LOAN PROCESSING - American Financial Network,...
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© 2018. All Rights Reserved. American Financial Network, Inc. | Rev. 05/10/2018 BRANCH LOAN PROCESSING MANUAL
Transcript of LOAN PROCESSING - American Financial Network,...
© 2018. All Rights Reserved. American Financial Network, Inc. | Rev. 05/10/2018
BRANCH LOAN PROCESSING
MANUAL
OPERATIONS – CORPORATE
Loan Processing Manual
AFN-P-Pro_BranchProcManual • Rev. 05/10/2018
CONTENTS GETTING STARTED AS A PROCESSOR ............................................... 1
Welcome Message .................................................................................... 1
Loan Processing for AFN ........................................................................... 1
Helpful Links ............................................................................................ 2
AFN Intranet .......................................................................................... 2
Quick Links from the Home Page ............................................................... 2
Human Resources and Accounting ............................................................. 2
Operations and Technology ...................................................................... 2
Policies .................................................................................................. 3
Procedures ............................................................................................. 3
Compliance and Quality Control (QC) ......................................................... 4
Loan Programs ....................................................................................... 4
Marketing and Sales ................................................................................ 5
Educaton and Training ............................................................................. 5
Maintaining Production ............................................................................ 5
Workflow and Time Management ............................................................... 5
Ideal Production Levels ............................................................................ 6
Sample Production Calendar ..................................................................... 6
ENCOMPASS LOAN ORIGINATION SYSTEM (LOS) ............................. 7
Logging In to Encompass ......................................................................... 7
Procedure: Encompass Log In ................................................................... 7
Pipeline .................................................................................................... 8
Default Pipeline Views .............................................................................. 8
Loan Processor, Processing Queue ............................................................. 9
Additional Pipeline Views ........................................................................ 11
Custom Views ....................................................................................... 12
Custom Field Width ............................................................................... 13
Searching and Sorting Fields ................................................................... 14
Loan Folders ........................................................................................... 14
Accessing Loan Folders .......................................................................... 14
Frequently Used Folders ......................................................................... 15
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Loan Numbers ........................................................................................ 16
Overview ............................................................................................. 16
Encompass Icons .................................................................................... 16
Key to Encompass Icons ........................................................................ 16
Email Signatures .................................................................................... 18
Introduction ......................................................................................... 18
Procedure: Setting Up an Email Signature ................................................ 18
Default File Contacts .............................................................................. 19
Introduction ......................................................................................... 19
Procedure: Adding Default File Contacts ................................................... 19
Channels of Business .............................................................................. 20
Commonly Used Channels of Business ...................................................... 20
MILESTONES ................................................................................... 21
Processing Workflow and Encompass Milestones ................................... 21
Loan Progress ....................................................................................... 21
Milestone Templates .............................................................................. 21
Default Milestones ................................................................................. 21
Changing the Milestone Template ............................................................ 21
Milestones ― Retail ................................................................................ 22
Retail Workflow ..................................................................................... 22
Milestones ― Brokered Out Loans .......................................................... 28
Introduction ......................................................................................... 28
Brokered Out Workflow .......................................................................... 29
Milestones ― Reverse Mortgage ............................................................. 31
Procedure: Reverse Mortgage Milestones .................................................. 31
Milestones ― DPA 2nd ............................................................................ 35
Procedure: DPA Milestone....................................................................... 35
ENCOMPASS LOAN PROCESSING .................................................... 38
Loan Review ........................................................................................... 38
Procedure: Opening a Loan File for Review ............................................... 38
File Log .................................................................................................. 38
Introduction ......................................................................................... 38
Activity ................................................................................................ 39
Conversation Log.................................................................................... 39
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Introduction and Policy .......................................................................... 39
Procedure: Adding Notes to the Conversation Log ...................................... 40
Default Option for New Log Entries .......................................................... 41
Procedure: Viewing Notes in the Conversation Log ..................................... 41
Alerts and Messages ............................................................................... 42
Timely Resolution of Alerts ..................................................................... 42
Access to Alerts and Messages ................................................................ 42
Common Alerts ..................................................................................... 43
Unread Messages .................................................................................. 43
Clearing Alerts and Messages .................................................................. 44
Milestone Worksheet and Tasks ............................................................. 44
Worksheets .......................................................................................... 44
Tasks .................................................................................................. 44
Procedure: Adding a Task ....................................................................... 44
Mavent (Compliance Review Tool) ......................................................... 45
Compliance Checks ............................................................................... 45
Mavent ................................................................................................ 45
Compliance Review Audit Results ............................................................ 46
Fields Required to Run Mavent ................................................................ 46
Initial Disclosures .................................................................................. 47
Origination Team: 1003 ......................................................................... 47
Origination Team: RESPA and 4506-T ...................................................... 47
Disclosures Sent via Encompass eFolder ................................................... 48
Procedure: Document Retrieval ............................................................... 49
Disclosure Tracking Tool ......................................................................... 49
Disclosures Sent via US Mail ................................................................... 49
Disclosure Tracking: Multiple Entries ........................................................ 50
Intent to Proceed .................................................................................. 50
Completing the App Received and Processing Milestones ....................... 51
Receiving Signed Disclosures .................................................................. 51
App Received Milestone .......................................................................... 52
Send to Processing Milestone .................................................................. 52
eFOLDERS ....................................................................................... 53
Organizing the eFolder ........................................................................... 53
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Paperless System .................................................................................. 53
Uploading Documents ............................................................................ 53
Guide to Sorting and Placeholders ........................................................... 53
eFolder: Initial Disclosures ..................................................................... 60
Document Organization .......................................................................... 60
Placeholder: FHA/VA Disclosures ............................................................. 60
Placeholder: State Specific Disclosures ..................................................... 61
Placeholder: LE-Related Disclosures ......................................................... 61
Placeholder: Misc. Initial Disclosures ........................................................ 62
eFolder: Re-Disclosures .......................................................................... 62
Placeholder: Re-Disclosed LE-Related ....................................................... 62
eFolder: Assets ....................................................................................... 63
Placeholder: Assets ............................................................................... 63
Letters of Explanation (LOEs) .................................................................. 63
Non-Payroll Deposits ............................................................................. 63
eFolder: Income ..................................................................................... 64
Placeholder: Income .............................................................................. 64
Multiple Borrowers ................................................................................ 64
LOAN PROCESSOR REVIEW ............................................................. 65
Processing and Submission Review ........................................................ 65
Review ................................................................................................ 65
Processing Checklist .............................................................................. 65
Loan Eligibility ........................................................................................ 67
Initial Review ....................................................................................... 67
Forms View ............................................................................................ 83
Setting Up Forms View ........................................................................... 83
AFN – Borrower Summary Origination ................................................... 84
Updating Loan File Information ............................................................... 84
Processing Sections in Forms View ........................................................ 84
AFN – Borrower Summary Origination ...................................................... 84
1003 ................................................................................................... 85
Subject Property Information .................................................................. 85
Title Only Spouse .................................................................................. 85
Transaction Details ................................................................................ 86
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Approved Investors ............................................................................... 87
Change Loan Program ............................................................................ 88
Bond/DPA Products ............................................................................... 88
Credit Information ................................................................................. 88
SSN Verification .................................................................................... 89
Processing Form (Screen) ...................................................................... 89
Workflow ............................................................................................. 89
Submission Notes .................................................................................. 91
Underwriting Review .............................................................................. 91
Third Party Services ............................................................................... 92
Items Ordered from a Third Party Service ................................................. 92
CTI Services ......................................................................................... 93
Escrow/Title ........................................................................................... 93
Opening Escrow and Title ....................................................................... 93
AUS .................................................................................................... 93
Appraisals .............................................................................................. 94
Policy .................................................................................................. 94
Approved AMCs..................................................................................... 94
Ordering Appraisals ............................................................................... 94
CDA/Desk/Field Reviews ....................................................................... 94
Ordering CDA, Desk, or Field Reviews ...................................................... 94
AVMs ...................................................................................................... 95
Ordering AVMs ...................................................................................... 95
FHA/VA Case Numbers ........................................................................... 95
Ordering FHA/VA Case Numbers .............................................................. 95
FHA Refinance Authorization ................................................................... 95
VA Case Assignments ............................................................................ 95
FHA/VA Case Numbers ........................................................................... 96
CAIVRS Numbers .................................................................................. 96
Verification of Employment .................................................................... 96
Policy .................................................................................................. 96
Procedure: Ordering a VOE via Encompass ............................................... 96
Verification Types .................................................................................. 97
Procedure: Printing the VOE Form ........................................................... 97
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Payoffs ................................................................................................... 98
Policy .................................................................................................. 98
Obtaining Payoffs .................................................................................. 98
Updating the Loan Balance ..................................................................... 99
File Contacts ........................................................................................... 99
Fraud Guard ......................................................................................... 99
Missing File Contacts ............................................................................. 99
Third Party Contacts ............................................................................ 100
Procedure: Entering File Contacts .......................................................... 100
File Contacts for Purchase Loans ........................................................... 101
Notice of Incomplete Application (NOIA) ............................................. 103
Reg B Compliance ............................................................................... 103
Extending the Timeline ........................................................................ 103
Procedure: Sending an NOIA ................................................................ 104
Submittal Milestone.............................................................................. 105
Procedure: Completing the Submittal Milestone ....................................... 105
Approval and Closing Review ............................................................... 107
General Overview ................................................................................ 107
Compliance Audits ................................................................................ 112
Workflow ........................................................................................... 112
Settlement/Closing Agents .................................................................. 114
Policy ................................................................................................ 114
Approved Closing Agents ...................................................................... 115
Escrow/Aggregate Setup (Loans With Impounds) ............................... 115
Procedure: Escrow/ Aggregate .............................................................. 115
Re-Disclosing/Change of Circumstance ................................................ 122
Policy ................................................................................................ 122
Re-Disclosure Timeframe ..................................................................... 122
Required Forms .................................................................................. 122
COC Form .......................................................................................... 122
Special Considerations When Re-Disclosing ......................................... 124
Additional Items ................................................................................. 124
Wait Periods ....................................................................................... 126
Adding Non-Borrowing Parties to Title ................................................. 127
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Policy ................................................................................................ 127
Procedure: Borrower Information - Vesting ............................................. 127
Closing Disclosure ................................................................................ 130
Special Considerations ......................................................................... 130
Customer Considerations ...................................................................... 131
Closing Disclosure Checklist .................................................................. 131
Wait Periods (Disclosing CDs) ............................................................... 137
Underwriting Decisions ........................................................................ 137
Notification of Decision ........................................................................ 137
Milestones .......................................................................................... 137
Processor's Steps Towards Closing ......................................................... 138
Review to Clear Compliance .................................................................. 144
Handling a Denial ................................................................................. 144
Preparing a Loan for Closing ................................................................ 144
Introduction ....................................................................................... 144
Summary of Items to Verify.................................................................. 145
Final Approval ...................................................................................... 145
PTD Review Milestone .......................................................................... 145
Dry States ......................................................................................... 146
Wet States ......................................................................................... 146
Ordering Closing Documents ................................................................ 147
Doc Orders Form (Screen) .................................................................... 147
Procedure: Scheduled Closing Date/Time ................................................ 148
Funding ................................................................................................ 152
Wet States ......................................................................................... 152
Dry States ......................................................................................... 152
Canceling a Loan .................................................................................. 153
Introduction ....................................................................................... 153
Procedure: Canceling a Loan ................................................................. 153
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GETTING STARTED AS A PROCESSOR
WELCOME MESSAGE
Loan Processing for AFN
Welcome to American Financial Network (AFN)! AFN is a Direct Lender with delegated authority to underwrite and close Conventional, FHA, USDA, VA, and Alt-QM products in-house. The purpose of this manual is to provide basic operating information that will support your success as an AFN Loan Processor. If you have any questions about the information contained herein or to schedule new processing training, please contact the AFN processing management team (Branch Account Managers) at [email protected]. For general Encompass questions, you may also reach out to the Branch Relations Department as an additional resource ([email protected]). Loan Processors are responsible for maintaining a current file in Encompass and keeping the status up-to-date within the system using the tools made available. This manual will help Processors navigate through Encompass, provide guidance on common screens used within Encompass, and milestone management throughout the life of the loan. Information on how to process loans (i.e., calculating income, reviewing title reports and appraisals, etc.) is not covered here. It is assumed that Processors responsible for an active Pipeline already possess the skills required to process loans. Rather, this manual is a guide to workflow expectations and navigation through Encompass, and serves to educate Processors on AFN’s policies and procedures for specific loan types, programs, and third party services.
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HELPFUL LINKS
AFN Intranet AFN Policies and Procedures may be centrally accessed from
AFN's intranet site, where staff members may view and download program guidelines, details for specific loan products, Encompass procedures, compliance information, and additional tools. For convenience, frequently accessed links are provided below.
Quick Links from the Home Page
• AFN Intranet Home Page o AFN Branch Wire Newsletters o Disaster Alerts o Underwriting Scenario Desk o TRID Info o AFN Web Mail (AFN email for your web browser) o Bright Idea Suggestion Box
Human Resources and Accounting
• HR & Accounting Main Menu o AFN Underwriting Scenario Desk o AFN Employee Handbook o HR & Acctg Forms Business Card Order Form Business Expense Reimbursement Form
Operations and Technology
• AFN Operations & Technology Main Menu o AFN Bulletins o Disaster Alerts o Disaster Alert Matrix o Encompass Newsflashes o Forms Canceled/Denied Loans – QC Checklist Compliance Review Checklist-TRID Affiliated Business Arrangement Disclosure Intent to Proceed – GFE Intent to Proceed – LE Property Inspection Waiver
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HELPFUL LINKS (CONTINUED)
Operations and Technology (Continued)
o Brokered Out Check Cover Sheet o Check Request o Closing Date Waiver o Condo/PUD Certification o Handbooks/Manuals o Matrices AFN Approved Condo Projects
o Technology AFN Email for iPhone Users AFN Email for Android/Smart Phone Users
o Departmental Meeting Notes
Policies • Ops Policies Menu o Disaster Alert Policy o Employee Loans o Adding/Removing Applicants o TRID Policy Manual o HPML Loans o Disputing Values o Property Taxes o Rebuttable Presumption VA IRRRLs
Procedures • Ops Procedures Menu o Encompass Quick Reference Guide o LO Encompass Training Video (password = training) o Adding Non-borrowing Spouse to Title o Canceling Loans in Encompass o Extended Fraud Alerts o Handling Bond/DPA Programs o Handling HPMLs o Handling FHA Loans o Handling LPMI Loans o Handling Manufactured Home Loans
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HELPFUL LINKS (CONTINUED)
Compliance and Quality Control (QC)
• Compliance & QC Main Menu
o Compliance Matters Bulletins o Compliance Connection o Advertising Policy o AFN Approved AMCs (Appraisers) o AFN Approved Closing Agents AFN Closing Agent Approval Application & Agreement
o AFN Approved Condo Projects o AFN Approved Downpayment Assistance Programs o AFN Approved Lenders for Brokering Out Loans o AFN Elder Abuse Policy o AFN QC Manual o AFN State-Specific Fee Matrix o Ellie Mae State Disclosure Matrix
Loan Programs
• Loan Programs Main Menu o AFN Investor Overlay Matrices: Conventional FHA Standard FHA Streamline Refinance VA Standard VA IRRRL
o AFN Approved Down Payment Assistance Programs o AFN Protection + o Agency Underwriting Manuals Fannie Mae Freddie Mac HUD VA Lenders Handbook AFN Fannie Mae Direct Product Summary
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HELPFUL LINKS (CONTINUED)
Marketing and Sales
• Marketing & Sales Main Menu
o Advertising Request Form (password GoTeamAFN) o AFN Store
Educaton and Training
• Education & Training Main Menu o Charts and Diagrams Encompass Milestone File Flow Mortgage Insurance Workflow Tutorial
o Quick Reference Guides Adding Borrowers to a Loan Changing Loan Officers E-Signing the 1003 Higher Priced Mortgage Loan Workflow & FAQ How to Lock a Loan How to Restart a Loan
MAINTAINING PRODUCTION
Workflow and Time Management
The processing workflow coincides with milestones in the Encompass LOS system. By utilizing the following workflow, users will find it easier to perform daily tasks within the Encompass system and to maintain an efficient file flow while managing a Pipeline of active loans. Time management and maintaining production are key components to success. In order to efficiently move loans, the Processor must stay on track to attain the larger goal.
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MAINTAINING PRODUCTION (CONTINUED)
Workflow and Time Management (Continued)
Balancing submissions, approvals, docs, and funding can be a daunting task, but with effective time management and ownership of the file, a Processor can successfully maintain healthy production levels.
Ideal Production Levels
Based on an average of 20 business days in any given month, Loan Processors should aim to doc out at least one loan per day (depending on the branch’s production levels), with seven per week. This would give a Processor consistent funding of 20 to 30 loans per month without sacrificing service to the borrower and branch or feeling overwhelmed. The sample calendar below illustrates an ideal pace for the month with important deadlines for refinances (if there is a rescission period).
Sample Production Calendar
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ENCOMPASS LOAN ORIGINATION SYSTEM (LOS)
LOGGING IN TO ENCOMPASS
Procedure: Encompass Log In
An individual user name and password is required to access Encompass. User names and login IDs should never be shared. If you have not yet received login credentials, contact AFN's Help Desk for assistance.
Logging in to Encompass: 1. Locate the Encompass icon on your desktop:
or
2. Enter User ID and Password:
3. Once logged in, Encompass will open on the Home Page. A variety of information is displayed, including AFN’s turn times and a link to AFN's Underwriting Management teams with contact information for Underwriting.
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LOGGING IN TO ENCOMPASS (CONTINUED)
Procedure: Encompass Log In (Continued)
4. Click the Pipeline tab to access loans:
PIPELINE
Default Pipeline Views
From the Pipeline tab, Processors will have different options to set up a Pipeline view to see loans (typically, Processors will want to see loans assigned specifically to their name or to their branch).
Encompass has three default Pipeline views: 1. Loan Processor – Processing Queue 2. Loan Processor – Funded 3. Loan Processor – Cancelled/Denied
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PIPELINE (CONTINUED)
Default Pipeline Views (Continued)
Loan Processor, Processing Queue
The main default view is Loan Processor – Processing Queue. This view displays active loans not yet funded. Processors can manage their active pipeline, sort loan files by status, and quickly identify file progress without having to open individual loans.
Encompass Pipeline: LOAN PROCESSOR − PROCESSING QUEUE
Field Description
Alerts Total number of alerts on a loan; click the number to view specific alerts outstanding without having to open the file
Messages Number of messages on a loan (such as eDisclosures); identify when items sent directly through Encompass have been received
Last Finished Milestone Current loan status and milestone
Est. Closing Date Estimated closing date in Encompass; helps identify past due closing dates that need updating
Original Closing Date from Purchase Contract
If purchase: original closing date from purchase contract (as entered in Encompass)
Compliance Conditions Approve Date
Date Compliance approved/cleared all conditions (blank if not yet cleared)
PTD Outstanding Date Date loan submitted to underwriting for review (blank if not in line for review)
Milestone Date – Processing
Date processing milestone completed: within 24 hrs of receipt borrower documentation/initial stip package
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PIPELINE (CONTINUED)
Encompass Pipeline: LOAN PROCESSOR − PROCESSING QUEUE (Continued)
Field Description Milestone Date – Submittal
Date submittal milestone completed (date submitted to UW for initial review; milestone triggers initial compliance review)
Milestone Date – Conditional Approval
Date underwriting conditionally approved the loan
Milestone Date – PTD Reviews
Date underwriting signed off on all PTD conditions and cleared the loan for closing
Milestone Date – Cleared for Docs
• Date loan is cleared for closing (both underwriting and compliance must sign off on the loan to be moved to this milestone)
• Wet states: QC must also clear prior to completion of this milestone
Milestone Date – Doc Request
Date Doc Request Milestone completed (indicates to the doc department that the loan is in line for closing review)
Branch Name Branch name for a loan; useful when working with multiple branches
Loan Number Loan number identifier; use to locate a loan or identify the loan number without opening individual files
Borrower Name Borrower identifier and additional search method for specific loans
Note Rate Current interest rate
Lock & Request Status Lock status and remaining days of lock (if locked)
Underwriting Conditions PTD
Lists all open PTD (prior to docs) conditions, if any
Loan Purpose Identifies loan type (Purchase, Rate/Term Refi, Cash Out Refi, etc.)
Loan Program Displays selected program code (program code identifies loan type Conventional, FHA, VA, USDA, or other program type and loan term)
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PIPELINE (CONTINUED)
Encompass Pipeline: LOAN PROCESSOR − PROCESSING QUEUE (Continued)
Field Description
Occupancy Identifies primary residence, second home, or investment property
Total Loan Amount Total loan amount including MIP, if applicable
LTV Identifies Loan-to-Value Ratio (LTV)
Bottom Ratio Shows the current back end DTI (useful for qualifying purposes)
Subject Property Address
Useful when completing more than one loan for the same borrower (distinguishes property addresses)
Loan Team Member Name – Loan Processor
Identifies the Processor on the file; enter your name here to restrict the view to your loans only
Loan Team Member Name – Underwriter
Identifies the Underwriter, if assigned; quick access to contacts
Loan Team Member Name – Doc Drawer
Identifies the Doc Drawer, if assigned; quick access to contacts
Loan Team Member Name – Funder
Identifies the Funder, if assigned; quick access to contacts
Loan Team Member Name – Loan Officer
Identifies the Loan Officer; quick access to contacts
Additional Pipeline Views
• Once funded, loans move from the Processing Queue to the Funded View. Access the Loan Processor – Funded View to see funded and post-closing loans
• Cancelled or denied loans are accessed in the Loan Processor – Cancelled/Denied view
• Each view contains a different set of fields than the Processing Queue detailed above
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PIPELINE (CONTINUED)
Custom Views Information and how it is displayed in a Pipeline view can be
customized to the user's preference.
