Category: Challenges

August 15, 2022

• Appraisal Options: UpdateWe are excited to announce that VanDyk Mortgage has been invited to participate in pilot programs for both Freddie Mac and Fannie Mae for increased modern appraisal options.  It is IMPORTANT that on conventional single-family homes (including those with ADU’s) to run both AUS upfront to make sure you get the quickest, best appraisal option to utilize these tools.  See details in the Conventional Appraisal Flexibilities document

• Reverse Mortgages

We are a GO people!  Reverse mortgages are now available in-house and will be proceeding as a Principal Agent.  We have completed these transactions in the past but our new set up is different than before and as a result, everyone will be required to go through a refresher with our reverse team before access to Reverse Vision will be granted.  Details are attached.  Reach out to a member of the Reverse Team:  Sophie Morales (smorales@vandykmortgage.com), Adam Wilson (awilson@vandykmortgage.com), Kristine Kuss (kkuss@vandykmortgage.com) or Production Support should you need additional assistance.

• Bank Statement Program – New In-House Option

We are pleased to offer another Retail solution for the Bank Statement loans through Bayview.  These loans will be a hybrid process for underwriting and closing where Bayview will do the underwrite and VDM will handle the closing. Offering another Retail option will provide more pricing and guidelines options to our borrowers.

• Loans in MA, CT, NY, UT, HI, MO, NV are not permitted
• Texas 50(a)(6) not permitted

Any questions can be directed to nonQM@vandykmortgage.com. Please refer to the attached Pricing Guide for tips on pricing these loans in OB. A new Process Flow for Bank Statement loans is attached as well, along with NewRez and Bayview program overviews.

• FHA Buydown Options

We are excited to offer 2/1 FHA buydowns effective today, 8/15/22. A 2/1 buydown is going to reduce a borrower’s interest rate 2% in the first year, 1% in the second year, and then the note rate the following 28 years. We will be offering both lender and seller funded buydown options. Buydown matrix is attached for your reference.

In Encompass, you can select the “FHA 30 Year Fixed 2/1 Buydown” loan program. Upon selection of this loan program, the buydown information will automatically be input to the loan.

On the Reg-Z CD form within Encompass, you can click the Buydown Disbursement button to see the full details and determine the buydown amount that will need to be collected.

• Production Support: Department Update

We are pleased to announce the addition of Alex Green to the Production Support team!  Alex has experience in VanDyk’s underwriting division as both a Jr Underwriter and a Condo Review Specialist, and we are delighted that he has joined the Production Support team.  Please be sure to email productionsupport@vandykmortgage.com or complete a support ticket should you need assistance.  The Production Support menu of services and other details is attached.

• Self Employed Income Review Team: Update!

Our Self-Employment Income Support Team is now reviewing/calculating rental income!  Feel free to submit your file for review for your borrowers with rental income.  Attached is a reminder on process flow and required documentation.

• SSA-89 Forms – Now Available to Be eSigned

The wet signed SSA form has been removed from the initial disclosure pack in SimpleNexus as it can now be e-Signed. You can also request the SSA form be eSigned as a one-off document if you need to validate a SSN and do not have a wet signed SSA form. Please reach out to ProductionSupport@vandykmortgage.com with questions.

• New UDM Requirements

Effective immediately, UDM will be required for all files with a DTI of 40% or higher.  Due to audit results where undisclosed debts were present, DataVerify is requiring a revision to our UDM policy.  Any new fraud report pulled today where the DTI is 40% or higher, UDM will automatically be turned on.  We will accept a soft pull in leu of a UDM report (sometimes there is an issue with the UDM request vs. ECD time frame).  Contact Production Support for assistance with soft pulls if needed.

• Loan Comparison Tool (LCT)

An updated Loan Comparison Tool has been added to Encompass to assist in tracking changes in a loan file. This tool compares current loan data to data sent on the last set of disclosures. Any discrepancies in the tracked data will trigger the below alerts in encompass. The alerts will clear once a new LE or CD is sent on the file.

