COMMERCIAL provides robust charge-off processing features for today’s complex and challenging lending environment. A charge-off indicates that a portion of the receivable balance of the loan has been determined to be uncollectible. All or a portion of the loan asset may be charged off in COMMERCIAL. Charge-off and recovery transaction activity is recorded. Loan principal balance charge-offs are offset by system-generated General Ledger Account offsets to the loan loss account, with recoveries offset by system-generated General Ledger Account offsets to the loan loss recovery account, for this activity.

Payments may arrive from the borrower, from asset recovery, or from any other source. Such credits will be applied to the loan in COMMERCIAL . By default, COMMERCIAL will recover principal on the loan record, apply the credit to the shadow loan (link to Shadow Loans document) and will recover principal on the charge-off record. The latter will occur only when the charge-off balance is equal to the loan balance. In other words, when a loan is not 100% charged-off, the system will not automatically post recoveries until the remaining portion has been collected.

Payoff quotes, activity transmittals, and the like can be obtained from COMMERCIAL. In addition, information is available for regulatory reporting, SBA transmittals, IRS reporting, as well as to any internal portfolio analysis and reporting facilities. If more detailed recovery processing is desired, the charge-off information in COMMERCIAL can be interfaced to RECOVERY through the existing Unified Charge Off (UCO) interface.