FDM.4:5.1 - A payment, an instruction and a modification

In the constructed loan, 105 is due on day 30. Adequate evidence establishes a payment of 60 by the borrower to the lender. The supplied application rule applies all 60 to that due amount; there are no additional fees or interest. The resulting unpaid amount is 45.

A servicing report still showing 105 unpaid disagrees with that established effect. The model returns the 45 position and the report discrepancy. It retains the original 105 contractual schedule and the actual 60 payment as distinct statements, rather than editing either into the other.

Now suppose the available evidence instead establishes only that the borrower sent a payment instruction for 60. The evidence does not yet establish the event that the supplied terms recognize as payment. The claimed reduction to 45 remains unresolved. The next question is whether that event occurred, not whether subtraction was performed correctly.

A separate pre-funding example has different effect conditions. A valid modification, made by the competent parties under supplied terms, changes a lender’s conditional advance obligation before any money moves. The model follows that rule and its actual occurrence. It does not wait for disbursement to recognize every change.

These examples demonstrate reasoning under their supplied premises. Another instrument’s payment-allocation, formation or modification rule can produce a different result.