To add or remove columns: 1. Right click any column header and select Customize
Columns
2. From Customize Columns > Selected Columns • To remove a column, clear the corresponding check box • To add a column, select the corresponding check box • Click [OK]
To change column order: • Click and drag a column to the desired location
or • From Selected Columns (steps 1 and 2, above, "To add
or remove columns"), highlight the column header and use the arrows to change the order
• Click [OK]
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PIPELINE (CONTINUED)
Custom Views (Continued)
To save a customized view:
1. After making changes, click the [Save] icon located next to the dropdown options (Note: The [Save] button will go "live" when changes are made to the standard default view)
2. Select [Save as] 3. Enter a name for the customized view ("My Pipeline" in the
example below) 4. To make this your default view, check the box labeled Set
as my default view 5. Click [Save]
Note: Once a customized view has been created, it will appear in the Pipeline View dropdown menu.
Custom Field Width
Due to space restrictions on most computer monitors, the user may wish to reduce the width of certain fields in order to make the view fit on one screen.
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PIPELINE (CONTINUED)
Field Width (Continued)
To change the field/column width: 1. Point the cursor to the line between two fields. 2. An icon will appear allowing the user to adjust the field to
the desired width. 3. Follow the steps in "Saving a Customized View" (above) to
save to an existing view or create a new view. 4. If changes are not saved for a customized option, the
default settings will be reinstated when the user changes a view or restarts Encompass.
Searching and Sorting Fields
The fields displayed in any view are searchable and may be filtered to restrict criteria. (For example, if you only want to view purchase loans, you can do so by restricting the Loan Purpose field to "purchase.") Loans may also be sorted by milestone, allowing for easier pipeline management. Please keep in mind that if a current filter is set on an existing field when the view is saved with changes, that filter will be saved with any other changes made. Use care in changing view settings to make sure filters have not been added that should not be included in the general Pipeline view.
LOAN FOLDERS
Accessing Loan Folders
In addition to the different Pipeline views available, there are also different folders within Encompass where loans are housed. To access available folders, select the appropriate folder from the dropdown menu in the Pipeline tab in Encompass located underneath the dropdown for the Pipeline views.
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LOAN FOLDERS (CONTINUED)
Accessing Loan Folders (Continued)
Frequently Used Folders
Frequently used folders are detailed in the following table.
FOLDER PURPOSE
Prospects • Origination; loan files begin in the Prospects folder • From here, check loans for messages (disclosures received
from borrowers, loans that need to be moved to the Pipeline folder)
• Processor moves the file from the Prospects folder to the Pipeline folder when the loan attains the App Received milestone (signed initial disclosures)
Pipeline • Active loans with completed disclosures • Loans from App Received to Reconciled may appear here,
depending on the Pipeline view and filters used • Main folder for use in Pipeline management
Canceled-Denied
• AFN Corporate Staff moves cancelled or denied loans here once all HMDA requirements have been confirmed for compliance
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LOAN NUMBERS
Overview AFN loan numbers are assigned when a new loan is saved in
Encompass. Loan numbers are typically 10 digits long with the first four digits being the branch ID. (For example, a loan officer associated with the corporate office will have a loan number beginning with 1001, identifying the loan as originated by corporate.) The following six digits of the loan number are unique to that loan. Note: If a loan number is tied to the wrong branch, please refer to Bulletin 14-020 for instructions on how to update the branch ID and loan number.
ENCOMPASS ICONS
Key to Encompass Icons
Encompass icons and descriptions are listed below.
ICON NAME AND DESCRIPTION
Alert – One or more alerts exist for the loan
Message – One or more messages exist for the loan
Add – Add a new record within the current function
Edit – Open the selected item for editing
Duplicate – Create a duplicate of the selected item
Save – Save the currently open item
Delete – Delete the selected item
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ENCOMPASS ICONS (CONTINUED)
ICON NAME AND DESCRIPTION (CONTINUED)
Reset – Discard changes, restore to previous settings
Refresh – Update data (such as a Pipeline view)
Find – Search for stored information
Excel – Exports selected data to an Excel spreadsheet
Print – Print selected information (or go to the Encompass Print Engine to generate forms)
Copy – Copy the selected item
Cut – Remove an item (will place item on the Windows clipboard so it can be pasted to another location)
Paste – Paste an item from the clipboard to the selected location
Email Conversation Log – Open a conversation log dialog box and MS Outlook for the associated contact
Phone Conversation Log – Open a conversation log for the associated contact
Address Book – Open the Business Contacts address book to copy a contact to the file
Calculation Field Unlocked – Value recalculated if field unlocked and related fields changed
Calculation Field Locked – Value will not recalculate if field locked and related fields changed
Rate Lock – No lock activity on the file
Rate Lock – File is locked (if red, rated lock is expired)
Continued
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ENCOMPASS ICONS (CONTINUED)
ICON NAME AND DESCRIPTION (CONTINUED)
Rate Lock – Initial rate lock requested
Rate Lock – Rate lock extension requested
Rate Lock – Rate lock extension requested on an expired lock
Rate Lock – Rate lock extension pending
Rate Lock – Lock cancelation requested
Rate Lock – Rate lock canceled
EMAIL SIGNATURES
Introduction For users who send information via email directly from
Encompass (such as eDisclosure notifications to borrowers), a personal email signature can be set up similar in manner to setting up signatures in Outlook.
Procedure: Setting Up an Email Signature
To set up an email signature: • From the Encompass menu (upper left corner of
Encompass screen) select Settings… • Click the “+” next to Personal Settings to expand the
menu and select My Profile • Edit the Email Signature pane
• Click the icon [Save] (upper right corner of page) • Click the [Close] button
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DEFAULT FILE CONTACTS
Introduction Encompass has a Default File Contacts feature that allows
individual users to enter commonly used service providers. For instance, if a dedicated escrow company is going to be used on most transactions for a branch processor, a default contact may be set up to associate the escrow company with the Processor’s Encompass information.
There is also a Line Item Number field for each default contact where the corresponding line item number of the LE/CD can be entered to ensure the contact is transferred to appropriate forms.
Procedure: Adding Default File Contacts
To set up or add default file contacts: 1. From the Encompass menu (upper left corner of
Encompass screen) select Settings 2. On the left panel click the “+” next to Personal Settings
to expand the menu, then select Default File Contacts 3. Click the Address Book icon next to the Company Name
field for the category of default file contact you want to add • The following categories may be set up as Default File
Contacts: o Appraiser o Escrow Company o Title Insurance Company o Hazard Insurance o Mortgage Insurance o Flood Insurance o Credit Company o Underwriter
Continued
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DEFAULT FILE CONTACTS (CONTINUED)
Procedure: Adding Default File Contacts (Continued)
4. Contacts associated with the selected category will be displayed in a new window, Business Contacts
5. Select a business contact and the contact information will be copied to the Default File Contacts list
6. Click the [Save] icon (upper right corner of page), then click [Close]
CHANNELS OF BUSINESS
Commonly Used Channels of Business
Each channel of business has a set of unique milestones to be completed by various loan team members. The channels of business most commonly used in Encompass are:
• Banked – Retail • Banked – Wholesale (for use by Orion Lending Wholesale
Division only) • Brokered
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MILESTONES
PROCESSING WORKFLOW AND ENCOMPASS MILESTONES
Loan Progress Loans progress in Encompass by attaining a series of milestones,
one stage and one department to the next until completion.
Milestone Templates
Milestone templates frequently used in Encompass are: • Retail • Brokered Out • Reverse Mortgage • DPA 2nd
Default Milestones
New loans in Encompass default to the retail channel and follow the milestones below. If for any reason, the loan falls in to one of the other programs listed above, the milestone template must be changed accordingly.
Changing the Milestone Template
Once the loan is coded with the correct channel (for Brokered Out loans) or the correct program (for Reverse Mortgage or DPA 2nd) and saved, Encompass may automatically change the milestone template. If the milestone template does not automatically change from within the loan in Encompass
1. Click the Loan menu header at the top of the page 2. Select the Manage Milestone Templates… option, then 3. Click the Apply Automatic Mode… option
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PROCESSING WORKFLOW AND ENCOMPASS MILESTONES (CONTINUED)
Changing the Milestone Template (Continued)
4. The following message will appear:
5. Click [OK], then click [Save]
6. The Milestone Log Change dialog box will open displaying current (default) and new (program/channel-specific) milestones
7. Click [OK] to accept changes 8. Click [OK] to confirm
MILESTONES ― RETAIL
Retail Workflow
The Retail Channel is the most commonly used by AFN Loan Processors. The following table outlines the retail workflow and the Processor’s responsibilities in completing a loan. (Additional details are provided in later sections of this manual.)
Milestone ― RETAIL
Milestone Details
File Started • Default milestone assigned to each new loan originated in Encompass
• The Loan Officer is assigned; he or she completes the 1003 application and AFN – Borrower Summary Origination screen in Encompass when speaking with the borrower(s) and requesting initial paperwork (stips)
• Initial Disclosures are prepared and sent Continued
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MILESTONES – RETAIL (CONTINUED)
Milestone ― RETAIL
Milestone Details (Continued)
App Received
(24 Hours)
• Initial Disclosures returned [via eDisclosures in Encompass, or with live signatures by the borrower(s)]
• Loan Officer or Processor completes the App Received milestone within 24 hours of receipt of signed disclosures
• Upon completion of App Received milestone, loan is moved from the Prospects to the Pipeline folder
• Disclosures are sorted into appropriate placeholders in the eFolder
Processing
(24-72 Hours)
• Within 24 hours of receipt of borrower’s initial paperwork (stips), the Processor completes the Processing milestone to confirm receipt and start the initial review of the file
• Confirm minimum required items received for review for the requested loan program (i.e. income for all listed jobs, credit report, legible ID, disclosures, current property expenses, and mortgage statements for all properties owned)
• Confirm receipt of a purchase contract for a purchase file (unless TBD property)
• Review documents received and organize all documentation into appropriate placeholders in the eFolder
• Confirm correct program code in Encompass
• Run preliminary AUS (if program requires it) to confirm eligibility
• Processor, or Junior Processor at Processor’s direction, confirms compliance with disclosure requirements and orders all applicable third party items (appraisal, title, VOE(s), transcripts, flood certification, SSA-89, credit supplement(s), and FHA/VA case number/CAIVRS for government loans, if applicable)
• Complete the introduction call to the borrower and request any remaining items needed to submit the loan to underwriting
• Send follow up email (if borrower has an email address) to reiterate the conversation from the introduction call and items needed; include the Loan Officer in the email
Continued
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MILESTONES – RETAIL (CONTINUED)
Milestone ― RETAIL
Milestone Details (Continued)
Processing (24-72 Hours), (Continued)
• Copy and paste the email or enter detailed notes in the Encompass Conversation Log
• Complete the Processing screen in Encompass and, for tracking purposes, mark the items requested from the borrower and third parties
• Follow up with the borrower within 48 hours if items have not been received in order to move the file to submittal as soon as possible
• Complete any necessary re-disclosures within 3 days of changed circumstance
Submittal (48-72 Hours)
• Upon receipt of all needed items, re-confirm program code and re-run AUS (if program requires) to confirm eligibility and complete the Submittal milestone to send the file to Underwriting for review
• Compliance department will complete preliminary audit of disclosures and state-specific items needed prior to Underwriting approval (Processor to review upon completion)
• Complete any necessary re-disclosures within 3 days of changed circumstance
• Underwriter to review the loan as submitted and issue decision (Suspended/Decisioned or Conditional Approval), and list conditions needed in Encompass Underwriting Conditions tab (in eFolder)
Decisioned/ Conditional Approval (5-7 Business Days)
• If suspended, Underwriter shall complete the Decisioned milestone and provide all conditions needed on loan (for both approval and prior to docs and funding)
• If approved, Underwriter shall complete the Conditional Approval milestone and provide all conditions needed on loan (for both prior to docs and funding)
• Processor shall review underwriting conditions and prepare list of items needed
• Processor shall review compliance audit conditions and prepare list of items needed
• If there are any items the Processor does not understand, clarify with the Underwriter or Compliance auditor
Continued
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MILESTONES – RETAIL (CONTINUED)
Milestone ― RETAIL
Milestone Details (Continued)
Decisioned/ Conditional Approval (5-7 Business Days) (Continued)
• Processor shall contact the borrower with a combined list of needed underwriting and compliance conditions (ensure all items are reviewed so that a complete and comprehensive list is provided to the borrower)
• Processor shall send a follow up email (if borrower has an email address) to reiterate the conversation from the approval call and items needed, and include the Loan Officer on the email
• Processor shall copy/paste the email or provide detailed notes in the Conversation Log in Encompass
• Processor shall follow up with the borrower within 48 hours if items are not received right away so the file may be cleared in underwriting as soon as possible
• Processor to complete any necessary re-disclosures within 3 days of changed circumstance
• Upon receipt of all (or most major) underwriting conditions, Processor to place the loan in the PTD Review queue for the Underwriter to indicate it is ready to be reviewed for underwriting conditions (Processor should take notice to minimize touches as much as possible)
• Processor shall prepare the loan for closing, ensuring the estimated closing date is accurate, an accurate fee sheet is obtained from the settlement agent with the fees updated in Encompass for the correct loan amount, correct impound dates (if an escrow account is to be established), and a current payoff with the payoff balance updated in Encompass (if refinance) – changes after clearance in Underwriting will result in additional Underwriting touches and delays
• Upon submission of loan to PTD Review, Processor to issue initial CD (if file is ready to have it issued – this is the earliest a CD may be issued) and submit the loan to the Compliance Review queue for the Compliance Auditor to indicate it is ready to be reviewed for compliance conditions (confirm receipt of all compliance conditions when doing so and take care to minimize touches as much as possible)
Continued
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MILESTONES – RETAIL (CONTINUED)
Milestone ― RETAIL
Milestone Details (Continued)
PTD Review (24-48 Hours)
• Within 24 to 48 hours of submission to the PTD Review queue, the Underwriter shall review all submitted underwriting conditions and either clear or reject as applicable (if rejected, Underwriter to state reason for rejection so Processor is aware of what is still needed)
• An automated email will be sent out by Encompass notifying the Processor that the file was cleared in Underwriting or if there are still outstanding conditions
• If all conditions are satisfactory, Underwriter to complete the PTD Review milestone in Encompass (if Compliance is also approved, the loan should auto-complete the Cleared for Docs milestone as well, unless a wet state)
• Wet states: once the PTD Review milestone is cleared, the file will undergo a QC audit. Upon completion of the QC audit, the file will either move to Cleared for Docs (if the compliance conditions are also cleared) or, if QC conditions are added, they will need to be addressed before the file can be cleared
Cleared for Docs (24 Hours)
• Within 24 hours of submission into the Compliance Review queue, the Compliance Auditor shall review all submitted compliance conditions and clear in Encompass (if applicable)
• An automated email will be sent out by Encompass notifying the Processor that the file has been cleared in Compliance or if there are still outstanding conditions
• Unless in a wet state, if all compliance conditions are cleared, the Compliance Auditor will complete the compliance approval in Encompass and the loan will automatically be moved to the Cleared for Docs milestone (if PTD Review has been completed)
• For wet states, once the PTD Review milestone is cleared, the file will undergo a QC audit; upon completion of the QC audit, the file will either move to Cleared for Docs (if the compliance conditions have also cleared) or, if QC conditions are added, they will need to be addressed before the file can move to Cleared for Docs
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MILESTONES - RETAIL (CONTINUED)
Milestone ― RETAIL
Milestone Details (Continued)
Docs Request (24 Hours)
• Once cleared for docs, the Processor shall complete the Doc Order screen in Encompass and assign a Doc Drawer or Doc Drawer group for the file
• Processor shall confirm the signing date/time with the settlement agent when completing the signing information on the Doc Order screen
• The loan will automatically be moved to the Docs Request milestone once the Doc Order screen is completed in full (including the Doc Request Checklist) and a Doc Drawer is assigned to the loan
• The Processor shall take care to confirm that all items addressed on the Doc Request Checklist are in fact in the eFolder for the Doc Drawer to review (otherwise the file may be kicked back to Processing for completion of necessary items and delays in docs may occur) – such items include but are not limited to, VVOEs for all borrowers and all jobs, accurate fee sheet from settlement agent, updated insurances, all invoices in file
• Processor reviews the prior-to-funding conditions to confirm all items are timely addressed so there are no funding delays
• The Doc Drawer will complete this milestone upon validation of all necessary items for docs (from the Doc Checklist) and submission of the loan docs to the settlement agent
• Processor to confirm receipt of docs with the settlement agent and verify that a signing appointment is set up for the proper date/time (most states have date-sensitive closing documents)
Doc Signing (24 hours)
• Funding Team completes this milestone when docs are received back and checked into the system for a Funder to review
Docs Review (24 Hours)
• The Funder will complete this milestone when they have completed the pre-funding review of the loan; final prior to funding conditions will be issued at this time
Continued
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MILESTONES - RETAIL (CONTINUED)
Milestone ― RETAIL
MILESTONE DETAILS (Continued)
Docs Review (24 Hours) (Continued)
• The Processor shall review and request all necessary funding conditions, then upload the items and notify the funder upon receipt so that the funder can review and clear for funding and prepare the wire to be sent out (for wet states, there shouldn’t be any prior to funding conditions, the funder will review at time of doc release to make sure the wire is sent on time)
Funding • The Funder will complete this milestone once the wire is sent and funding confirmation has occurred
Shipping • The Shipper will complete this milestone when the loan has been shipped to the investor
Purchased • The Post Closer may contact the Processor if there are post-closing items needed by the investor in order to purchase the loan
• The Post Closer will complete this milestone when the loan has been purchased by the investor
Reconcile • Trailing Docs is assigned and will follow up on trailing documents needed to complete the loan file
Completion • Trailing Docs will complete this milestone when all trailing documents have been received and no more tasks are required on the file
MILESTONES ― BROKERED OUT LOANS
Introduction In the event that a loan cannot be closed in-house (through the
retail channel), it may have to go through an exception process to be approved to be brokered out. For details on how to request an exception to broker out a loan, and procedures on handling brokered out loans in Encompass, please refer to the AFN Procedure Tracking Brokered Out Loans.
Continued
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MILESTONES ― BROKERED OUT LOANS (CONTINUED)
Brokered Out Workflow
Once a loan is approved to be brokered out, the channel must be changed in Encompass for the system to recognize it as a brokered out loan. Follow the steps listed in Tracking Brokered Out Loans to change the channel of business in Encompass.
Milestones – BROKERED OUT
Milestone Details
File Started • This is the default milestone assigned to each new loan when originated in Encompass
• The Loan Officer is assigned at this milestone, where he or she should be completing the 1003 application & AFN – Borrower Summary Origination screen in Encompass when speaking with the borrower(s) and requesting initial paperwork (stips)
• Initial Disclosures are prepared and sent at this milestone
App Received • Initial Disclosures are returned [either via eDisclosures in Encompass or returned with live signatures by the borrower(s)]
• The Loan Officer or Processor shall complete the App Received milestone within 24 hours of receipt of the signed disclosures
• The loan should be moved from the Prospects to the Pipeline folder upon completion of this milestone
• Disclosures should be sorted into their appropriate placeholders in the eFolder
Processing • Within 24 hours of receipt of borrower’s initial paperwork (stips), the Processor shall complete the Processing milestone to confirm receipt and start the initial review of the file
• Processor shall confirm the channel is reflected as Brokered in Encompass
• Processor shall confirm the Brokered Out screen is completed and exception to broker out is approved by corporate
• Processor shall confirm minimum items needed are received for review for the requested loan program (i.e. income for all listed jobs, credit report, legible ID, disclosures, and current property expenses and mortgage statements for all properties owned)
• Processor shall confirm receipt of a purchase contract for a purchase file (unless TBD property)
Continued
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MILESTONES ― BROKERED OUT (CONTINUED)
Milestones – BROKERED OUT
Milestone Details (Continued)
Processing (Continued)
• Processor shall review the documents received and organize all documentation into their appropriate placeholders in the eFolder
• Processor shall confirm the program code is correct in Encompass • Processor shall run preliminary AUS (if program requires it) to
confirm eligibility • Processor (or Junior Processor, at Processor’s direction) shall confirm
compliance with disclosure requirements and order all applicable third party items (appraisal, title, VOE(s), transcripts, flood cert, SSA-89, credit supplement(s), and FHA/VA case number/CAIVRS for government loans, if applicable)
• Processor shall complete an introduction call to the borrower and request any remaining items necessary to submit the loan to underwriting
• Processor shall send a follow up email (if borrower has an email address) to reiterate the conversation from the introduction call and items needed, and include the Loan Officer on the email
• Copy and paste the email or enter detailed notes in the Encompass Conversation Log
• Complete the Processing screen in Encompass and for tracking purposes, mark the items requested from the borrower and third party items
• Follow up with the borrower within 48 hours if items have not been received so the file may be moved to submittal as soon as possible
• Complete any necessary re-disclosures within 3 days of changed circumstance
Submit to Lender
• Upon receipt of all needed items, Processor shall complete the Submit to Lender milestone when the file is sent to the Lender for Underwriting
Approved by Lender
• Upon receipt of the approval from the lender, the Processor shall complete the Approved by Lender milestone and upload a copy of the Lender’s approval to the eFolder in Encompass
Continued
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MILESTONES ― BROKERED OUT (CONTINUED)
Milestones – BROKERED OUT
Milestone Details, (Continued)
Lender Docs Out • Processor shall complete this milestone when docs are prepared and sent out by the Lender
• Any documentation received for conditions should be uploaded to the eFolder by the Processor to ensure the file is completely documented
Lender Funded • Processor shall access the Brokered Out screen in Encompass and complete the Closing section of the screen once confirmed that the Lender has funded the loan
• Processor shall enter the funded date and the anticipated broker check information on the Brokered Out screen
• The Lender Funded milestone will automatically complete once this information has been entered in the Brokered Out screen
Completion • Corporate will review and audit the file to ensure completion and complete the audit review on the Brokered Out screen
• Processor shall comply with any requests for documentation needed to ensure the file is complete in Encompass
• Milestone will auto-complete once corporate has cleared the audit on the Brokered Out screen
MILESTONES ― REVERSE MORTGAGE
Procedure: Reverse Mortgage Milestones
When the loan program is a reverse mortgage the Processor must:
1. Ensure the program code is entered correctly on the AFN Borrower Summary – Origination screen for Encompass to recognize the loan is a reverse mortgage
2. Confirm the loan program selection reflects HECM30 to indicate the loan is a reverse mortgage
Continued
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MILESTONES ― REVERSE MORTGAGE (CONTINUED)
Procedure: Reverse Mortgage Milestones (Continued)
3. Milestone templates should then auto-update to the proper milestones for reverse mortgages If Encompass does not automatically change the milestone template, follow the steps for Changing the Milestone Template (page 20, above) to update the milestone template appropriately once the correct program code has been selected. For training materials and access to the portal for originating HECM loans, please contact Richard Fitzpatrick, CSA ([email protected]).
