Blog | Nortridge Software

The Unforeseen Economic Consequences to Thanos Finger Snap

Aaron Abrams — Wed, 20 June 2018 12:04:00 PDT

In Marvel's latest and most anticipated film, Avengers: Infinity War, we witnessed Thanos iconic finger snap which wiped many of our favorite heroes including Spiderman, Groot, Dr. Strange, Starlord, and half of the entire universe. With Earth losing halfing their population, how did the finger snap affect it's economy?

Han Solo's Debt Revisted

Aaron Abrams — Fri, 1 June 2018 12:04:00 PDT

A long time ago (in a galaxy far, far away), I concluded that with an initial debt of 10,000 Imperial Credits and a loan with a one-week 15% interest rate, that with weekly compounding, we had an annual interest rate of 780% and an APR of 143,580%.

Keys to a Successful Nortridge Loan System Implementation

Aaron Abrams — Wed, 20 December 2017 16:04:00 PDT

Rather than scratch the surface that has been scratched so many times, I’m going to get down into the weeds and talk about implementation success in more detail.

Tournament Poker Variance and Backing

Aaron Abrams — Wed, 9 August 2017 16:04:00 PDT

Poker tournaments are big business today, and for some players are fun to play and even make for a televised spectator sport. These tournaments also happen to have some interesting math associated with them.

Turning Data to Gold

Preston Cecil — Wed, 21 June 2017 16:04:00 PDT

Learn the value of data and how you can use it to increase business efficiency and profitability.

Data - The New Moat for Lenders

Edgar Cerecerez — Thu, 8 June 2017 16:04:00 PDT

Machine learning is advertised as a competitive advantage for lenders. But what if it isn't machine learning that will set them apart, but the data they use?

What is the effect of Beginning or End of Day Accrual on APR

Aaron Abrams — Thu, 17 April 2017 16:04:00 PDT

When you have a loan where the payment is a fixed amount, to be divided on a monthly (or other periodic) basis between interest and principal, how do you calculate the correct payment that will cause that loan to pay off in the specified term?

Calculating an Amortized Payment

Aaron Abrams — Thu, 30 March 2017 16:04:00 PDT

Calculating APR: Part 2

Aaron Abrams — Thu, 27 February 2017 16:04:00 PDT

In part 1 of our blog on how to calculate APR, we discussed the mathematical procedure for deriving the APR from a payment flow. Today, we are going to look at the effect of having an extra 19 days in the first period.

Trends to Watch in 2017

Edgar Cerecerez — Thu, 19 January 2017 16:04:00 PDT

As we look to another new year of lending, here are some of our thoughts on the trends that will shift the industry.

How to Make Credit Cards Work For You

Edgar Cerecerez — Thu, 3 January 2017 16:04:00 PDT

Using your credit card is an amazing way to save consumers hundreds of dollar per year. Here's how.

The Giants Awaken

Edgar Cerecerez — Thu, 1 September 2016 16:04:00 PDT

Lenders should keep an eye on Goldman Sachs and its soon-to-be-launched online lending products.

Calculating APR (Part 1)

Aaron Abrams — Fri, 19 August 2016 16:04:00 PDT

In this blog, I will go into the specific detail of that method as is detailed in the documentation by none other than the US Government.

Top Three Keys to Successful Implementation of New Loan Servicing Software

Bret Davis — Thu, 28 July 2016 16:04:00 PDT

For lenders, deciding to switch to new loan servicing software is a big deal. There are multiple factors to consider, and being prepared for the transition is crucial to having a successful implementation.

What Do Star Trek, The Roman Age, and Lending Have in Common?

Aaron Abrams — Thu, 30 June 2016 16:04:00 PDT

Imagine that the Roman Empire never fell. Better yet, if you are a Star Trek Fan like I am, you can refer back to that one episode. What if we had to use the Roman numeral system for lending? Here's how the math would look

Should We Be So Focused on Lending Regulations?

Edgar Cerecerez — Fri, 29 April 2016 13:54:00 PDT

While we should keep an eye on regulations, they are just one indicator when trying to plan out the future of a lending company. What’s more important, regulations are a lagging indicator.

