VanDyk Mortgage News: May 5, 2023

May 5, 2023

• VanDyk Mortgage: Now Licensed in 48 States + DC!

We are thrilled to announce that our Vermont lender/broker/servicer license has been approved! The only two states we are not licensed in are Hawaii and Missouri, which both require brick-and-mortar offices.

• FHA Gift Donor Deposits

EXCITING UPDATE!  Effective immediately for new all FHA loans (new and those in process), we will no longer require sourcing of large deposits into the Gift Donor account, so long as there is no indication that the deposit has come from an interested party in the transaction.  With this update, we also wanted to clarify that Gift Funds from a donor’s business account are acceptable if the donor is documented to be an owner of the business.

• Coming Soon: Bond Comparison Tool

We have had a wonderful response from everyone who has tried out our broker comparison tool and we are excited to announce the team is now working on a similar tool for available bond programs!  Look forward to details soon!

• Update: Right to Receive Copy of Written Appraisal/Valuation
  Due to updated investor requirements, we will be reinstituting the Notice of the Right to Receive a Copy of the Appraisal disclosure in our initial disclosure packages. This disclosure will be automatically added to your disclosure packages and no further action is required at this time.
• Halcyon
  The IRS has made obtaining transcripts using a 4506 form more difficult and cumbersome to our borrowers and the timeframes involved can be detrimental to a loan closing.  We are thrilled to announce our partnership with Halcyon for obtaining tax records from the IRS via the Tax Wallet.  With the borrower’s Single Sign On (SSO) on the IRS website or a single 8821 form, we will be able to quickly obtain multiple years and/or forms needed.  Compliance will be adding the necessary forms to our initial disclosure packages in the coming days and training will be coordinated for sales and staff soon.
• Investment Property- Business Purpose Disclosure

As of 4/19, investment properties require a Loan Purpose Certification to be signed by borrower(s). This document will allow borrower(s) to confirm they will be using the property for business purposes and thus their loan can be excluded from ATR/QM fee limits.  aiUW has been updated to include a condition for the new business purpose disclosure on all investment properties.
The disclosure is being sent with initials, but can be signed at closing (there are a handful of files where the form was not sent initially). A copy of this disclosure is attached.

• The Cost of Misrep and Repurchase 
  Did you know that ONE repurchased/scratch-and-dent loan can cost the company tens of thousands of dollars? Now is a great time for originators, processors and underwriters to consider whether they are deploying the right tools and strategies to minimize risks in this ever changing market.  Please see the attached Cost of Misrep and Repurchase PDF for more details.
• Broker Partner Updates
  • Union Savings Bank will now charge Credit Cards for all appraisals as soon as the invoice is received.  The Appraisal amount must be disclosed on all LE’s.  Upon closing, USB will issue a $250 lender credit on all Appraisals which will be included on the final closing statement.   There will be no refund or credit for any file that does not close.  Please make sure that the credit card form for the appraisal is from the borrower, as they do not have a way to reimburse the VanDyk on the CD for this charge.
  • Angel Oak: Important reminder: when a borrower signs their Angel Oak disclosures, they will see an option to upload docs as well. Please tell your borrower NOT to upload docs directly to Angel Oak – we will not be able to access them and will need to re-request from the borrower.
  • Quorum Credit Union will be joining us as a full wholesale partner offering 2^nd lien HELOC products.  Our incredible Production Support department is working on the implementation and training plan now, and resources and additional information will be forthcoming.   This will be a max 1% comp to the LO option.

• Knock Knock – Refresher Training

We’re excited to roll out an updated Knock Knock soon, which should no longer kick users out of loans or slow them down as it had in the past. We will be hosting a Knock Knock refresher training for everyone who uses Encompass on Tuesday, May 16 at 3pm ET.  We’ll cover how the feature works, best practices and etiquette. Please plan to attend this 15 minute power course – invites coming soon!

• Assumptions
  We are seeing an influx in requests for information regarding Assumptions due to the current market.  If you have a borrower who has contacted you regarding an assumption, please contact our Servicing Team at servicemyloan@vandykmortgage.com to verify the following:
  • We are the servicer,
  • The loan is assumable, and
  • The loan payments are current.

If it is determined that the loan is eligible for an assumption transaction, the Servicing Team will include Lindsey Kuhnle in their confirmation email, and she will assist in next steps based on the type of loan being assumed.  Due to the nature of the assumptions, there is no LO comp that will be paid.

• Soft Pull vs. Credit Refresh
  To clarify jargon:  If you are conditioned for a Soft Pull from underwriting, or if UDM isn’t reporting and you’re given an option for a soft pull instead, what you are being asked for is actually known as a “Refresh Report” in Sarma.  It is important you DO NOT pull a true soft pull with Sarma, but you follow the steps to obtain a “Refresh Report.” If a Soft Pull is obtained and your borrower(s) FICO has gone down, a new tri-merge Credit Report will be required and associated with the AUS.

If you ordered a Sarma soft pull because UDM monitoring was unavailable, please email the invoice for your soft pull to ProductionSupport@vandykmortgage.com. (If you used the Sarma Credit Refresh option, you do not need to email the invoice.)

