Compliance Review Setup

The TILA review includes comparisons, tests, functions and calculations based on the Truth In Lending Act and Mortgage Disclosure Improvement Act (MDIA). Specifically, the Encompass Compliance Service recalculates the finance charge amount, amount financed, APR, total of payments, payment schedule, and the amortization schedule. The MDIA test validates that the loan's disclosure dates are in compliance with the "3-7-3 rules" set forth in the MDIA. Note that the MDIA test is optional and you can choose to exclude it from your compliance reports. The results of the review display in the TILA-Tolerance and TILA-Payment sections of the compliance report.

The TILA-RESPA review applies to closed-end loans secured by 1-4 unit dwellings attached to real property, where the application is taken on or after October 3, 2015.

If the Encompass Compliance Service does not receive enough information to determine whether the loan is secured by real property, it will apply the TILA-RESPA Rules to all closed-end loans secured by 1-4 unit dwellings, made primarily for personal, family, or household purposes, where the application date is on or after October 3, 2015 and where the Encompass Form Version is TILA-RESPA 2015 LE and CD.

This review includes the following: 

• Fannie Mae Points & Fees - The review calculates the allowable Fannie Mae points and fees thresholds as defined in the Fannie Mae Lender Letter 03-00, issued April 11, 2000 (and codified in Fannie Mae's Selling Guide Part VII, Section 104.11), as updated and amended based upon loan data.

• Freddie Mac Points & Fees - The review calculates the allowable Freddie Mac points and fees thresholds as defined in the Freddie Mac Industry Letter, issued December 28, 2000 (and codified in Freddie Mac's Seller/Servicer Guide Section 22.32), as updated and amended based upon loan data.

• GSE HUD-HOEPA Mortgage High Cost Thresholds - The review calculates the high cost thresholds as defined in the Fannie Mae Selling Guide Part VII, Section 104.15, as updated and amended, and the Freddie Mac Single-Family Seller/Servicer Guide Chapter 22, as updated and amended, based upon loan data.

The results of the review display in the GSE section of the compliance report.

The State Rules review applies the requirements of over 340 US state laws for consumer residential mortgage loans secured by real property. It enforces the laws as they relate to: 

• Usury rate ceilings percentage caps

• Prohibited fees

• Fee percentage or dollar amount limits

• Higher-rate, higher-risk, higher-priced, subprime, non-prime, and rate spread loans

• Prepayment penalty prohibitions and limitations

• Late fee dollar amount limits and length of late fee grace periods

• Interest accrual start dates

• Negative amortization prohibitions

• Balloon payment prohibitions or term limitations

• Payment and term limitations

The results of this review display in the State Rules section of the compliance report.

The VA Enterprise Review contains rules to test for some of the prohibited terms on VA loans. This review contains the following enterprise rules:

• Federal - Late Charge Limitation (VA)

• Federal - Grace Period Limitation (VA)

• Federal - Discount Points May Not Be Financed in a Purchase Money Loan (VA)

• Federal - Discount Points May Not Be Financed in a Cash-Out Refinance Loan (VA)

• Federal - Discount Points Limitation in a Rate and Term Refinance Loan (VA) (Warning)

• Federal - Loan Origination Fee 1% Limitation (VA)

• Federal - Unallowable Itemized Fees (1% Maximum) (VA)

• Federal - Loan Origination Fee and Unallowable Itemized Fees Charged (VA)

• Federal - Rate and Term Refinance Itemized Fees Charged (VA) (IRRL Warning)

The LO Compensation Review will provide a Warning message on a closed-end loan secured by a 1-4 unit dwelling with an Application Date on or after April 1, 2011 that includes the Mortgage Broker (loan originator) receiving any of the following fees from someone other than the Borrower:

• Loan Discount (Fee ID 2)

• Yield Spread Premium (Fee ID 12)

• RESPA - Your Charge/Credit (Points) amount (Fee ID 15)

• Prepaid Interest (Fee ID 31)

• Interest Rate Buydown Fee (Fee ID 158)

The Encompass Compliance Service will provide a Warning message on a closed-end loan secured by a 1-4 unit dwelling with an Application Date on or after April 1, 2011 that includes the Mortgage Broker (loan originator) receiving compensation directly from the Borrower and from another person.

