This company had been purchasing automobile installment
contracts from dealers throughout the country and the majority of these contracts
purchased used a unique accounting method called "Rule of 78th" to
calculate its payoff amount. The company used a well-known third party loan servicing
system running on mainframe to service all branches in U.S. through leased T1 lines. This
computer system has the following two serious problems to service their securitized
receivables:
Time had run out, the management over New York had to move on and Kao & Kao was called in to their Division headquarter at Sacramento, California and consulted on these issues. In fact, on that very same day, the first "automobile contract " securitization transaction of the company was completed at New York, and there was no servicing program. Kao & Kao immediately suggested to them a local area solution using the downloaded data from the mainframe system. Then, Kao & Kao, using all internal resources, solved all the problems by doing the following:
Kao & Kao C.P.A.'s
1848 Lincoln Blvd., #200, Santa Monica, CA 90404 Tel:(310)396-5448