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July 7, 2023

 Mid-Year Look Back

It might be hard to believe, but we are halfway through 2023! Here’s a recap of some of the highlights in the first half of the year:

Launched Halcyon Tax Wallet Total Expert official launch + Office Hours calls for support Additional marketing support tools added for branch + individual LOs Opened up soft pull credit options with 1 click ordering in Simple Nexus Updated brokered loan funding process Borrower Summary – VanDyk improvements Shifted UDM ordering to a manual process Added several additional lenders to our Broker Partners: Quorum FCU, Champions, United Ag… Shannon Schmidt featured on National Mortgage News VDMU Product Certification Program eNotes

Revamped AWESOME recruiting website Launched industry benchmarking survey with Experience.com FHFA DTI Hit was removed FHFA revised LLPAs + AMI LLPA Waivers released URLA Milestone completion rules Launched SpecUW and BrokerSupport email channels Broker Comparison Tool Employee loan referral bonus program Servicing software improvements Winnow – new compliance platform Shifted Compliance & Production Support to a ticketing system for tracking/training purposes VDM Shared Event Calendar Loan Duplication Tool

 

• BombBomb

Have you heard the news? BombBomb, the industry-leading video platform, has integrated with Total Expert in a way that will help you automate the delivery of your personalized messages to clients and referral partners. This new integration has been shown to increase engagement and conversion and we can’t wait for you to give it a try. Want to hear even better news, for the next two months – VanDyk Mortgage is picking up the tab for originators that sign up to join us and complete the assigned activities within BombBomb. Want to learn more? Send an email to Vandykmarketing@vandykmortgage.com and a marketing team member will help you get signed up.

 

• UDM: Auto-On Function Discontinued

The “auto-on” function for UDM was discontinued on 6/26 and the production staff was trained on manual start functions during the June Round Table.  This means any fraud report run on or after 6/26 through Encompass TQL for files with DTI over 40% will need UDM to be manually turned on.  Why the change?  We have identified several files where UDM was turned on too soon (TBD files) or was not needed by the time the loan was submitted in for initial UW (DTI had decreased). This change will result in substantial cost savings for our branches.

• VDMU – Product Certifications

We had a wonderful turn out for our first VDMU Product Certification offering in June for Buy Downs and will be presenting additional courses soon.  Reminder if you are interested in originating or assisting on a Buy Down loan, you will need to complete the course to have access to the program templates in Encompass.  Reach out to ProductionSupport@vandykmortgage.com with questions.

• Bond Locks: Exciting Update!

When a bond loan is locked right before closing, we will no longer require an additional LE to be sent – we can now disclose the lock on the initial CD! This applies to all current bond programs. Should a future program require a different process, the change will be communicated at that time.

• Revised LE Training Session – Next Week

The Origination Compliance Department is holding a Revised LE training session on Wednesday July 12th from 1pm to 2pm EST. The team will go over the process of how to review a loan file and how to process change of circumstances. Attendance is required in order to be given access to issue Revised LE’s to borrower(s). The training invitation, COC policy and how-to guide are attached. We hope to see you there!

• “Other” Loan Features Section  

We have an option to identify if a refinance is standard with Fannie Mae in Encompass now, should the AUS come back with REFI NOW verbiage.  On the ULRA Lender form, click “Other” in the loan features section and identify “Standard LCOR” if your loan is NOT a REFI NOW transaction.  Re-run your AUS and the finding will be updated with the regular refinance conditions.

• Broker Updates
  • NEW BROKER! United Ag Lending: We are excited to announce a new broker partner, United Ag Lending. This new relationship gives us a LOT of new property types to lend on, including barndominiums, off grid properties, properties with large acreage, hobby farms, and even full-time farms. We’ll be hosting training for our sales team in late July or early August – we’ll send invites and more details soon! In the meantime, check out the  Broker Comparison Tool for more info, or the United Ag Lending folder in the Broker Support shared files.
  • REMN 5 Day HELOC: LO Compensation has been reduced to 1.75% on the HELOC. And as a reminder – the HELOC does require an Encompass file and broker approval from Secondary PRIOR to closing.  We will not be able to pay any compensation if this procedure is not followed.
  • GO Mortgage: GO Mortgage suspended their Construction programs effective June 13, 2023. They have been removed as an option from our Broker Comparison Tool and on the Brokered Request Form in Encompass.
• Reverse Mortgage Update

Over the last year, our in-house Reverse Team has worked hard to assist with training and coordinating those needing help originating and closing reverse mortgages under our Principal Agent channel.   The reverse mortgage market has been affected by shifts in the economy like other loan products, and we have determined that our borrowers and LOs will be better served on the broker side.  We will be suspending our in-house reverse team services and terminating our PA relationship with FAR and Longbridge in the coming days and requiring all reverse mortgages to be originated through the broker channel with FAR or Longbridge.  ReverseVision will no longer be available, as each of these lenders allow access to their systems and proposals are prepared online.  To originate a reverse mortgage moving forward, you will follow the broker loan process already in place.  Our comparison tool and contact form will be updated soon to include reverse mortgages and website access details will be provided.

If you have a reverse mortgage currently in process with our in-house reverse team, you should have already been contacted. If you have a loan in the works and need to know how to proceed, please reach out to BrokerSupport@vandykmortgage.com for assistance.

