Author: VanDyk Mortgage

January 10, 2024

 

• 2023 Lookback/Gratitude Wins

As you are aware, VanDyk Mortgage is the best of the best!  We rise above other lenders in the industry in many areas but feel our people and our culture are what set us most apart.  With the focus we place on integrity, honesty, hard work, and gratitude, we have been able to support each other through one of the roughest years in recent memory.  See the attached document showcasing just a few of our team members quoted from 2023 – we are grateful for your attitudes of gratitude!

• 2024 Newscast Schedule

To ensure all employees have opportunity to attend our monthly newscast, we are taking over the 2^nd Thursday of each month at 1pm EST time slot.  A calendar invite was sent out and the meeting details are also posted on our shared What’s Happening calendar on VDMC.net.  Email ProductionSupport@vandykmortgage.com should you like the outlook invitation re-sent to you or forwarded to potential recruits.

• Credit Report Costs

As previously announced, costs for credit reports and credit related services are increasing.  See the attached email for details regarding the SARMA fees and be sure to review with your Branch Manager any changes in what is being disclosed to your borrowers.

• Soft Pulls with LPA

Due to the increased fee for soft pull reports taking effect 1/19/2024, we have revised our policy for loans being submitted to LPA / Underwriting with a soft pull to allow for a single or two-bureau report instead of requiring all three bureaus.  Please be mindful of the following:

1. If completing a 1 bureau pull, Experian is the default you should select (they tend to be the most accurate and are the least expensive)
2. If pulling 2, Experian and TU are the default.
3. To lock using a soft pull, a three-bureau report must be provided.

A copy of the breaking news email addressing this is attached and you can contact ProductionSupport@vandykmortgage.com for assistance.

• Pipeline Updates

We have created a new pipeline view for LOs available now in your Encompass!

The Loan Officer – Refi 2024 view will provide you with a list of borrowers closed on a rate over 6.4% who may be eligible to Rate/Term refi when interest rates drop.  We recommend reaching out to these borrowers ahead of time to get everything lined up so you can close them all quickly once you lock them in.  BRING IT ON 2024!!!

• Trainings from MI Companies/Agencies

We are thrilled to make 2024 a growing year.  This year, each month we will be highlighting trainings that both our agency and MI partners are offering.  Nothing is top secret or off limits!  We know knowledge is power and we are powerful people. Highlights for the month of January:

• • Freddie Mac Policy on Point Webinar (previously recorded) – VARIABLE INCOME!  A Discussion With Policy and Quality Control Experts About Rental and Employed Fluctuating Income (youtube.com)
  • Essent’s “DU Live! Advanced Micro Session” – January 9 – Register Here (gotowebinar.com) AND “LPA Live!  How to READ AUS Findings like a PRO” – Coming January 11 – Register Here (gotowebinar.com)
  • USDA Turn Income Into Opportunity – Coming January 18 – Register REGISTRATION SFHGLP “Turn Income into Opportunity” January 18, 2024 (2 pm – 3 pm ET) (office.com)
  • MGIC – Self-Employed Borrower Opportunities – January 16, January 23 and January 30 – Multiple Sessions can be found here: Mortgage Industry Training | MGIC

 

Find links to additional training provided by the MI companies here.

• EPO Policy Reminder

With the anticipated rate drops for 2024 and refinances on the horizon, we wanted to remind everyone of our Early Payoff policy.  Be sure you are watching the Earliest Refi Date in your Encompass pipelines and talk with your borrowers up front on every transaction regarding their intent to keep the loan.  If it is anything less than one year, communicate with Secondary to ensure your risk is minimized wherever possible.  Our EPO policy can be found HERE.

• EPDs and Risk

VP of Servicing Pam Groosbeck has put together an overview of delinquent loans and the seven basic stages of default. Please take a moment to review to see how the back end impacts the front end when it comes to delinquent loans.

Interested in learning more about VanDyk’s stance on late payments and early payoffs? Tune in to the Newscast for a special feature discussion piece.  You don’t want to miss this!

• Updated 8821/Halcyon Form

Halcyon has updated their disclosure to provide more transparency and detail regarding the individuals named on the 8821.  The new disclosure has been updated in Encompass as a 2 page document with the 8821 form to be signed by the borrower as the second page.

• Howee’s Agency Guideline Search: Updated

If you missed our announcement on December 12, the Howee Agency Guideline search has been improved. Check out the attached email for more information, and try it out next time you have a guideline question!

• Marketing Updates

Have you joined Marketing’s Video Challenge Teams Channel? Participate to learn and improve your video marketing techniques, dynamically connect with clients and colleagues, and have the chance to WIN BIG!!  Reach out to Morgan Bledsoe today to get added to the Teams Channel!

• HR Updates

Available Now: 2024 Annual Employee Training

• • As of January 2, the Annual Employee Training course is available to complete. Please visit VDMU to complete your training today.
  • New employees hired from Oct 1 -December 31, and who have already completed the training, do not need to repeat the training at this time.
  • See the attached announcement and contact hr@vandykmortgage.com with any questions.

Blue Cross Blue Shield: Mobile App Instructions

• • Always have your virtual Blue Cross Blue Shield card accessible for dental and/or vision care appointments. Check out the attached instructions to download!

