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Audience: Loan Servicer or Collector, Upper Management, Developers, Loan Servicing/Collections Managers
Sometimes borrowers are unable to make their payments or send you a document, but promise that they will just a couple of days, or by the end of next week. To make tracking these agreements easier, LoanPro has a Promises feature that lets you record what the borrower said they would do and when. And if they promise to to pay a certain amount, the system can automatically track whether its criteria were met and mark it as fulfilled.
This article will explain the basics of how promises work and what you can track with them. Check out our Creating and Fulfilling Promises article to see exactly how to log a promise.
Promises in LMS are designed to help you keep track of agreements you've made with your customers. The feature was created with promises to pay in mind, but, by adding a note, you can use it to track any kind of agreement you've made with a customer. For any promise, you can track the subject, type of promise, and date the promise should be fulfilled. And for promises to pay, you can keep track of the amount. LMS will also track the status of the promise. It will be marked as ‘Pending’ until it is fulfilled. If it has not been fulfilled by the due date, the status will show ‘Failed.’ If the correct conditions are met and the promise is completed, the status will show ‘Fulfilled.’
How your company handles promises is up to you, whether you require them to be fulfilled within a certain number of days, have rules about what level of action fulfills a promise, or if you credit collections agents for recording a promise. Whatever you decide, you'll have a place to keep a record, and you can generate a report to see what promises have been made, and the status of those promises.
Automatic Promise Fulfillment
While promises can be manually fulfilled by an agent, they can also be fulfilled automatically when they meet certain criteria. LMS will remind you when the fulfillment date arrives. Only promises to pay can be fulfilled automatically. You can set the criteria that will determine if a payment counts as fulfilling a promise. This includes setting payment parameters like the date range during which the payment must be received, or the percentage of promised amount that must be paid.
Automatic promise fulfillment removes the need for collections agents to exercise their individual judgement about whether a payment meets fulfillment requirements. This is especially useful if agents are commissioned on fulfilled promises, because they won't be the ones to decide the circumstances that count as fulfilling the promise.
Where do Promises Fit?
As a lender, it's important to be prepared for situations when borrowers don't make their payments. The Promises feature allows you to keep track of what your borrowers say they will do. This also allows you to see how many times the borrower has made, kept, or broken promises in the past. This can help you stay on top of problems and maintain your lending portfolio.
This Feature is Not
Promises do not guarantee that borrowers will make their payments. This feature is for lenders to keep a record; it does not process payments. The borrower is still responsible for making the payment or fulfilling the agreement. Setting up an AutoPay, while still not a guarantee that a payment will be made, usually increases the odds.
Now that you're familiar with them, you're ready to start Creating and Fulfilling Promises. That article shows how to log, track, fulfill, and export promises. After that, you should check out Automatic Promise Fulfillment and the Promises Report.
And if you plan on using promises to track when borrowers have promised to make a payment, you might also want to brush up on our Intro to Payments.