Milestones – REVERSE MORTGAGE
Milestone Details
File Started • This is the default milestone assigned to each new loan when originated in Encompass
• The Loan Officer is assigned at this milestone, where he or she should be completing the 1003 application & AFN – Borrower Summary Origination screen in Encompass when speaking with the borrower(s) and requesting initial paperwork (stips)
• Initial Disclosures are prepared and sent at this milestone (HECM documents and disclosures must be sent)
App Received • Initial Disclosures are returned (HECM documents and disclosures)
• The Loan Officer or Processor shall complete the App Received milestone within 24 hours of receipt of the signed disclosures
• The loan should be moved from the Prospects to the Pipeline folder upon completion of this milestone
• Disclosures should be sorted into their appropriate placeholders in the eFolder
Continued
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MILESTONES ― REVERSE MORTGAGE (CONTINUED)
Milestones – REVERSE MORTGAGE
Milestone Details (Continued)
Processing • Within 24 hours of receipt of borrower’s initial paperwork (stips), the Processor shall complete the Processing milestone to confirm receipt and start the initial review of the file
• Processor shall confirm the channel is reflected as Brokered in Encompass
• Processor shall confirm minimum items needed are received for review
• Processor shall review the documents received and organize all documentation into their appropriate placeholders in the eFolder
• Processor shall confirm the program code is correct in Encompass (HECM30)
• Processor (or Junior Processor, at Processor’s direction) shall confirm compliance with disclosure requirements and order all applicable third party items (appraisal, title, VOE(s), transcripts, flood cert, SSA-89, credit supplement(s), and FHA/VA case number/CAIVRS for government loans, if applicable)
• Processor shall complete an introduction call to the borrower and request any remaining items necessary to submit the loan
• Processor shall send a follow up email (if borrower has an email address) to reiterate the conversation from the introduction call and items needed, and include the Loan Officer on the email
• Processor shall copy/paste the email or provide detailed notes in the Conversation Log in Encompass
• Processor shall complete the Processing screen in Encompass marking the items requested (both from the borrower and third party items) for tracking purposes
• Processor shall follow up with the borrower within 48 hours if items are not received right away so the file may be moved to submittal as soon as possible
• Processor to complete any necessary re-disclosures within 3 days of changed circumstance
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MILESTONES ― REVERSE MORTGAGE (CONTINUED)
Milestones – REVERSE MORTGAGE
Milestone Details (Continued)
Submit to Lender
• Upon receipt of all needed items, Processor shall complete the Submit to Lender milestone when the file is sent to the Lender for Underwriting
Approved by Lender
• Upon receipt of the approval from the lender, the Processor shall complete the Approved by Lender milestone and upload a copy of the Lender’s approval to the eFolder in Encompass
Lender Docs Out • Processor shall complete this milestone when docs are prepared and sent out by the Lender
• Any documentation received for conditions should be uploaded to the eFolder by the Processor to ensure the file is completely documented
Docs Signing • The Funding team will complete this milestone when docs are received back and checked into the system for a funder to review
Docs Review • The Funder will complete this milestone when they have completed the pre-funding review of the loan; final prior to funding conditions will be issued at this time
• The Processor shall review and request all necessary funding conditions, then upload the items and notify the funder upon receipt so that the funder can review and clear for funding and prepare the wire to be sent out (for wet states, there shouldn’t be any prior to funding conditions, the funder will review at time of doc release to make sure the wire is sent on time)
Funding • The Funder will complete this milestone once the wire is sent and funding confirmation has occurred
Shipping • The Shipper will complete this milestone when the loan has been shipped to the investor
Purchased • The Post Closer may contact the Processor if there are post-closing items needed by the investor in order to purchase the loan
• The Post Closer will complete this milestone when the loan has been purchased by the investor
Reconcile • Trailing Docs is assigned and will follow up on trailing documents needed to complete the loan file
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MILESTONES ― REVERSE MORTGAGE (CONTINUED)
Milestones – REVERSE MORTGAGE
Milestone Details (Continued)
Completion • Trailing Docs will complete this milestone when all trailing documents have been received and no more tasks are required on the file
MILESTONES ― DPA 2ND
Procedure: DPA Milestone
If the loan falls under a Bond/DPA program, the Processor must ensure the program code is entered correctly on the AFN Borrower Summary – Origination screen in order for Encompass to recognize the loan has a Bond or DPA.
• Confirm the Loan Program selection is BOND or BOND + DPA or DPA
• Loans with an accompanying DPA must have an additional loan for the DPA funds generated in Encompass
• Refer to the AFN Procedure Handling Bond/DPA Programs for detailed information on handling Bond, DPA loans in Encompass
• Once the additional loan has been generated in Encompass for the DPA funds, ensure the program code is correct on the AFN Borrower Summary – Origination screen in order for Encompass to recognize the loan is for DPA funds
• Confirm the Loan Program selection is *Bond/DPA Subordinate Lien to indicate the loan is a DPA
Note: Once entered, the milestone templates should auto-update to the proper milestones for DPAs. If the milestone template does not automatically update, follow the steps to Changing the Milestone Template (page 20) to update the milestone template appropriately once the correct program code has been selected.
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MILESTONES ― DPA 2ND (CONTINUED)
Milestones – DPA 2ND
Milestone Details
File Started • This is the default milestone assigned to each new loan when originated in Encompass
• The Loan Officer is assigned at this milestone, where he or she should be completing the 1003 application and AFN – Borrower Summary Origination screen in Encompass when speaking with the borrower(s) and requesting initial paperwork (stips)
• Initial Disclosures are prepared and sent at this milestone (if the DPA program requires disclosures such as an initial LE, the Processor should confirm they are properly generated)
App Received • The Loan Officer or Processor shall complete the App Received milestone within 24 hours of receipt of the signed disclosures
• The loan should be moved from the Prospects to the Pipeline folder upon completion of this milestone
Processing • The Processor shall complete this milestone upon initial review for the DPA
Doc Request • The Processor shall complete this milestone for both the 1st and the DPA 2nd when ready to request docs
Docs Out • The Doc Drawer will complete this milestone upon validation of all necessary items for docs (from the Doc Checklist) and submission of the loan docs to the settlement agent (for both the 1st and the DPA 2nd)
Docs Signing • The Funding team will complete this milestone when docs are received back and checked into the system for a funder to review (for both the 1st and the DPA 2nd)
Docs Review • The Funder will complete this milestone when they have completed the pre-funding review of the loan (for both the 1st and the DPA 2nd); final prior to funding conditions will be issued at this time (conditions issued on 1st only)
Continued
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MILESTONES ― DPA 2ND (CONTINUED)
Milestones – DPA 2ND
Milestone Details (Continued)
Funding • The Funder will complete this milestone (for both the 1st and the DPA 2nd) once the wire is sent and funding confirmation has occurred
Shipping • The Shipper will complete this milestone (for both the 1st and the DPA 2nd) when the loan has been shipped to the investor
Purchased • The Post Closer will complete this milestone (for both the 1st and the DPA 2nd) when the loan has been purchased by the investor
Reconcile • Trailing Docs is assigned and will follow up on trailing documents needed to complete the loan file
Completion • Trailing Docs will complete this milestone when all trailing documents have been received and no more tasks are required on the file
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ENCOMPASS LOAN PROCESSING
LOAN REVIEW
Procedure: Opening a Loan File for Review
To review in Encompass: 1. Open the loan by double clicking on the loan from the
Pipeline view. 2. Once opened, a banner will display at the top of the loan
file reflecting pertinent loan information [borrower(s) names, property address, loan number and amount, LTV/CLTV, DTI, rate, lock status, estimated closing date, and a dropdown of the assigned file contacts (file starter, loan officer, processor, underwriter, doc drawer, and funder, provided that a party is assigned to these roles)].
3. Under the borrower section, there is a dropdown menu that allows the user to toggle back and forth between applications when there is more than one borrower pair listed.
FILE LOG
Introduction The File Log communicates historical, current, and future loan-
related activities and events. It includes milestones with their anticipated completion dates and logged file activity. Note: A milestone in bold font has been completed; the corresponding date is the completion date.
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FILE LOG (CONTINUED)
Activity To view File Log activity:
• Click the “+” sign in front of a milestone to view file activity during that milestone
Note: When no “+” sign appears in front of a milestone, no activity has been logged.
CONVERSATION LOG
Introduction and Policy
The Encompass Conversation Log is used to track interactions with borrowers, service providers, and other contacts, and to leave important notes to fellow AFN personnel who will access the file. When instructed to “add a note” to the file, the Conversation Log is where the note should be added.
Continued
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CONVERSATION LOG (CONTINUED)
Introduction and Policy (Continued)
Each time the user adds a note in the Conversation Log, the notes are automatically dated and time stamped with the user’s information.
• Every time a loan is opened and touched the user must enter notes regarding actions and progress in the loan file
• Notes must be in compliance with confidentiality requirements and used primarily to update status and maintain a record of contact that keeps all parties informed of work completed and items pending on the loan
• Notes must be current and precise; Conversation Log notes may never be deleted and are a permanent internal record in the Encompass system
Procedure: Adding Notes to the Conversation Log
To add a note to the Conversation Log:
1. Click the [Add] icon next to the File Log tab
Add icon or
2. Click on the Tools tab 3. Select Conversation Log
Continued
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CONVERSATION LOG (CONTINUED)
Procedure: Adding Notes to the Conversation Log (Continued)
4. Type a subject in the Name field
Default Option for New Log Entries
If a Conversation Log entry is marked [] "Show entry in the loan log," a notation of the entry will be made in the file log once the Processor adds the name and comments detailing the notes to add to the file. This is the default option when adding a new entry.
Procedure: Viewing Notes in the Conversation Log
To view notes: 1. Click Tools 2. Select Conversation Log
Existing notes are listed from oldest to newest. Users are encouraged to read and review the conversation log when opening a file, particularly when the file is first assigned, as there may be pertinent information useful in processing the loan (i.e., settlement agent information, structure/set up notes, etc.).
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ALERTS AND MESSAGES
Timely Resolution of Alerts
An alert is notification of a pending, due, or overdue event (i.e., a re-disclosure is required). Processors must ensure the timely resolution of all alerts. Failure to meet time requirements may jeopardize the entire loan.
Note: A red flag next to an entry denotes a compliance item alert.
Access to Alerts and Messages
There are two methods to access alerts and messages: 1. Loan Processor – Processing Queue
The Alerts & Messages tab will appear in the first two columns of the Pipeline view when utilizing the Loan Processor. The number of alerts is shown in red; messages are shown in green, or
2. When opening a loan The Alerts & Messages tab is located next to the File Log on the upper left-hand side.
Note: A number appearing for either means an alert or message is outstanding that requires immediate review/action.
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ALERTS AND MESSAGES (CONTINUED)
Common Alerts
Alerts include (but are not limited to): • ATR/QM Notifications • Compliance Review results (Alerts/Warnings/Did Not Pass) • Document Expected or Document Expired • eFolder Updated • Good Faith Fee Variance Violated • Changes to Loan Data After Lock • Lender Credit Not Approved by Branch • Rate Lock Activity • Re-Disclose LE or CD (APR/Fee Changes or Lock Activity) • Send Initial Disclosures • NOIA Due • NOIA Follow-Up
Unread Messages
A number in a green box indicates a loan file contains unread messages. To view a message listed on the Alerts & Messages tab, click on the line item and the message will appear in the right pane of the loan window. Messages will often indicate the receipt of e-consent, disclosures, or faxes from a borrower: checking messages regularly will help ensure the timely review of all received documentation.
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ALERTS AND MESSAGES (CONTINUED)
Clearing Alerts and Messages
For more information on how to clear alerts, please refer to the AFN Alerts/Messages Matrix.
MILESTONE WORKSHEET AND TASKS
Worksheets Every milestone has an associated Worksheet with areas for
Documents, Tasks, Required Fields, and Milestone Comments.
To access the Worksheet go to the Log tab and click the milestone (i.e., Send to Processing).
Tasks Tasks are either programmed by the Administrator (Corporate) and must be completed prior to finishing the milestone, or can be added individually by the user. Tasks can help the user (or others with whom the user will interact while working the file) with required follow-up and other important file activity.
Procedure: Adding a Task
To add a task: • Click the [Task List] button • Click the [Add] icon • A Task dialog box will appear • Assign the task High, Normal or Low priority • Select the milestone at which it should be completed
o Indicate the number of days to complete • Assign follow-up alerts, and • Leave comments on the task
Note: Once created, the task may appear as an alert to be cleared if it becomes past due based on the due date entered by the user.
Continued
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MILESTONE WORKSHEET AND TASKS (CONTINUED)
Procedure: Adding a Task (Continued)
MAVENT (COMPLIANCE REVIEW TOOL)
Compliance Checks
The Encompass Compliance Review tool (Mavent) is used during the loan process to run a compliance check of the file. This check reviews file data for compliance with TILA, RESPA, HOEPA, NMLS Licensing, High Cost Loans, Consumer Credit, and various other industry regulations. Reviews run automatically at certain milestones and can also be ordered manually. Note: When manually ordering a Compliance Review, order a Preview Report because the Preview Report is based on the loan’s current information, not the last disclosed information.
Mavent To access Mavent: 1. Click the Tools tab 2. Select Compliance Review
Continued
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MAVENT (COMPLIANCE REVIEW TOOL) (CONTINUED)
Mavent (Continued)
Compliance Review Audit Results
When Mavent is run, a Compliance Review Audit Results window may open with a list of warnings, alerts, fail messages, or possible fatal errors. If this occurs, review the results carefully and determine a resolution.
Fields Required to Run Mavent
At a minimum, the following Encompass fields are required prior to running a Mavent report:
• Loan Amount (Field ID 1109) • LE Date (Field ID 3972) or Application Date (Field ID 745) • Appraised Value (Field ID 356) or Estimated Appraised
Value (Field ID 1821) • Loan Term (Field ID 1347)
Continued
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MAVENT (COMPLIANCE REVIEW TOOL) (CONTINUED)
Fields Required to Run Mavent (Continued)
• Note Rate (Field ID 3) • First Payment Date (Field ID 682) • If ARM: Index Value (Field ID 688) • ZIP Code (Field ID 15)
Note: To go to a field using the Field ID, press [Ctrl] + [G] > enter the Field ID in the text box that opens > press [Enter].
INITIAL DISCLOSURES
Origination Team: 1003
The Origination team will start the loan in the Encompass Prospects folder and will complete all required fields for the 1003, including but not limited to: basic loan criteria for qualification, employment information, schedule of real estate for all properties owned, fees on the 2015 Itemization screen, and liabilities imported from the credit report. (The credit report needs to be run at the time of application to ensure a credit score disclosure is correctly populated).
Origination Team: RESPA and 4506-T
The Origination team will have three days to generate and send initial disclosures once all six pieces of RESPA information are entered (detailed in the following table).
In order to send out disclosures at this time, 4506-T information must also be completed for all borrower pairs.
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INITIAL DISCLOSURES (CONTINUED)
RESPA
Form (Screen) Field Name Field ID
AFN Borrower Summary Origination or 1003 Page 1
1. Borrower Name First name Middle name (optional) Last name
4000 4001 4002
1003 Page 2 2. Gross Monthly Income Borrower: Total Co-Borrower: Total
910 911
AFN Borrower Summary Origination or 1003 Page 1
3. Social Security Number Borrower SSN Co-Borrower SSN
65 97
AFN Borrower Summary Origination or 1003 Page 1
4. Property Address Address City State ZIP
11 12 14 15
AFN Borrower Summary Origination
5. Property Estimated Value
1821
AFN Borrower Summary Origination or 1003 Page 1
6. Mortgage Amount Sought
Base Loan Amount or Loan Amount (on 1003)
1109
Disclosures Sent via Encompass eFolder
The preferred method to send disclosures is electronically through the Encompass eFolder. With this method, both the LO and the borrower(s) will sign disclosures electronically. Once signed by all parties, the Loan Originator or Processor can retrieve the disclosures via the eFolder.
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INITIAL DISCLOSURES (CONTINUED)
Procedure: Document Retrieval
To retrieve disclosures and other documents sent through the Encompass system:
1. Click on the message indicator to clear the message alert, then go to the eFolder and click the [Retrieve] button.
2. The system will retrieve the documents and place them in the document placeholders that were created when the disclosures were generated. If there is no placeholder present, the documents will be placed in the File Manager for the user to move to the appropriate placeholders.
3. For more information on managing Encompass documents and attachments, see Encompass eFolder Quick Reference Guide.
Disclosure Tracking Tool
Encompass tracks what is disclosed to borrowers and when. The Disclosure Tracking Tool tracks the method of delivery (eSignature through Encompass, US Mail, In Person, or Email), APR at time of disclosure, the disclosures that have been sent (i.e., whether an LE or CD was sent out with the package), and stores copies of the sent disclosures so the user can see exactly what the borrower received.
Disclosures Sent via US Mail
When disclosures are not sent via Encompass eDisclosures, the default method for delivery of disclosures becomes the US Mail. In this case, the user must manually update the delivery method used and track the received date (which should match the borrower's signature date). Note: Because this affects other closing dates in the loan file, the delivery method and receipt date must be 100% accurate.
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INITIAL DISCLOSURES (CONTINUED)
Disclosure Tracking: Multiple Entries
When multiple entries are made in Disclosure Tracking:
1. Avoid making multiple entries in Disclosure Tracking for the same disclosure set (initial or re-disclosure); preview the disclosures to be sent out prior to printing or sending (both printing and sending will prompt the system to make an entry on the Disclosure Tracking screen); errors are caught by previewing in advance to avoid having to regenerate the disclosure(s).
2. Disclosures generated in error (with no intent to deliver to the borrower), must be excluded from the timeline so as not to affect tracking dates: click on the Disclosure History entry you wish to exclude and click the [Exclude from Timeline] button.
3. Included entries should match what is actually uploaded for that disclosure entry in the eFolder.
Intent to Proceed
Completing the Intent to Proceed:
When initial disclosures are received, the Processor must complete the Intent to Proceed information accurately in the Disclosure Tracking tool. Updating the Intent To Proceed date: Click on the initial disclosure entry; enter the actual received date of the disclosures for each borrower, then click the [Intent to Proceed] box.
Continued
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INITIAL DISCLOSURES (CONTINUED)
Intent to Proceed (Continued)
Once clicked, the user can then select the date of receipt and the received method (as shown the example below).
COMPLETING THE APP RECEIVED AND PROCESSING MILESTONES
Receiving Signed Disclosures
If the borrower(s) completed disclosures via signature through Encompass, a message will appear upon completion notifying the user that the disclosures are ready to be retrieved.
The borrower is still responsible for sending in any accompanying “wet signed” disclosures, such as the borrower’s authorization, social security authorization form, and any other necessary forms. If the borrower elected to wet sign the entire package, the recipient must manually upload the signed disclosures and notify the processor upon receipt if not sent back using an Encompass cover sheet or other method to receive directly in Encompass.
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COMPLETING THE APP RECEIVED AND PROCESSING MILESTONES
(CONTINUED) App Received Milestone
Within 24 hours of receipt of signed disclosures, the Loan Originator or Processor must complete the App Received milestone. The loan will now appear in the Loan Processor’s Pipeline view. Once in the App Received milestone, the Processor must move the loan from the Prospects to the Pipeline folder.
Send to Processing Milestone
Upon receiving the loan in the Pipeline view and receiving preliminary items for review, the Processor will complete the Send to Processing milestone. Completion of this milestone will start the Loan Processing turn time clock ticking. This is when initial review by the Processor should take place as well as the ordering of all pertinent third party items.
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EFOLDERS
ORGANIZING THE EFOLDER
Paperless System
The Encompass eFolder is a paperless system where electronic copies of all file documents are retained within placeholders.
Uploading Documents
The Loan Processor must ensure all required documentation is acceptable (completed properly, has required signatures, etc.) and uploaded to the Encompass eFolder in appropriate placeholders. Prior to submission to Underwriting, documents are to be rotated if necessary to face the proper direction for viewing.
Guide to Sorting and Placeholders
The following table is a general guide for sorting items and determining which placeholders should be used for the document type.
GUIDE TO SORTING DOCUMENTS
Document Name Description
***Compliance Conditions for Review***
Any necessary compliance audit conditions
***Loan Doc Attachments***
Any documents to be signed by the borrowers with the closing documents
Acctg - Appraisal Invoices
Appraisal invoices
Acctg – Credit and Misc Invoices
Credit and any other applicable third party invoices
Asset - Bank Statements and All Other Asset Types
• One bucket per borrower pair (joint borrowers can be combined if both are on the accounts) and uploaded in the following order:
o Bank statement #1 (most recent month) o Bank statement #1 (next consecutive month) o Source of funds/LOE for deposits #1 (if applicable) o Access letter, etc. #1 o Bank statement #2 (most recent month)
Continued
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ORGANIZING THE EFOLDER (CONTINUED)
GUIDE TO SORTING DOCUMENTS (CONTINUED)
Document Name Description
Asset - Bank Statements and All Other Asset Types, (Continued)
• Bank statement #2 (next consecutive month) • Source of funds/LOE for deposits #2 (if applicable) • Access letter, etc. #2
Asset - Gift Documentation
• Executed gift letter and proof of donor funds/transfer
Asset - Misc. Assets • Miscellaneous asset items Compliance Report • Compliance report (Mavent)--most recent (the rest should be
removed to trash folder)
Credit - Picture ID and SS Card
• Driver's license/passport • SS Cards and/or SS validation results
Credit Report • Credit report Credit - Credit Supplement
• Credit supplement(s) for any updated items on the credit report
Credit - Credit Report - Spouse
• Spouse's credit, authorization and SSA-89 results/SS card (for community property states on government loans where spouse is not on the loan)
Credit - Letter of Explanation
• Borrower LOE's (inquiries, addresses, derog. credit, and any other applicable letters)
Credit - Payment History/Cancelled Checks
• Payment history from creditor/VOM for account being excluded
• Cancelled checks/bank statements showing 12-month history of payments by party
Credit - Current Mortgage Statement (subject)
• Mortgage statement(s) for all existing loans on subject property
Credit - Note (copy) from original loan
• Note with all pages for existing loan on subject property
Credit - Proof Taxes/Insurance - Other Properties
• Mortgage statement(s) for other property (separate bucket for each additional property, description should show property address)
• Insurance (hazard and flood, if applicable) for other property • HOA statement (if applicable) for other property • Tax bill for other property
Continued
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ORGANIZING THE EFOLDER (CONTINUED)
GUIDE TO SORTING DOCUMENTS (CONTINUED)
Document Name Description
Credit - Proof Taxes/Insurance - Other Properties (Continued)
• Property profile report for other property • Tax bill for other property • Property profile report for other property
Credit - Appraisals - Other Properties (not subject)
• Appraisal for other property, if required for qualification
Credit - Bankruptcy Papers
• BK discharge • BK schedules • Accompanying BK documents (reaffirmation agreements,
etc.) Credit - Divorce Decree/Marriage License
• Divorce decree or marriage cert • Separation agreement/child support agreement(s) if
applicable Credit - Misc. Credit • Any other misc. credit items (credit card statements, etc.)