 

 

Agency Updates

REMINDER: Self-Employed Borrower + Rental Income

As a reminder, effective January 1, 2024, Fannie Mae and Freddie Mac both updated their requirements involving self-employment and rental income.    Here is a highlight of those changes:

 

Fannie Mae – https://singlefamily.fanniemae.com/media/37021/display

Rental Income:

1. Non-Subject Rental Properties acquired in the last 12 months will require the borrower to have a primary housing expense and at least a one-year history of property management experience to use the full amount of rental income towards qualifying, otherwise the amount may be limited.
2. Lease Agreement use – Form 1007 or Form 1025 must support the income reflected on the lease agreement or the lease agreement must provide evidence the terms of the lease have gone into effect with proof of receipt for at least two-month’s rental payments.

 

Self Employed:

1. Less than a two-year history – Personal and Business Federal Tax Returns must reflect a minimum of 12 months of self-employment income from the current business (if a business was opened 2/1/2022, the 2022 tax return would not have a full 12 months of self-employment income and therefore could not be considered).
2. Using one-year of Tax Returns – This will only be allowed when ALL self-employed businesses have been in existence for five years and the borrower has had a 25% or greater ownership interest for the last 5 consecutive years.

 

Freddie Mac – https://guide.freddiemac.com/app/guide/bulletin/2023-19

Lease Agreements:

1. Lease term of a minimum of one-year is being removed – This is a flex!
2. Newly Executed Leases must require the due date of the first rental payment be no later than the first payment due date of the Mortgage.
3. Evidence of receipt of the security deposit plus first month’s rent OR receipt of two month’s rental payments AND must have evidence that the payments were cashed or deposited into the Borrower’s depository account or transferred into a third-party money transfer application account owned by the borrower.

 

Fannie Mae

Verification of Employment

Effective immediately, Fannie Mae has updated their Verification of employment to include alternative documentation to satisfy the final verbal verification of employment such as a paystub or bank statement.

• Within 15 business days prior to the note date, the borrower can provide either
• The most recent available paystub as of that date that

o meets the requirements in B3-3.1-02, Standards for Employment Documentation,

o reflects information for the most recent expected pay period based on the date it is provided and the borrower’s pay cadence, and

o does not include any information indicating the borrower may not be actively employed.

• Bank statements dated no earlier than 15 business days prior to the note date that

o meets the requirements in B3-4.2-01, Verification of Deposits and Assets,

o reflects information for the most recent expected pay period based on the date of the statement and the borrower’s pay cadence, and

o does not include any information indicating the borrower may not be actively employed.

 

Restricted Stock Units and Restricted Stock

Restricted Stock Units and Restricted Stock has been added as an eligible income source under “Other Sources of Income”.  Documentation requirements can be found here.

 

Non-Taxable Income

Fannie Mae is aligning with Freddie Mac to allow 15% of the social security income to be grossed up by 25% and added to qualifying income without needing to provide additional documentation (tax returns) evidencing the nontaxable status.  They have also specific that child support income may be grossed up by 25% without having to provide documentation of nontaxable status.

 

Freddie Mac

Verification of Employment

Effective immediately, Freddie Mac is also updating their 10-day Verification of employment to include use of a paystub.  The paystub must be the pay period immediately preceding the Note Dat AND has the “paid through” date no more than 15 business days before the Note Date.  For all alternate 10 day PCV allowances from Freddie Mac, visit their Selling Guide.

 

Non-Occupying Borrowers on Cash-Out Refinances

Effective with loans closing March 6, 2024, Freddie Mac is no longer allowing non-occupying borrowers.  All borrowers must occupy when it is a Primary Residence.

 

Condo Project – COMING SOON!

Coming in February, Freddie’s Condo Project Advisor Project Assessment Request will indicate if a project is not eligible.  Also in February, the condominium unit mortgages webpage will detail how an authorized representative of an HOA may contact Freddie Mac to inquire both whether a project has received a “Not Eligible” status and/or how to appeal a “Not Eligible” status.

 

VA

As announced in a special Corporate Communications update (attached), effective as of January 1, 2024, non-medical and non-charged off collection accounts must be considered in the DTI with 5% of the balance unless there is a documented established payment arrangement.

 

 

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Upcoming Events and Reminders

Miss a training? You’ll find our monthly newscast and Iron Sharpens Iron recordings in the VDM Vault. Department-specific trainings are shared in their respective Seafile folders.

Don’t forget: you can find invitations on our shared calendar under What’s Happening at VDMC.net (all times posted on the What’s Happening calendar are EST)

• Deal Desk: Every Tuesday at 1:30pm Eastern
• In House HELOAN Training: Wednesday January 10^th @ 1pm Eastern
• VanDyk Mortgage Newscast: Thursday, January 11^th @ 1pm Eastern
• Iron Sharpens Iron: Tuesday, January 16th @ 11am Eastern
• HECM 101 – Reverse Mortgage Training: Wednesday, January 24^th at 11am Eastern
• Production Roundtable: Wednesday, January 24^th @ 1pm Eastern – National Talk Like a Grizzled Prospector Day  REMINDER: ATTENDANCE IS MANDATORY for all LPs and TCs/LOAs who perform Processor or TC functions.

 

Updated Matrices

The VanDyk matrices have been updated to reflect 2024 loan limits. You can review in the Product Matrices folder here.

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FHA Timeframes

Where the 4000.1 HUD Handbook is silent on what a timeframe is based upon, it is to be assumed that it is based on the FHA Case Number Assignment Date.  An example of this would be late payments in the last 12 and 24 months.

In a case where the FHA Case Number has been transferred to us from another lender, the timeframe is based upon the date of the documented transfer.

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FHA New Construction Reminder

For aiUW to generate FHA New Construction document requirements: “New (less than 1 year)” must be checked within the HUD-92900LT FHA Loan Transmittal:

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Brokered Loans & Appraisals

As a reminder, any questions regarding a brokered loan appraisal should be directed to the Account Executive.

