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August 8, 2024

• Risk Update: Wire Fraud

In recent weeks, we have seen increased phishing activity where unsavory parties emulating title companies are looking for borrower information and providing alternative wire instructions.  Don’t allow yourself or our borrowers to be victimized!!!  As mortgage professionals, we need to remember to take care with managing our email.  Jeanie Nivison sent an important Newsflash email (which you can review here) outlining the steps we have taken to increase security and provide guidelines for our company best practices.  Please be vigilant and take measures to ensure you do not put yourself, your clients, or our company at risk.

• Bond Disclosure Training – Follow-Up

We hosted two trainings in July to educate branches on the steps required to send your own bond disclosure packages.  If you missed it, a recorded session can be found here.  Reminder – the fee for our compliance department to send the initial or COC packages out for you is $40.  We encourage everyone to complete the training and pass the quiz so you can deliver the bond disclosure packages to your borrowers directly.

• Chase Community Lending: Exciting Update!

Great news! The Chase Community Lending program is now allowing Fannie Mae Value Acceptance (Appraisal Waiver) + Property Data or Freddie Mac ACE + PDR.

• CreditXpert Updates

CreditXpert, the company that facilitates What If and Wayfinder products with our credit vendors, will be separating and requiring the scenarios to be run on their website. Xactus, Sarma and all other credit vendors will no longer be able to offer the Wayfinder/What If options themselves.  With this change will come a cost increase, so we are looking at an alternate option and will provide additional information as it becomes available.

• MI Center

Some Great News!  We are delighted to announce an option to run quotes with all MI providers at once in Encompass will be available soon!  We are finalizing the process and should be able to provide additional information and instructions soon.

• Verifications – Are You Having the Conversation?

We are finding borrowers are unwilling to complete payroll and asset verifications from Veri-Tax and PointServ because they are suspicious about the source.  It is imperative you discuss with the borrower why you are requesting the verification and what they should expect prior to placing the verification order.  If you are unsure of the process or what the borrower experience is, we can help!  Check out the payroll user guide from Veri-Tax which details what the borrower will see and explains what they should do.  The most important thing to remember is to address the borrower’s concerns and ensure they have confidence in the product and process before placing the verification order.  ProductionSupport@vandykmortgage.com can answer questions and assist with account creation.

• Polly Pilot: Coming Soon

As announced in July, we have decided to make a pricing engine switch to Polly from Optimal Blue. We are on target to start a Pilot later this month. We do have a couple volunteers, but if anyone else would like to join the Pilot, please reach out to Brad or Zuzana. Our tentative go live date is 10/1 for all VanDyk. We will be doing live trainings in September. Stay tuned for more information.

• Buydown Matrix: Updated

The Buydown matrix has been updated to include second homes as eligible properties – check out the updated matrix here.

• Multi Factor Authentication, System Security and You

We have placed the majority of our employees on an authentication program which requires validation of your identity via your cell phone.  Users with more than one Microsoft account must validate for each one, per device, per app.  Often, changing your IP address will prompt the authentication.  This may seem cumbersome; however, with the increase in cyber-attacks and issues hitting close to home, we feel the extra layers of security will keep our borrower’s sensitive and personal information safe.

In the event your borrower in unable/unwilling to provide their loan documents or personal data via Floify, we have an option for secure file delivery within our Seafile system.  All users can deliver a secure upload link and access items within Seafile.  See this job aid for instructions and reach out to IThelpdesk@vandykmortgage.com with questions.

• HR Updates

Welcome to our most recent new hires!  We are delighted to announce the following have joined our team.  Be sure to give them a warm welcome and log in to our Welcome to VDM (vfairs.com) site to “like” the photos they have added to the photobooth:

Ashley Piehl, LO                           Branch 231 – Clearwater, FL

Natalia Ospina-Restrepo, LO Branch 727 – Tampa, FL

Lisseth Sesatty, LO                                 Branch 131 – Muskegon, MI

Verna Jackson, LO                                   Branch 703 – Delray Beach, FL

Jessica Yates, LO                         Branch 259 – SLC, UT

Kyla Eadie, IT Specialist

Charlie Sundstrom, Business Development Director

 

Agency Updates

You may be hearing rumblings about changes and required disclosures that must be implemented within a lender’s Reconsideration of Value (ROV) policies and procedures for Fannie Mae, Freddie Mac, and FHA.  Initially, these updates were to be in effect by September 2; however, this date has been pushed out to October 31, 2024.  We are working to update our ROV policies and procedures and expect to have this completed and published by our News coming October 2024.  Stay tuned!