Disclosures - LE/GFE (Initial)
• AFN Notice of Intent to Proceed • Initial LE • Settlement service list of providers
Disclosures - LE/GFE Re-Disclosed #__
• Re-disclosed LE and COC (separate bucket for each time re-disclosed)
Disclosures - Misc. Initial Disclosures
• All other disclosures (excepting state-specific disclosures and government program disclosures)
Disclosures - State Specific Disclosures
• All state-specific disclosures
Disclosures - FHA/VA Disclosures
• All FHA/VA (government-specific) disclosures except for HUD Addendum (initial 92900A/1802A is separated as per below)
Escrow/Title - Purchase Agreement/Addendums
• Purchase contract addendums • Purchase agreement
Escrow/Title - POA - Authorized Signer List for PA
• Authorized signor list for purchase agreement (if applicable)
Escrow/Title - CD Fee Sheet Estimate
• Estimated settlement statement/CD from settlement agent--most recent only (old versions should be moved to trash)
Continued
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ORGANIZING THE EFOLDER (CONTINUED)
GUIDE TO SORTING DOCUMENTS (CONTINUED)
Document Name Description
Escrow/Title - CD Initial • Initial CD disclosed by AFN
Escrow/Title - Flood Insurance Policy
• Flood insurance policy and invoice/paid receipt
Escrow/Title - Hazard Insurance Policy
• Hazard insurance policy and invoice/paid receipt
Escrow/Title - HO-6 Insurance Policy
• HO6/interior dwelling coverage (condos) and invoice/paid receipt
Escrow/Title - Condo Master Insurance Policy
• Master insurance policy (if subject property is a condo/attached PUD)
Escrow/Title - E & O Insurance
• Settlement agent's E & O policy
Escrow/Title - EMD Receipts/Copy of Check
• EMD receipt from settlement agent and copy of check (front and back)
Escrow/Title - Escrow Instructions
• Escrow instructions and amendments (in escrow states)
Escrow/Title - Prelim or Survey
• Preliminary Title Report • Any applicable title supplements • Survey or plat map, if applicable
Escrow/Title - Property Tax Rolls
• Tax bill • Proof of payment, if applicable
Escrow/Title - Vesting • Vesting amendment/confirmation (if applicable)
Escrow/Title - Wiring Instructions
• Wiring instructions for settlement agent
Escrow/Title - Grant Deed/Quit Claim
• Executed grant deed/quit claim signed at docs
Escrow/Title - Pay off Demand
• Payoff demand(s) for subject property--most recent only (old versions should be moved to trash)
Escrow/Title - Property Profile
• Property profile report for subject property only
Escrow/Title - Termite Report and Clearance
• Termite Report (original report and clearance)
Continued
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ORGANIZING THE EFOLDER (CONTINUED)
GUIDE TO SORTING DOCUMENTS (CONTINUED)
Document Name Description
Escrow/Title - CPL (Closing Protection Letter)
• CPL
Escrow/Title - Power of Attorney
• Executed Power of Attorney (if applicable)
Escrow/Title - Trust Documentation
• Trust Documents/Trust Certification (if applicable)
Escrow/Title - Seller - LLC Documentation
• Seller LLC documentation (if applicable where seller is an entity)
Escrow/Title - Misc. Escrow/Title
• Any other applicable miscellaneous items from Settlement Agent
Gen - 1003 (initial) • Initial 1003 signed by all parties
Gen - 92900 A or 26-1802a (initial)
• Initial 92900A/VA 26-1802A signed by all parties
Gen - Bond/DPA Agency Final Approval Letter
• Bond/DPA agency notice of approval
Gen - Bond/DPA Misc. Disclosures
• Any required Bond/DPA agency disclosures
Gen - Bond/DPA Reservation Letter
• Reservation and rate lock letter
Gen - FHA /VA Case Number and CAIVRS
• FHA case (showing borrower validation cleared) or VA 26-1805/LAPP appraisal order or VA IRRRL case
• CAIVRS for all borrowers • Refinance authorization (if FHA to FHA loan)
Gen - Homebuyer Education Certification
• Homebuyer's education certificate, if applicable (typically required on DPA programs)
Gen - Maximum Loan Amount Worksheet
• Maximum mortgage worksheet (depending on loan type)
Gen - MCC Commitment Notice
• MCC commitment letter
Gen - MCC Documents • Any required MCC agency disclosures
Continued
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ORGANIZING THE EFOLDER (CONTINUED)
GUIDE TO SORTING DOCUMENTS (CONTINUED)
Document Name Description
Gen - MCC Reservation Letter
• MCC reservation letter
Gen - Net Tangible Benefit Worksheet
• NTB form (depending on loan type)
Gen - Note and Deed for Subordinate Lien
• Note/credit line agreement w/all pages and deed of trust
Gen - Subordination Agreement
• Executed subordination agreement from lender
Gen - VA Certification of Eligibility
• Certificate of Eligibility from VA
Gen - VA DD-214 Discharge Papers
• VA DD214 discharge paperwork
Income - Income Calculation Sheets
• Income calculation sheet(s) for all income sources
Income - VOEs and Paystubs and W2's/1099's and Misc.
• One bucket per borrower (description should show borrower name to identify each one):
• Written VOE(s) • Paystubs (most recent on top) • W-2's (most recent on top) • Misc. Letters explaining job history, wage discrepancy, LOE
from employer, etc. Income - P & L/Balance Sheet
• Profit and Loss Statement(s) for self-employed borrowers
Income - Tax Returns (personal)
• Federal tax returns and all schedules (most recent year on top)
Income - Corp Tax Returns
• Federal Tax Returns and all Schedules (most recent year on top)
Income - Partnership Returns
• Federal Tax Returns and all Schedules (most recent year on top)
Income - Signed Tax Returns
• Signature pages from tax returns fully executed by borrower(s)
Income - Tax Transcripts
• IRS transcripts for all applicable years (most recent on top)
Continued
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ORGANIZING THE EFOLDER (CONTINUED)
GUIDE TO SORTING DOCUMENTS (CONTINUED)
Document Name Description
Income - Rental Agreement
• Rental/lease agreement with all pages (one bucket per property, description should show property address)
Income - Misc. Income • Alternative income documentation (if applicable)
Income – VVOE's (Docs)
• VVOE performed by processor, to include: • AFN VVOE Form • Employer Verification Form (if applicable) • Yellow Pages listing or Internet printout showing contact
information Mortgage Insurance • MI quote (if MI is needed) to verify amounts used for
disclosing Property - AIR Appraisal Delivery Certification
• AIR Delivery Certification & AIR Lender Acknowledgment Forms
Property - Appraisals • First Generation Appraisal Report and Independence Certification (E&O Policy for Appraiser if not included in original report)
Property - 1004 D Inspection for Repairs
• 1004D/442, if applicable
Property - Condo Warranty and HOA Docs
• Completed HOA questionnaire form • By-laws, CC&Rs and any other accompanying documents
Property - Flood Certification
• Flood Certification
Property - New Construction Exhibits
• Builder Certification • Warranties • Permits
Property - Submission Summary Report (SSR's)
• FNM and FRE submission summary reports or FHA submission summary report
Property - Misc. Property
• Miscellaneous Property Documentation
Continued
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ORGANIZING THE EFOLDER (CONTINUED)
GUIDE TO SORTING DOCUMENTS (CONTINUED)
Document Name Description
TRASH • Trash Folder--Items not to be used in underwriting decision--items should still be labeled for easy retrieval in the event they need to be recovered
Underwriting • AUS findings--most recent only (the rest should be moved to the Trash folder)
EFOLDER: INITIAL DISCLOSURES
Document Organization
During the processing review, the Processor is required to ensure all documents in the eFolder are organized in accordance with AFN’s required placements (as above). Depending on the loan type, a particular file will have at minimum three disclosure folders for all initial signed disclosures (four if a government loan). All other individual placeholders for specific disclosures should be removed from the eFolder, with the exception of the initial 1003 (for all loans), and the initial 92900A/1802A (for government loans), to be filed in the following placeholders:
• Gen – 1003 (initial) • Gen – 92900 A or 26-1802a (initial)
Examples of the different disclosure placeholders are provided below.
Placeholder: FHA/VA Disclosures
Government loans: All FHA/VA disclosures are placed under the Disclosures – FHA/VA Disclosures placeholder.
Continued
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EFOLDER INITIAL: DISCLOSURES (CONTINUED)
Placeholder: FHA/VA Disclosures (Continued)
Example:
Placeholder: State Specific Disclosures
All loans: Any State-specific disclosures are placed under the Disclosures – State Specific Disclosures placeholder.
Example:
Placeholder: LE-Related Disclosures
All loans: All Initial LE-related disclosures are placed under the Disclosures – LE/GFE (Initial) placeholder. Example:
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EFOLDER INITIAL: DISCLOSURES (CONTINUED)
Placeholder: Misc. Initial Disclosures
All loans: All other initial disclosures are placed in the Disclosures – Misc. Initial Disclosures placeholder. Example:
EFOLDER: RE-DISCLOSURES
Placeholder: Re-Disclosed LE-Related
All loans: Re-disclosed LE-related documents are placed in the Disclosures – LE/GFE Re-Disclosed #__ placeholder. Example:
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EFOLDER: ASSETS
Placeholder: Assets
All Asset documentation is placed under the Assets – Bank Stmts & All Other Asset Types placeholder:
1. Itemize within that placeholder for each borrower pair. 2. For separate borrower pairs, a new placeholder should be
used if the assets are not jointly owned. Example:
Letters of Explanation (LOEs)
When applicable, LOEs are to be placed in the same placeholder with bank statements. Example:
Non-Payroll Deposits
All large non-payroll deposits must be documented and explained as part of the submission package to the Underwriter.
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EFOLDER: INCOME
Placeholder: Income
All Income documentation is placed under the Income – VOEs & Paystubs & W2s/1099s & Misc. placeholder, with a separate entry for each borrower (even if borrowers are married), as shown in the example below:
Multiple Borrowers
If more than one borrower, type the borrower’s name in the Description field. Entries for multiple borrowers will appear as shown in the example below:
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LOAN PROCESSOR REVIEW
PROCESSING AND SUBMISSION REVIEW
Review Upon receipt of the loan file in the Processing milestone,
ensure that all required documentation is in the eFolder; review thoroughly for accuracy and completeness.
Processing Checklist
Complete the steps in the checklist below to ensure all items are addressed properly prior to Submission to Underwriting. Note: A few of these topics will be discussed in further detail in later sections.
INITIAL REVIEW AND FILE ORGANIZATION IN ENCOMPASS
ACTION DESCRIPTION √
Initial Disclosures
Upon receipt of initial disclosures in Encompass (message will appear in Encompass for eSigned disclosures), move to App Received milestone in Encompass, retrieve disclosures in eFolder and split (miscellaneous, state-specific, LE/GFE, 1003, and FHA/VA disclosures, if applicable).
Initial Stip Package
Upon receipt of borrower's initial stip package in Encompass, move to Processing milestone, confirm minimum items necessary are in receipt (including complete information on 1003 in Encompass), and review and validate ALL documents (documents should never be emailed, only uploaded to the file).
Split Documents in Encompass
Confirm all documents received are split into proper folders in Encompass, ensuring all documents are legible, facing the right direction, and labeled appropriately.
Confirm Loan Eligibility
Validate loan information in Encompass and update figures as necessary (including preliminary income calculation), and verify loan is eligible for selected program (i.e., run AUS to verify approve/eligible) and determine what items are still required to submit to Underwriting.
Order Third Party Services
Review AUS (if applicable) and file checklist and determine what third party services are needed once eligibility is confirmed - request all items (i.e., title, appraisal, flood cert, WVOE, appraisal, transcripts, credit supp, SSN validation).
Continued
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PROCESSING AND SUBMISSION REVIEW (CONTINUED)
LOAN VALIDATION AND TRACKING
ACTION DESCRIPTION √
Complete Processing Screen
Use the Processing screen to track items needed for submission to Underwriting and requested third party items (use the File Review checklist as a guide with the Processing screen during initial file review of stips); track all items being requested from borrower as well as third party services.
Welcome Call to Borrower
Prepare itemized needs list for borrower; contact via phone to conduct welcome call; email needs list to borrower.
Notify Loan Officer and Update Conversation Log
Notify loan officer of contact (or cc in welcome/needs list email and update conversation log in Encompass detailing borrower contact and items requested (include third party items).
NOIA In the unlikely event that borrower/third party items necessary to submit the file to Underwriting have not been received, send a Notice of Incomplete Application to borrower no later than 30 days from application date, detailing items missing in order to maintain active application.
SUBMIT LOAN TO UNDERWRITING
ACTION DESCRIPTION √
Processing Screen
Update Processing screen as items are received or if items need to be re-requested so tracking is up-to-date and file status is current with outstanding items.
Validate Loan Documents
Upload and validate all requested documentation from borrower and third parties to confirm satisfactory, updating Encompass file as necessary so all information is accurate.
Verify Loan Terms
Confirm if loan amount, terms, etc., are still correct or if any changes are necessary to maintain program approval (re-disclose as necessary if a changed circumstance results from change).
Finalize AUS Re-run AUS (if AUS is required for loan program) after all updates/changes are made in Encompass so AUS reflects loan as it should be submitted to Underwriting.
Continued
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PROCESSING AND SUBMISSION REVIEW (CONTINUED)
SUBMIT LOAN TO UNDERWRITING (CONTINUED)
ACTION DESCRIPTION √
File Contacts Update file contacts in Encompass to make sure all third party information is reflected accurately for escrow, title, appraisal (if available), agents and seller(s), if applicable.
Submit Loan to Underwriting
Once all items are completed above, complete Submittal milestone in Encompass to put in line for Underwriting (if any special circumstances need to be notated to the Underwriter, place notes in Encompass on the Processing screen).
Notify Borrower & Loan Officer
Notify borrower and loan officer of loan submission status and ETA for decision (current underwriting turn times).
Update Conversation Log
Update conversation log with current status.
Review Mavent (Compliance Review)
Review Mavent preview run on file at submission milestone to catch and resolve any potential compliance and/or HPML issues upfront.
LOAN ELIGIBILITY
Initial Review Before submitting the file to Underwriting:
• Ensure all required documentation is in the eFolder • All documentation is accurate and complete • All relevant information in the Encompass file is updated for
consistency • Use the Comprehensive Checklist below to complete a
thorough initial review • Request and obtain missing documentation necessary to
complete the loan file and to ensure a clean approval process
Note: Not all items may apply to all loans or be required prior to submission.
Continued
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LOAN ELIGIBILITY (CONTINUED)
Initial Review (Continued)
Note: Some fields in Encompass may be locked or have restricted access once the file has been sent to Underwriting. Sending complete information upfront facilitates the loan process by reducing the need to update fields that may be restricted.
Comprehensive Checklist: DISCLOSURES/COMPLIANCE
DOCUMENT NAME DESCRIPTION √
Initial 1003 (signed by all parties)
• Fully executed Initial 1003 by borrower(s) and loan officer
• Confirm 2 years employment, 2 years residence, and REO section w/all properties currently owned completed in full (otherwise need to revise and obtain borrower signature in acknowledgement of revisions)
Initial LE • Fully executed Loan Estimate (check fees to confirm proper disclosure of title/settlement charges, recording, owner's title premium if applicable, and state required transfer taxes)
• Intent to Proceed (update actual received date for all borrowers in disclosure tracking and mark intent to proceed in Encompass)
• 2015 Settlement Service Provider List
Miscellaneous Initial Disclosures
• Fully executed Miscellaneous Disclosures (both E-signed and wet signed), sorted and uploaded in Encompass
State Specific Initial Disclosures
• Fully executed State-Specific Disclosures (E-signed and wet signed), sorted and uploaded in Encompass
Mavent: Confirm if HPML Alerts are Present (Once Locked)
• Mavent will post a warning until locked; re-run at time of lock to address any alerts/failures
CD – Fee Sheet Estimate From Settlement Agent
• Request and upload CD fee sheet estimate to file (last disclosed LE must reflect accurate settlement fees w/valid changed circumstance matching initial CD – get accurate fees!)
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: CREDIT
DOCUMENT NAME DESCRIPTION √
Photo ID • Legible copy of current driver's license, or
• Passport for all borrowers
• Verify address (if address is different from present address on 1003, need LOE)
• Verify expiration date (cannot be expired)
SSN Card and/or SSN Validation Results
• Legible copy of social security card for all borrowers, or
• Valid SSN results from CTI uploaded to file
• If credit report shows SSN variations, execute SSN Validation form with CTI and provide results regardless of whether SS card is in file
Credit Report • Verify credit report date is not more than 90 days old
• Verify credit reference number matches the report being used in Encompass (credit information on AFN - Borrower Summary Origination screen)
• Verify borrower(s) and name(s) match in Encompass
• Verify SSN and DOB are correct (if corrections needed, a new credit report will need to be run)
• Verify FICO scores on credit match in Encompass and that all 3 bureaus are returning results for each borrower (address any credit freezes with borrower and re-run credit once freeze removed, if applicable)
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: CREDIT (Continued)
DOCUMENT NAME DESCRIPTION √
Credit Report (Continued) • Verify trade lines on page 2 in Encompass (liabilities section) match to credit report (any altered, omitted, or deleted tradelines in Encompass need to be addressed with supporting documentation)
• Review tradelines to confirm if any leases, HELOCs, etc., and update liability type if necessary in Encompass to match credit report
• Verify all mortgages/HELOCs tied to property address in REO schedule
• Verify all mortgages accounted for on credit report (if not listed, order a credit supplement or obtain VOM/pay history to confirm satisfactory payment history for ALL mortgages/HELOCs on ALL properties)
• Verify if any mortgages report as foreclosure/short sale (settled for less than full balance): supporting documentation for date of transfer/sale required
• Verify if any public records are showing and the declarations on page 3 of 1003 are updated appropriately to match credit history
• Verify if any judgments/liens in public records section and address accordingly (credit supplement updating status if not showing released/satisfied or other supporting documentation)
Credit Supplement • Confirm all open mortgages/HELOCs rated and ratings must be current
• Remove duplicate accounts
• Update any other applicable accounts needing to be updated (reporting in error, updating balance with supporting documentation, etc.)
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: CREDIT (Continued)
DOCUMENT NAME DESCRIPTION √
Dispute Removal • Disputes on credit to be removed (order repository update through CTI with supporting documentation)
• Re-run credit as necessary once CTI confirms completion
LOE: Inquiries • Signed/dated LOE from borrowers explaining all inquiries reflected on credit report and if any new trade lines opened (CTI explanation letter may be used)
• Any new trade lines as a result of inquiries to be added to liabilities section of 1003 in Encompass and supporting documentation (statement or credit supplement) provided
LOE: Addresses • Signed and dated LOE from borrowers explaining all address variations on credit report and any other address discrepancies on file documentation (CTI explanation letter may be used)
LOE: Derogatory Items • Signed and dated LOE from borrowers explaining derogatory items on credit (CTI explanation letter may be used)
Pay History, Cancelled Checks
• Pay History/Cancelled Checks for Excluded Liabilities
• Any altered, omitted, or deleted trade lines in Encompass need to be addressed with supporting documentation (i.e., 12 month pay history showing paid by other)
Mortgage Statement(s) for Subject Property
• If refinance, need mortgage statement with payment breakdown for all mortgages/HELOCs on subject
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: CREDIT (Continued)
DOCUMENT NAME DESCRIPTION √
Note/Credit Line Agreement • If refinance, note/credit line agreement with all pages for any subordinate liens not paid/released at closing
Bankruptcy Papers w/all Schedules
• If BK is showing in public records on credit within the last 4 years, need BK discharge and all schedules
Divorce Decree/Marriage Certificate
• Required if name change on documentation, divorce reflected based on marital status change, and/or child support or alimony income/liabilities present
Additional Properties For additional properties owned:
Mortgage Statement(s) for All Encumbrances
• Need mortgage/HELOC statements reflecting payment breakdown for all loans against property
Hazard/HO6 Insurance • Current hazard/HO6/HOA insurance dec page(s)
Property Tax Bill • Current property tax bill
HOA Statement • Current HOA statement documenting amount of dues
Property Profile Report • Property profile report reflecting ownership history
Comprehensive Checklist: INCOME
DOCUMENT NAME DESCRIPTION √
1003: Income Source Listed in Employment Section
• Confirm all current and previous employment sources for the last 2 years are accurately listed on 1003
Income Calculation Worksheet(s)
• Income Calculation Worksheet uploaded for all income sources being used in file
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: INCOME (Continued)
DOCUMENT NAME DESCRIPTION √
Wage Earner For all employment sources from wages:
Paystubs • Most recent paystubs covering a consecutive 30-day period w/YTD earnings reflected
W-2(s) • Depending on AUS requirements, most recent 1-2 years W-2's for all employment sources (confirm 1003 has accurate employment history before running AUS)
Federal Tax Returns (all pages and schedules)
• Depending on AUS requirements, most recent 1-2 years federal tax returns w/all pages and schedules unless W-2 only program (confirm 1003 has accurate employment history before running AUS)
1-2 Year(s) ROA or W-2 Transcripts
• Depending on AUS requirements, most recent 1-2 years Record of Account transcripts (files w/tax returns), or W-2 transcripts (W-2 only program)
IRS Installment Agreement and Proof of Payments
• If ROA transcripts show balance outstanding (or borrower confirms balance owed prior to receiving transcripts), obtain IRS installment agreement, payment history
• Add liability to 1003 so DTI includes payment
Less Than 2 Years on Job For > 1 employer within last 2 years:
1003 Completed • In addition to the income source requirements, obtain a fully executed written VOE for all current and previous employers to verify time on job, any job gaps, and accurate employment history
LOE: Employment History • Signed/dated LOE from borrower explaining any job gaps, employment history needing clarification, etc.