• • Zero Tolerance Fee Increase (LTC) – Triggers on an INCREASE of zero tolerance fees, which likely have a 3-day window to disclose.
  • Data Discrepancy (LTC) – Triggers on any change of the tracked data.

• ATR/QM Alerts

In addition to the LCT alerts, we would also like to highlight the ATR/QM alerts. These alerts MUST be resolved prior to closing and typically require additional lender/seller credits or a pricing adjustment to resolve.

• • Pricing Exceeded = Your current APR is over the allowed threshold over the APOR. APR must be lowered.
  • Points and Fees Exceeded = Your fees exceed the ATR/QM threshold and must be lowered.

• Branch Disclosures: Initials

With the implementation of the Disclosure Automation (Disclosure Desk – VDMC) and the Loan Comparison Tool, we will be moving toward branch generated initial disclosures in the coming weeks. This workflow will allow branches to issue their own initials disclosures quickly and easily without a required second compliance review on each file.

• • This will be rolled out on a region by region and will be coordinated through your Reginal Manager. More information to come!

• Broker Process Update: Effective September 1

Due to industry changes and product demands, we have revised how we are managing the broker process at VanDyk mortgage.  These changes will go into effect for loans approved to broker on or after September 1^st – watch your email for training invitations coming soon!

Update: Lightning Closings

The Lightning Closing workflow has been a huge success! We have seen an increase in closing efficiencies, a decrease in turn times, and have received rave reviews for all parties involved. Below are some changes and reminders to help keep this workflow running smoothly.

• Updated Hyperlinks for Manufactured Homes, POA/Trust, and Final VOEs
• VOE override for SS income and/or no income loans. (Coming Soon)

Reminders:

• • Please keep your Closing Date Requested as updated as possible.
  • Utilize the Closing Notes for any special instructions for your closer.
  • Clear to Close is not required to submit a closing request. Please submit once the following is met:
    • A CD has been issued.
    • Final VOEs have been completed (typically within 10 days of closing).

• In House vs. Non-Delegated vs. Brokered: A Quick Explanation
  • In-House:  VanDyk Mortgage handles the process of the loan file from application through closing and funding.  LO compensation is not disclosed to the borrower on the CD
  • Non-Delegated:  VanDyk Mortgage handles all but the underwriting of the loan file.  The loan is priced and locked in OB and the comp plan is set up the same as your regular conventional in-house plans.  The loan closes and funds in VanDyk Mortgage’s name.  LO compensation is not disclosed to the borrower on the CD.
  • Broker:  Our Broker Partner handles all but the processing of the loan file.  The loan closes and funds in the Broker Partner’s name.  LO compensation is disclosed to the borrower on the CD.

• Agency Update: Fannie Mae

Highlight(s) from the Fannie Mae Selling Guide Update SEL-2022-07 (08/03/2022): Final Verbal Verification of Employment Alternative

Our current policy requires a verbal verification of employment (verbal VOE), written verification, or a third-party verification report within 10 business days prior to closing to verify employment for borrowers who are not self-employed.

We updated the Selling Guide to add an alternative to satisfy the verbal VOE requirement for non-DU validation service loans. With this updated requirement, the lender

• may use an email exchange with the borrower’s employer within 10 business days prior to closing to verify employment;
• must conduct due diligence to confirm the email address for the employer is accurate;
• and must ensure the email is from the employer’s work email address and includes the borrower’s name; name, title, and work email address of the individual contacted at the employer; date of contact; and borrower’s current employment status.

Effective: Lenders may begin using this verbal VOE alternative immediately. DU will be updated the weekend of Aug. 20, 2022, to support this policy change.

• Agency Update: Freddie Mac

Highlight from the Freddie Mac Bulletin 2022-16:  Selling (08/03/2022): AIM Income Offerings – Partial Income Representation and Warranty Relief

Partial income representation and warranty relief (formerly referred to as source level representation and warranty relief) is granted when multiple income sources are submitted through Loan Product Advisor and one or more of the income sources receive income representation and warranty relief, but additional sources of income are required. In these instances, the income that is not granted representation and warranty relief must be documented in accordance with the Guide.