Changing the Competitive Landscape: How Consumer Lenders Can Make Competition Irrelevant

Edgar Cerecerez — Mon, 16 November 2015 13:54:00 PDT

What if you could make your competition irrelevant? Competition in the consumer lending space is only getting worse. The blue ocean strategy may hold clues on what to do.

A Scripting Story: How I Taught A Computer to Integrate

Aaron Abrams — Fri, 30 October 2015 11:54:00 PDT

How Aaron Abrams made a VB Script from an excel that calculated the Black-Scholes Model, a complex pricing model that calculates the premium of an option.

The History of Lending - Part 4: How many mortgages could one Loan Officer service before there were computers?

Aaron Abrams — Wed, 30 September 2015 12:54:00 PDT

How were mortgage loans done before computers? How many people were needed per 1,000 loans? More importantly, can it scale?

Auto Lenders: Does Your Loan Management Software Help You Achieve CFPB Compliance?

Matt Heary — Wed, 05 August 2015 12:54:00 PDT

Guide on what to look for in loan management software to help auto lenders meet CFPB requirements

The History of Lending - Part 3

Aaron Abrams — Wed, 05 August 2015 12:54:00 PDT

The dark history of lending past the Roman era and into the Reformation.

The Competitive Lender’s Scorecard

Edgar Cerecerez — Tue, 30 June 2015 12:54:00 PDT

8 ideas to arm yourself with in the new lending arena

The History of Lending - Part 2

Aaron Abrams — Fri, 26 June 2015 12:54:00 PDT

On the second part of the history of lending, Aaron goes over how lending in Rome started.

Lenders - 4 Tips to Improve Your Website

Edgar Cerecerez — Wed, 26 May 2015 16:54:00 PDT

Some lender's websites make the financial industry look dated and behind the times. Here are 4 techinical tips lenders can use to improve their website.

The History of Lending - Part 1

Aaron Abrams — Wed, 20 May 2015 16:40:00 PDT

How do we calculate interest when we have barely invented math? (And the collateral is you.). Read the first part of a five part series on the history of lending.

7 Questions to Ask As You Shop For New Software

Kim Stempel — Thu, 29 April 2015 17:05:00 PDT

Shopping for new loan servicing software can be a daunting task. Sometimes it's difficult to know where to begin. This list of seven questions will get you started.

The History of Money Part 5: Dollars and Pieces of Eight - Makes Cents

Aaron Abrams — Fri, 17 April 2015 16:42:00 PDT

In Part 4 of our series on the History of Money, we saw how money evolved in England and in the British Empire. English money was one of two types of money that were used in the English colonies. The other was Spanish - they were here first (the native Americans were really here first, but they did not mint coins, and the colonists probably would not have cared if they did). The third point of the triangle trade (aside from New England and Great Britain) was the Spanish Islands of the West Indies. So, a history of American money begins with a history of Spanish money.

Why We Salted Our Hashes

Greg Hindson — Mon, 30 March 2015 16:42:00 PDT

Lately, I have been asked several times why we hash some of our data and why we salt the hashes. We're not talking about breakfast here. We're talking about data security. In the Nortridge Loan System (NLS), we hash data that requires search functionality, such as a customer's Social Security Number. We also have a field for an encrypted version of the Social Security Number. This is what you see on the screen when viewing a customer in NLS.

The History of Money Part 4: In For a Penny, In for a Pound

Aaron Abrams — Thu, 12 March 2015 18:54:00 PDT

In Part III of our series on the history of money, we left off with the Roman Empire. During the reign of Diocletian, rampant inflation led to a revaluation of the currency. As of 301 AD, the silver denarius was the smallest coin. Within 150 years, the Empire had fallen and many of these coins found their way into the hands of the German tribes who had sacked Rome.

The Changing Nature of Lending: Why Payday Lenders Are Moving Toward Traditional Consumer Lending Models

Kim Stempel — Fri, 27 February 2015 18:20:00 PDT

Payday lending is estimated at $27 billion in annual loan volume. It's big business. And there's constant debate about whether or not consumers truly understand what they're getting into when they take out a payday loan.