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: INCOME (Continued)
DOCUMENT NAME DESCRIPTION √
Wages Reflecting Variable Income, Commission, Bonus, and Overtime
For wage earners with variable hours, commission, bonus, or overtime earnings reflected on paystubs:
Written VOE with Income Breakdown
• Obtain a fully executed from the employer with the income breakdown for all types, and verification of average hours worked, continuance of bonus/overtime and any other necessary clarifications
Schedule C Income For files with Schedule C Income and Loss on tax returns:
1-2 Year(s) Most Recent Federal Tax Returns (all pages and schedules)
• Depending on AUS requirements, most recent 1-2 years federal tax returns w/all pages and schedules (confirm 1003 has accurate employment history w/Sch C business(es) marked self-employed before running AUS)
1-2 Year(s) ROA Tax Transcripts Matching Returns in File
• Depending on AUS requirements, most recent 1-2 years 1040 Record of Account transcripts
If Balance Still Due on ROA Transcripts: IRS Installment Agreement and Proof of Payments
• If ROA Transcripts show balance outstanding (or borrower confirms balance owed prior to receiving transcripts), obtain IRS installment agreement, payment history, and add liability to 1003 so DTI includes payment
YTD Profit & Loss Statement • YTD Profit and Loss Statement w/profit and expense breakdown signed and dated by preparer (can be borrower)
Proof of Business and Trade License or CPA Letter Confirming Business Existence and Active Status
• Proof of active business or trade license or CPA/tax preparer letter (on letterhead) confirming Schedule C business status is active
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: INCOME (Continued)
DOCUMENT NAME DESCRIPTION √
Schedule E Business Income
For Files With Schedule E Income and Loss on Tax Returns:
1-2 Year(s) Most Recent Federal Tax Returns (all pages and schedules)
• Depending on AUS requirements, most recent 1-2 years federal tax returns with all pages and schedules (confirm 1003 has accurate employment history with Schedule E business(es) marked self-employed before running AUS)
1-2 Year(s) Most Recent K-1s • Depending on AUS requirements, most recent 1-2 years K-1(s) for all businesses reflected on Schedule E of tax returns
1-2 Year(s) Most Recent Business Tax Returns (all pages and schedules)
• If K-1(s) reflect 25% or more ownership interest by borrower(s), full 1-2 years business tax returns with all pages and schedules are required for each such business
1-2 Year(s) 1040 ROA Tax Transcripts Matching Returns in File
• Depending on AUS requirements, most recent 1-2 years 1040 Record of Account transcripts
If Balance Still Due on ROA Transcripts: IRS Installment Agreement and Proof of Payments
• If ROA Transcripts show balance outstanding (or borrower confirms balance owed prior to receiving transcripts), obtain IRS installment agreement, payment history, and add liability to 1003 so DTI includes payment
YTD Profit & Loss Statement • YTD Profit & Loss Statement with profit and expense breakdown signed and dated by preparer (can be borrower)
Proof of Active Business License
• Obtain current business standing from Secretary of State (or borrower to provide proof of license)
4506-T Form for All Businesses
• Signed and dated 4506-T form for all businesses required (does not need to be executed for results)
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: INCOME (Continued)
DOCUMENT NAME DESCRIPTION √
Rental Income For files with Rental Income on Schedule E/Rental Income Being Used to Qualify:
1-2 Year(s) most Recent Federal Tax Returns, all pages/schedules
• Depending on AUS requirements, most recent 1-2 years federal tax returns w/all pages/schedules (confirm 1003 has REO section completed prior to running AUS)
1-2 Year(s) 1040 ROA Tax Transcripts Matching Returns in File
• Depending on AUS requirements, most recent 1-2 years 1040 Record of Account transcripts
If Balance Still Due on ROA Transcripts: IRS Installment Agreement and Proof of Payments
• If ROA Transcripts show balance outstanding (or borrower confirms balance owed prior to receiving transcripts), obtain IRS installment agreement, payment history, and add liability to 1003 so DTI includes payment
Rental Agreement for Subject Property
• If rental income is being used to qualify on subject property, will need current rental agreement w/all pages (regardless of whether the income is reporting on tax returns as it is required to verify terms)
Rental Agreement (Other Properties)
• If rental income is being used to qualify on other properties and is not reporting on tax returns, will need all pages of current rental agreement w/all pages (proof of deposit receipt also required)
Fixed Income For Files with Fixed Income Sources:
Most Recent Award Letter(s) • Most recent award letter from all applicable agencies (if pension/retirement income, needs to verify length of benefit or confirm if lifetime benefit)
1-2 Year(s) Most Recent 1099s • Depending on AUS and/or when receipt of income began, 1-2 years most recent 1099s for all sources
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: INCOME (Continued)
DOCUMENT NAME DESCRIPTION √
Fixed Income For Files with Fixed Income Sources (Continued):
1-2 Year(s) Most Recent Federal Tax Returns, all pages/schedules
• Depending on AUS requirements, most recent 1-2 years federal tax returns w/all pages/schedules (confirm 1003 has accurate source of income selected with dropdowns before running AUS (do not manually type in source))
1-2 Year(s) 1040 ROA Tax Transcripts
• Depending on AUS requirements, most recent 1-2 years 1040 Record of Account transcripts (files w/tax returns) or Verification of Non-Filing, if applicable
IRS Installment Agreement and Proof of Payments
• If ROA Transcripts show balance outstanding (or borrower confirms balance owed prior to receiving transcripts), obtain IRS installment agreement, payment history, & add liability to 1003 so DTI includes payment
Comprehensive Checklist: ASSETS
DOCUMENT NAME DESCRIPTION √
1-2 Months Most Recent Bank Statements w/All Pages to Verify Cash to Close/Reserves
• Depending on AUS requirements, 1-2 months most recent bank statements or most recent quarterly account statement documenting available funds to close or reserves as required for loan program
Source of Large Deposits • All large deposits not sourced on statement or transferred from other documented accounts must be documented with source of deposit and LOE, if necessary to explain
Terms of Withdrawal for Retirement Funds
• If retirement/annuity funds (non-liquid assets) are being used to verify assets for funds to close or reserves, terms of withdrawal are provided
Gift Letter Fully Executed by All Parties
• If gift funds are being utilized, need gift letter (print from Encompass) fully executed by all parties
Gift: Proof of Donor's Ability • Proof of donor's available funds to provide gift to borrower
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: ASSETS (Continued)
DOCUMENT NAME DESCRIPTION √
Gift: Proof Gift Received or Verification of Transfer to Settlement Agent
• Proof gift transferred to borrower or directly to settlement agent if provided at closing
Comprehensive Checklist: PROPERTY
DOCUMENT NAME DESCRIPTION √
Appraisal • If AUS/program requires an appraisal, order is placed once all initial disclosures are received (processing staff to order with AMC or VA, cannot be ordered by loan officer); confirm property type and occupancy prior to placing order
• Upon receipt of appraisal, verify property address, property type, project name, HOA dues, zoning compliance, year built, value, if value is "as is," and photos (request needed corrections if discrepancies)
• Appraisal invoice to be uploaded to Acctg – Appraisal invoices in eFolder immediately upon receipt
SSR • SSR(s) to be received from AMC upon appraisal completion (not required for VA)
1004D • If appraisal is subject to completion, a 1004D inspection ordered once borrower/agent confirms completion
2nd Appraisal • If program requires a 2nd appraisal, processing to order subject to requirements on appraisal ordering above
CDA/Desk/Field Review • If underwriting conditions for a CDA, desk or field review, processing staff to place order with Clear Capital, AMC or VA appraiser, subject to requirements on appraisal ordering above
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: PROPERTY (Continued)
DOCUMENT NAME DESCRIPTION √
Property Inspection Waiver Form
• If AUS/program allows for an inspection waiver (conventional/DURP/LPOA), receipt of signed property inspection waiver form from borrower(s)
AIR Delivery Certification and Lender Acknowledgment
• Upload completed AIR Delivery Certification and Lender Acknowledgement forms confirming appraisal delivery to borrower(s) (print from print groups in Encompass)
HOA Statement • If located in a project, verification of HOA dues for subject property (not required if confirmed on appraisal)
Condo HOA Docs/Questionnaire
• Follow project requirements for program in determining what documents will be required
Flood Certification • Life of Loan flood certification with property address and borrower name(s) matching to file
Flood Hazard Notice • If in a flood zone, confirm signed flood hazard notice signed by borrower(s) included with disclosures
VA 26-1805: Request for Appraisal and Validation of VA Case Number
• For VA loans (unless IRRRL), VA 26-1805 form printed from VA webLGY confirming appraisal order and case number (upload to Gen – FHA/VA Case Number and CAIVRS in eFolder)
AVM • If appraisal is not required, an AVM supporting value used, if required by investor
Comprehensive Checklist: ESCROW/TITLE
DOCUMENT NAME DESCRIPTION √
Purchase Contract • Legible copy of fully executed purchase contract with all pages; include any addendums and extensions
Earnest Money Deposit • Earnest money deposit receipt from settlement agent; (please note: verification of EMD being withdrawn from borrower(s) asset statement is also required)
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: ESCROW/TITLE (Continued)
DOCUMENT NAME DESCRIPTION √
Hazard Insurance • Existing hazard insurance policy or HOI quote (if purchase) at time of submission; evidence to reflect AFN mortgagee clause, sufficient dwelling coverage, replacement cost, and invoice/paid receipt showing balance prior to closing
Flood Insurance • If property is in a flood zone, existing flood insurance policy or quote (if purchase) at time of submission; evidence to reflect AFN mortgagee clause, sufficient dwelling coverage, and invoice/paid receipt prior to closing; flood zone must match flood cert
HO6 Insurance • For properties located in a condo, evidence of HO6 insurance policy for interior coverage/fixtures if not covered by HOA evidence to reflect AFN mortgagee clause, sufficient dwelling coverage, and invoice/paid receipt prior to closing
Master HOA Policy • For properties located in a condo or attached PUD, evidence of HOA master policy for liability/building coverage (confirm if "walls in" coverage included); evidence to reflect AFN mortgagee clause prior to closing
Preliminary Title Report • Current preliminary title report with all pages reflecting vesting, encumbrances, property history, and legal description (plat map if applicable)
Property Tax Bill • Current property tax bill/information showing breakdown of tax amounts/due dates
Payoff Demand(s) for all Encumbrances (Refinance)
• Current payoff demand(s) for all secured loans being paid off for the subject property
Subordination Indicated for Any Encumbrances Not Being Paid at Closing (Refinance)
• If any HELOCs/subordinate loans are remaining open, subordination agreement with terms matching approval on loan from lender on subordinate loan
Termite/Pest Inspection • If required by contract or program, recent termite inspection and clearance
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: FHA/VA
DOCUMENT NAME DESCRIPTION √
Initial 92900a or 1802a • Fully executed initial 92900a (FHA) or 1802a (VA) - must be signed/dated by loan officer on page 1 and signed/dated by borrower(s) in two places on page 2
FHA/VA Initial Disclosures • Fully executed FHA/VA Disclosures (E-signed and wet signed), sorted and uploaded in Encompass
FHA/VA Case Number • FHA/VA case number uploaded to file and entered on page 1 of 1003 under Agency Case No (cannot be ordered until all disclosures are returned); complete FHA/VA management screen(s) in Encompass
• VA case number: confirm eligibility before ordering (VA case number functions as appraisal order unless IRRRL)
• FHA Case Number to show success (warnings should be cleared and all borrowers validated)
CAIVRS • Clear CAIVRS number for all borrowers on FHA/VA
VA Certificate of Eligibility (COE)
• VA certificate of eligibility confirming entitlement amount and if borrower is exempt (not required for VA IRRRLs)
VA DD214 Discharge Certification
• If DD214 is required by VA to provide Certificate of Eligibility, need copy #4 for VA review (not required for Underwriting provided a valid COE is uploaded)
FHA 203(k) Exhibits • Fully executed FHA 203(k) exhibits/disclosures and completed 203(k) max mortgage worksheet
Note on Existing Loan (FHA Streamline/VA IRRRL)
• If FHA streamline or VA IRRRL, need copy of note on existing loan being paid off with all pages (to confirm terms and borrowers on original loan)
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: FHA/VA (Continued)
DOCUMENT NAME DESCRIPTION √
FHA Refinance Authorization
• For FHA-to-FHA transactions (paying off an existing FHA loan on a new FHA refinance), pull a Refinance Authorization from FHA Connection (required if FHA payoff, regardless of whether or not new loan is a Streamline) uploaded with case assignment in eFolder
• For FHA Streamlines, original property value from Refinance Authorization to be used for property value
Max Mortgage Worksheet (FHA Streamline/VA IRRRL)
• FHA Max Mtg Streamline screen completed in Encompass and uploaded to eFolder; VA Max Mtg IRRRL screen completed in Encompass and uploaded to eFolder
FHA Net Tangible Benefit (NTB) Worksheet
• For FHA Streamlines, complete the FHA Streamline NTB screen in Encompass and upload to the eFolder
Spouse's Credit Report (Community Property State)
• For community property states, spouse's credit report (if not a borrower on the loan) uploaded to eFolder along with spouse’s signed authorization and executed SSA results; any separate debts of spouse added to liabilities (not required for FHA streamlines/VA IRRRLs)
Comprehensive Checklist: DPA/BOND/MCC
DOCUMENT NAME DESCRIPTION √
DPA/MCC Reservation • DPA/Bond/MCC reservation confirmation uploaded to eFolder documenting registration
DPA/MCC Specific Forms/Disclosures
• Disclosures required for DPA/Bond/MCC uploaded to eFolder for Underwriter review
Homebuyers Education Certificate
• Homebuyers Education Certificate uploaded to eFolder
Continued
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LOAN ELIGIBILITY (CONTINUED)
Comprehensive Checklist: UNDERWRITING
DOCUMENT NAME DESCRIPTION √
MI Quote • For conventional loans, if LTV exceeds 80% and MI is required, provide quote documenting MI type and terms to the eFolder for Underwriter review (confirm MI terms added in Encompass before running AUS so it is accurate at submission)
AUS Findings • If program requires AUS run, valid AUS findings prior to submission (confirm all terms on AUS match file at time of submission so it is accurate)
FORMS VIEW
Setting Up Forms View
For easier viewing of Encompass processing screens: 1. Open the loan file 2. Select Loan > Apply Input Form Set Template 3. From the pop-up menu, select Loan Processors
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FORMS VIEW (CONTINUED)
Setting Up Forms View (Continued)
This 3-step procedure will update the Forms settings to display frequently used screens (such as Processing, Doc Orders, and Compliance Audit) in the Processor’s form defaults without having to “Show All” to view these screens. Once completed, Encompass will apply this setting to the file every time the loan is opened. Note: This step must be taken on each individual file when initially opening the loan to update the Forms list.
AFN – BORROWER SUMMARY ORIGINATION
Updating Loan File Information
While reviewing and updating file documentation in the eFolder, update Encompass itself to ensure accuracy of all documentation. Resolve any discrepancies between the loan documentation and the application.
The AFN – Borrower Summary Origination form (screen) is the main screen in Encompass and includes an overview of the loan file from the 1003.
Ensure the AFN – Borrower Summary Origination, all pages of the 1003, and the Processing screens in Encompass are regularly updated with current, accurate information.
PROCESSING SECTIONS IN FORMS VIEW
AFN – Borrower Summary Origination
When the forms view is set up properly in the preceding step, the AFN – Borrower Summary Origination will be the first form listed for viewing in Encompass. The form itself is divided into several parts. Those relevant to processing are detailed below.
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AFN – BORROWER SUMMARY ORIGINATION (CONTINUED)
AFN – Borrower Summary Origination (Continued)
This first section shows the loan channel (Banked – Retail, Wholesale, or Brokered), the current loan status, branch ID and information, and the application date of the loan.
1003 This section contains basic borrower information from the 1003. Review for accuracy. (The complete 1003 screens must still be reviewed for accuracy by the Loan Processor.)
Subject Property Information
This section displays the subject property address, property type, estimated value, and appraised value.
Note: The Order functions shown here are not active for Flood. For more information about ordering appraisals and titles through Ellie Mae services, please see the section, Ordering Third Party Services (below).
Title Only Spouse
• Displays if the subject property is in a community property and/or homestead state
• Requires information to be completed when a spouse will be on title but not a party to the loan transaction
• Processor must indicate if the borrower’s spouse will be on title for each borrower pair listed in Encompass
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AFN – BORROWER SUMMARY ORIGINATION (CONTINUED)
Title Only Spouse (Continued)
In cases where a married borrower’s spouse is to be listed on title but is not a party to the loan, the Processor must access the link from this section to the Borrower Information – Vesting screen in Encompass to update the spouse’s information.
Please refer to Encompass Newsflash #208: Adding Non-Borrowing Spouse to Title and the Initial CD for more information.
Note: This is a required step prior to disclosing a CD to ensure that all spouses taking title have been properly disclosed.
Transaction Details
This section provides loan-specific information: • Confirms the loan program • Documentation type • Purpose of loan • Lien position • Amortization type • Occupancy • Impound type, and • Loan terms
Prior to Underwriting, the Processor must indicate: • If the loan will include a Mortgage Credit Certificate (MCC) • A loan that is being submitted with W-2 transcripts only
(instead of full tax returns and transcripts) • Lock information appears at the bottom of this section
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AFN – BORROWER SUMMARY ORIGINATION (CONTINUED)
Approved Investors
Upon approval, the Processor will also be able to view the UW Approved Investors selected as eligible for the loan by the Underwriting staff (example below).
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AFN – BORROWER SUMMARY ORIGINATION (CONTINUED)
Change Loan Program
Changing a loan program will reset default items in Encompass, particularly on the 2015 Itemization form (screen) and MI factors, if applicable. Use caution: Confirm these items have updated accurately when changing the loan program.
Bond/DPA Products
Loan program must indicate Bond or DPA: Once the loan program has been entered as such, the dropdown menus to enter the Bond/DPA agencies will go live for the Processor to enter applicable information.
Credit Information
Displays credit report information associated with a loan file. • Verify the Credit Reference Number matches the actual
report in the eFolder • If there is a mismatch, update the information to reflect
the correct report prior to submitting the loan file to Underwriting
• If the information is accurate, FICO scores will be displayed here along with the middle score used for decision-making
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AFN – BORROWER SUMMARY ORIGINATION (CONTINUED)
SSN Verification
The [Order SSN Verification] button has been disabled in this section. SSN verifications are ordered directly through CTI. (See "Ordering Third Party Services" below).
PROCESSING FORM (SCREEN)
Workflow The Encompass Processing Form (screen) is used at initial
review to track progress of any missing items needed for submission to Underwriting.
Proper workflow is as follows: 1. Complete the Processing Form (screen) at the time of initial
review to track dates and items needed to complete the file.
a. File audited by Processor:
Required field for all loans; must reflect the date initial review is completed.
b. Contract Date Must be completed for all purchases with the original date of the purchase contract.
c. Original Closing Date from Purchase Contract Required field for all purchases and is to be entered at the time of review; enter closing date from the contract. Note: This date is crucial as it is used in Pipeline views and helps to ensure milestones and closing dates are met.
d. Contract Execution Date Must be completed for all purchases with the date all parties completed execution of the purchase contract
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PROCESSING FORM (SCREEN) (CONTINUED)
Workflow (Continued)
e. Estimated Closing Date – required field for all loans and is the same as the estimated closing date on the AFN – Borrower Summary Origination form (screen); the closing date is used to track when files are scheduled to close and to confirm all milestones are met; if this date lapses prior to the loan closing, update with a revised estimated closing date. Note: For purchases, the closing date on the purchase contract and the estimated closing date will not always match, particularly if the contract is extended.
2. Prepare final figures and update the closing date so the loan amount, costs, prepaids, and final numbers are accurate any time the file is submitted to Underwriting for review (initial submission or condition review).
3. Complete the Items Needed for Submission to Underwriting checklist in order to submit the file to Underwriting.
a. Click the [Details] button located in the upper right corner of the screen to open the Quick Entry-Details dialog box.
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PROCESSING FORM (SCREEN) (CONTINUED)
Workflow (Continued)
b. Check items needed for submission to Underwriting.
c. Track dates when items are requested, re-requested (when applicable), due, and received. This allows all departments to view what is needed, when requested, when due, etc. and whether the file is moving forward or has stalled.
d. Return to the screen throughout Loan Processing to ensure accurate and current information is maintained.
Submission Notes
Use this field to provide file-specific notes for the Underwriter. For example: “Borrower is on a fixed income and is not required to file income taxes; transcripts in file show no record for this reason.”
Underwriting Review
This section provides information after the loan has been underwritten including the approval dates, underwriter name, and document expiration dates.