• URLA Completion Milestone Movement Rule
  We will be rolling out the rules discussed last month in small batch phases weekly to ensure everything is working properly before implementing the next batch.  TCs / Processors and Underwriters have all been trained on this feature.  The first batch phase was implemented on Tuesday 5/2 and seems to be working well.  The next batch phase is scheduled to be implemented on Tuesday 5/9 and will focus on the Asset and Other Liabilities sections of the URLA.  One difference with this phase is the pop-up box feature which will appear if you have assets listed without an institution name, address, account number or phone number:

If you are unable to submit a file to underwriting or move a milestone from conditional approval forward due to missing sections of your URLA, and you feel these sections are completed or should not be required, please contact productionsupport@vandykmortgage.com so the concern can be addressed

• MI Training Availability for May 
  Our MI Partners are offering several training courses in May – the attached document entitled May MI Trainings includes courses we highlighted for Production Round Table.  Registration fills up quickly so if you are interested be sure to secure your place soon.

Agency Updates

Fannie Mae

• Fannie Mae has published Alternatives for Tax Filing Documentation!  They must know and understand the delays with the IRS this time of year as well as we do.  For borrowers who have filed an extension, Fannie Mae will now allow proof of e-filing of IRS Form 4868 or payment confirmation (including the confirmation number) of all or part of the estimated income taxes due to support that the borrower has filed an extension.
• In addition, since we are now in a time where a “No Record Found” Tax Transcript would be required where a borrower has filed an extension for 2022, we are able to accept borrower-provided evidence directly from the IRS website.

Freddie Mac

• For Borrowers with IRS Installment Agreements, Freddie Mac is issuing clear guidance on documentation requirements.  When a Borrower is obligated under an IRS Installment Agreement, the following requirements must be met:

1. The monthly payment must be included in the DTI if there are more than 10 payments remaining under the agreement,
2. A copy of the APPROVED Installment Agreement by the IRS verifying the payment terms, including the monthly payment and balance,
3. Verification that the Borrower is not past due under the terms of the Installment Agreement (TIP – ROA Tax Transcripts will show monthly payments OR this can be obtained from the IRS website), AND
4. No indication that the IRS has filed a Notice of Federal Tax Lien for the taxes owed under the installment agreement.

• Freddie Mac has updated their Selling Guide to permit the use of reduced real estate taxes, including those exempt from property taxes, in the monthly housing expense!  REMINDER!  If you wish to use a lower tax amount than that indicated on the Tax Bill, include this information when submitting and resubmitting your loans into Underwriting.

To use a tax amount that is lower than the current tax rate(s) you must provide the following:

1. *Written documentation of the estimated taxes OR tax exemption from Title/County;
2. *Evidence the reduction will be in effect prior to the next tax bill;
3. *Documents that need to be filed must be completed and signed by appropriate parties and approved by the Underwriter prior to close

*If the items provided are satisfactory, a Closing condition will be added to instruct the Title company to file the appropriate documents with the Taxing Authority.

USDA

• While there are no updates directly from Rural Housing, we have done a complete overhaul on our USDA Matrix.  Check out the new and improved USDA Matrix attached!

*  *  *

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/Thursday at 1pm Eastern
• Brokering Loans – The VanDyk Process: Thursday, May 11 @ 2pm Eastern
• VanDyk Mortgage Newscast: Friday, May 12 @ 1pm Eastern
• Iron Sharpens Iron: Tuesday, May 16 at 11am Eastern
• Knock Knock Refresher: Tuesday, May 16 at 3pm Eastern
• Winnow Training: Friday, May 19^th at 2:30pm Eastern
• Production Roundtable: Tuesday, May 23^rd at 3pm Eastern – World Turtle Day

Holiday Reminder: Memorial Day is Monday, May 29. There are no fundings, closings, CDs or disbursements on Monday, and it does not count as a recission day or one of the CD waiting period days. Please prepare accordingly!

Reminder: Don’t Run Services on the Co-Mortgagor’s URLA

If you have multiple borrower pairs in Encompass, please confirm you are on the first URLA/borrower pair prior to running any service. Borrowers’ income/liabilities flow up to the first URLA – if you run from a 2^nd or 3^rd borrower pair, it will not read DTI/AMI properly.

* * *

Reminder: No Submission Cutoff!

Did you know that we no longer have a 4pm cutoff for initial submissions or resubmissions?

Since we have implemented the 48-hour SLA (Service Level Agreement) for initial underwriting and re-submission reviews, a cut off time of day no longer applies.

Have no fear!  The SLA is not impacting how the Underwriting Team is setting up their day and most everything is still being reviewed next business day.  We now have a big opportunity to under promise and over deliver as well as control the volume!

VanDyk rocks!

* * *

Simultaneous Loans for Borrowers

If you have more than one loan for the same borrower, the loans MUST come into underwriting together for initial underwrite and resubmittal.
This ensures we are underwriting all loans to the proposed payments/expenses.

* * *

Over-Ordering and Over-Documenting
We are still seeing an overabundance of VOEs and credit supplement orders. We STRONGLY urge you to review your AUS and the documents you already have from your borrower before you even THINK about pulling a VOE.  RUN DU and LP.

If you aren’t using overtime, bonus or commission income, you will most likely only need a paystub and w-2 from the prior year (if that).

If your borrower’s self-employed business has been in existence for 5 or more years, Freddie Mac will only require 1 year tax returns.  Fannie will likely kick back a similar result.

When you run LoanBeam, there is no need to request FHA workbooks on a conventional loan.

Less is more when completing an initial scrub on a loan.  Please be mindful of the money you are spending on a file.