
In the IMG activity Define Clearing Account for Open Item Transfer Posting, you enter the account determination for the transfer posting of open items.
Under Define Reasons for Borrower Change, you enter the reason for the borrower change.
Features
In addition to the general data for a loan, such as the company code, loan number or the name and address of the current main borrower, the Business Operation Header also displays the business operation status (such as new, entered or executed), in cases of activated release the release status (such as 21, indicating the dual control principle and the number of releases still to be made) and the release workflow indicator (such as BC in Release Workflow, indicating that a release workflow already exists for the business operation). In the BO Description field you can either enter a posting text manually or using the F4 help selection. This description is then transferred to the Text field in the Additional Posting Data screen. At this point, you can still change the default text. Once the posting has been executed, the text appears on the FI document header.
You define the posting texts that are available as possible entries in the IMG activity Define Company Code-Specific Texts.
After you have entered the relevant data (see below), you have the option of saving, and if necessary deleting the business operation or executing and then if necessary resetting the business operation. If the loan is assigned to a finance project, you have to carry out collective processing for all of the loans in a finance project. In other words you also have to enter, delete, execute or reset a borrower change for these loans.
- When you save a business operation no postings or changes are made to the contract.
- Once you have saved a business operation you can delete this via Business Operation
® Delete.
Choose Execute to execute and, if applicable, to post the entire business operation at once
- The main borrower is exchanged, whereby the partner relationship of the previous main borrower is terminated one calendar day before the specified transfer date and a new partner relationship is entered and begins on the transfer date. Although the standard payment method and the bank details are copied over from the borrower change data, the dunning recipient and the dunning interest rule of the old main borrower remain unchanged. You need to choose a transfer date that does not cause partner relationships to overlap, meaning that you can only ever introduce a borrower change at the end of partner relationships.
- The (remaining) open items for the previous main borrower that exist when the borrower change is executed are transfer posted to the new main borrower. A new remaining item is created for each open item in the customer account of the new main borrower. The new remaining items (provided they are debit items) retain the bank details and the payment method that you have specified within the borrower change. The new remaining items are simple customer account postings and like normal remaining items do not have counter-postings in the loans subledger.
The transfer posting is made via a defined clearing account, that you can enter at company code and at chart of account level. If a disbursement exists that is posted but not yet paid out, this needs to be cleared or reversed before you can execute the borrower change.
In the IMG activity Define Clearing Account for Open Item Transfer Posting, you enter the account determination for the transfer posting of open items.
- All cleared items stay with the main borrower. This does not apply to cleared items with a posting date after the posting date of the borrower change if a balance sheet transfer is being carried out with the borrower change. These cleared items are transfer posted to the new main borrower.
All future postings will be always be made via the new main borrower however. Open items that have been reactivated after the borrower change - for example, by way of a reversal or return debit memo - are posted via the new main borrower.
- In the conditions currently valid for the loan the previous main borrower is exchanged for the new main borrower and the bank details and payment method from the borrower change data are entered, provided that the condition generates debit position flows. The system generates the updated cash flow on the basis of these revised conditons. If a forward rollover or a rollover offer exists, you need to delete this before you can execute the borrower change.
- The previous main borrower is also exchanged in the payment splitting data, that you can process in the contract in the conditions on the Key Data tab page. However, you should differentiate between the application type Value Date Change and Debit Memo Collection Apportionment or Subsidies / Allowances. Although the entries with the application type Value Date Change still exist after the main borrowers have been changed, all of the other entries in the payment splitting data are deleted.
- In addition to the condition based planned records, the system automatically converts other business operations (such as disbursement, payoff, charges and waivers) to the main borrower when you execute the borrower change.
- If additional flows exist these are posted directly.
- If a new account assignment reference is connected with the exchange of main borrowers the necessary balance sheet transfer is carried out during the execution of the borrower change. In this context the cleared items with a posting date after the posting date of the borrower change, and so after the balance sheet transfer, are posted to the new main borrower together with the open items. The balance sheet transfer follows the same logic that applies to balance sheet transfers executed outside of a borrower change; namely the balance sheet transfer for additional costs is brought about by the reversal of the documents concerned.
- The indicator for the interest certificate is also passed on to the loan contract and the corresponding documents are generated.
- If you have executed a business operation, you can no longer delete it. If necessary you need to reverse it via Business Operation
® Reset, though documents can be posted during this activity. The reset, like the Execution, works through all of the loans in the finance project.
- The reset procedure is for the most part the execution of a new borrower change in the other direction.
- Unlike the execution procedure the partner history is not updated but the partner relationships created during the execution are deleted.
- Once the partner relationships for the alternative payer and the authorized drawer have been terminated they cannot be automatically reactivated.
- Similarly, the reset does not recreate the original state of the loan as regards the open items. In the same way as during the execution of the borrower change, all of the open items that exist when the borrower change is reset are posted back to the old main borrower. If a disbursement exists that is posted but not yet paid out, this needs to be cleared or reversed before you can reset the borrower change. If originally transfer posted flows have been cleared after the execution, the system outputs a warning message accordingly.
- If you have changed the dunning recipient and the dunning interest rule for the main borrower after you executed the borrower change, these will remain the same after you reset the borrower change.
- All of the changes made to the bank details and the payment method are processed in the same way as during the execution, however the system determines the characteristics to be used from the reactivated partner relationship with the old main borrower and displays these in the borrower change.
- If additional flows exist, you must reverse these manually before the borrower change is reset using the reversal function.
- If a balance sheet transfer has been carried out during the borrower change, a new balance sheet transfer takes place during the reset procedure according to the current account assignment reference.
- You can change the current interest certificate indicator, which is proposed in the loan master data, before you reset the borrower change. The indicator is then carried over to the loan master data.
The system automatically displays the status of the business operation. This cannot be changed manually but rather by an activity (such as Execute).
If the release function is activated, you forward the business operation Borrower Change to the inbox of the Business Workplace using the To be released function. From there, it is released. You can save the business operation directly from the Release Function The system then also displays the release status in the Business Operation Header. You cannot change this. You can then execute the business operation from the borrower change function itself.
You can branch to the following:
- By choosing Cash Flow you can re calculate the cash flow with the new borrower's payment data.
- You can display the Payment Schedule.
- Choose Display Contract to branch directly to the contract.
- You can display the Loan Summary or Account Statement for the selected loan. In the account statement the new business partner is displayed together with the open (remaining) items.
- You can use the Generate Correspondence function to process correspondence for the borrower change according to different languages and roles.
In the IMG activity Define Documents, you must leave the Report Category field on the detail screen blank for each letter that is used for the borrower change. If you want the outgoing letter to be archived automatically in file management, you must define a Document Type.
If you intend to use the Correspondence function for borrower change processing, you should also define External Flow Types for the flow types that are relevant for a borrower change.
- Using Maintain Partners you can change the data for the new main borrower that is on the Basic Data tab page in the New Borrower field, in particular the relationships and the bank details.
- The borrower change function is linked to Limit Management.
On the lower part of the screen you can make entries in the following tab pages, provided you have activated them in Customizing under Define General Control Data.
Activities
Choose Position Management ® Business Operations ® Workplace for Business Operations ® Borrower Change ® Create. For more information about using the Workplace for Business Operations, see the documentation for Business Operations.
Enter or change the relevant data and save, then you save or execute the business operation.