Continued
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PROCESSING FORM (SCREEN) (CONTINUED)
Underwriting Review (Continued)
• Pay attention to the highlighted document expiration dates (above) once underwritten to track documentation and updates that may be required
• When a file is ready for conditions to be signed off, utilize [From Processor to Underwriter] checkboxes to send the loan to the PTD Review queue
THIRD PARTY SERVICES
Items Ordered from a Third Party Service
During the initial processing review, the Processing staff should order all required third party services, including, but not limited to, the following items:
• Credit report (if not already ordered by sales) • Credit supplement(s) • Flood certificate • 4506-T transcripts • SSA-89 Verification • Escrow/Title items (including prelim, fee sheet, wiring
instructions, CPL, and any other required settlement items) • AUS (DU or LP, depending on program requirements) • Appraisal (provided the processor has verified qualification
and all disclosures are signed and in file)
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THIRD PARTY SERVICES (CONTINUED)
Items Ordered from a Third Party Service (Continued)
• FHA/VA Case Assignment, CAIVRS, and FHA Refinance Authorization, if applicable (all disclosures must be signed and in file)
• Written Verification(s) of Employment (VOE) • Payoff(s), if refinance with existing mortgage(s) to be paid
off
CTI Services All orders for credit reports, credit supplements, flood certificates, transcripts, and SSA-89 results must be placed using CTI. To obtain a CTI login, please contact the AFN Help Desk.
• For specific information on ordering these services, see Ordering CTI Services
• Information on ordering other third party items are detailed in the sections below
ESCROW/TITLE
Opening Escrow and Title
To open escrow and title: 1. Confirm which provider is to be used. 2. Contact the settlement agent directly.
Exception: When the chosen company is set up as an Ellie Mae partner the Services tab may be used to place these orders.
AUS Determine which type of AUS (if any) the loan file will need and if not already done, run the appropriate AUS on the file. Note: The number of re-runs must be kept to a minimum. More than 10 AUS submissions on a single file will cause a red flag alert and subject the file to additional audit. Note: For DU, individual credentials are not issued and do not need to be entered in the initial AUS screen. For LP, credentials are issued by the AFN Help Desk. (See Ordering an AUS.)
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APPRAISALS
Policy • Only the Processor is authorized to order an appraisal
• All initial signed disclosures must be in the file prior to ordering an appraisal
• Exercise caution in evaluating the loan to ensure it qualifies before charging the borrower or branch an appraisal fee
Approved AMCs
For AMC logins, please contact the AFN Help Desk. The AMC must be on AFN’s approved AMC list in order to be accepted (with the exception of VA loans: all VA appraisals are ordered directly through VA’s webLGY portal unless an IRRRL requiring an appraisal).
Ordering Appraisals
The preferred method for ordering appraisals is through the Services tab in Encompass. For more information, see Ordering Appraisals.
Note: Upon receipt of the appraisal, it is the Processor’s responsibility to send a copy of the report to the borrower within 24-48 hours. The Processor must upload a completed AIR Appraisal Delivery Certification and AIR Lender Acknowledgment to the eFolder to confirm compliance with delivery requirements to the borrower.
CDA/DESK/FIELD REVIEWS
Ordering CDA, Desk, or Field Reviews
When required by Underwriting, the Processor may see a condition for a CDA, Desk, or Field Review to support value.
• If a CDA is requested, contact the AFN Help Desk to request a login for Clear Capital (AFN’s selected CDA provider)
• Desk or Field reviews may be ordered through any AFN-approved AMC
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AVMS
Ordering AVMs
When required by Underwriting or for a particular loan type, the Processor may have to order an AVM. In most cases an AVM is an investor requirement for loan types not requiring an appraisal (i.e. a VA IRRRL). Contact AFN's Help Desk to obtain an AVM login.
FHA/VA CASE NUMBERS
Ordering FHA/VA Case Numbers
When applicable, order the FHA/VA case number. FHA and VA case assignments may only be ordered by Processing and only upon receipt of all initial signed disclosures, including the signed initial 1003 and signed initial 92900A or 26-1802A. All signed disclosures must be uploaded in the file prior to ordering a case number.
For more information on ordering FHA case assignments, see Using FHA Connection and Handling FHA Loans.
FHA Refinance Authorization
For an FHA Streamline or a non-Streamline refinance with an FHA payoff obtain an FHA Refinance Authorization through FHA Connection and upload to the Encompass eFolder.
VA Case Assignments
For VA case assignments, the case assignment is actually the appraisal order unless a VA IRRRL. For more information, see Ordering Appraisals.
• For VA loans other than an IRRRL, the case assignment may be ordered directly through VA’s webLGY portal. For more information, see Handling VA Loans
• IRRRLs requiring an appraisal may be ordered through any AFN Approved AMC
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FHA/VA CASE NUMBERS
CAIVRS Numbers
For all government loan types (FHA or VA): • Valid CAIVRS number must be obtained for all borrowers • CAIVRS may be ordered through FHA Connection and
uploaded to the eFolder for use with either loan type
VERIFICATION OF EMPLOYMENT
Policy Only the Processor is authorized to order a Verification of
Employment (VOE). • VOE form can be printed from Encompass • The requestor’s title must be Loan Processor • VOE must be signed and dated by the Processor • VOE cannot be addressed to a specific person
o Addressed to department is okay, i.e. “Human Resources” or “Payroll”
• For Conventional Loans trying to obtain Day 1 Certainty eligibility through Fannie Mae, the Processor will need to order the VOE through The Work Number
o Work Number login credentials are required to use this service; to obtain logins, please contact the AFN Help Desk
Procedure: Ordering a VOE via Encompass
To order The Work Number employment verification through Encompass (preferred method): • Access the Services tab from the loan file in Encompass • Select Order Verifications • Select The Work Number as the provider, then click
[Submit]
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VERIFICATION OF EMPLOYMENT (CONTINUED)
Verification Types
Verification types available: • Employment Only (No Income Validation) • Employment Plus Income (Income Validation Included) • Researched Verifications (For employers not already
utilizing The Work Number, their staff will call to obtain the VOE and provide results back to AFN) Note: There is a quoted turn time for researched verifications of approximately 72 hours.
Verification types not available through Encompass (these types must be ordered on The Work Number’s website directly): • Alternate Verification (Employers requiring an alternate
verification number other than the borrower’s SSN to access employee records)
• Re-Verifications (updates on previously obtained The Work Number VOE to confirm still active, as in the case of updating for funding purposes) Note: If ordering directly from The Work Number’s website instead of using Encompass’ integration, the Processor must enter the AFN loan number as the Tracking Number.
For all other loan types, the Processor may utilize The Work Number or manually request the VOE directly from the employer.
Procedure: Printing the VOE Form
To manually print the verification form (to send directly to the employer): • Access the 1003 Page 1 form (screen) in Encompass • Click on the Show All (VOE) button • Update the information for the employer to whom the
verification will be sent • Enter the date
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VERIFICATION OF EMPLOYMENT (CONTINUED)
Procedure: Printing the VOE Form (Continued)
• Attention (department or leave blank) • Phone and fax or email, and • Ensure that the From information indicates the Loan
Processor with the correct contact information
PAYOFFS
Policy For refinance loans, a payoff should be obtained and uploaded to
the eFolder for all open mortgage loans secured against the subject property. This will ensure that the loan amount is properly set up and that the cash to/from the borrower is accurate.
Obtaining Payoffs
Obtain a payoff by contacting the current lender’s customer service department and requesting the payoff directly from the lender (most lenders have automated payoff request lines that will send via fax within hours).
Continued
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PAYOFFS (CONTINUED)
Obtaining Payoffs (Continued)
A backup option is to have the settlement agent obtain the payoff demand(s). However, this option removes Processing's control of receipt and ability to follow up, instead relying on a third party to obtain the information in a timely manner on the Processor’s behalf. For this reason, ordering the payoff directly by the processing staff is highly recommended. Send a copy to the settlement agent prior to closing if obtaining directly from the lender.
Updating the Loan Balance
Upon receipt of any loan payoffs, update the balance for that liability in Encompass. To do so, access the 1003 Page 2 form (screen) in Encompass, locate the liability in question in the Liabilities section, and update the Balance amount so that the payoff is updated accurately in the loan file.
FILE CONTACTS
Fraud Guard Ensure all file contacts are entered in Encompass prior to
submitting the loan to Underwriting. Once submitted, the workflow requires a Fraud Guard to be completed by the Underwriting Assistant Team. This includes an LDP/GSA search for all parties to the loan transaction.
Missing File Contacts
Inaccurate or missing file contacts may result in additional conditions, once approved. It is the Processor’s responsibility to ensure all contact information is entered accurately in Encompass.
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FILE CONTACTS (CONTINUED)
Third Party Contacts
For all loans, the applicable AFN personnel will auto-populate once the user is assigned a role in Encompass (i.e., Loan Processor’s name and information will automatically populate once assigned to the loan). Therefore, the Processor only needs to be concerned with entering all third party contact information.
For refinances, contact information will be limited to the escrow/settlement agent, title, and appraisal (if an appraisal is required on the transaction). For purchases, contact information will include the above, as well as the buyer’s agent, seller’s agent, and seller(s).
Procedure: Entering File Contacts
To enter File Contacts in an Encompass loan file: 1. Access the Tools tab from the left-hand column inside the
loan file in Encompass, and then the File Contacts form (screen).
2. Once in the File Contacts, enter the company name,
address, officer name, phone, email, and fax (if known) for all applicable contacts.
Escrow Company Information (line 32): For states that do not have an escrow agent, this will be the settlement agent. Be sure to enter the company license information as this will need to appear on the CD.
Once the entry is completed, click on the [Copy to Settlement Agent] box in the upper right.
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FILE CONTACTS (CONTINUED)
Procedure: Entering File Contacts (Continued)
Title Company Information (line 33): Enter all applicable information as above (license information not required for this contact entry). If there is no separate title company from the settlement agent, the settlement agent information will have to be duplicated for this entry.
Appraiser Information (line 31): When applicable, enter the appraiser’s information from the appraisal report upon receipt. Include all applicable information as above, as well as the contact (appraiser’s) license number.
File Contacts for Purchase Loans
For purchase loans, the following contacts must be completed as well as all of the above applicable information: Buyer’s Agent (line 36): On most purchase contracts, the buyer’s agent will be referred to as the Selling Agent. Enter all applicable information as above (license information should be included for both the real estate company AND the real estate agent).
If the purchase contract does not include the company or agent’s license information, search the state’s real estate license database to find the information, as the license information MUST be include for both the company and the agent for the CD. Upon completion of all information, click the [Add to CD Contact Info] box in the upper left corner.
Continued
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FILE CONTACTS (CONTINUED)
File Contacts for Purchase Loans (Continued)
Buyer’s Agent (line 36) (Continued):
Seller’s Agent (line 37): For most purchase contracts, the seller’s agent will be referred to as the Listing Agent. Enter all applicable information as above (license information must be included for both the real estate company AND the real estate agent).
If the purchase contract does not include the company or agent’s license information, search the state’s real estate license database as the license information MUST be included for both the company and the agent for the CD.
Upon completion of all information, click the [Add to CD Contact Info] box in the upper left corner.
Note: Entering “N/A” is only acceptable when the transaction does not involve any agents (i.e. for sale by owner). Do not enter "N/A" to bypass system requirements as all contact information must be entered for LDP/GSA to run accurately. The file cannot be cleared until this is completed.
Seller __ (lines 38 – 41): Enter the seller’s name and address information only (seller name and address must be entered so the CD prints correctly at closing) as applicable, for as many separate sellers are listed on the purchase contract. If the seller is a company, check the “Not a Natural Person (legal entity)” box when entering the information.
Continued
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FILE CONTACTS (CONTINUED)
File Contacts for Purchase Loans (Continued)
NOTICE OF INCOMPLETE APPLICATION (NOIA)
Reg B Compliance
All loans are subject to Reg B compliance requirements for incomplete files. All staff are responsible to get loans submitted to Underwriting and approved within 30 days of the application date. As the Processor has the most control of the file during this initial period, it is essential to keep the application date in mind when reviewing a loan to ensure that timeline requirements are met to stay in compliance with Reg B.
Extending the Timeline
For loans not yet submitted to Underwriting, the Processor has the option to send out one (and only one) Notice of Incomplete Application (NOIA) to the borrower(s) in order to extend the timeline on the file. Sending out an NOIA prior to the 30-day expiration will allow the loan to remain active up to an additional 30 days, thereby providing more time to gather remaining documentation that is necessary to render a decision.
For purposes of Reg B, a “decisioned” loan requires that the loan be approved or denied by an Underwriter. AFN’s Encompass milestone - Decisioned is technically a suspension, therefore loans in this milestone are still subject to NOIA deadlines in order to remain active in the system.
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NOIA (CONTINUED)
Extending the Timeline (Continued)
It is imperative that an NOIA notice be sent by the 29th day from application in order to remain active in Encompass when the loan has not yet been submitted and approved in Underwriting. If the NOIA is not sent out in time, the loan will have to be cancelled and re-originated.
Similarly, if an NOIA is sent out and the loan has not been submitted and approved in Underwriting by the 59th day from application, the loan must be cancelled and re-originated.
To maintain compliance with Reg B and allow the loan to remain active while extending the processing time needed to obtain required documentation, the Processor should keep careful watch for any NOIA alerts on a loan and send out the notice in a timely manner. This will avoid having the loan fall out of compliance and require re-origination.
Procedure: Sending an NOIA
To send out an NOIA: 1. Access the NOIA form (screen) in Encompass.
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NOIA (CONTINUED)
Procedure: Sending an NOIA (Continued)
2. Once on the NOIA form, follow the directions by numbering each line for items pending from the borrower in order to submit the loan to Underwriting.
3. Select [Print] once completed. 4. The NOIA form is to be sent to the borrower with a copy
uploaded to the Encompass eFolder under QC – NOIA Letter.
For more information, see Reg B – Handling Incomplete Files.
SUBMITTAL MILESTONE
Procedure: Completing the Submittal Milestone
Once ready to submit the loan to Underwriting, complete the Submittal milestone so the loan appears in the Underwriting queue. Files are underwritten on a first-come-first-served basis, with current turn times posted on the Encompass home page.
To complete the Submittal milestone: 1. Click Log and go to the Submittal milestone to access the
Submittal worksheet.
2. Confirm that all required fields are completed in Encompass and all required documents are uploaded in their proper placeholders for Underwriting to review before moving forward.
Continued
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THE SUBMITTAL MILESTONE (CONTINUED)
Procedure: Completing Submittal Milestone (Continued)
3. Select the Branch-assigned Underwriter,
or Select the User Group for the operations center. If the branch or operations center does not have a designated Underwriter or Group, select the User Group "Underwriting" and the loan will be assigned for review by the Underwriting Management team.
4. Check [Finished] to submit the file for underwriting.
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APPROVAL AND CLOSING REVIEW
General Overview
For a general overview, follow the steps listed on the checklist below to ensure that all items are addressed properly prior to closing. A few of these topics will be discussed in further detail in later sections.
COMPLIANCE AUDIT
ACTION DESCRIPTION √
Compliance Audit Screen Reviewed and Conditions Addressed
Review compliance audit screen and conditions before going to the Underwriter's conditional approval
Closing Agent Approval Status Confirm Settlement/Closing Agent is approved - if not, include approval application when sending settlement agent condition list
Borrower Items Needing Signature for Compliance Added to Condition List
Identify any borrower items that need to be addressed and add those items to the borrower needs list (including any state-specific Lock Agreement or Commitment forms)
Third Party/Processor Items Identify any third party items needed & add to internal needs list for CTC
CONDITIONAL APPROVAL/UNDERWRITING DECISIONS
ACTION DESCRIPTION √
Review PTD and PTF Conditions (and PTA, if applicable)
Review Underwriting conditional approval/decision and breakdown items to a list of internal items v. borrower items that need to be requested, including both PTD and PTF conditions (and PTA, if suspended) so everything is addressed upfront (include PTF items borrower needs to be involved in)
Create List of Borrower Conditions
Separate out borrower items needed and add in compliance conditions needed from borrower so that all items are requested together
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APPROVAL AND CLOSING REVIEW (CONTINUED)
Conditional Approval/Underwriting Decisions (CONTINUED)
ACTION DESCRIPTION √
Create List of Internal Conditions
Separate out the remaining conditions and group based on whether they need to be requested from a third party (i.e., settlement agent, employer) and internal items for Processor to complete, again adding in any needed compliance conditions
Contact Borrower & Third Parties to Request All Conditions and Complete Internal Items
Once all conditions have been separated, prepare an email to the borrower with a list of all items needed from them and call out approval to the borrower as well. Request all third party items from vendors (settlement agent, appraiser, etc.) and update internal items
Conversation Log Copy/paste emails sent to borrower, settlement agent, and any other third parties to conversation log so file is up-to-date with all requests
Upload Received Conditions Upload received conditions as they are obtained and attach to the underwriting conditions to keep track of what has been collected (do not wait until all items are in to upload at one time) - update notes and all parties w/remaining items outstanding so they receive regular updates
Review Lock, Alerts, and Prepare File for Closing
Prior to requesting PTD Review and compliance clearance, ensure all items for rate lock and re-disclosure are addressed; review Alerts in Encompass; and prepare the file for closing using the steps below (preparing in advance will assist in avoiding last minute corrections/changes to terms)
Request PTD Review and Compliance Clearance
Upon receipt of all Underwriting PTD conditions and/or Compliance Conditions, place file in line for clearance with each department accordingly (ideally, CD should be the final compliance condition since it cannot be generated until placed in line for PTD Review, then compliance can be requested to be cleared the same day)
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APPROVAL AND CLOSING REVIEW (CONTINUED)
LOCK CONFIRMATION AND RE-DISCLOSURE
ACTION DESCRIPTION √
State-Specific Lock-in Agreement Form
Verify all state-specific lock agreement/commitment forms are generated for borrower and loan officer to sign/date (needed for compliance)
Revised Loan Estimate Disclosed at Time of Lock
Prepare and send out revised LE for any changed circumstances (including lock). Note: last disclosed LE should match terms and fees with the initial CD (get accurate fees from settlement agent in advance for accuracy)
Confirm Lender Credit is Being Issued
Confirm if branch is issuing a lender credit and amount (have branch manager request secondary approval for credit in Encompass)
Initial CD Disclosed with Final Fees (Matching Last Disclosed LE) Prior to Closing
When loan is submitted for PTD Review to Underwriting, prepare initial CD (make sure last disclosed LE is sent if any change of circumstance is needed first) and send out (CD should be the final compliance condition)
ALERTS
ACTION DESCRIPTION √
Review all alerts in Encompass Review any alerts appearing in left side column of file in Encompass under "Alerts and Messages." Make sure to address each and resolve so there are no last minute issues or items needed at closing
Review Mavent (Compliance Review)
Review Mavent report in Tools (Compliance Review) and read messages to confirm what warnings, alerts, and fail messages need to be resolved. Re-run Mavent preview as necessary to update/confirm cleared
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APPROVAL AND CLOSING REVIEW (CONTINUED)
PREPARE FILE FOR CLOSING (COMPLETE PRIOR TO PTD REVIEW)
ACTION DESCRIPTION √
Complete Pre-Closing Review Before PTD Review and Initial CD Issuance
Prior to turning in file for Underwriting and Compliance to Clear (and before CD is issued), review all steps below to verify loan terms, cash to close/cash to borrower are all accurate and no changes needed
Closing Date and First Payment Date Accurate in Encompass
Verify first payment date and estimated closing date are accurate in Encompass as it will affect per diem interest and aggregate set up for impounds, changing cash to close/cash to borrower
Confirm Sufficient Time Remaining on Lock
Verify there are enough days remaining on lock and have branch request extension from lock desk if necessary
Verify if Branch is Issuing a Lender Credit
If a lender credit is being issued, verify amount and have branch request approval from lock desk (must be done by Branch Manager - Lender Credit screen in Encompass)
Escrow Due Dates and Aggregate Set Up Completed Accurately
Once first payment date is confirmed, review aggregate set up if loan has impounds and verify due dates are set up accurately (use due date or discount date, not delinquent date). Confirm 2-month cushion included.
Insurance/Tax Items Due Prior to First Payment Date Set Up To Be Paid At Closing
Any taxes or insurance balances due prior to first payment date should be collected upfront at closing in 900 section of Itemization
Insurance (Hazard/Flood/HO6/HOA Master Policy):
Confirm all applicable insurance policies for property type are included in file and updated accordingly
Dwelling Coverage Sufficient Verify dwelling coverage sufficient based on property/insurance type and loan requirements (include replacement cost calculator from agent if cannot be increased to requirements)
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APPROVAL AND CLOSING REVIEW (CONTINUED)
PREPARE FILE FOR CLOSING (COMPLETE PRIOR TO PTD REVIEW) (CONTINUED)
ACTION DESCRIPTION √
Replacement Cost Verified (if investor requires- See Alert Matrix)
If investor requires verification of replacement cost, include verification from insurance or processor cert confirming coverage
Mortgagee is Correct on Insurance in File
Verify mortgagee is updated to reflect AFN's mortgagee clause and loan number on all applicable policies
Receipt Confirming Paid In Full/Balance Due in File for Insurance Policy
Obtain invoice or paid in full receipt for all insurance policies (any balances due to be paid at closing - include in 900 section of Itemization)
If Refinance, Ensure Payoffs are Accurate
Review payoffs to ensure current (not expired) and update payoff balances on page 2 of 1003 (liabilities section) in Encompass
Review Loan Amount and Cash to Close/Cash to Borrower for Accuracy
Once all updates are made in Encompass, verify loan amount is correct (update if needs to be adjusted) and confirm cash to close/cash to borrower is correct before submitting to PTD Review so underwriting can review changes with conditions at one time and CD is issued with all items updated so compliance can also be cleared
VOE: Verbal Completed on All Present Jobs for All Borrowers
Complete VVOE for all jobs on all borrowers and include Yellow Pages listing/Internet printout showing company phone number. For any self-employed borrowers, include third party verification (business registration, CPA letter, license verification)
Confirm all items on Doc Order Checklist completed
Review Doc Order screen in Encompass and go through Doc Checklist to confirm all items are addressed and file will be ready to close once CTC is obtained from Underwriting & Compliance
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APPROVAL AND CLOSING REVIEW (CONTINUED)
FUNDING
ACTION DESCRIPTION √
Review PTF Conditions At time of Doc Request, review PTF conditions again to ensure all items requested and addressed so there are no funding delays
Request Any New Items If any new conditions added, request ASAP to ensure no delays in funding
Upload Conditions Promptly Upon receipt of PTF items, upload and attach in Encompass in the Underwriting conditions tab (same as if they were PTD conditions)
Notify Funder and/or Underwriter of Condition Receipt
Once uploaded and attached, notify the Funder and/or Underwriter (if UTR item) that conditions are in and ready for their review
Follow Up to Ensure Loan Has Funded
If the Funding milestone is not yet completed in Encompass, verify with the Funder that the loan has funded and follow up to ensure that the Funded milestone is completed in Encompass
COMPLIANCE AUDITS
Workflow Once the loan is submitted to Underwriting, a series of events are
triggered in Encompass that will move the file through the loan process. The loan is not only submitted to Underwriting for initial review, but also automatically queued for audit by AFN’s compliance team.