December 6, 2023

 

• Closing Request: CD No Longer Required!

With the recent change in who is preparing and sending Closing Disclosures (either the assigned Closer or a Branch team member), we have determined a CD being sent out prior to submitting the closing request is no longer a requirement.

What does this mean?  It means you can now SUBMIT your Closing Request as soon as you have the information on the form completed, no Closing Disclosure required!

• 2024 Conventional and FHA Loan Limits: Update

Please see the attached email for the updated Conventional and FHA loan limits and full details. We will allow Conventional loans to close on or after December 18th, 2023 utilizing the 2024 loan limits. Locks will need to be valid through 1/1/2024.

FHA limits are effective with case number assignments on/after 1/1/2024. The new directive raises the FHA one-unit loan limit to at least $498,257. The full mortgagee letter is attached.

• Please keep in mind that the maximum loan limit is determined by the effective date of your case number. If you have an FHA loan already in process, and the case number has already been assigned, you cannot increase the loan amount to the new limits.

Note: Conventional loan limits are now live in Optimal Blue.

• Floify eClose Update

As we work through a few minor wrinkles with hybrid eClosings in Floify, we wanted you to be aware of a quick and easy fix should your borrower experience issues completing their closing documents.  Please know we absolutely CAN and LOVE to close as many borrowers as possible using the hybrid eClose option with Floify and look forward to full eClosing packages with Floify very soon.

Borrowers may see a “Page Expired” error when trying to complete their closing documents in Floify when:

• • Accessing via Safari on iPad, iPhone, or Mac
  • Accessing via Chrome in Incognito Mode (private browsing)

Please see the attached how-to for the workaround for these “page expired” error messages.

• Bond Submissions & Best Practices

State Housing, Bond and DPA loans require additional steps and work from a secondary, compliance, underwriting and closing standpoint and it is important to ensure each department is given ample time to complete their required processes.  When mistakes are not caught prior to closing, the costs to cure can be substantial.  We ask for your support and assistance when originating and processing these loans to submit them in a timely manner and set expectations with your borrowers and realtor partners.  Lightning close is not available for these programs.

• REMINDER – SOFT PULLS should NEVER be pulled outside of Floify

With the recent uptick in soft pull activity and the upcoming possibility of price increases in 2024, we wanted to remind you of our companywide policy regarding how soft pulls are obtained.  We pull all soft pulls via Floify once the borrower has given consent.  This ensures we have the required permission in writing and our aiUW condition will be properly applied to the Encompass file.  It is IMPERATIVE that written authorization is in the file the day a soft pull is completed.

In the very rare occasion your borrower is not able to create a Floify account, you must present the borrower’s credit authorization to pull in writing to ProductionSupport@Vandykmortgage.com so a manual soft pull can be done.  Sarma is pulling reports and actively requesting proof of the credit authorization in writing, which we must be able to provide.  Please contact Production Support if you need a refresher training on how to obtain a soft pull via Floify.

• Social Media Support

If you have a YouTube, TikTok or Instagram account and would like your VanDyk co-workers to like and subscribe or follow, you can add your handle and pages to our Social Media Inspiration group in Teams!  This is a great way to get support and be supported by your VanDyk team so if you add your information here, be ready to follow back co-workers who follow you – that’s just part of the deal.  If you want to participate, email vandykmarketing@vandykmortgage.com to be added to the Social Media Inspo group in Teams today!

• Broker Updates
  • REMN has overhauled their HELOC program – Steve from REMN will be presenting on these updates Tuesday, December 19 at 12pm Eastern. The invitation is available in the attached Training email.
  • Acra Lending: Reminder that we have a new broker partner – our A/E Steve Sansone will be presenting on these products on Monday, December 18 at 1pm Eastern. See attached Training email for invitation.
• Product Certifications: Reminder

If you missed our in-house HE loan training, you can find the training here at VDMU – once you pass your quiz, you will receive your Product Certification. A product certification in Buydowns is available as well!

• New Pilot Program: CitiBank HomeRun

Exciting news: VanDyk Mortgage was selected to help CitiBank pilot a Community Lending product, HomeRun. This product is in very select markets, see attached eligible areas. HomeRun offers a no mortgage insurance option for borrowers up to 97% LTV and minimum borrower contributions as low as 1%. The borrower does need to be at or below 80% AMI to qualify and this will be a product that Citi will underwrite. See attached HomeRun product overview and Manual for all the program details.

• Last Call: Licensing Renewals

Don’t forget! All licenses expire on 12/31/2023 – and you are not eligible to renew your license until your 2023 CE has been complete and posted in your NLMS account. If you have any questions, reach out to Shelby Losinski.

• KUDOS and WINNING!

Congratulations to Heather Simon, Branch Manager in Oklahoma, for receiving a 2023 HBA Presidential award!  The Oklahoma branch of VanDyk Mortgage has only been open for 16 months and has already made an impressive impact in the marketplace.  We also congratulate Heather for becoming the VP of Oklahoma’s HBA Southwest Chapter.  We are thrilled for you!

If you have a win, kudos or other great news you would like published and shared, email ProductionSupport@vandykmortgage.com

• #VanDykDifference

At VanDyk Mortgage, our difference and what sets us apart is our culture and our people.  VanDyk is THRILLED to have TWO members of our leadership team featured in the most recent issue of National Mortgage Professional magazine.  Congratulations to Jon Barnes and Lindsey Kuhnle for their incredible accomplishments in the mortgage industry!     40 Under 40: The Future Is Here Digital Edition | NMP Magazine (nationalmortgageprofessional.com)

 

Agency Updates

As you’re aware, the agencies passed along maximum loan amount updates for 2024 – which was their most exciting news.  They have been quiet on any additional updates. Should any Agency Updates be released in the coming weeks, we will be sure to pass along in a separate Corporate Communication.