The NMLS (Nationwide Mortgage Licensing System) Registration Review review verifies an individual loan originator’s NMLS information against NMLS data using NMLS B2B Access. The review may be used to test for the applicable individual loan originator’s NMLS registration information on seasoned loans, with the applicable data and information at the time the loans were closed.

The Encompass Compliance Service will return Warning or Failure messages if the loan originator's NMLS unique identifier, name, or license number does not match the NMLS registration data provided by NMLS B2B Access. The service also will return the name and license(s) associated with the individual loan originator’s NMLS unique identifier for easy reference.

ICE Mortgage Technology maintains a nationwide database of over 450,000 licensed mortgage entities, including lenders and brokers, that is updated as frequently as state regulatory agencies make new licensing information available. The custom License review uses this database to determine the following: 

• The lender assigned to the loan is licensed in a particular jurisdiction.

• The license is active and in good standing.

• The license authorizes the lender to originate this transaction type.

The results of the review display in the License section of the compliance report.

The Standard Report (Subscription) is a legacy product and not available to new Encompass Compliance Service customers. For more information please contact your ICE Mortgage Technology sales representative.

This option includes the following reviews:

• TILA/TILA-RESPA Review
• HOEPA Review
• Higher Priced Mortgage Review
• GSE Review
• FHA Review
• Citi Mortgage Rules
• VA Review
• LO Compensation Review
• NMLS Registration Review
• Ability to Repay/Qualified Mortgage Review

For information on setting up these reviews, refer to the Premium Report (Subscription) or Premium Report (Closed Loan Pricing) section.

1. Clear the TILA/TILA-RESPA Review checkbox if you do not want to include the TILA/TILA-RESPA review in the loan check.

   If you are including the TILA/TILA-RESPA Review:

   • Click the Edit icon to designate required channels, milestones, fields that must be satisfied before the TILA/TILA-RESPA Review will run, manage which components of the review is run, when the finance charge tolerance portion of the review will run, how a rebate will be treated, select whether the Loan Estimate or Closing Disclosure preview will be run, or select whether investment properties will be included in the TILA-RESPA rules.

     Review Requirements Tab

     • In the Required Channel Types section, if you want the TILA/TILA-RESPA Review to be included in the loan check only for loans in a specific loan channel, select the Channel checkbox, and then select the checkbox for each loan channel you want to specify.

     • Select No additional condition from the dropdown list if you do not want to apply any conditions to the review.
     • To restrict the review from being performed until a specific milestone has been finished, select Run Review only when a certain Milestone is reached from the dropdown list, and then select the milestone from the appropriate dropdown list. Select a milestone for each loan channel as needed.

     For loans where a loan channel (field ID 2626) has not been selected on the Borrower Summary, the system uses the Default Channel you selected on the Report tab when determining the starting milestone for the TILA Review.

     • To restrict the review from being performed until specific fields are populated, select Run Review only when certain Fields are filled in from the dropdown list, and then select the desired fields from the Required Fields list.

     Components Tab

     Each component of the TILA-RESPA Review can be configured to either be applied or suppressed for an individual loan review. You must select whether to run a component of the review at all, and at what point (milestone) the component should be run.

     • Select Run Components only when a specific Milestone is reached if you want a component to be run when a specific milestone is reached. A list of components is displayed.
     • In the Milestone column, select which milestone will trigger each component to run.
     • By default, the Enabled checkbox will be selected and the component will run when the specified milestone is reached. If the Enabled checkbox is cleared, that component will be disabled.

     Additional Settings Tab

     • In the TILA Finance Charge Run Conditions section, if you want the finance charge tolerance portion of the review to run, select Run Review only when a certain Milestone is reached from the dropdown list, and then select the milestone from the appropriate dropdown list. Select a milestone for each loan channel as needed.