1. An auto-email will be sent through Encompass once the initial compliance review has been completed. In most cases, the initial compliance review will be completed within 24-48 hours, typically before an underwriting decision is issued.
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COMPLIANCE AUDITS (CONTINUED)
Workflow (Continued)
2. Processors may always access and review the Compliance Audit form (screen) in Encompass to determine whether a file has been audited and to view conditions. Compliance conditions will NOT appear on the conditional loan approval in Encompass. They can only be viewed on the Compliance Audit screen.
3. Submit compliance conditions to the Compliance Analyst by uploading the required documentation to the Encompass eFolder utilizing the following placeholders, as applicable: a. ***Compliance Conditions for Review:
All compliance conditions with the exception of required re-disclosed LE and CD below.
b. Disclosures – LE/GFE Re-Disclosed #: All pages of Re-Disclosed LE and completed Change of Circumstance (COC) form.
c. Escrow/Title – CD Initial: All pages of initial CD.
d. Escrow/Title – CD Initial Re-Disclosed: All pages of re-disclosed CD, if applicable, and completed Change of Circumstance (COC) form.
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COMPLIANCE AUDITS (CONTINUED)
Workflow (Continued)
4. Once all compliance conditions are met, go to the Compliance Audit form (screen) in Encompass and mark the [Cond’s submitted to Com] checkbox. This will place the file in the Compliance Analyst’s queue for review and signoff.
Note: Both Underwriting and Compliance must be signed off and cleared before a loan can move forward to closing. Processors are strongly advised to address compliance audits as early as possible so that closings are not delayed. Processors should make it a habit to review both compliance and underwriting conditions together and request all items at the same time to prevent re-conditioning and the need to ask borrowers or third party vendors for additional items. For more information, see the Compliance Review Loan Detail Checklist.
SETTLEMENT/CLOSING AGENTS
Policy AFN policy requires all closings to be conducted by AFN Approved
Closing Agents in order to limit the potential for statutory or regulatory violations and related consumer harm, and to protect AFN and its consumers from the risk of loss due to actions or omissions by a closing agent during the mortgage process.
As part of the compliance review, the settlement/closing agent is reviewed for AFN approval as a settlement agent. If not AFN approved, a compliance condition is placed for approval prior to closing.
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SETTLEMENT/CLOSING AGENTS (CONTINUED)
Approved Closing Agents
To become an AFN Approved Closing Agent, a completed AFN Closing Agent Approval Application and Agreement must be submitted along with the required documentation to Compliance at [email protected].
A current list of AFN approved closing agents can be found at AFN Approved Closing Agents.
ESCROW/AGGREGATE SETUP (LOANS WITH IMPOUNDS)
Procedure: Escrow/ Aggregate
Prior to disclosing or re-disclosing on any files, fees should be accurately updated in the system along with the escrow setup if the loan is locked with impounds. This will ensure accurate figures when new disclosures are generated.
Determine if there are to be impounds on the loan in question by checking the AFN – Borrower Summary Origination form (screen) as discussed in the Transaction Details section.
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ESCROW/AGGREGATE SETUP (LOANS WITH IMPOUNDS)
(CONTINUED) Procedure: Escrow/ Aggregate (Continued)
Once impounds are determined, verify and set up impounds properly by using the 2015 Itemization form (screen) or the Aggregate Escrow Account form (screen). Since most Processors need to regularly access the 2015 Itemization to confirm fees are accurate, it may be easier to review from there directly. The following steps are based on accessing the aggregate setup from the 2015 Itemization form (screen): 1. Access the 2015 Itemization form (screen) in Encompass
and scroll down to the section labeled 1000. Reserves Deposited with Lender.
2. Confirm all monthly amounts for taxes and insurance are
correct. (Verify against the insurance and tax bills provided in the eFolder.) • The amounts listed below must all be monthly amounts • If mortgage insurance is on the loan, do not update from
this form; mortgage insurance is only to be updated and verified using the Get MI feature on the AFN – Borrower Summary Origination or 1003 page 2 forms (screens)
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ESCROW/AGGREGATE SETUP (LOANS WITH IMPOUNDS)
(CONTINUED) Procedure: Escrow/ Aggregate (Continued)
• For multiple insurance policies (i.e. 2-4 unit properties with different policies for the individual units) or multiple tax bills (i.e. school, county and town taxes), determine whether each bill has a different due date; if the same due date is to be used for all insurance policies, then the total can be lumped on the same line item for insurance and one due date used in the aggregate setup below
• Treat flood insurance separately from any hazard insurance policies, and enter on line 1006
• If there are separate due dates for the items to be escrowed (for example, PA property taxes for school and county have different due dates), taxes must be split for each item having a different due date and put on the appropriate line item so that the escrow account can be set up properly; for example, county taxes would be calculated with the monthly amount on line 1004, city taxes would be calculated with the monthly amount on line 1005, and school taxes would be calculated with the monthly amount on line 1007
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ESCROW/AGGREGATE SETUP (LOANS WITH IMPOUNDS)
(CONTINUED) Procedure: Escrow/ Aggregate (Continued)
Note: HOA dues are not escrowed (impounded) and should not be collected here. Only insurance (hazard, flood, etc.) and tax bills should be escrowed.
3. To update or verify the collection months, click on the button labeled [Aggregate Setup] shown above. • Do not update the months directly from the form (screen);
otherwise, all the figures will be inaccurate; the months of collection for impounds should only be done by updating through the [Aggregate Setup] button
• Before entering or validating the due dates, first check the top section of the screen to confirm the First Payment Date on the loan (this will change depending on the Estimated Closing Date entered in Encompass); if incorrect, update the Estimated Closing Date to refresh the First Payment Date before updating the due dates for the escrow items
• For any items coming due on or before the First Payment Date, these amounts should be collected for upfront and escrowed instead for the renewal or subsequent due dates; for example, for a loan closing in November and taxes due in November and February, the escrow collection dates would be entered as February and November of the following year, as the current November installment due would need to be collected upfront and will be placed in a different section of the 2015 Itemization, to be discussed in step 4 below
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ESCROW/AGGREGATE SETUP (LOANS WITH IMPOUNDS)
(CONTINUED) Procedure: Escrow/ Aggregate (Continued)
• Verify the due dates entered on the screen to confirm they are accurate (update if incorrect); if none have been entered, the Processor needs to enter the appropriate due dates
• A date should be entered for each installment applicable for every line item in the 1000 section (except for mortgage insurance, if applicable); for example, if insurance is collected annually, then only one date will be entered; taxes collected semi-annually will have two dates entered; for all dates, use the first day of the month in which it is due (i.e. insurance renewal due 10/26/2017 would be entered here as 10/01/2017, as shown below)
• Pay close attention to tax bills in particular – some tax collection agencies may collect annually, semi-annually, or even quarterly
• For property taxes, confirm use of the Discount Date or Due Date from the tax bill (whichever is earlier); do not use the delinquent date if there is a listed discount or due date (for example, FL shows a delinquent date in March, but a discount date in November; the correct entry for use in escrow collection would be November)
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ESCROW/AGGREGATE SETUP (LOANS WITH IMPOUNDS)
(CONTINUED) Procedure: Escrow/ Aggregate (Continued)
• If there are no due dates listed on the tax bill provided, search the tax collection agency’s website for information on collection due dates (commonly found in Q&A sections) and upload that to the eFolder along with the tax bill to support the dates used for collection
• Enter a 2-month cushion for all items (except for mortgage insurance, if applicable)
• Leave the mortgage insurance settings as is (if applicable to the loan); cushions and due dates should not be revised or altered for mortgage insurance
4. Verify any items coming due on or before the First Payment
Date are collected for upfront (to be paid at closing) unless proof of payment is provided. Example: For a loan closing in November and taxes due in November and February, the escrow collection dates would be entered as February and November of the following year, as the current November installment due would need to be collected upfront (per above).
• To enter the amount to be collected upfront to be paid at closing, access the 2015 Itemization section labeled 900 Items Required by Lender to be Paid in Advance
• For insurance amounts due, enter on line 903 for hazard insurance or line 906 for flood insurance, if applicable; (Note: The field may need to be locked if entering the number of months results in an inaccurate figure)
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ESCROW/AGGREGATE SETUP (LOANS WITH IMPOUNDS)
(CONTINUED) Procedure: Escrow/ Aggregate (Continued)
• For property taxes due, enter on line 904 (Note: The field may need to be locked if entering the number of months results in an inaccurate figure)
• Any supplemental or additional insurance premiums or taxes due should be entered on line 907 and the dropdown should be set to the correct item type to indicate what is being collected
5. If the Estimated Closing Date is changed, the First Payment Date on the loan will be affected; the Processor must go back into the 2015 Itemization and re-confirm that due dates for escrow collection are still accurate. • Processors should regularly check the 2015 Itemization
prior to sending out any new disclosures or re-disclosure items, taking care to keep the Estimated Closing Date accurate in the system so that the First Payment Date is also accurate
• Changes to the Estimated Closing Date may affect the First Payment Date, which, in turn, may also change the aggregate setup; regularly check these to determine if changes are necessary before sending out disclosures, and to verify that the figures in Encompass are accurate
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RE-DISCLOSING/CHANGE OF CIRCUMSTANCE
Policy The Loan Estimate (LE) is to be re-disclosed due to a valid
change of circumstance. The loan term or charges can only be changed in the event of one of the following: • Act of God, war, disaster, or another emergency situation • Information particular to the borrower or transaction which
was relied upon when providing the LE that has since changed or been found to be inaccurate (may include borrower’s credit to qualify, loan amount, estimated property value or any other information that was used to provide the LE)
• New information particular to the borrower or transaction which was not relied upon when providing the LE has been discovered
• Other circumstances particular to the borrower or transaction, such as boundary disputes, the need for flood insurance, or environmental problems, have arisen
Re-Disclosure Timeframe
Changed circumstances must be disclosed within three business days of receiving the changed information, and only those fees affected by the changed circumstance may be amended.
Required Forms
When re-disclosing the LE, the following forms are required with re-disclosure: • Change of Circumstance (COC) identifying the change(s)
being made • Revised LE with new disclosure dates and charges, as
applicable
COC Form The following items are required when completing the COC form: • Date:
The date of the COC form must match the date of the re-disclosed LE
• Revision number: Ensure the LE Revision # is completed
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CHANGE OF CIRCUMSTANCE (COC) (CONTINUED)
COC Form (Continued)
• Reason for change: Select the applicable checkboxes
• Justification: In the "reason" section, provide a detailed explanation for why the change occurred
• Itemize changed fees: All line items from the prior to the re-disclosed LE should be compared and notated on the COC form to itemize any charges being revised (if there is no change, it does not need to be notated)
o LE page 1 - Value/Purchase Price o LE page 1 - Loan Amount o LE page 1 - Interest Rate
LE page 1 – Program Changes (i.e. Fixed to ARM) LE page 1 - Mortgage Insurance changes LE page 2 – Section A Origination Charges (list any
individual fees changing) LE page 2 – Section B Services You Cannot Shop For
(list any individual fees changing) LE page 2 – Section C Services You Can Shop For
(list total of fees changing) LE page 2 – Section E Taxes and Other Government
Fees (list any individual fees changing) LE page 2 – Section H Other (list any individual fees
changing) LE page 2 – Section J Total Closing Costs – list any
changes in Lender Credits, if applicable
Note: LE page 2 – Sections F (Prepaids) and G (Initial Escrow Payment at Closing) do not need to be addressed on the COC form.
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CHANGE OF CIRCUMSTANCE (COC) (CONTINUED)
COC Form (Continued)
• Preparer: The preparer’s name must be completed
SPECIAL CONSIDERATIONS WHEN RE-DISCLOSING
Additional Items
In addition to the required re-disclosure timeframes and forms above, pay special attention to the following items before sending out the re-disclosure forms: • Update Settlement Fee Sheets:
Prior to sending the re-disclosure, verify with the settlement agent if any fees have changed (i.e. loan amount change that may result in different state tax amounts); these fees should be updated with the re-disclosure since they are changing because of the loan amount
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SPECIAL CONSIDERATIONS WHEN RE-DISCLOSING (CONTINUED)
Additional Items (Continued)
• HPML: If the re-disclosure is due to a rate lock, re-run Mavent (Compliance Review) to confirm whether the loan will be considered HPML; for more information on HPML, see Handling HPMLs and Higher Priced Mortgage Loan Workflow & FAQ
• Lender Credits: If re-disclosing with a lender credit, keep in mind that once disclosed, a lender credit cannot be reduced
• ARM programs: If re-disclosing an ARM program, update and refresh the rate adjustment, margin, and index information on the RegZ – LE form (screen); particularly for the index, the lock date may change the index value and affect the APR resulting in closing delays if the re-disclosure contains incorrect information; refresh the Index value by clicking the [Get Index] button on the RegZ – LE form (screen)
• Loans with Mortgage Insurance:
For loans with PMI, review the changed circumstance if the MI factors will also change as a result of the COC (i.e. appraised value came in lower than estimated, resulting in a loan amount and LTV change); if LTV changes result due to the COC, the MI factors may also change;
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SPECIAL CONSIDERATIONS WHEN RE-DISCLOSING (CONTINUED)
Additional Items (Continued)
• Loans with Mortgage Insurance (Continued): In these cases, an updated MI quote and refreshing the MI information in the file may be necessary
o If an updated MI quote is obtained, it should be uploaded and retained in the eFolder to support the COC
• Multiple LE Re-Disclosures: Please note that two LE Disclosures may not be generated on the same day; similarly, an LE and a CD may not be generated on the same day. Finally, once a CD is disclosed, an LE cannot later be disclosed (a re-disclosed CD would instead have to be sent for any changed circumstance)
• Final Re-Disclosed LE: The initial CD must match the final re-disclosed LE; any discrepancies will result in compliance conditions for corrections; AFN policy requires the final disclosed LE matches the initial CD; exercise extreme care when re-disclosing to ensure accuracy of all fees so an additional LE does not have to be disclosed later in order to generate a CD
Wait Periods Keep in mind that when re-disclosing an LE, there are wait periods in regards to consummation (closing): • LE has to be received within 4 specific business days before
consummation [this will be the required wait period when receipt is evidenced by providing the re-disclosed LE signed by the borrower(s)]
• If not signed, the LE wait period will be extended an additional 3 specific business days before consummation to account for mailing
For more information on TRID, training materials, and FAQs, see TILA/RESPA Integrated Disclosure (TRID) Documentation.
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ADDING NON-BORROWING PARTIES TO TITLE
Policy As indicated previously, the AFN – Borrower Summary Origination form (screen) includes a section labeled Title Only Spouse for indication of whether a non-borrowing spouse is to be included in vesting, or if it is mandated they be included due to community property or homestead state requirements.
For states having this requirement, or loans where the borrower is married and the spouse is not on the loan but will be vested on the title, Processors are required to enter the spouse’s information in the Borrower Information – Vesting form (screen) in Encompass. This step is required prior to generating a Closing Disclosure (CD).
Procedure: Borrower Information - Vesting
To determine whether or not the subject property state has such a requirement, view the Title Only Spouse section of the AFN – Borrower Summary Origination form (screen). 1. From the AFN – Borrower Summary Origination form
(screen), click on Borrower Information – Vesting or access the form directly from the Forms menu on the left side in Encompass (the user may need to click Show in Alpha Order and Show All in order to see the screen from the Forms menu):
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ADDING NON-BORROWING PARTIES TO TITLE (CONTINUED)
Procedure: Borrower Information – Vesting (Continued)
2. Scroll to the Vesting Information section of the form (screen). All borrowers who are listed on the loan will already have a default entry included in this section (type will show as individual for borrowers on the loan).
3. To add a non-borrowing party for title purposes, click the
"+" icon highlighted above. 4. A new window will open titled Borrower Vesting. 5. Enter the party’s name that needs to be listed on title
(either due to community property state requirements, homestead state requirements, or being included on vesting).
6. Go to the Borrower Type dropdown and select either of the following: a. Title Only (for parties being included on vesting) b. Non Title Spouse (for spouses being included due to
state requirements and will not be included on vesting)
7. Click [OK] once completed.
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ADDING NON-BORROWING PARTIES TO TITLE (CONTINUED)
Procedure: Borrower Information – Vesting (Continued)
If the subject property is located in a community property or homestead state that would normally require the spouse to receive a CD and acknowledge the security instrument at closing, and will not be vested on title, the above requirements to add the spouse in the vesting section as a Non Title Spouse would not be required if the Processor obtains a Quit Claim or Warranty Deed showing the spouse is releasing their rights to the property.
• For refinances – this may be evidenced by uploading a previously recorded Quit Claim or Warranty Deed to the eFolder to show previous release of marital rights to the property
• For purchases – this may be evidenced by uploading a prepared Quit Claim or Warranty Deed to the eFolder that will be signed with the Closing Documents to show the spouse will be releasing their marital rights to the property
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CLOSING DISCLOSURE
Special Considerations
Special Considerations When Generating the Initial Closing Disclosure:
• AFN policy prohibits the initial Closing Disclosure (CD) from being issued until the loan is in line for PTD Review (may be issued at first PTD Review submission back to Underwriting or later)
• The initial CD must match the final re-disclosed LE; any discrepancies will result in compliance conditions for corrections, as AFN policy requires that the final disclosed LE and initial CD match; exercise extreme care when re-disclosing to ensure accuracy of all fees so an additional LE does not have to be disclosed later in order to generate a CD
• Once a CD has been issued, the Processor cannot go back and issue a revised LE; only a re-disclosed CD may be issued after the initial CD is sent
• Please refer to the re-disclosure section above for generating Loan Estimates to ensure all figures are accurate and all items addressed prior to generating the CD
• If the subject property state is located in a community property or homestead state, there may be state requirements to list a spouse on the CD; if the spouse is not on the loan and falls within one of these states, the spouse’s name must be listed on the CD when generated for signature. Similarly, a spouse vesting on title that is not a party to the loan must also acknowledge the CD and therefore be listed when generated for signature; failure to add the spouse when required will result in a required re-disclosure and new waiting period, see above, Adding Non-Borrowing Parties To Title for details on how to add a non-borrowing party prior to generating a CD
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CLOSING DISCLOSURE (CONTINUED)
Customer Considerations
Customer Considerations When Generating the Closing Disclosure: Be mindful that the Closing Disclosure replaces the former HUD-1 Settlement Statement. Since it is the lender’s responsibility to generate the Closing Disclosure, exercise extreme care and pay attention to detail prior to generating the Closing Disclosure to ensure that it is as accurate as possible: the borrower(s) is relying on this statement to know the final figures for their closing. Any discrepancies can likely result in customer service issues if the Closing Disclosure does not reflect the accurate figures for fees, credits, and escrow information.
Closing Disclosure Checklist
The following checklist may be used to assist in generating the Closing Disclosure.