 

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Upcoming Events and Reminders

Miss a training? You’ll find our monthly newscast and Iron Sharpens Iron recordings in the VDM Vault. Department-specific trainings are shared in their respective Seafile folders.

Don’t forget: you can find invitations on our shared calendar under What’s Happening at VDMC.net (all times posted on the What’s Happening calendar are EST)

• Deal Desk: Loan Save with Dave: Every Tuesday at 1pm Eastern
• Deal Desk: Feature Topic + Loan Save with Dave: Every Thursday at 1pm Eastern
• VanDyk Mortgage Newscast: Friday, December 8 @ 1pm Eastern
• Production Roundtable: Wednesday, December 20 @ 3pm Eastern on National GAME Day REMINDER: ATTENDANCE IS MANDATORY for all LPs and TCs/LOAs who perform TC functions.
• Iron Sharpens Iron: Tuesday, December 19 @ 11am Eastern

 

Training Feast: Leftovers!

Hungry for more training? Join us for any or all of these upcoming sessions! Find Outlook invitations in the attached email or on the shared training calendar.

• The UW’s Brain-Income Part 1:  Variable Income, Emp related Assets, VOE cheat sheet | Wednesday, 12/6 12pm ET
• The UW’s Brain-Credit:  Bankruptcy, non-traditional credit, disputed accounts Wednesday, 12/6 3pm ET
• Broker Flow- The Updated VanDyk Way:  New milestones, the broker tool and tips/tricks Monday, 12/11 1pm ET
• Encompass Mastery Part 1: most common errors/issues will be reviewed Tuesday, 12/12 12:30 pm ET
• The UW’s Brain-Income Part 2:  Nontaxable income, rental income on tax returns, S Corp, Schedule C Wednesday, 12/13 12pm ET
• Prism Income Calc- The VanDyk Way:  A review of calculating income in Prism Friday, 12/15 3pm ET
• Acra Lending- New Broker Partner: Review products/processes with our new lender Monday, 12/18 1pm ET
• REMN HELOC Updates:   A review of the new process/program updates Tuesday, 12/19 12pm ET
• Secondary 101:  What is the secondary market/back end and pricing basics including LO Comp Wednesday, 12/20 1pm ET
• Buydown Refresher:  price and structure a buydown, review the agreement disclosure practice Friday, 12/22 12pm ET

 

AUS Findings + W2s

If AUS is calling for W2s for the prior year, a W2 is required for any employers for that previous year – regardless of it being prior employment or income that we are not using for qualification if it is on the application.

The same would go for the 2 years of W2s requirement.  In lieu of W2s, a written VOE can be obtained – but 12B of our written VOE form must be completed.

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Supplemental Wages

Though many agencies allow for use of supplemental wages of at least 12 months, we must still attempt to verify 2 years history of that type of income via paystubs + 2 years W2s or written VOEs with income covering a 2-year period, as applicable per agency requirements.

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In-House HE Loans: Appraisals/AVMs

Did you know an AVM is possible to use for our in-house HE Loan program through Vista Point?

Reach out to AskUW@vandykmortgage.com to determine how and when you can use an AVM.

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25 Points

 

November 3, 2023 

• In-House HE Loan Product Certification

Great news! Beta testing has been completed and we are ready to roll out our in-house second mortgage product companywide. AWESOME!!!  If you are interested in originating or assisting with an in-house HELOAN, you will need to complete a training course for Product Certification to have access to the program templates in Encompass.   We have a live training session scheduled for Tuesday 11/14 at 11am EST.  The outlook invitation is attached, and we will send out a separate invitation with additional details soon.  Reach out to ProductionSupport@vandykmortgage.com with questions.

• Condo Vault Training

Earlier this week, Tony Migliavacca from the Condo Vault hosted training for all our processors and TCs.  Branches are able to order their own condo reviews immediately, however,  as of November 6, all condo orders must be placed by the branch directly through The Condo Vault. Attached is our FAQ for Condo Vault orders and Condo Reviews, and you can find recordings of the training and a how-to guide in the Condos Seafile.

• Compliance Disclosures Update

Our fabulous production team of transaction coordinators and loan processors were trained on sending initial and revised disclosures during last month’s round table and as of today, all of our sales team members have had an opportunity to attend this training as well.  Thank you so much to everyone who participated!  Remember to reach out to Compliance@Vandykmortgage.com  on your first one or two packages should you need assistance or would like to have someone screenshare with you as you work on your first few, to make sure all your questions are answered.  Here are some key updates and important information:

1. Branches will be responsible to send all initial disclosures and COCs starting 12/1.
   1. We will provide additional training for bond loans that require a 2^nd Encompass file.
2. If the compliance team is sending out any initial disclosure packages (aside from the excluded Bond loans) the fee has increased from $30 to $40 as of 11/1 and the SLA has been updated to the end of the 3^rd business day
3. Beginning December 1^st, any COC/Revised LE packages will be an additional $40
   1. $40 per disclosure set sent

The job aids for sending initial and revised packages are attached and also available with other training resources HERE

• Closing Disclosure Update

As of 11/1, your Closing Disclosures are being sent by the Closing department.  A few of our go-getter branches asked to be trained on sending the CDs themselves (to avoid waiting on someone else in urgent situations and to take the power into their own capable, brilliant hands) and we are THRILLED to accommodate anyone else wanting to take on the CD portion of disclosures.  If you are not trained to send a CD at your branch, a closer will be assigned and work on sending out the CD for you within current our current SLA.  Contact Compliance@Vandykmortgage.com to schedule training.

