Step #3: Cost Allocation
Step three is the
identification and allocation of loan origination costs, fixed
overhead and servicing costs, and variable servicing and marketing
costs over the total loan portfolio. These costs are allocated by loan
type, loan size, and probability of default and loss given default.
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Supporting Solutions:
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Cost Allocation application
allocates loan origination costs, fixed overhead and servicing
costs, and variable loan servicing and marketing costs by loan type,
loan size, and probability of default. Accrual provisions and
economic capital are allocated by probability of default and loss
given default |
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