With these changes:

1. A Loan Product Advisor feedback message indicating partial income representation and warranty relief has been added
2. Loan Product Advisor feedback messages have been updated to provide representation and warranty relief details specific to each income source submitted
3. Loan Product Advisor feedback messages will be specific and actionable

Each income source will still be considered for representation and warranty relief eligibility through Loan Product Advisor as it is today.

• Agency Update: VA

VA has issued CIRC 26-22-13 allowing for Alternative Valuation Methods, Exterior-Only and Desktop Appraisals, for PURCHASE transactions where all of the following are true:

1. Purchase Price does not exceed the current calendar year conforming loan limit for the property jurisdiction.
2. The dwelling is a single family (1-unit) home that is not a manufactured home or condominium, not located on a leasehold estate, and not undergoing renovation.
3. One or both of the following:  The Veteran is making a down payment of at least 20% of the purchase price OR more than 7 business days have elapsed since the lender requested an appraisal and the case remains unassigned in VA’s system.

Attached are also Exhibits A & B outlining the Appraisal Assignment Waterfall and Appraisal Report Supplemental Information.

VA Manufactured – We are lifting our overlay on Singlewide Manufactured Homes.  Attached is the updated VA Fixed Rate Matrix removing singlewides as ineligible.

• Coming Soon: New Marketing Platform!

Introducing Total Expert at VanDyk Mortgage, a CRM system to create growth and loyalty for Loan Officers.

Total Expert offers the industry’s only platform with CRM and marketing built together from the ground up. Design and deliver a better customer experience from the first contact and increase overall production by an average of 20%.

With Total Expert, you can create and deploy campaigns in multiple channels-including print, direct mail, social, SMS, and email marketing to meet consumers in the channel that they prefer. Total Expert will have integration points with the rest of the technology stack including Encompass, Optimal Blue, and SimpleNexus to drive hyper-personalized marketing efforts.

The implementation work has started – you can anticipate a roll-out of the tool in Q4 of this year. More detailed information on timelines will be available soon.

• Upcoming Events and Reminders

If you need an invitation to one of the Zoom meetings, please respond to this message.

• Iron Sharpens Iron – Tuesday, August 16 @ 11am Eastern
• VanDyk Mortgage Newscast (Formerly Ops Huddle) – Thursday, August 25 @ 1:30pm Eastern
• Production Roundtable – Tuesday, August 30 @ 1pm Eastern

35^th Anniversary Events

• September 10, 2022 | 35^th Anniversary Dinner – President’s Club
• October 8, 2022 | Ops Fly-in 35^th Anniversary Meet and Greet
• March 2 – 4, 2023 | Annual Sales Fly-in

Joint Applications – Reminders/Updates

As a reminder, unmarried borrowers may be on a joint application in Encompass (unless it is a VA). Joint borrowers need a joint credit report for AUS to run.

Please keep in mind – if we have a multiple borrower file, the “joint” pair should be reserved for spouses/couples/partners. (Example: if a married couple is signing with their child, the child should not be joint with one of the parents.)

* * *

Reminder: Suggestion Box

Do you have an idea to improve our workflow, or a change in Encompass that you would like to see and will also help your colleagues? We want to hear from you!

The Suggestions Inbox is LIVE and available to everyone at https://suggestionsbox.vdmc.net/

Please submit your ideas! Suggestions are reviewed weekly by management and we are looking for suggestions with 5 or more votes. Any suggestion implemented as a business improvement that was upvoted by peers or accepted by management will win a $50 gift card.

• Lightning Closings Are Here!

We are pleased to announce our new Lightning Closing Procedure will being going live next week! Here is how it will work: Submit your Closing Request as soon as your CD is issued – your file doesn’t need to be in Resubmittal or Clear to Close status. As long as your closing request is submitted 48 hours prior to your requested ECD, you are on track to hit your closing date. Once your loan is Clear to Close, your closing package can be delivered to title in as little as 4 hours!