• Loan Comparison Tool

Are you utilizing the LTK – Loan Comparison Tool to view changes made to your file?  You SHOULD BE!  Easily identify if a re-disclosure is needed at a glance and what modifications are being made to your file.  Check it out under Forms > LTK Loan Comparison Tool

 

• Floify Reminders

Accepted Documents: Once we give a “thumbs up” and accept docs in Floify, those docs should flow into the Unassigned portion of the File Manager. If that isn’t happening, reach out to Production Support so we can troubleshoot your Encompass integration and make sure it’s set up properly.

Disclosure Automation: After you request a disclosure package, be sure to exit the file. If the file is occupied, Floify will not be able to access the file to send disclosures to the borrower. This can cause issues if we have a time-sensitive CD needing to be sent to the borrower – so best practice is to exit the file and allow Floify access to get them sent.

Floify Inbox: Now that we have worked through our initial launch – when you email Floify@vandykmortgage.com, those emails will be forwarded to Production Support to answer. If you need help after hours or on weekends, Concierge@floify.com has expanded hours (Monday through Friday 9:30 AM – 8:30 PM eastern, Saturday and Sunday 10:30 AM – 7:00 PM Eastern).

Floify and the Borrower Experience: We have some excellent helps and resources from Floify regarding the borrower’s experience and the co-pilot feature where you can follow along with your client while they are in their Floify Portal.  Check out the videos and articles below to become an expert in what your clients experience when accessing their accounts:

• Videos
  • Borrower Portal Overview
  • The Borrower’s Experience (this is a webinar)
  • Borrower Filling out the Application

 

• Help Articles
  • Co-Pilot
  • Borrower facing – Complete My Loan Application

 

• Broker Updates
  • Angel Oak has rolled out non-QM standalone closed-end seconds. You can find more details on this program here.
  • Quorum is now offering an interest-only first lien position HELOC “Bridge” product – see the attached PDF for additional information.
• Loan Template Sets – Floify/Loan Duplications

When loans are duplicated in Encompass or are submitted through Floify, they will come into Encompass without a loan template set applied. Best practice is to apply a loan template set the first time you are in the file. If you forget to do this, a Conventional Purchase template set will be applied by default.

• Licensing Renewals

It’s that time of year! Please see the attached email on licensing renewals. As a reminder, all licenses expire on 12/31/2023 – and you are not eligible to renew your license until your 2023 CE has been complete and posted in your NLMS account. If you have any questions, reach out to Shelby Losinski.

• Human Resources Update: Open Enrollment

Open Enrollment for 2024 is just around the corner! Invitations will be sent soon for informational meetings being held Monday, November 20 at 10am and 2pm eastern. Open Enrollment will start on Monday, November 20 and run through Friday, December 1. See attached PDF for additional details.

• Who Do I Contact

With recent changes to roles and responsibilities, our Need Help?  Who to call link on VDMC.net has been updated.  In a nutshell, all our “extra” department addresses (SpecUW, NonQM, BrokerSupport) have been suspended in favor of one general email address for each department: askUW@vandykmortgage.com, ProductionSupport@vandykmortgage.com, Compliance@vandykmortgage.com etc.  Please take a moment to review the Need Help?  Who to call link on VDMC.net to ensure your email communications are responded to as quickly as possible.

• SE Income Support?  PRISM and AskUW!

We are over a month into our full PRISM launch and with the success of this income tool we are transitioning away from our current Self-Employed and Rental Income Support Team set-up.  Have no fear, once you have completed your PRISM calculation, if you have concerns with your income, you can contact askuw@vandykmortgage.com for support.

• Property Taxes – Important!

We are approaching the months of the year where property taxes are coming due. This is important for us when structuring our LEs and cash to close on files. Many title companies and attorneys’ offices will begin using the estimates for what is due to establish tax proration credits, and we will also need to account for this in our escrow account set-up as well, which in turn effects the final monthly payment we use for qualification.

Please be sure that you are reviewing the most up-to-date estimates in your locality. Also be reminded that in situations where taxes or CDDs are paid for the year in advance, there is a considerable reimbursement due from our Borrowers to the Sellers on purchase transactions. This often grossly increases cash to close over what we may have estimated – please review your LEs and escrow account set-ups carefully and make sure that your borrowers have the most accurate information up front.

• QC Updates

During the QC process we continue to see numerous loan files that have employment and income discrepancies.  Here are some common red flags that, if you watch out for and address up front, should reduce the number of discrepancies and improve our overall loan quality.  See November’s Quality Control Insight letter attached for all the details.

• Offer letters and qualifying with future employment (start date after close)
• Unable to validate business – location, phone number, online presence, or websites.
• Applicant’s job title is generic – e.g., “manager” or “vice president.”
• Income levels are inconsistent with applicant’s occupation and position.
• Income appears to be out of line with the applicant’s type of employment, length of time at the employer, or education level.
• Recent large pay increases

Agency Updates

Fannie Mae has specified in their most recent Selling Guide Announcement that when a borrower is scheduled to begin new employment under the terms of an employment offer or contract, the offer or contract cannot be for employment by a family member or interested party to the transaction.  This is regardless of whether a paystub is obtained prior to loan delivery.

We are re-attaching the DU Release Notes from last month’s new as these updates will occur the weekend of November 18.

Reminder about LTV changes! BIG NEWS coming for DU Casefiles created on and after or resubmitted on and after the weekend of November 18, 2023!!!  LTVs are increasing to 2- and 3-4-unit properties up to 95%!!