 

Fannie Mae

Fannie Mae has updated their Selling Guide in relation to Rent-related Credits, most specifically, Rent Credit with an Option to Purchase and Rent-back Credit.  We are implementing these immediately.

Rent credit with an option to purchase

Current policy states that rent credit, which is determined by calculating the difference between the market rent and the actual rent paid for the last 12 months, can be credited towards the downpayment or minimum borrower contribution under a documented rental/purchase agreement. This policy update permits more than 12 months’ rent credit to be used as long as all other requirements are met.

Additionally, we expanded the documentation requirements to include:

• rent verification documentation, including bank statements or other reasonable methods evidencing the rental payments over the term of the agreement; and
• minimum terms outlined in the rental/purchase agreement.

Rent-back credit

A rent-back credit is an amount paid by the property seller to the borrower in exchange for allowing the seller to stay in the home for a specified period of time after closing. While rent-back credit to the borrower paid by the seller is permissible as part of the sale, it cannot be used as an eligible source of funds for closing costs, down payment, or reserves. Additionally, lenders must underwrite the loan without any consideration of the rent-back credit and must document that the borrower has sufficient funds for the transaction from eligible sources.

 

Freddie Mac

LPA: Freddie Mac is updating feedback messages in LPA (Loan Product Advisor) surrounding cash to close, reserves, and income.  These are welcomed messaging as cash to close shortages are frequently overlooked since LPA will return Accept / Eligible results and the messages around certain retirement incomes such as VA Disability, Pension, and SSI will be clearer and more concise. For the full list of feedback messages and how they will change or what is new, visit Freddie’s LPA Matrix here.

Selling Updates: Freddie Mac has made updates to the Income Underwriting and Documentation Requirements around Self-Employment, Non-Arm’s Length Employment, Fluctuating Hourly Employment, and Social Security Income types.  The following updates are being implemented immediately.

Self-employed income: We are making the following updates related to self-employed income:

• Self-employed history of less than two years:
  • Specifying that the Borrower must have a combined two-year history of receipt of income from the current self-employment and the prior job in the same or similar occupation or industry
  • Specifying that the qualifying income must be determined by using the lesser of the stable monthly income from the new business or the stable monthly income earned in the previous occupation
• Business structure changes: Adding guidance and requirements to address business structure changes (e.g., the Borrower’s business structure changed from a sole proprietorship to an S-corporation), including requiring that there must be no change in the Borrower’s percentage of ownership interest in order for the current and prior business structures to be considered the same business.

Employed income: non-arm’s length employment. We are updating our requirements to:

• Permit the use of the Internal Revenue Service (IRS) wage and income transcript for the most recent year in lieu of the tax returns (W2 Transcripts), and
• Specify that the documentation must validate the prior year earnings from current employment and support the current income level. If the current income level is not supported, the Seller may use the validated income amount from the prior year as qualifying income.

Calculation of income from fluctuating hourly employment

We have specified that in certain instances, the income average for fluctuating earnings may be based on a shorter number of months if a written justification and/or documentation is provided to support the applicable months used in the calculation.  The total number of months used in the calculation must be at least 12 months.

Documentation for Social Security retirement and Social Security disability income types

We have expanded our documentation requirements for Social Security retirement and Social Security disability income types to permit IRS Form 1099-SSA and pages 1 and 2 of the Borrower’s most recent federal individual income tax return or pages 1–3 if the tax return was filed using IRS Form 1040-SR. When using tax returns that were filed jointly with an individual who is not a Borrower on the transaction, additional documentation is required.

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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
• VanDyk Mortgage Newscast: Thursday, August 8 at 1pm Eastern
• Iron Sharpens Iron: Tuesday, August 20 @ 11am Eastern
• Production Roundtable: Wednesday, August 21 @ 1pm Eastern REMINDER: ATTENDANCE IS MANDATORY for all LPs and TCs/LOAs who perform TC functions.

Additional Training Opportunities

• Freddie Mac has published their training offerings available in August. Check out the calendar here and enroll today!
• Essex Mortgage is hosting an overview of their nationwide DPA program on Tuesday, August 13 at 1pm ET. Register here to receive the calendar invite.
• Essent is hosting a webinar on Advanced Variable Income – hourly rate increases, significant income fluctuations, and variable work hours. This will also be Tuesday, August 13 at 1PM Eastern. Register here to attend!

 

 

 

Reminder: Run Both AUS!

Reminder, our best practice is to run both LPA and DU on every file to ensure you are getting the best options in pricing and documentation level for your clients.  We encourage each LO and Processor (and any other team members, as applicable) to run both AUS as a normal part of their workflow.

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25 Points