Lending Announcement: June 17, 2021

Topics in the Announcement

June 17, 2021 

• Lending Department Special Memo

We have had some exciting changes in the Lending Department over the second quarter! We are excited to update you on several additions to our management team and structure of the department. The special memo attached reviews our new managers and team updates!

• New QM Rule: Effective July 1, 2021

Loan with application dates on/after July 1, 2021 will be subject to the revised General QM Rule. The new rule will sunset the 43% DTI limitation and GSE QM patch and will emphasize overall loan cost instead. The revised General QM Rule requires us to take a closer look at APR and loan balance and will be fully integrated into the MAVENT compliance engine and the ATR/QM tools in Encompass. We do not foresee any major interruption with business operations or changes to our workflow.

• Coming July 1: TBD Underwrites for All Loan Types!

As of June 1, we brought back TBD underwrites for manually underwritten government loans, and loans using income from self-employed borrowers. Starting July 1, we will accept TBD submissions for all loan types.

• VA Funding Fee: New Automation in Place

Encompass will now automatically update the VA Funding Fee based on the current loan data. The Funding Fee will adjust automatically upon saving the file based on the LTV, Loan Type (Purchase, Refi, or IRRRL), and First Time Use Status. Please see the attached VA Funding Fee Automation Memo for more details and a how-to.  Note: This will impact all VA files created on or after 6/17/21.

• New Product: Fannie Mae RefiNow

Fannie Mae has introduced a new no-cash out refinance option for low income borrowers. RefiNow is available to borrowers with current income at or below 80% of the AMI, whose current mortgage is backed by Fannie on one-unit, primary residences. With this program, Fannie will provide a $500 credit to the lender if an appraisal was obtained, which gets passed to the borrower. In addition, the 50 bps up-front adverse market refi fee is waived.

Full borrower and loan eligibility details are available in the attached Lender Letter, fact sheet, and at Fannie Mae’s website. Also attached is the VanDyk RefiNow Matrix.

In Compass PPE, you will need to select “RefiNow” under Special Products on the scenario page when pricing your loan. CPPE will not automatically pick up that your loan is RefiNow eligible. Selecting RefiNow as the Special Product will force CPPE to only price the RefiNow product.

Note: Freddie Mac has a similar product coming later this summer (Refi Possible). We will pass along more details in a future Lending Announcement.

• EMD/Other Credits: Reminders

The updated EMD and Additional Credits workflow is being expanded to the Prospects and TBD folders. This change may impact your existing Earnest Money Deposits and Additional Credits currently listed on Borrower Summary – 2021, Itemization, and URLA – Lender Forms.

Please double check that your credits are accurate prior to requesting disclosures.

• Technology Update: Encompass Enhancements!

Encompass is here to stay!  A couple years ago, we had decided to move away from Encompass and go to BlackKnight’s Empower LOS.  Our decision was based on the turmoil Ellie Mae was going through at the time and the lack of focus on the needed infrastructure improvements.  Since then, ICE Mortgage Technologies has purchased Encompass and we see renewed energy in in making the necessary improvements.  We have decided to stay with Encompass and shift our focus on making Encompass the best it can be.

The rest of this year, you will see enhancements to our platform – some subtle, some not so subtle – but all to improve our overall integrity, ease of use, and efficiencies in the system.

This week you may have noticed these changes:

• Home Counselor Plugin – This is not something you will see, but this automatically runs instead of Compliance having to manually run.
  1. Upon entering the borrower’s current address, this plugin will auto-populate the Home Counseling Providers list for disclosure.

• ePrint – All users will see an ePrint icon near the eFolder icon. This will print a screenshot of the input form currently being viewed in the borrower file, excluding the 2015 Itemization (we are working on this one). Users can designate how the document is named and placed in the eFolder.
• eFolder Magnifying Glass – A magnifying glass was added to the eFolder to assist in locating specific document and condition names, instead of having to scroll through the list:

• History FX Plugin – As you work in Encompass and click thru Forms and Tools, a list will be created under the History FX tab. You can use this list to quickly navigate between common forms and tools you have been visiting. You can also use the arrows to go back and forth between the forms recently visited:

• FEMA Look Up – This tool automatically pulls FEMA Disaster Declarations from the FEMA website using the Subject Property State and County. It records all relevant disaster declarations from the past year to the loan file.  It will put the report in the eFolder:

• USPS Look Up – All you need to do is make sure the Subject Property Address is filled out (the ZIP code isn’t even required), click the USPS button or go to the “LTK – USPS Validation” form, and click the “Verify Address” button. This will verify the address with USPS. If you click the “Yes” button in the popup, it will automatically update the Subject Property Address with the valid address USPS uses. Then the report will be placed in the eFolder.  As a reminder, please do not abbreviate the City name in any way.

We have a lot more ideas and projects coming.  If you have any suggestions or if you want to be part of a committee on the consumer portal, LO Connect, origination workflow, or processing workflow, please email Jeanie Nivison.