     The Select Additional Condition applies to the entire TILA/TILA-RESPA Review.

     • The available milestones under each corresponding TILA Review finance charge run condition channel are ones that are equal to or later than the milestones selected in the TILA/TILA-RESPA Review run condition channels.
     • The milestone selected in the corresponding channel under the TILA/TILA-RESPA Review run conditions is the default channel selected under the TILA Finance Charge run conditions for that channel.

     • In the Prepaid Finance Charge Credit Settings section, if you want to indicate how a rebate should be treated, select an option from the dropdown list and then one of the radio button options. For more information on the available options, see Prepaid Finance Charge Credit Settings.

     If you select Apply rebate until Amount Financed equals the Note Amount (Default), only the For all Negative Prepaid Finance Charges option is available.

     • In the TILA-RESPA Preview Settings section, if you want to indicate which preview (Loan Estimate or Closing Disclosure) should be performed for a specific loan channel, select the milestone from the appropriate dropdown list.

     You should only consider this setting when there is one or more Loan Estimates included within Disclosure Tracking but no included Closing Disclosures.

     • In the Investment Property Applicability section, if you want to include investment properties in the TILA-RESPA (Know Before You Owe) rules, select one or both of the checkboxes.

     • Select Apply TILA-RESPA Rules to Investment Properties if you want to include investment properties in the TILA-RESPA rules.
     • Select Apply TILA-RESPA Rules to Owner-Occupied Rental Properties if you want to include owner-occupied rental properties in the TILA-RESPA rules.
     • When finished, click Save.

   • Select the tolerance to apply to loan reviews using the APR and Finance Charge Tolerance options.

     • Select 0.125% for all loans to set up the report to note a violation if there is a difference between the disclosed APR and the current APR greater than .125% when reviewing any type of loan.

     • Select the 0.125% for regular loans... option to set up the report to note a violation if there is difference between the disclosed APR and the current APR greater than .125% when reviewing a loan or if there is a difference between the disclosed APR and current APR greater than .25% when reviewing an irregular loan

     More Information About APR and Finance Charge Tolerances

     When the APR and Finance Charge Tolerance option is included in the TILA/TILA-RESPA Review, the Encompass Compliance Service does not test for APR over disclosure unless it is configured as part of a Custom Report. In addition, the Encompass Compliance Service does not receive sufficient information to determine whether the APR is closer to the "actual APR" and therefore does not test for tolerances pursuant to 12 C.F.R. § 226.22(a)(5). 

     Regulation Z defines the "accuracy" of the closed-end APR in 12 C.F.R. § 226.22. As a general rule, the disclosed APR is considered accurate if it is not more than .125% above or below the APR determined in accordance with 12 C.F.R. § 226.22(a)(1). In an "irregular transaction", the APR is considered accurate if it is not more than .25% above or below the APR. An "irregular transaction" is one that includes one or more of the following features (as defined in 12 C.F.R. § 226.22(a)(2) and (3)):

     • Multiple advances

     • Irregular payment periods, or

     • Irregular payment amounts (other than an irregular first period or an irregular first or final payment)

     Because most creditors and secondary market purchasers prefer a more conservative test, you have the option of using the more restrictive 0.125% for all loans option or applying "the benefit of the quarter" to irregular transactions (i.e., the 0.125% for regular loans and 0.25% for irregular loans option). If you chose to apply the more liberal test to irregular transactions, the Encompass Compliance Service uses the following criteria to determine the loan's status as irregular:

     • A closed-end loan secured by a 1-4 unit dwelling that has:

     • More than one advance in the payment stream

     • More than three payment streams

     • Payments that are not equal in amount (except for the first and/or last payment), or

     • Payment periods that are not equal (the first payment period can be different).

   • Select the tolerance to apply to the Closing Disclosure Total of Payments to loan reviews either generally or for purposes of a consumer’s right of rescission:

     • $100 Disclosure and Rescission Tolerances - selected by default. If selected, the following rules will be applied to the loan:

       • For rescindable refinance transactions, Disclosed Total of Payments is considered accurate if it: (1) is understated by no more than ½ of 1% of the face amount of the note or $100, whichever is greater; or (2) is greater than the amount required to be disclosed.