The History of Money Part 3

Aaron Abrams — Tue, 10 February 2015 22:28:00 PDT

Roman legends date the founding of the city to around 750 BC. This is earlier than the invention of coins by the Lydians of Anatolia (See History of Money: Part 1). Just like the Greeks, the Romans had an economy based on the trade of bronze (actually bronze and sheep were the early mediums of exchange). In the case of the Romans, the form of the bronze was an ingot called an aes rude (rough bronze). These were irregular in shape and size, and so they needed to be weighed for each transaction.

Planning for 2015: Practical Advice and Interesting Concepts

Edgar Cerecerez — Thu, 29 January 2015 18:29:00 PDT

Business planning, like any other type of planning, starts with two things: setting goals that are hard but reachable, and making those goals SMART. But what happens after that? Let's take a look at execution, ideas, and concepts that can help make sure you reach your goals.

Top Lending Trends to Watch in 2015

Edgar Cerecerez — Mon, 5 January 2015 09:00:00 PDT

There are a number of lending trends to watch. We present several here that we saw in 2014 and expect to carry on into 2015. We arrived at them from the conversations we’ve had with our customers and from the changes we’ve noticed in the industry. However, none of the predictions are unexpected. It’s worth mentioning there are two business shifts that every company should pay attention to even though they affect more than the lending industry.

The History of Money Part 2

Aaron Abrams — Sun, 30 November 2014 12:30:00 PDT

In the centuries following the Trojan War (approximately 1200 BC), the Bronze age cities of Greece formed complex trade-based economies. The currency was, naturally enough, bronze. The unit of exchange was the Obol. The original Obol was a long, thin rod. The word Obol can also be translated as "spit," as in the stick that holds meat over a fire. A handful of six Oboloi was called a Drachma, which translates as "handful."

Vendor Due Diligence: What Does it Mean to Non-Bank Lenders?

Matt Heary — Fri, 21 November 2014 17:12:00 PDT

Did you know that the Consumer Financial Protection Bureau (CFPB) released a bulletin in April 2012 requiring banks and supervised non-banks to establish a vendor due diligence process? The process is designed to minimize the risk of putting a consumer in harm’s way through any action taken by you or your vendor in your regular business practice. The "in harms way" is referring to UDAAP or unfair, deceptive or abusive acts and practices for which the CFPB is monitoring for ALL lenders. You can be held accountable for the negligence of your vendors... These suggested steps include...

Vendor Due Diligence: What Does it Mean to Non-Bank Lenders?

Matt Heary — Fri, 21 November 2014 17:12:00 PDT

The History of Money - Part 1: Barter and the Invention of Coin

Fri, 31 October 2014 17:25:00 PDT

Early human communities hunted and gathered food together, and they tended to share their produce. The only personal property would be something that one had made for himself, like a bow or a flint knife. The transition to a settled agrarian economy resulted in the separation of labor. People started to produce much more of one thing than they needed, and they had to rely on others to produce the other items that they needed. They had to trade.

High Finance: A Fun Look at Airplane Financing Terms

Mon, 27 October 2014 12:55:00 PDT

What if you are thinking of purchasing an airplane, and you don't have enough cash on hand? You would ask yourself just how much do you need, how much can you borrow, and on what terms? What does one cost and what will the monthly payments be? We all buy cars, so we have an idea of what they cost and what a car payment might be over three to six years, but aircraft are on a whole different plane (so to speak).

Data Storage: How Many Words is a Picture Really Worth?

Thu, 11 September 2014 14:55:00 PDT

They say a picture is worth a thousand words. Well, it occurs to me that the worth of an image, with words as a unit of worth, is entirely quantifiable. Using simple mathematical calculations based on agreed upon definitions, I can determine exactly how many words any picture of any size is "worth."

Are You Sure Your Company Is Safe from UDAAP Violations?

Thu, 28 August 2014 12:00:00 PDT

Put yourself in the consumers shoes before rolling out a new product and ask yourself if any part of the process looks or feels unfair, deceptive, or abusive. If it feels that way, it probably is. Most states have their own version of UDAAP, so be sure to know those requirements as well.