2015 ITEMIZATION √
a. Validate Receipt of Actual Costs from Settlement Agent Matching Final Loan Terms (uploaded to Escrow/Title – CD Fee Sheet Estimate)
b. Verify all costs are updated appropriately matching on the 2015 Itemization form (screen) and match the figures disclosed on the last disclosed LE (any discrepancies would result in a re-disclosed LE to be issued prior to generating a CD)
SETTLEMENT FEE CHANGES √
a. Verify fees are entered on the correct fee line
b. Verify the “paid by” is entered correctly for B(Broker), L(Lender), or O(Other)
c. Verify fees are marked correctly as P(POC/PTC) B(Borrower Select), A(APR Fees)
d. Verify “paid to” is entered correctly for B(Broker), L(Lender), S(Seller), I(Investor), A(Affiliate), O(Other)
Continued
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GENERATING THE CLOSING DISCLOSURE (CONTINUED)
SETTLEMENT FEE CHANGES (CONTINUED) √
e. • Review settlement fee charges to determine if they were indicated as “Borrower Can Shop” or not (if the service provider is the same as listed on the 2015 Settlement Service Provider List, then fees cannot be marked as “Borrower Can Shop”)
• If indicated as “Borrower Can Shop” see "f," below
• If not indicated as “Borrower Can Shop,” correct if applicable and COC must be issued for clerical error
f. • Review “Borrower Can Shop” fee to determine if borrower chose their own provider (if the service provider is the same as listed on the 2015 Settlement Service Provider List, then fees cannot be marked as “Borrower Can Shop”):
• If borrower chosen provider: update fees, mark borrower did shop for all provided services in the 1100 section of the 2015 Itemization, and proceed
• If borrower used our provider (listed provider on the 2015 Settlement Service Provider List): review fee increase percentage and proceed to step g. below
g. • If borrower used our provider, determine if fees increased by a total of more than 10%
• If fees did not increase by more than 10%, update fee and proceed below
• If fees increased by more than 10%, review for valid change of circumstance information (see step h below)
h. For fees increasing by more than 10%:
• If there is a valid change of circumstance, update fees and re-disclose on date of discovery, select a valid COC reason, enter the description, mark accordingly on COC form, and re-disclose LE before generating a CD
• If no valid change of circumstance exists, follow RESPA cure process
Continued
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GENERATING THE CLOSING DISCLOSURE (CONTINUED)
FEE VARIANCE WORKSHEET TOOL √
a. • Check for fee changes outside of tolerance
b. • Work with branch manager to validate and apply cure (lender credit) to specific line items on 2015 Itemization, if necessary
REQUIREMENTS BEFORE DISCLOSING √
a. • Disclosure Tracking – If LE received date = Today’s date, STOP. • LE and CD cannot be issued same day, CD must be issued 24 hours after
last LE disclosure
b. Loan must be locked
c. Settlement agent is approved
d. Confirm estimated closing date and first payment date are accurate
e. Confirm aggregate escrow setup is completed properly, if loan has impounds (see Escrow/Aggregate Setup section above)
f. Loan has been sent to Underwriting for PTD Review (CD cannot be disclosed if prior to first PTD review request)
g. If Conventional loan > 80% LTV, MI approval received
h. Confirm if any parties will be on title that are not listed as a borrower on the loan, or if the state requires a spouse to be listed on the security instrument (community property or homestead states): if so, add the party name in Encompass by accessing the Borrower Information – Vesting form (screen)
EFOLDER REQUIREMENTS PRIOR TO GENERATING CD √
a. Appraisal:
• Appraisal received (if required) and in eFolder
• Validate address to confirm matches in system
• Validate property type on AFN Borrower Summary – Origination screen
• If PUD or Condo, project name and HOA dues are reflected in Encompass
Continued
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GENERATING THE CLOSING DISCLOSURE (CONTINUED)
EFOLDER REQUIREMENTS PRIOR TO GENERATING CD (CONTINUED) √
b. Title:
• Preliminary Title Report received and in eFolder
• Validate address to confirm matches in system
• Validate property type on AFN Borrower Summary – Origination screen
c. • Purchase Agreement (if Purchase Transaction)
• Fully executed final purchase agreement/sales contract received and in eFolder
• Review seller credits and additional services required (i.e. home inspection) to ensure accuracy of all fees/services on 2015 Itemization
d. • Payoffs (if refinance transaction)
• Current payoff demand(s) good through closing date received and in eFolder (update if necessary prior to issuing CD)
• Validate payoff amounts match liability section of 1003 (page 2)
e. Invoices:
• Appraisal invoice(s), if appraisal was required, received and in eFolder
• Credit invoice(s) for all borrowers received and in eFolder
f. • Settlement agent fee sheet
• Accurate fee sheet received from settlement agent with loan amount matching in Encompass, uploaded to eFolder
FILE CONTACTS REQUIREMENTS PRIOR TO GENERATING CD √
a. Add all third party contacts (see File Contacts section above for direction on required parties and information to be completed)
b. Ensure appropriate provider has been marked as settlement agent
c. Enable “Add to CD Contact Info” for settlement agent, and if purchase, RE agents
d. Confirm seller name(s) and address entered, if purchase
CLOSING DISCLOSURE PAGE 1 FORM (SCREEN) √
a. If a RESPA cure or clerical error has been applied to be disclosed on the pre-closing disclosure, complete the changed circumstance section and corresponding reason checkboxes
Continued
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GENERATING THE CLOSING DISCLOSURE (CONTINUED)
CLOSING DISCLOSURE PAGE 1 FORM (SCREEN) (CONTINUED) √
b. Update closing date (date borrower signs closing documents)
c. Update disbursement date (funding date)
d. Update file # for settlement agent
e. If Conventional loan with MI, confirm MIC (Mortgage Insurance Certificate) # is entered (can be pulled from the MI approval cert)
CLOSING DISCLOSURES PAGE 2 FORM (SCREEN) √
a. Verify fees are populated in accurate sections of the CD from the 2015 Itemization (make any corrections from the 2015 Itemization if necessary)
CLOSING DISCLOSURE PAGE 3 FORM (SCREEN) √
a. Review details of transaction on 1003 page 3 and enter all adjustments and other credits (include tax proration amounts and any applicable credits not already carried over)
b. • Within the calculating cash to close, review CD adjustments and other credits by clicking the edit icon
• Seller and lender credits on Line L of 1003 Details of Transaction automatically appear in the seller and/or lender credit boxes listed on page 3 in calculating Cash to Close and also in Section L
• Enter prorated taxes from borrower as a negative value
• Enter prorated taxes from seller as a positive value
• Enter escrow transfers as a positive value
• Enter grant funds from Bond/DPA agencies as a positive value
c. • Update summaries of transactions section with items listed in adjustments and other credits (all values should be entered as positive values regardless of how they are entered within adjustments and other credits)
• Update section K with items borrower is crediting seller as a positive value (i.e. tax proration or HOA dues paid by the borrower)
• Update section L with items seller is crediting borrower as a positive value (i.e. grant funds, tax proration paid by seller, HOA dues proration paid by seller, or escrow transfer)
• Validate earnest money deposits into escrow are listed in section L, line 01 deposit (should match 1003 details of transaction)
Continued
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GENERATING THE CLOSING DISCLOSURE (CONTINUED)
CLOSING DISCLOSURE PAGE 3 FORM (SCREEN) (CONTINUED) √
d. Validate cash to/from borrower matches between calculating cash to close section and summaries of transactions section and 1003 details of transaction (all 3 must match)
CLOSING DISCLOSURE PAGE 4 FORM (SCREEN) √
a. Assumption (confirm correct selection):
• Conventional/Jumbo: will not allow assumption
• Government loans: will allow assumption
b. Demand Feature: should reflect “Does not have a demand feature”
c. Late Payment: Click [Get Late Fee] button
e. Partial Payments: should reflect “does not accept partial payments”
d. Negative Amortization: should reflect “do not have a negative amortization feature”
CLOSING DISCLOSURE PAGE 5 FORM (SCREEN) √
a. Other Disclosures: should reflect “state law may protect you from liability for the unpaid balance”
b. Contact Information:
• Update lender information by clicking “Copy from 1003”
• Confirm Buyer’s and Seller’s Agent information carried over from File Contacts (see above) for all purchase transactions – license information for company and agent must be reflected
• Confirm Settlement Agent information carried over from File Contacts (see above) for all transactions – license information for company must be reflected
COMPLIANCE REVIEW (MAVENT) TOOL √
a. Select Preview
b. If Fail, Warning, or Alerts present, review report to determine what the issue is and how to correct
c. If unable to clear, escalate to Compliance Resolution team or Branch Account Manager
Continued
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GENERATING THE CLOSING DISCLOSURE (CONTINUED)
CONVERSATION LOG √
a. Enter notes in Conversation Log
b. Generate CD and send to borrower(s) for signature
Wait Periods (Disclosing CDs)
Keep in mind that when disclosing a CD, there are wait periods in regards to consummation (closing): • CD must be received within 3 specific business days before
consummation [this will be the required wait period when receipt is evidenced by providing the disclosed CD signed by the borrower(s)]
• If not signed, the CD wait period will be extended an additional 3 specific business days before consummation to account for mailing
TRID For more information on TRID, training materials, and FAQs, see: TILA/RESPA Integrated Disclosure (TRID) Documentation
UNDERWRITING DECISIONS
Notification of Decision
The Processor will receive notification from Encompass or can access their Pipeline view in Encompass to determine whether the Underwriter has “Decisioned” a loan.
Milestones At AFN, there are two possible milestones to achieve once the Underwriter completes the initial review of the submission package. 1. Decisioned – Loan is suspended. Underwriter has reviewed
the submission package and there is either a qualification issue or insufficient documentation to render an approval on the loan at this time.
Continued
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UNDERWRITING DECISIONS (CONTINUED)
Milestones (Continued)
There will be a list of suspense (Prior to Approval) conditions as well as Prior to Doc (PTD) and Prior to Funding (PTF) conditions in Encompass for the Processor to review. Note: For purposes of Reg B compliance, a Decisioned loan is not considered a decision for Reg B, as this is still a suspended loan. Reg B requires either an approval or a denial to render a decision for the loan to be in compliance with required turn times. Do not get confused by the milestone name. Loans in the Decisioned milestone are still subject to NOIA requirements to satisfy Reg B timelines as discussed previously in this manual.
2. Conditional Approval – This is a conditionally approved loan. The Underwriter has reviewed the submission package in Encompass and there is sufficient documentation in order to render an approval on the loan. There will be a list of Prior to Doc (PTD) and Prior to Funding (PTF) conditions in Encompass for the Processor to review.
Processor's Steps Towards Closing
Upon receipt of the Underwriting Decision in Encompass, the Processor should conduct a series of steps to ensure the loan is worked on regularly to proceed towards closing. The checklist referenced above is useful in completing these tasks.
1. Review ALL conditions (PTD and PTF) at time of approval (include PTA conditions as well, if suspended).
2. To access the list of conditions on the loan, the Processor should open the loan file in Encompass, access the eFolder, and then access the third tab, labeled Underwriting Conditions to see a complete list of items needed.
Continued
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UNDERWRITING DECISIONS (CONTINUED)
Processor's Steps Towards Closing (Continued)
Once in the Underwriting Conditions tab, the user can sort columns in any preferred order by clicking on a column header and dragging to the desired location.
In the example below, the Prior To header was clicked in order to sort the conditions to show Prior to Doc (PTD) first, then Prior to Funding (PTF) conditions.
Columns may be expanded if needed to read the complete list without having to click on the individual condition to see all details.
Continued
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UNDERWRITING DECISIONS (CONTINUED)
Processor's Steps Towards Closing (Continued)
If preferred, the Processor may also review a printed version of the Decision directly in Encompass:
• Access the eFolder documents and look under Gen – Internal Underwriting Decision; the Underwriter on the loan should have a printed version here for viewing that the Processor can also review for conditions
In the event that the printed version was not uploaded, the Processor may still print an approval or suspense notice directly from Encompass by doing the following inside the loan file: 3. Click the [Print] icon in the upper right corner in Encompass.
4. From the Print menu, click on Custom Forms, then select the Underwriting folder.
5. Double click on the Underwriting Folder, then select AFN Conditional Approval – Open Conditions (Retail) if approved, or AFN Notice of File Suspension if suspended, and add, then Print as desired.
Continued
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UNDERWRITING DECISIONS (CONTINUED)
Processor's Steps Towards Closing (Continued)
Note: Conditions marked “Internal” within the Underwriting Conditions tab in the eFolder will not appear in the print version of the Underwriting Decision. For this reason, the preferred method to review conditions is from within the Encompass eFolder > Underwriting Conditions tab as directed above.
Include any needed compliance conditions from the borrower(s).
• Upon review of all open conditions, separate out borrower items needed and add in compliance conditions needed from borrower so that all items are requested together
• Separate out and create a list of the remaining conditions and group based on whether they need to be requested from a third party (i.e., settlement agent, employer) and internal items for Processor to complete, again adding in any needed compliance conditions
Once fully reviewed and prepared, contact the borrower(s) and any third parties to request all open conditions needed on the loan.
• Update the conversation log accordingly with the items requested from all parties and taking care to update each time a new request or update is sent out to any parties
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UNDERWRITING DECISIONS (CONTINUED)
Preparing File for Re-Submission
Upon receipt of conditions, the Processor should prepare the file for re-submission as follows:
• Ensure all PTA and/or PTD conditions are uploaded to the Encompass eFolder under their appropriate placeholders (there should be individual placeholders for each item type, conditions should not all be lumped into one generic folder)
• Link the uploaded documents to the Underwriter’s conditions so they can be readily checked by the Underwriter: • To link a document, it must first be uploaded to the
individual placeholder in the eFolder as indicated above • Once in the eFolder, access the Underwriting Conditions
and click/open the individual condition(s) • Once open, click on the “+” sign to attach a document;
a list of documents in the eFolder will open
• Click on the item to be attached, then click [Assign] at the bottom right corner to attach it.
Note: Multiple documents may be attached if necessary by holding the [Ctrl] button and highlighting multiple items to assign.
Continued
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UNDERWRITING DECISIONS (CONTINUED)
Preparing File for Re-Submission (Continued)
• Go to the Processing form (screen) in Encompass and mark the [Cond’s submitted to UW] checkbox; this will place the file in the Underwriter’s queue for review
• Processors are strongly encouraged to keep touches (re-submissions to Underwriting) to a minimum, however, if a loan is suspended, it is of utmost importance to get the loan approved as soon as possible in order to avoid any NOIA timeline issues for Reg B; if all suspense items have been received and there are still PTD items pending, the Processor should still move forward with re-submitting the loan to Underwriting for review in an effort to get the loan approved as soon as possible
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UNDERWRITING DECISIONS (CONTINUED)
Review to Clear Compliance
Review lock, alerts and compliance items to get underwriting and compliance cleared.
• Review any alerts appearing in the left side column under Alerts & Messages in Encompass and address all items to ensure there will not be any issues holding up the file for closing
• Confirm receipt of all compliance conditions and turn in to Compliance for review and clearance (see Compliance Audits, above)
• Review Mavent (Compliance Review) tool and read messages to determine whether any warnings, alerts, or fail messages need to be resolved; re-run as preview if necessary to update and confirm clearance
HANDLING A DENIAL
If a loan is denied, the Processor or Branch will be contacted by the Underwriter regarding the reasons for denial. The Branch will have five (5) business days to rebut the denial and submit supporting documentation. If the denial is not rebutted in that timeframe, a Statement of Credit Denial will be issued to the borrower and the loan will be denied in the system.
PREPARING A LOAN FOR CLOSING
Introduction Processors should utilize the approval and closing checklist above to ensure the loan is prepared for closing with accurate closing dates, fees, and escrow items before sending to Underwriting for final approval. Many fields become locked once cleared for docs and changes cannot be made to a locked field.
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PREPARING A LOAN FOR CLOSING (CONTINUED)
Summary of Items to Verify
To summarize, when preparing a loan to close Processors must verify that the following items are correct in Encompass:
• Accurate loan terms, cash to close/from borrower • Accurate estimated closing date and first payment date • Confirm sufficient time remains on the lock • Accurate lender credit amounts (if any) • Escrow due dates and aggregate set up are accurate • Insurance and tax amounts due prior to the first payment
date are set up to be paid (or proof of payment is uploaded to the eFolder)
• Insurance policies provide sufficient coverage with replacement cost verification, if necessary
• Insurance invoices/paid receipts are obtained for all applicable policies and uploaded to the eFolder with the updated policy for closing
• Refinance loans: payoffs are accurate and none are expired; confirm with the borrower if a payment has posted since payoff issue date, indicating an updated payoff would be necessary
• Review again that loan amount and cash to/from borrower is accurate
Again, address the above items upfront so that the final disclosed LE and initial CD are accurate, and the terms and figures are correct and ready for closing when the loan is turned in to Underwriting for final approval.
FINAL APPROVAL
PTD Review Milestone
When the Underwriter is able to clear all PTD conditions (and PTA if previously suspended), they will complete the PTD Review milestone at time of re-submission review.
Continued
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FINAL APPROVAL (CONTINUED)
PTD Review Milestone (Continued)
If all conditions are not satisfied, the loan will be removed from the queue and remain in the Decisioned or Conditional Approval milestone. The Processor must then continue working to satisfy all remaining conditions and re-submit for review once all remaining items are received. Depending on whether the subject property address is located in a dry state or a wet state, the following processes will occur once the Underwriter is able to complete the PTD Review milestone.
Dry States • Underwriter will complete the PTD Review milestone upon receipt of all satisfactory PTD conditions (and PTA, if applicable)
• If compliance is not yet signed off, the loan will remain in the PTD Review milestone until compliance is cleared; it is the Processor’s responsibility to ensure all compliance conditions are received and cleared by the Compliance Auditor (see Compliance Audits, above)
• If compliance is also signed off at that time, the loan will automatically move forward to the Cleared for Docs milestone, allowing the Processor to order closing documents
Wet States • Underwriter will complete the PTD Review milestone upon receipt of all satisfactory PTD conditions (and PTA, if applicable)
• The loan will automatically be placed for a Pre-Funding Quality Control (QC) review once the PTD Review milestone is completed
• If the Pre-Funding QC review results in no findings and compliance is also cleared, the file will be moved forward to the milestone Cleared for Docs or
Continued
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FINAL APPROVAL (CONTINUED)
Wet States (Continued)
• If the Pre-Funding QC review results in findings, PTD conditions will be placed requiring resolution of those findings before the file can move forward
• When all Pre-Funding QC items are addressed and clear, but compliance has not yet signed off, the loan will remain in the PTD Review milestone until compliance is cleared; it is the Processor’s responsibility to ensure all compliance conditions are received and cleared by the Compliance Auditor (refer to Compliance Audits, above)
• If compliance is also signed off at that time, the loan will automatically move forward to the Cleared for Docs milestone, allowing the Processor to order closing documents
ORDERING CLOSING DOCUMENTS
Doc Orders Form (Screen)
In order to submit the loan to the doc department to generate closing documents, the Processor will be required to complete the Doc Orders form (screen) in Encompass.
Continued
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ORDERING CLOSING DOCUMENTS (CONTINUED)
Procedure: Scheduled Closing Date/Time
1. The Processor is required to complete the Scheduled Closing Date/Time section accurately, as this information will be used by the Docs and Funding Departments to schedule closings appropriately.
2. To include any special instructions to the Doc Drawer for closing: • Click “Yes” for Special Instructions • Select the appropriate reason • List the docs needed by information, and • Enter any necessary explanation in the comments box to
communicate to the closing team
Continued
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ORDERING CLOSING DOCUMENTS (CONTINUED)
Procedure: Scheduled Closing Date/Time (Continued)
3. Confirm all information is accurate and all other required fields have been completed on the form:
a. Condo or PUD: Enter Project Name b. PMI: indicate Yes or No, as applicable c. Enter vesting as it should appear on the closing
documents o Please confirm state spousal requirements as
indicated above in Adding Non-Borrowing Parties to Title
d. Verify lender credit information is correct; complete the actual lender credit amount for closing o Note: The lender credit amount approved must be
at least the actual lender credit amount for closing, otherwise approval is necessary from the Lock Desk for the higher lender credit amount prior to requesting docs
e. Confirm all fees are correct o Note: this should just be a review as the Processor
should have already verified this information prior to issuing final disclosures
4. Click [Doc Request Checklist] at the top right corner of the form (screen) and complete all questions accurately.
Continued
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ORDERING CLOSING DOCUMENTS (CONTINUED)
Procedure: Scheduled Closing Date/Time (Continued)
All items on the Doc Request Checklist must be completed accurately. The Processor is to ensure that all required documents are uploaded to their appropriate placeholders in the eFolder prior to placing the Doc Order to minimize delays in closing allowing the Doc Drawer to quickly complete the doc order request.
5. The Processor confirms all the following: a. Estimated Closing Date and First Payment Date are
accurate in Encompass b. Aggregate setup for escrows and any items to be paid
at closing are addressed accurately on the 2015 Itemization and were disclosed properly
c. Insurance policies are updated with the correct mortgagee clause, has sufficient coverage, and an invoice or paid receipt is included
d. Verbal Verifications of Employment for all borrowers for all present jobs are completed o Third party verification of the phone number/listing
(i.e. Yellow Pages listing) is included e. Business license/CPA letter is uploaded for any present
self-employment sources f. Closing Disclosure (CD) is uploaded and appropriate
wait period given prior to closing date requested (a signed copy must be uploaded to the file if using a 3-day waiting period) - CD must include title only parties or non-title spouses required to be included per state requirements, if applicable
g. Closing/settlement agent fee sheet is uploaded with accurate fees and terms matching the final loan amount
h. All invoices for appraisals and credit reports are uploaded
Continued
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ORDERING CLOSING DOCUMENTS (CONTINUED)
Procedure: Scheduled Closing Date/Time (Continued)
i. No documentation is expired (verify expiration dates on the Processing screen)
j. Items that need to be signed with the closing documents (such as tax return signature pages) are uploaded to the eFolder under ***Loan Doc Attachments***
6. Click [Log] and go the Doc Request milestone to access the Doc Request worksheet. • Select the appropriate Doc Drawer:
o Branch assigned Doc Drawer, if applicable, or o For Dry States, select the User Group "Doc Drawers"
if the Branch does not have an assigned Doc Drawer, or
o For Wet States, select the User Group "Schaumburg" if the Branch does not have an assigned Doc Drawer
7. Once the Doc Drawer is selected and all fields are completed on the Doc Orders form, return to the bottom of the Doc Orders form (screen) in Encompass and click the [Reviewed] checkbox to submit the loan to the Doc Department.
8. The Doc Department will prepare the loan documents and
send to the appropriate party for signing as indicated on the Doc Orders form by the Processor.
9. Coordinate directly with the settlement agent to ensure a signing appointment is scheduled for the requested date and time.
Continued
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ORDERING CLOSING DOCUMENTS (CONTINUED)
Procedure: Scheduled Closing Date/Time (Continued)
10. Forward any insurance documents, payoffs, and final disclosures to the settlement agent for their file so they can prepare the loan documents accurately for signing once documents are received.
FUNDING
Wet States The file will undergo a review by the Funder prior to releasing
loan documents to the settlement agent in order to confirm the loan is ready for funding.
Dry States Closing documents will be released by a doc drawer; the Funder will review the original signed loan documents and issue any required Prior to Funding (PTF) conditions upon review.
• Re-review any outstanding PTF conditions at time of requesting docs to ensure that any outstanding items are requested and addressed, to prevent any delays in funding; any new items needed should be requested as soon as possible
• Upon receipt of funding conditions, upload and attach the conditions in the Underwriting Conditions tab of the eFolder in Encompass (same procedure as for PTD conditions in Underwriting above)
• Notify the Funder and/or Underwriter once items are uploaded in the file for review to be cleared (if the Underwriter specified they need to review a particular condition)
• Once conditions are reviewed and cleared, the Funder will issue the wire and move the milestone to Funded in Encompass
OPERATIONS – CORPORATE LOAN PROCESSING MANUAL
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CANCELING A LOAN
Introduction As part of a Processor’s pipeline management, loans that are no
longer active must be cleared out and cancelled in a timely manner. This will keep the Processor’s pipeline activity up-to-date and provide both a realistic picture of the workload for each Processor as well as better projections based on the active Pipeline.
Procedure: Canceling a Loan
To cancel a loan: 1. The Processor must go to the Canceled form (screen) in
Encompass (also accessible from the Processing form).
2. Use either the Quick Cancel tool (if the loan qualifies for a quick cancel), or complete the Cancellation Request section, including a detailed reason for the cancellation request.
Continued
OPERATIONS – CORPORATE LOAN PROCESSING MANUAL
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CANCELING A LOAN (CONTINUED)
Procedure: Canceling a Loan (Continued)
3. Ensure that all applicable documentation, including invoices for appraisal and credit, etc. are uploaded to the eFolder, as cancelled loans are still reportable and therefore subject to audit for completeness.
4. For loans that do not qualify for a Quick Cancel and no denial has been issued by Underwriting, a Notice of Withdrawn Application must also be uploaded to confirm the cancellation request.
For more information please refer to Canceling Loans in Encompass.