       • For rescindable refinance transactions, Disclosed Total of Payments is considered accurate, after the initiation of foreclosure on a consumer’s principal dwelling, if it: (1) is understated by no more than $35; or (2) is greater than the amount required to be disclosed.

     • $100 Disclosure Tolerance - If selected, the following rule will be applied to the loan:

       • Disclosed Total of Payments considered accurate if it: (1) is understated by no more than $100; or (2) is greater than the amount required to be disclosed.

   • Clear the MDIA checkbox if you do not want to include the MDIA review in the loan check.

     When the MDIA checkbox is selected, the MDIA review will be performed on all loans, including investment properties.

2. Select the TILA Right of Rescission checkbox to include the TILA ROR review in your loan check.

   If you are including this review, click the Edit icon to designate required channels or milestones that must be satisfied  before the review will be performed on the loan.

   • To  indicate that you want the TILA ROR to be included in the loan check only for loans in a specific loan channel, select the Channel checkbox, and then select the checkbox for each loan channel you want to specify.

   • To restrict the review from being performed until a specific milestone has been finished, select Run Review only when a certain Milestone is reached from the dropdown list, select the milestone from the appropriate dropdown list, and then select a milestone for each loan channel as needed.

     For loans where a loan channel (field ID 2626) has not been selected on the Borrower Summary, the system uses the Default Channel you selected on the Report tab when determining the starting milestone for the TILA ROR.

   • When finished indicating required loan channels or milestones, click Save.

   • When working with dates for this review, input the last day of the RTC expiration regardless of the funding date.

3. Clear the GSE Review checkbox if you do not want to include the GSE HUD-HOEPA Mortgage High Cost Thresholds review in the loan check.

   If you are including the GSE Review, click the Edit icon to designate required channels, milestones, or loan types that must be satisfied before the GSE Review will run.

   • To indicate that you want the GSE Review to be included in the loan check only for loans in a specific loan channel, select the Channel checkbox, and then select the checkbox for each loan channel you want to specify.

   • Select No additional condition from the dropdown list if you do not want to apply any conditions to the review.

   • To restrict the review from being performed until a specific milestone has been finished, select Run Review only when a certain Milestone is reached from the dropdown list, select the milestone from the appropriate dropdown list, and then select a milestone for each loan channel as needed.

     For loans where a loan channel (field ID 2626) has not been selected on the Borrower Summary, the system uses the Default Channel you selected on the Report tab when determining the starting milestone for the GSE Review.

   • To restrict the review from being performed based on loan type, select Run Review only when certain Fields are filled in from the dropdown list, and then select the type of loans you want to be reviewed from the Required Loan Types list.

   • When finished, click Save.

4. Clear the HMDA Review checkbox if you do not want to include the HMDA review in the loan check.

   If you are including the HMDA Review, click the Edit icon to designate required channels, milestones, or fields that must be satisfied before the HMDA Review will run.

   Review Requirements Tab

   • To indicate that you want the HMDA Review to be included in the loan check only for loans in a specific loan channel, select the checkbox for each loan channel you want to specify or select the Channel checkbox to select all channels.

   • Select an additional condition from the dropdown list:

     • No additional condition - This selection will not apply any conditions to the review.

     • Run Review only when a certain Milestone is reached - This selection restricts the review from being performed until a specific milestone has been finished. Select a milestone for each loan channel (default setting is “Submittal”) as needed.

       For loans where a loan channel (field ID 2626) has not been selected on the Borrower Summary, the system uses the Default Channel you selected on the Report tab when determining the starting milestone for the HMDA Review

     • Run Review only when certain Fields are filled in - This selection restrict the review from being performed until specific fields are populated. Select the desired fields from the Required Fields list.

   Additional Settings Tab

   • Select the Do not run HMDA Review option if the Exclude loan from HMDA report checkbox (field ID HMDA.X24) is selected for the loan on the HMDA Information input form.