How Much Did Han Solo Owe? - Compound Interest in a Galaxy Far, Far Away

Thu, 14 August 2014 14:24:00 PDT

A long time ago, in a galaxy far, far away, there was a smuggler named Han Solo. You may have heard of him. He became famous for his actions in the Battle of Yavin and several incidents after, but just prior to that monumental event, he was running Glitterstim Spice for a Hutt cartel. An incident just weeks before the famed battle had far reaching consequences, not just for his life, but for the course of the Galactic Civil War.

Two Insights that Metrics Don't Give You - These Shortfalls Can Cost You Money

Tue, 29 July 2014 16:28:00 PDT

I’m not going to tell you what metrics and Key Performance Indicators (KPIs) you should be tracking - not in this article at least. I’ll assume that you, the pragmatic and analytical reader, read financial statements often. And hopefully, you've determined what KPIs make the most sense for your business. Instead, I will to share the inherent shortfalls of some common metrics, such as financial statements and sales reports.

Newest TCPA Law - Are You Up To Speed?

Wed, 23 July 2014 21:29:00 PDT

The latest Telephone Consumer Protection Act (TCPA) law from the FCC, effective October 16, 2013, is on the street in full force. We should all pay attention. Violations of the TCPA are punishable by fines of up to $16,000 per individual call made in violation. The TCPA also allows the consumer to bring a private civil action for $500 per violation—or three times that amount if the violation was willful.

Are Electronic Signatures Fully Enforceable?

Fri, 27 June 2014 12:49:05 PDT

The bill that ensures e-signatures are legit is the Electronic Signatures in Global and National Commerce Act or ESIGN Act, which was passed by Bill Clinton in 2000. There is conflicting information available about whether or not an e-sign consent document needs to be signed by the borrower in ink to validate the customers understanding that they are signing electronically.

Get Customers to Remember You By Telling Stories

Fri, 23 May 2014 17:15:05 PDT

Here's the best marketing advice for the lending industry: Tell the story behind the loan. It's 100 times more memorable, it engages emotionally, and it is the best way to build a brand.

Best Practices for Database and Version Upgrade and Testing

Fri, 23 May 2014 17:15:05 PDT

Here is a list of the optimal procedures for initiating an upgrade of the software version on the client computers and performing the database upgrade to be compatible with the new client software version.

The Hiring Conundrum

Mon, 28 April 2014 17:20:00 PDT

In today’s leaner and meaner business environment, we are constantly under pressure to deliver more with less. Whether it’s an increase in sales with fewer sales reps, more business intelligence with fewer analysts, or more units with fewer workers, we all feel the pressure. Finding the solution that moves the business forward without inflating overhead costs is critical.

Accounting for Reverse Mortgages

Thu, 17 April 2014 16:07:00 PDT

A reverse mortgage is a loan with no regular payment required, but equity may be cashed out through regular payments from the lender to the borrower. Contrast this to a traditional mortgage, in which there is one large principal advance at the beginning and many (usually monthly) payments over the life of the loan. In a reverse mortgage, the advances are small and periodic, and all repayment occurs upon the sale of the property or the death of the owner.

Humanizing Marketing

Thu, 27 March 2014 13:03:00 PDT

There is something intrinsically appealing about truly connecting with your audience. In the world of marketing, that means being honest about your intentions, presenting clear and transparent information to your potential customers, and not selling. Not selling is an important part. When we are “not selling,” we are “listening." The more you listen, the better your response. Active listening creates a two-sided conversation rather than a pitch. Eventually you begin to understand the customer, and you truly connect. That connection is based more on how we share information rather than the information itself. This is the main idea behind the 'More Human' video that Hubspot shared last year.

So What the Heck is the Money Supply Anyway?