We will be updating the existing “Closing Request – VDMC” form in Encompass with the Lightning Closing Process. You will use this form to submit your closing requests as shown below.

To submit your closing request, all blue fields must be completed. If any fields are missing, you will be met with an error message specifying which fields need to be completed. These fields are required to allow your Closer to begin accurately working your file for closing, even if it is not yet CTC. If this information is inaccurate, it may delay your Lightning Closing.

Once your Closing Request has been submitted, you will receive email confirmation that it has been received.

Closing Requests submitted within 48 hours of your closing date will trigger a Severe Weather Alert. These Severe Weather Alerts will be treated like our current rush requests, the Closing Department will make every effort accommodate the closing date but turn times may not be guaranteed.

If your file is not ready for closing and the closing date must be extended, please update your Closing Date Requested with your new closing date and communicate this change with your Closer. If no new closing date is known, please remove your Closing Date Requested and resubmit when a firm closing date is identified.

Communication is key. For us to achieve Lightning Closings it will take a team effort from each VDM team member that touches the file.

• aiUnderwriter

We are a full 2 months into Beta Testing the ai Underwriting tool with our Underwriting Team!  aiUW was launched to our Processors at last month’s Processing Roundtable and more recently to our Regional Sales Managers, Branch Managers, and Loan Officers.  We officially have {most} hands-on deck.  As a reminder, this is a tool that we will continue to build and customize to what we need to enhance our VanDyk Mortgage teams and processes; all feedback is continued to be welcomed.  We have BIG things coming with enhancements specific to our Loan Officers that you won’t want to miss – Stay Tuned for more information.  If you or your team would like additional training with using ai Underwriter and help with how to fit this into your process flow, please reach out to Lindsey and Megan.

• New Down Payment Assistance Provider: Lakeview

We are pleased to announce that Lakeview has launched a DPA product that offers up to 4% of the lesser of the appraised value or the purchase price, with no maximum cap. The second mortgage is due and payable upon sale, maturation, refinance, early payoff of the first mortgage, or transfer of the property. The 2nd mortgage has interest only payments based on the interest rate of the first mortgage.

• Eligible States: AK, ND, AL, HI, IL (other than in Cook County which is not eligible), IN (other than in Allen, Kosciusko, LaGrange, Marion, Steuben and Wabash Counties which are not eligible), KY, MA, MD, MI, MO, MS, MT, NJ, SD, TN, & VA

A Product Overview and Matrix are attached. Lakeview will be hosting a training on July 19 at 2pm Eastern – please register at this link to attend:  https://www.lakeviewcorrespondent.com/event/lakeview-national-training-2-3-pm-et-2/

• Jumbo Updates: Truist

Truist has re-entered the Jumbo space in an aggressive fashion for Delegated clients. Earlier this month, we obtained our Delegated Underwiring approval with Truist and they have been added to the Jumbo pricing options In Optimal Blue. Attached is an updated Jumbo comparison sheet.

• Appraisal Transferability Updates

We are absolutely THRILLED to announce that as of today, we will be able to accept transferred appraisals on conventional loans!  The appraisal and XML file should be emailed to Amber Workman (aworkman@vandykmortgage.com) as soon as received from the prior lender so we can ensure the report is run through the UCDP.  Once completed, Amber Workman will upload the appraisal to your Encompass file and mark as “Ready for UW”.  The appraisal will be reviewed when the file is submitted to underwriting like usual (either as an initial underwrite or with your conditions).  If the underwriter determines the appraisal is unacceptable and cannot or should not be used, a new report will need to be obtained by VanDyk mortgage through the usual process.  Please find attached our updated transferability cheat sheets as well as updated Appraisal Expiration Cheat Sheet.