 

Freddie Mac wins the hottest topic from the year – Income!  Most of the Freddie Mac bulletin surround income this month.  If you read anything, please read this!  (Okay – And read everything else, too.)

Freddie Mac is emphasizing the importance of documenting our income analysis and calculation as this may aid in future secondary reviews.  This starts from application.  When you are calculating income at any point in the loan process, please be sure that this is explained and documented if you are using anything other than the recommended income.  It could mean the difference between a post-closing issue and not.

 

The Bulletin this month also touches on history requirements, how to determine the earnings type, and fluctuating earnings.  Freddie Mac has created an FAQ to aid in their Employed Income Calculation and Requirements HERE

 

Timeshare Related Obligations:

*Timeshare loans are considered installment debts, regardless of how they are reflected on the credit report and are not considered housing payments; foreclosure time periods are not applicable.

*Timeshare maintenance fees are not required to be included in the monthly debt to income ratio. And

*Timeshare ownership is not considered an ownership interest for First-Time Homebuyers.

 

FHA  has made multiple updates to the 4000.1 – so much so that we are sharing the most recent version of the 4000.1 with changes effective November 7, 2023 HERE

Accessory Dwelling Unit (ADU) has seen some of the most specific updates from HUD.  We have attached a Summary Chart outlining these bullet points.

 

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Upcoming Events and Reminders

Miss a training? You’ll find our monthly newscast and Iron Sharpens Iron recordings in the VDM Vault. Department-specific trainings are shared in their respective Seafile folders.

Don’t forget: you can find invitations on our shared calendar under Whats Happening at VDMC.net (all times posted on the What’s Happening calendar are EST)

• Deal Desk: Loan Save with Dave: Every Tuesday at 1pm Eastern
• Deal Desk: Feature Topic + Loan Save with Dave: Every Thursday at 1pm Eastern
• VanDyk Mortgage Newscast: Friday, November 10 @ 1pm Eastern
• In-House HELOAN Training: Tuesday 11/14 @ 11am Eastern
• Production Roundtable: Wednesday, November 15 (National Clean Out Your Refrigerator Day) @ 1pm Eastern REMINDER: ATTENDANCE IS MANDATORY for all LPs and TCs/LOAs who perform TC functions.
• Iron Sharpens Iron: Tuesday, November 21 @ 11am Eastern

 

Variable Income

PRISM – When a borrower is a variable wage earner (hours or wage varies, union, traveling nurse, as examples),

make sure that the drop down within the Prism Worksheet reflects as “Variable” to get the most accurate income calculation.

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25 Points

October 6, 2023

• Floify Roundup

We had some exciting Floify updates last week (see attached Newsworthy News email). Let’s review some of the highlights:

• SimpleNexus access has been extended. If your borrower completed their initial disclosures in SN and their closing is before 12/31/23, they can stay in SimpleNexus. Any new files, TBDs, or loans that haven’t been disclosed yet need to be moved to Floify. See the attached Switch Guide for more details. We STRONGLY ENCOURAGE you to take this opportunity to reach out to your TBD borrowers and those who may be on the fence with a personal call/email – this is an excellent opportunity to get in front of them.
• The Mobile Mailbox has been disabled – any new loans submitted by borrowers will be imported by the Floify team and the branch will be notified. We will likely see a handful of old applications coming through – either from borrowers who started an app prior to Floify going live, or by partners/realtors giving out old links.
• Soft credit pulls must be obtained in Floify. More details on that below.

Check out the Floify Resources folder for recorded trainings and how-to guides. At the VDMC.net blog, the Howee’s Helpful Tips category is where you’ll find tips and tricks for Floify.

• SimpleNexus – Closing Documents + Login Reminders

When you’re utilizing SimpleNexus for closing, please advise borrowers to use the link that gets emailed to them to access their docs. If they go to the LO’s VanDyk website (name.vandykmortgage.com), it will incorrectly redirect them to Floify. Make sure those SN borrowers are logging in at https://simplenexus.com/login to access their existing loans.

• Soft Pulls in Floify

Currently, soft pulls are only available via Floify and are no longer available in SimpleNexus or on the Sarma website.  Please DO NOT request soft pulls directly from Encompass. See the attached how-to for pulling soft pulls in Floify. Like re-scores, the cost of a soft pull cannot be passed on to the borrower.  If you need access to an old report, please contact Production Support for assistance.

• Prism Income Calculation

Check out the Prism Income Calculation Resources folder for a step-by-step guide for using Prism, with embedded video walkthroughs of using the tool. We also have attached a comprehensive reference sheet that compiles all 4 of the live training sessions, lists the topics, and has timestamped links to the training to watch. We recommend using Ctrl+F if you use this guide as it’s quite extensive!

• Broker Updates
  • AFR has brought back site-built FHA Construction loans! Previously, site-built construction was only available on USDA and VA. (Note that Conventional Construction is still not available for site-built properties.)
  • Newrez will be joining us for product training on October 16 at 1pm Eastern. Since our in-house NonQM options are no longer available, we are happy to host NewRez on the broker side for a refresher! Watch your inbox for a training invitation – they will be sent this afternoon.
  • REMN 5 day HELOC loans are easy and require only a little effort on our part.  If you want to be paid the commission earned, the “little effort” you MUST complete includes creating the Encompass file, requesting/obtaining approval from Secondary to broker and uploading any docs REMN provides to you.
• .99 Interest Rates in OB

We are excited to announce that as of September 28, .99% rate options have been added to Optimal Blue. This is not an error – you may originate and lock loans with these interest rate options now.