Tue, 11 March 2014 16:17:00 PDT

Money is a strange thing. It has elusive properties that no other thing in our experience seems to have. If I have a $100 bill, I have some money. If I give it to the bank, I have money in the bank, but the bank also has the money. Did the money just double? The government defines the money supply as a matrix of multiple definitions. You see them in the business section of your morning paper with designations like "M0," "M1," and "M2." But what are those? That is what we will try to answer

How to Build A Foundation For Compliance

Wed, 26 Feb 2014 15:17:32 PDT

One of the keys to a compliant lending operation seems really obvious and straightforward - manage all workflow systematically. Track every step, explain every decision, record every interaction with any party to any transaction, and keep a complete audit trail without gaps or exceptions. That sounds pretty simple, but it takes systems and a commitment to gap-free businesses processes to actually make it work

Why Mortgage Loans Are Fixed Amortized

Fri, 31 Jan 2014 13:21:32 PDT

In a fixed amortized loan, the balance accrued on and the breakdown of the payments is preset and not dependent upon the day payments come in. If a payment is applied early, the loan will continue accruing on the principal balance prior to the payment, until the due date is reached. If a payment is late, the loan will lower the amount accrued as if the payment had been made on time. This ensures that no matter what the payment history looks like, when all of the contractually obligated payments have been received, the loan will be paid off (aside for perhaps some amount to account for rounding error)

The Relationship Between Interest and APR

Mon, 13 Jan 2014 15:30:15 PDT

Let's say you're going to borrow $100,000 in a 30-year mortgage. You have two loans to pick from. One is at a 12% interest rate with no fees, and the other is 10% but has $5,000 in upfront fees. The Truth in Lending Act (Regulation Z) requires the lender to state a value called APR (Annual Percentage Rate), which will allow you to take these two loans and compare them - apples to apples, so to speak.

Lending Technology Trends and Forecast for 2014

Wed, 11 Dec 2013 11:19:46 PDT

As we close out another calendar year, a time-honored holiday tradition is the writing of either a top ten list from the year gone by or a forecast for the coming year. Forecasts are more fun because you get to look back a year later and either revel in correctness or figure out how things went so far in the opposite direction.Lending technology lends itself to forecasting because it’s tightly coupled to macro-economic factors, technology trends, and social interactions

Simple Interest vs. Rule of 78's

Mon, 2 Dec 2013 12:30:15 PDT

Should you use simple interest or the Rule of 78s when calculating interest on a loan? Let's compare both to see why it matters.In general, with the exception of the final payment, the payoff of the Rule of 78s loan is always higher than it would be for the corresponding simple interest loan. On the rule of 78s loan, the same interest is "front loaded," which means that the principal is paid back slower. Extra profit is made on these loans whenever they are paid off early

Flexibility: The Difference Between Triumph and Dissapointment

Mon, 18 Nov 2013 18:16:19 PDT

Charles de Gaulle, the famous French statesman and WWII general, said, “You have to be fast on your feet and adaptive, or else a strategy is useless.” He's talking about being flexible. The same focus should be placed on business strategy. Strategy requires business leaders to constantly evaluate whether the existing approach is getting them the desired results.Today’s results-oriented environment places pressure on executives to bring successful strategies into the business, and then tasking operations to execute that strategy. If a company is limited in its ability to execute on strategies because of weak internal skill sets or inferior systems, the viability of any business strategy becomes suspect

Balloon Payments Explained

Mon, 29 Oct 2013 17:26:45 PDT

What is a balloon payment? This is a complex question, because in general, the answer requires context. In specific terms, the definition of a balloon payment can mean different things on different types of loans. For the purposes of a loan servicing system, we need one simple definition that encompasses all the others, so here goes: A balloon payment is any amount of principal that is owed by the borrower and is projected to be left over once all scheduled payments on the loan have been made. A balloon payment can come about in any of the following ways

Top 4 Lending Trends of 2013

Tue, 21 Oct 2013 12:30:15 PDT

As the recovery of the economy continues (consumer lending is projected to grow at a 4 percent this year and 4 percent next year) it gives lenders an opportunity to focus long term strategies. The use of big data by lenders and the access to more comprehensive data for consumers is changing the landscape of consumer lending. Also, the subprime auto lending industry is experiencing what payday lending did five years ago