• Income Calculation Worksheet: Update

Beginning August 1, all teams will be using the Income Worksheet – LTK form in Encompass instead of the Excel income calculation worksheet. For an overview of this worksheet, watch this training video. If you have any questions, reach out to ProductionSupport@vandykmortgage.com

• Fannie Mae Updates

SEL-2022-06 (Attached) was issued by FNMA July 6, 2022 to include changes to the following:

• Compliance with Address Confidentiality Programs adding additional requirements for sellers/servicers to comply with state laws (must comply by Sept 1, 2022)
• When an existing manufactured home is being sold to a consumer by a builder, developer, or manufacturer as part of a new or existing MFH subdivision, the LTV ratio will be based on the lower of:
  • the sales price of the MFH and land, or
  • the current appraised value of the MFH and land

• Freddie Mac Updates

Review the link for video of Selling Guide Bulletin 2022-15: Guide Bulletin 2022-15 (freddiemac.com) Updates Include:

• Effective for Mortgage with Loan Product Advisor (LPA) initial submission dates on or after July 10, 2022, enhancements were made to include a First-Time Homebuyer’s rent payment history in its credit assessment, providing expanded opportunities.
  • Seller must submit to LPA the current monthly rent amount paid by the Borrower AND
  • Obtain a verification report of the depository account(s) from which the Borrower makes their rent payments (see details for acceptable third-party sources).
    • The history will be included in the Loan Product Advisor credit assessment when the following requirements are met:
      • The Mortgage is a purchase transaction Mortgage secured by a Primary Residence
      • At least one Borrower with a rent payment history must:
        • Have a usable Credit Score, as determined by Loan Product Advisor
        • Be a First-Time Homebuyer who intends to occupy the subject property as their Primary Residence, and
        • Have been renting for a minimum of 12 months with a monthly rent payment of at least $300 that is paid from the depository account(s) in the verification report obtained by the Seller
• Clarification regarding Manufactured Homes with Affordability Seconds (Section 5703.3) that the MFH must be:
  • 1-unit Primary Residence
  • Mortgage must be a Home Possible Mortgage
  • If the MFH is in a condo project, guide requirements in section 5701.5(f)91) through (f)(5) must be met.

• FHA Updates

Please see this link for updates https://www.hud.gov/sites/dfiles/OCHCO/documents/4000.1hsgh-062022.pdf – here are some highlights:

• • Full access letter for joint bank account eliminated
  • Income Calculation Exception Due to COVID-19 Related Economic Event (for TOTAL & Manually underwritten loans) – Applies to W2 wage earners and Self-Employed.
  • Gaps in Employment (for TOTAL & Manually underwritten loans) – We can now consider the borrower’s income if the borrower has been in the same line of work (not current job) for at least 6 months at time of case number assignment AND a 2-year work history verified prior to the gap. See the attached Income Guidelines cheat sheet for additional information.
  • Revised Appraisal Validity Periods – Initial Appraisal extended to 180 days; Appraisal update extended to 1 year; 30-Day optional extension removed

• VA Updates

VA Circ 26-22-10 – The United States Space Force (USSF) is now considered as a branch of service; Certificate of Eligibility (COE) enhancement

Current and discharged members of the USSF or USSF Reserves, otherwise known as Guardians3, may be eligible for VA home loan benefits upon meeting length-of-service (LOS), and character-of service (COS) requirements.  Qualifying Surviving Spouses of Veterans who served in the USSF may also be eligible for the VA home loan benefit

VA Circ 26-22-12 – Certificate of Eligibility Funding Fee Status Update

VA is introducing a funding fee status to inform lenders when the VA Form 26-8937 has been received and the pre-discharge or memorandum rating request is in process. Upon receipt of VA Form 26-8937, VA will conduct research to see if the Service member has filed a pre-discharge claim.