   • Select the Display expanded HMDA details in Compliance Reports option to display expanded HMDA details in the Compliance Report. Selecting this option will display all the HMDA data points utilized in running the HMDA review.

   • When finished, click Save.

5. Select the Rate Spread Review checkbox to include the Rate Spread review in your loan check. If you are including this review, click the Edit icon to designate the rate spread run conditions that must be satisfied before the review will be performed on the loan.

   • To automatically populate the Rate Spread (field ID HMDA.X15), on the HMDA Information form during a loan check, select Import Rate Spread Data. Data from the report will be added to the Rate Spread field only if the field is blank.

   • Select Overwrite Existing Field Data to automatically import data from the report into the Rate Spread field even if the field currently contains data, and then select an option for the Rate Spread value:

     • Round Rate Spread - The rate spread is rounded to two decimal places, based on the value in the third decimal place. If the third decimal place is 0 to 4, the value is round down. If the third decimal place is 5 to 9, the value is round up.

       For example, if the rate spread is 10.254, then it should be round down to 10.25. If the rate spread is 10.299, then it should be round up to 10.30.

       This is the default option.

     • Truncate Rate Spread - The rate spread is truncated to two decimal places.

       For example, if the rate spread is 10.254, then it should be truncated to 10.25. If the rate spread is 10.299, then it should be truncated to 10.29.

     Regardless of which option is selected, if the rate spread has less than two decimal places, zeros are added so the rate spread has two decimals. If the rate spread is a number less than 10.0 (e.g., 9.99), a leading zero is added so the ten's place always has a digit.

   • When finished, click Save.

6. Clear the NMLS Registration Review checkbox if you do not want to include the NMLS review in the loan check.

   If you are including the NMLS Review, click the Edit icon to indicate if the review is performed as of the application date, consummation date, or both.

   • In the NMLS Review Date section, select the milestones at which the NMLS review should be run.

     You can select either the Application Date, Consummation Date, or both.

     • If only the Application Date is selected, the NMLS Review only checks the loan’s current finished milestone as of the application date.

     • If only the Consummation Date is selected, the NMLS Review only checks the loan’s current finished milestone as of the consummation date.

   • If you select both the Application and Consummation date for a milestone, select whether registration is required as of BOTH the Application Date AND Consummation Date or as of EITHER the Application Date OR Consummation Date in the dropdown field.

     • If both the Application Date and the Consummation Date are selected and the dropdown selection is “Application Date AND Consummation Date”, the NMLS Review checks the loan’s current finished milestone as of the application date and the consummation date, and returns a failure if the loan officer is not registered/sponsored as of either date.

     • If both the Application Date and the Consummation Date is selected and the dropdown selection is “Application Date OR Consummation Date”, the NMLS Review checks the loan’s current finished milestone as of the application date and the consummation date, and returns a failure if the loan officer is not registered/sponsored as of both dates.

   • When finished, click Save.

7. Clear the Ability to Repay/Qualified Mortgage Review checkbox if you do not want to include the ATR/QM review in the loan check.

   If you are including the Ability to Repay/Qualified Mortgage Review, click the Edit icon to designate required channels that must be satisfied, as well as conditions that must be met, before the review will be performed on the loan.

   Review Requirements Tab

   • To indicate that you want the Ability to Repay/Qualified Mortgage Review to be included in the loan check only for loans in a specific loan channel, select the checkbox for each loan channel you want to specify or select the Channel checkbox to select all channels.

   • Select No additional condition from the dropdown list if you do not want to apply any conditions to the review.

     • To restrict the review from being performed until a specific milestone has been finished, select Run Review only when a certain Milestone is reached from the dropdown list, and then select the milestone from the appropriate dropdown list. Select a milestone for each loan channel as needed.

       For loans where a loan channel (field ID 2626) has not been selected on the Borrower Summary, the system uses the Default Channel you selected on the Report tab when determining the starting milestone for the Ability to Repay/Qualified Mortgage Review.