Turning Off Acrual Processing Is Not Non-Accrual Loan

Mon, 30 Sept 2013 09:40:55 PDT

According to Generally Accepted Accounting Principles (GAAP) in lending, for many loan types, you must stop accruing interest into income when a loan is 90 days past due. This is called Non-Accrual Status. Also, in the Status Code setup, there is an option to turn off the accrual process. For example, if a loan is set to a Status Code where accrual processing is turned off, then that loan will not accrue. On its face, it would seem that this is the feature to be used to put a loan on Non-Accrual Status. IT IS NOT. Let me make a blanket statement and then I will give you the reasons

How I First Learned About Nortridge

Tue, 24 Sept 2013 09:40:55 PDT

Several years ago before joining Nortridge, I worked as a loan servicing manager at a financial institution that purchased commercial distressed debt. The underlying assets connected with this debt were valued in the millions of dollars. At the time of purchase, these loans had not been worked for a couple of years, and in some cases were sold and resold from banks or the FDIC. Thus, they were very delinquent.In order to make a profit on any of these debts, we found our greatest success when we attempted to work something out with the customer

Borrower Portal - A Jumping Off Point

Thu, 29 Aug 2013 12:28:00 PDT

If you are like many consumer lenders in today's markets, you want your borrowers to be able to go onto your website, look up balances on their own, get a copy of their last statement, and perhaps make a payment. For several years now, all this has been possible through NLS Web Services. Web Services is an interface that allows a website to connect with and talk to the NLS database. But, you were still responsible for building the front end website to which the borrower would connect.....

Loans vs. Cash Flows

Thu, 15 Aug 2013 15:45:00 PDT

In a standard installment loan, given the parameters: principal, periodic interest rate, and number of payment periods, we can solve for payment amount using an equation. But what if we know the payments but not the interest rate? There is a specific kind of "loan" where this happens. It's known as a cash flow.....

The Pros and Cons of Servicing Loans In-house

Mon, 29 Jul 2013 17:30:00 PDT

10 Questions Lenders Need to Ask Themselves....

Introducing the Nortridge Online Community – Participate!

Mon, 15 Jul 2013 16:24:00 PDT

Get the information you need at the Nortridge Online Community. This new community provides a forum where your Nortridge Loan System questions are answered by the Nortridge team as well as your peers in similar industries. We'll also post documentation, system updates, and Webinar Wednesday recordings. And we invite all participants to share with us the features you'd like added to NLS.....

Programmed to Make You More Efficient

Thu, 27 Jun 2013 08:13:00 PDT

Servicing and collecting on loan portfolios can be a very time-consuming and resource-heavy job. Wouldn't it be great to eliminate the need for some of the manual data entry you perform on a daily, weekly or even monthly basis? If you receive a file with data you need imported into your loan servicing software, chances are the processing can be done automatically. With every new software implementation comes the need for understanding the business objectives and discovering how certain processes can be automated and customized.......

Consumer Finance in 2013 - Rethinking your Marketing Strategy

Fri, 14 Jun 2013 10:07:00 PDT

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Distracted By Technology and Software Management?

Tue, 30 Apr 2013 11:09:00 PDT

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Break Out by Breaking the Mold

Tue, 23 Apr 2013 15:01:00 PDT

The Nortridge Loan System allows you to both improve your current business while expanding into new market areas. Besides improving the profitability of your current loan origination and servicing operations, our loan servicing system can reveal hidden opportunities to expand your business.....

Don't Get Hung Up on Finance Charge

Wed, 13 Mar 2013 14:18:00 PDT

Lenders can get away with approximating the finance charge because they know that this figure is going to deviate the first time that the borrower makes his payment on any day other than the due date. Usually this occurs the first month. So, they aren't going to go too far toward making sure they have an accurate figure for finance charge, since it is likely going to go the way of the dinosaurs before the first month is done.....

Lifting Up the Hood on Interest Year, The Math of Daily Accruals

Thu, 21 Feb 2013 08:02:00 PST

Understanding how interest is accrued on a daily basis will help you ensure you are setting up your loan properly in the Nortridge Loan System.....