1. If the Service member is eligible for the home loan benefit and VA records indicate the Service member does not have a pre-discharge claim pending, VA will annotate the COE record and issue the COE with a funding fee status of Non-Exempt.
2. If the Service member is eligible for the home loan benefit and VA records indicate the Service member’s pre-discharge claim has been adjudicated, VA will update the COE with the appropriate funding fee status and issue the COE.
3. If the Service member is eligible for the home loan benefit and VA records indicate the Service member has a pre-discharge claim pending that has not been adjudicated, VA will submit the rating request to the Veteran Service Center (VSC). VA will update the COE funding fee status to Non-Exempt – In Development and issue the COE. The Service member is not exempt at this time. If a proposed or memorandum rating is not obtained, and the loan closing takes place before the Veteran is discharged from service, the funding fee exemption does not apply, and the Service member will not be entitled to a refund. VA will update and reissue the COE as appropriate based on the response received from VSC.

VA Circ 26-22-11 – Pest Inspection Fees and Repair Costs

Effective immediately, VA is authorizing in advance, as a local variance, that Veterans may be charged wood destroying pest inspection fees, where required by the NOV. Veterans may also pay for any repairs required to ensure compliance with MPRs. Veterans are encouraged to negotiate the cost of the wood destroying pest inspection and repairs with the seller.

• 4506C – Clean Form Requirements

The IRS is changing how transcript orders will be accepted and processed.  For VanDyk Mortgage to be compliant, we have updated our initial disclosure and closing packages to include several 4506C forms per borrower.  Each form is slightly different to minimize the need to go back to the borrower(s) for multiple revisions later.  If corrections or revisions of the 4506C form are needed, they should be sent as one-off docs for borrowers to E-sign.

You can minimize the need for revisions and corrections by confirming with your borrowers, prior to requesting the disclosures, what name and address they used to file their most recent federal tax return under and completing the REQUEST FOR TRANSCRIPT OF TAX form in Encompass to match these details.

• Update – Reverse Mortgages In House

We are making excellent progress towards moving our reverse mortgage loans out of the broker world and back in house.  More information will be forthcoming.  If you have a reverse mortgage and have not yet been contacted or need assistance, please reach out to Kristine Kuss in the Production Support department (kkuss@vandykmortgage.com or productionsupport@vandykmortgage.com)

• More Good News – Coming Soon!
  • NonQM Options – Bank statement and DSCR options through Bayview
  • Buydowns – Actively working on a 2/1 buy down solution

• Mid-Year Look Back

We are halfway through 2022 – here’s a recap of some of the highlights in the first half of the year:

• Upcoming Events and Reminders

If you need an invitation to one of the Zoom meetings, please respond to this message.

• Iron Sharpens Iron – Tuesday, July 19 at 11am
• Ops Huddle – Thursday, July 21 at 1:30pm Eastern
• Production Roundtable – Wednesday, July 27 at 1pm Eastern
• 35^th Anniversary Events – see attachment for more details!

• August 10, 2022 | 35^th Anniversary Dinner
• August 11, 2022 | Annual Golf-N-Give
• September 10, 2022 | 35^th Anniversary Dinner – President’s Club
• October 8, 2022 | Ops Fly-in 35^th Anniversary Meet and Greet
• March 2 – 4, 2023 | Annual Sales Fly-in

• July 1 Improvements: Reminder!

As of July 1, the following improvements are active:

• • Introduction of Income Worksheet – LTK within Encompass (Click here for a training video if you missed last month’s Round Table)
  • Patriot Act Information Form AT closing Only for Title Agent to complete
  • Homeowners Insurance Reverification Form is no longer required
  • Excessive Runs LOE will only be required if there is a RED Flag on the AUS

• Loan Duplication – Updated Template

When Pipelines duplicates files for you, the VOM will now copy over to the new file! We hope this makes restarting a file a little easier.

• COC/CDs – Disclosure Automation

We will soon be expanding our disclosure automation to include Change of Circumstances (COCs) and Closing Disclosures. If you are currently sending your own initial disclosures through Disclosure Desk and would be interested in sending your own COCs and CDs, please contact compliance@vandykmortage.com to schedule your training.