Quote Originally Posted by BJ1 View Post
So. have I got this right. Harmoney introduces an option to increase investor revenue and now produces a calculation change which shows that investor revenue streams have fallen because of it? Why should the RAR calculation have updated to use the borrower principal amount? The point of the exercise was to increase investor returns? It seems to me that some techo has noticed the disparity between the borrower and investor principal amounts, panicked, and pushed the "correct" button when no correction was needed. The correct denominator is what the investor has invested - it is the investor's RAR, not the borrower's.
I read the explanation on the Harmoney site and to be honest it is a bit hazy in my mind not least because they don't define the term principal funded. I am assuming this is the total that we invest less payment protect sales commission fees going to Harmoney (up front). It appears at first reading that the calculation effectively writes off this up front sales commission rather than matching it to the income it generates. I'd be interested how others see it, not least the tax man!