• Got a Second? 😊 Coming Soon…

We have an in-house DSCR program and an in-house non-warrantable condo option.  We even have an in-house bank statement loan.  So why not offer an in-house second mortgage option?  We are excited to announce that coming soon we will be launching an in-house HE Loan product. This will be a closed end 2nd lien that is underwritten by the VanDyk team. With this being a closed end 2nd lien, full comp can be paid out. More to come in the coming days/weeks as we get our ops staff trained and systems enabled for this amazing product.

• Fraud Alert: Be On the Lookout

Fannie Mae published a Fraud Alert regarding misrepresentation of income, identified in the Northern California area – but please be alert for these scenarios. Fannie has uncovered misrepresented child support income using falsified and/or altered public records. The common threads between these loans were: no other source of income, common real estate agents between the transactions, and fabricated bank statements/canceled checks. Please read the attached FNMA Fraud Alert for full details.

• USDA: Previous Audit Findings

We are currently in the process of a USDA Audit as a follow up to our most recent review that took place in December of 2021.

During the period of December 1st, 2021 through December 9th, 2021, an oversight review of origination procedures was performed. As a result of this review, the following deficient findings were identified:

• The reserves entered into GUS were not supported (overstated) by the documentation located in the file.
• The stability of income for all Borrowers was not sufficient and supported. (Primary area of concern – use and calculation of OT Income)
• The originator did not fully document household eligibility income in the loan file. (Primary area of concern – All non-payroll deposits were not adequately explained in file)

Important Reminders:

• HB‐1‐3555 requires lenders to use the lesser of the current or previous months balance as reserves in GUS.
• Please refer to USDA HB-1-3555 Chapter 9: Income Analysis 7 CFR 3555.152 if you have any questions related to income used for qualification
• Please refer to USDA HB-1-3555 Ch.9.3.E(4) 7 CFR 3555.152(b)) https://www.rd.usda.gov/files/3555-1chapter09.pdf

*Did you know? A common misconception is that when we submit a loan to USDA, that they re-underwrite the loan. USDA does not re-underwrite the loan.

• 4506c Update/Halcyon Reminders

If you generate disclosures, please be advised that when new files are created, the default Request for Transcript of Tax form will reflect the 3 years per borrower. In addition, if there is a co-borrower, their forms will need to show on lines 4, 5 and 6.

These fields will also populate the 8821 that we use for Halcyon transcript orders – so make sure if you have a co-borrower, they start on line 4.

All new requests for tax transcripts should be places via the Halcyon Tax Wallet – no one should be ordering with DataVerify any longer.  We plan on removing the 4506Cs from our initial disclosure packages in the coming weeks.  4506Cs will continue to be delivered in all our closing packages.

 

• Upcoming MI Trainings
  Attached is a list of some training courses put on by MGIC and Essent for June/July.  Sessions fill up fast so be sure to register and secure your spot.

 

Agency Updates

Fannie Mae

Fannie Mae published temporary requirements related to significant deferred maintenance and special assessments in 2021 via LL-2021-14.  With the direction of the FHFA, Fannie Mae and Freddie Mac have worked together to update project review requirements to assist with identifying projects that may have issues that result in unsafe conditions, and to promote sustainable homeownership.  Attached (FNMA SEL-2023-06) is a full list of the project review requirements.  This will be implemented for Condo Review submissions on and after Monday, July 17, 2023.

 

Effective with loan applications dated on and after August 1, 2023, for limited cash-out refinances, at least one borrower on the new loan must be a current owner of the subject property (on title) at the time of the initial loan application.  The following exceptions will apply:

1. The borrower acquired the property though an inheritance or was legally awarded the property via a legal settlement or divorce decree, or
2. The property was previously owned by an inter vivos revocable trust and the borrower is the primary beneficiary of the trust.

 

Freddie Mac

Single-wide Manufactured Homes will no longer have a 10-year age restriction for mortgages with Settlement Dates on and after September 11, 2023.  Our internal Freddie Mac matrices have been updated to align with this change.

 

An updated Form 400: Warranty of Completion of Construction has been issued to provide greater clarity on who is required to sign the form attesting to the property’s completion.  This form is attached and has been updated in Howee.

 

As a reminder, AMI updates were made in Loan Product Advisor June 8, 2023.  A recap of LPA’s determination of HomePossible eligibility is attached as part of Freddie Mac Bulletin 2023-13.

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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
• Revised LE Training with Origination Compliance: Wednesday, June 12 @ 1pm Eastern
• VanDyk Mortgage Newscast: Friday, July 14 @ 1pm Eastern
• Iron Sharpens Iron: Tuesday, July 18 @ 11am Eastern
• Production Roundtable: Tuesday, July 18 @ 3pm Eastern MANDATORY for all LPs and TCs
• Condo Training (Details to Come): Wednesday, July 19 @ 1pm Eastern

 

Freddie Mac LP + Government Loans: Update
LP updated how findings read for FHA/VA loans. The Purchase Eligibility will no longer show as “Ineligible” – instead, it will read “N/A.”

As a reminder: this is okay for government loans!

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Speaking of LPA Findings…

Did you know that your LTV doesn’t have to be 97% to lock your borrower into that Affordable Loan Program?  Keep an eye on your LPA Findings for indicators that your AMI meets HomePossible financing!

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New Construction Reminder

As a reminder for New Construction… Final Appraisal Inspections and Certificates of Occupancy (as required agency) are prior to funding conditions.  It is imperative that any delay in receipt of these be communicated proactively with underwriting and closing to avoid any hold up with the funding of your loan.

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VA Funding Fee – Reminder

For VA loans: don’t forget to open the MI screen to confirm if it’s the borrower’s first use of the VA loan program.

Encompass defaults to subsequent use (and a higher VA Funding Fee)

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