1. Cash Flow Engine Reference Guide
  2. Cash Flow Dictionary
  3. Cash Flow Columns
  4. Payment Decrease Limit - Life (PMT_DECR_LIFE)
  5. Module Usage

8.2.111.2 Module Usage

Oracle ALM and Funds Transfer Pricing Cash Flow Methodologies reference PMT_DECR_LIFE when re-calculating the current payment for negative amortization events such as NEG_AMRT_LIMIT, PMT_ADJUST_DATE, and PMT_CHG_ FREQ. This is relevant only for adjustable-rate accounts where AMRT_TYPE_CD = 600.

For negative amortization-type accounts, the Cash Flow Engine uses PMT_DECR_LIFE to calculate the maximum decrease in the payment allowed during the life of the account. PMT_DECR_LIFE is defined in terms of a percentage of ORG_ PAYMENT. The Cash Flow Engine performs the following check:

ORG_PAYMENT - Newly calculated payment > (PMT_DECR_LIFE/100 * ORG_PAYMENT)

  • If the newly calculated payment satisfies the earlier equation, the cash flow engine limits the decrease to the amount = (PMT_DECR_LIFE * ORG_ PAYMENT).

    For example, if PMT_DECR_LIFE = 25.00, the calculated current payment is not allowed to decrease by more than 25% of ORG_PAYMENT.

  • If PMT_DECR_LIFE = 0, the cash flow engine assumes that there is no lifetime payment decrease limit.
  • The PMT_DECR_LIFE field is referenced when the following negative amortization events occur:
  • NEG_AMRT_LIMIT

    PMT_ADJUST_DATE

    PMT_CHG_FREQ

  • For an explanation of PMT_DECR_LIFE's relationship with other related negative amortization fields, see the Negative Amortization Amount (NEG_AMRT_AMT).