• COCs and CDs – SLA and Training Opportunities

When you need a re-disclosure package (COC) sent out or a CD delivered, you are more than welcome to submit your request in Encompass and the compliance department will happily prepare and send for you.  That’s some great news!  Our SLA for these requests is by the end of the 2^nd business day.  Example – you submit your request on Monday, the package will be generated and sent by end of business Wednesday at the latest.  If you need something sent urgently, shoot an email over to compliance@vandykmortgage.com after you have submitted your request, and we will determine the ETA we can accommodate.  The REALLY GREAT NEWS is our compliance team is ready, willing, and excited to teach you and/or your designated branch team member how to prepare and deliver YOUR OWN COCs and CDs!  HOLY AWESOME!!!!  Take back the power and learn how to generate disclosures when you need them.  Contact compliance@vandykmortgage.com to schedule a one on one or team training – we look forward to hearing from you!

• New Form to Replace Credit Card Authorization Form

We are doing away with the payment authorization form in Encompass that requires credit card information.  To charge the borrower for fees outside of closing, the new CC Link Request form will be required.  The CC Link Request form is available in Howee and Seafile here.

Once form is received by accountingclerk@vandykmortgage.com, a payment link will be emailed to the person (Borrower/Co-Borrower) listed on the form.  Be sure to include the Encompass loan number on your form.  Intent to proceed is ALWAYS required before the borrower can be charged, and we will not be able to request payment for any non-disclosed fees.

The below example is what the borrower will receive in their email.

When they Click to view/pay invoice, they will be taken to the specific transaction details where they can see the details and make a payment.

 

Borrowers not able to pay online can call the Accounting department to make a payment over the phone.

• Freddie Mac LPA with a Soft Pull

We have negotiated pricing for Sarma soft pulls – they will now be $5.50 per bureau per borrower, with a $2.25 mailing disclosure fee per borrower – but there is no reissue or Encompass fee if we run through Freddie Mac’s LPA.  That comes to $18.75 for an individual tri-merge soft pull – all in. Note: We cannot pass the cost of the soft pull over to the borrower (same as with a rescore).

At this time, Xactus is not able to provide us with the tri-merge soft pulls needed for running LPA, so we are only offering this option with SARMA.

Be mindful that the credit data could change in the time between the soft and hard pull (FICO score, balances, payments, inquiries etc).  If a soft pull is obtained after a tri-merge, a new tri-merge will be required and the most recent tri-merge used to qualify the borrower.

SARMA is all set up for a 3-bureau soft pull that can be run through Freddie Mac’s LPA.  Here are the important details:

1. Soft Pull MUST be pulled in Floify as a tri-merge.

1. If not running through LPA, a single or two bureau report can be pulled instead of a tri-merge.
2. Production Support can assist with the initial set up.

1. ALL soft pulls are required to be obtained via Floify.

1. For those few instances where borrowers are not in any LOS and deliver items face to face, contact Production Support for an exception/assistance.

1. All loan types can be run through LPA with a soft pull (except USDA which require GUS)

1. Fannie Mae DU is not eligible.
2. Manual UW/Bond programs are not eligible.

1. Loans can be conditionally approved in UW with the LPA + soft pull.
2. Processors should clearly list on the UW Cover Letter a soft pull is being used.
3. AI UW and/or manual UW condition(s) will be added to the file indicating a hard pull is needed.
4. Loans CAN be locked using a soft pull.
5. Loans CANNOT have a CD issued or be re-submitted for CTC with a soft pull.

• Xactus – Credit Provider

Reminder for those interested in an alternate credit option, XACTUS is available.  The A/E info is below – Kimberly is excited to talk with you and provide one on one or group training whenever you like.

Kimberly Donovan​ Strategic Account Manager

D:  (800) 258-3488 x4548 M:  (630) 337-3330  kimberly.donovan@xactus.com xactus.com

• Chenoa Fund Update

Great news from Chenoa: loans with AUS approval will not have payment shock calculations applied!

• NexBank

As announced in the September news, NexBank is offering reduced LLPAs on Second Home and Investment properties under their Mortgage Connect product. Reminder – these are portfolio products for the bank, so these loans will be underwritten by NexBank.

Currently, after a loan is locked and the lender specified as NexBank, DO must be run instead of DU.  UW will add a condition specifying this to ensure proper delivery.  Once DO is run, DU will NOT work.  We have set DO credentials accordingly and wanted you to be aware that you will receive an error message if you try to run DU after DO has been completed (and vice versa).  We are hopeful the requirement for DO can be removed in the future and will advise if the procedure changes. For assistance or questions, contact ProductionSupport@vandykmortgage.com

• Marketing Updates

New Training Resource: We’re excited to introduce the Real Estate Agent Co-marketing Training Journey, now available in your Total Expert accounts. This training is designed to assist your Real Estate Agent partners in maximizing the benefits of our Co-marketing tools.

Floify Marketing Materials: During the week of 9/26, we dispatched Floify marketing materials to your agent partners via your weekly marketing piece. Even if you opted out of sending the weekly piece for that week, you can still access this email in your Total Expert account.

Daily Office Hours: Have questions about either of these topics or anything related to Total Expert or other marketing technology? Join our daily office hours at 2:30 pm EST. Add office hours to your calendar.

• QC Update: Income Misrepresentation

Did you know that income fraud increased by 27.3% from 2021 to 2022? Most industry experts and risk managers say the increase in income fraud risk is their number one concern, methods of committing income fraud is through doctored paystubs.

• Compliance Corner with James Beebe

You have likely noticed recent guidance and clarifications around compliance rules – for instance, when it comes to getting authorization to pull credit. As we know all too well, the industry is constantly changing. We need to ensure that we are compliant, secure, and keeping up with state and federal rules. In an effort to provide transparency and clarify VanDyk’s best practices, James Beebe, our Chief Compliance Officer & General Counsel, has put together important memos regarding three topics which we recommend you review and become familiar with.  The memos are attached with a few important takeaways below:

• Information Security – do not accept unencrypted/unprotected document delivery of anyone’s private information and do not store these private documents anywhere outside of the Encompass or POS system (Floify/Simple Nexus)
• Credit Pull Authorization– get permission in writing from the borrower before credit is pulled.
• Pre-Approval Letters– Use only company approved letters, which can be generated in Floify and Encompass.  Uploading a copy of the letter into the Encompass file eFolder is a requirement.

 

Fair Lending Policy – Consistent Lender Fees

As a reminder, our Fair Lending Policy states that itemized lender fees must remain consistent for all borrowers, except in cases where there are legitimate, well-documented justifications for differentiation. When adjustments are necessary, we must adhere to our established practice of lender crediting the 801 fees rather than removing them entirely.

 

Agency Updates

Fannie Mae is beginning to align more with Freddie Mac in regard to Rental Income and Self-Employed Borrowers.  Where we previously had some flexibilities, this is changing for all loans with application dates on and after January 1, 2024.  Here are some bullet points of these impending changes:

Rental Income:

1. Non-Subject Rental Properties acquired in the last 12 months will require the borrower to have a primary housing expense and at least a one-year history of property management experience to use the full amount of rental income towards qualifying, otherwise the amount may be limited.
2. Lease Agreement use – Form 1007 or Form 1025 must support the income reflected on the lease agreement or the lease agreement must provide evidence the terms of the lease have gone into effect with proof of receipt for at least two-month’s rental payments.

Self Employed:

1. Less than a two-year history – Personal and Business Federal Tax Returns must reflect a minimum of 12 months of self-employment income from the current business (if a business was opened 2/1/2022, the 2022 tax return would not have a full 12 months of self-employment income and therefore could not be considered).
2. Using one-year of Tax Returns – This will only be allowed when ALL self-employed businesses have been in existence for five years and the borrower has had a 25% or greater ownership interest for the last 5 consecutive years.

BIG NEWS coming for DU Casefiles created on and after or resubmitted on and after the weekend of November 18, 2023!!!  LTVs are increasing to 2- and 3-4-unit properties up to 95%!!  Additional messaging updates will also be occurring over November 18^th weekend for changes announced in our previous news surrounding Limited Cash-Out Refinances, Gift Donors, and Trust Income.  See the attached DU V 11.1 Release Notes and the Newsflash email for full details.

. . .

Freddie Mac is also making updates to Rental Income requirements for Settlement Dates on and after April 1, 2024.

Lease Agreements:

1. Lease term of a minimum of one-year is being removed – This is a flex!
2. Newly Executed Leases must require the due date of the first rental payment be no later than the first payment due date of the Mortgage.
3. Evidence of receipt of the security deposit plus first month’s rent OR receipt of two month’s rental payments AND must have evidence that the payments were cashed or deposited into the Borrower’s depository account or transferred into a third-party money transfer application account owned by the borrower.

ADU:

1. At least one-comparable sale must have an ADU that is rented, when rental income generated from and ADU on a subject 1-unit Primary Residence is being removed as an appraisal requirement.

For the complete Freddie Mac Bulletin visit https://guide.freddiemac.com/app/guide/bulletin/2023-19

We will be working on an updated Rental Income Cheat Sheet for publishing by the end of the year with the changes!

Also attached for Freddie Mac are LPA Release Notes and updated Feedback Messages for your reading pleasure!

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Upcoming Events and Reminders

Miss a training? You’ll find our monthly newscast and Iron Sharpens Iron recordings in the VDM Vault. Department-specific trainings are shared in their respective Seafile folders.

Don’t forget: you can find invitations on our shared calendar under Upcoming Events at VDMC.net.

• Deal Desk: Loan Save with Dave: Every Tuesday at 1pm Eastern
• Deal Desk: Feature Topic + Loan Save with Dave: Every Thursday at 1pm Eastern
• VanDyk Mortgage Newscast: Friday, October 13 @ 1pm Eastern
• Newrez Broker Product Refresher: Monday, October 16 @ 1pm Eastern
• Iron Sharpens Iron: Tuesday, October 17 @ 11am Eastern
• Production Roundtable: Oct 24th @ 12 PM EST – National Bologna Day REMINDER: ATTENDANCE IS MANDATORY for all LPs and TCs/LOAs who perform TC functions.

 

Rent Free Letters

When a borrower is living Rent-Free and a Rent-Free Letter is required, evidence that the person providing the letter is either the owner of the home or the person on the existing lease is required.
A letter just from the borrower is not acceptable.

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Sarma + Freddie Mac LPA

As a reminder, when running LP with a Sarma credit report, make sure you are choosing MeridianLink (2) as the provider, with SARMA in the second dropdown.

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25 Points

Floify/SimpleNexus Pipeline Tip
You can add the Loan Source and Floify ID columns to your Encompass view to help manage your pipeline.

If the loan is active in Floify, it will have a Floify ID. If it’s blank, it hasn’t been set up in Floify yet.

For loans that were started in SimpleNexus but won’t close before 12/31, or for any new loans or TBDs, we want to make sure we see a Floify ID! If you don’t see a Floify ID, add your loan to Floify.

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