   Components Tab

   Each component of the Ability to Repay/Qualified Mortgage Review can be configured to either be applied or suppressed for an individual loan review. You must select whether to run a component of the review at all, and at what point (milestone) the component should be run.

   • Select Run Components only when a specific Milestone is reached if you want a component to be run when a specific milestone is reached. A list of components is displayed.

     • In the Milestone column, select which milestone will trigger each component to run.

     • By default, the Enabled checkbox will be selected and the component will run when the specified milestone is reached. If the Enabled checkbox is cleared, that component will be disabled.

   Additional Settings Tab

   • The Ability-to-Repay Loan Type field (field ID QM.X23) on the ATR/QM Management tool’s ATR/QM Eligibility tab is automatically populated based on specific data in the loan file. The value populated to this field determines what type of ATR review the Encompass Compliance Service performs. In the Default Ability to Repay Loan Type section, select a default ATR loan type. For loans where the Ability-to-Repay Loan Type field (field ID QM.X23) on the ATR/QM Management tool’s ATR/QM Eligibility tab is blank, the compliance review will run the ATR/QM rules that apply to the ATR loan type selected here.

   • The Qualified Mortgage Loan Type field (field ID QM.X24) on the ATR/QM Management tool’s ATR/QM Eligibility tab is automatically populated based on specific data in the loan file. The value populated to this field determines what type of QM review you want the Encompass Compliance Service to perform. In the Default Qualified Mortgage Loan Type section, select a default QM loan type. For loans where the Qualified Mortgage Loan Type field (field ID QM.X24) on the ATR/QM Management tool’s ATR/QM Eligibility tab is blank, the compliance review will run the ATR/QM rules that apply to the QM loan type selected here.

   • When finished, click Save.

8. Select any additional reviews to include in the loan check.

9. Click Next.

Custom reports are set up by ICE Mortgage Technology based on your company's configuration and loan volume. Contact your sales representative to determine the reviews to include the report. Custom reports cannot be used unless you obtain a custom service code (e.g., excluding Saturdays from a report) from ICE Mortgage Technology Technical Support.

For information on setting up the reviews, refer to the Premium Report (Subscription) or Premium Report (Closed Loan Pricing) section.

Select this checkbox to deviate from the standard Encompass Compliance Service rules and apply modified rules to certain New Jersey first lien third-party fee exceptions.

• After selecting the checkbox, read the ICE Mortgage Technology, Inc. Amendment to Agreement Governing the Use of the Encompass Compliance Service.

• If you agree with the terms, select the I have read, fully understand, accept and agree... checkbox, and then click I Accept.

• If you do not agree to the terms, click I Decline, and then click Yes to confirm your decision. The position will not be in effect when compliance reports are run.

Select this checkbox to deviate from the standard Encompass Compliance Service rules and apply modified rules to certain Washington first lien fees.

• After selecting the checkbox, read the ICE Mortgage Technology, Inc. Amendment to Agreement Governing the Use of the Encompass Compliance Service.

• If you agree with the terms, select the I have read, fully understand, accept and agree... checkbox, and then click I Accept.

• If you do not agree to the terms, click I Decline, and then click Yes to confirm your decision. The position will not be in effect when compliance reports are run.

By selecting this option, you are requesting two modifications to the standard compliance rules. See below for a definition of the standard rules and the requested modifications. 

Standard Rule

Requested Modification

Standard Rule

Requested Modification

Maryland law permits a lender to elect to make a loan under the Maryland Credit Grantor Law if the choice to do so is specified in the loan documents [MD COML §12-913.1 and §12-1013.1]. If this election is not made and documented in writing, then other laws in Maryland govern the loan.

• No Statutory Election - If you select this option, the Compliance Review service will apply the Interest and Usury Provisions to all Maryland loans consummated on or after January 1, 2019.

• Credit Grantor Law Election (for All Loans) - If you select this option, the Encompass Compliance Service will: 

  • Apply the Credit Grantor Revolving Credit Provisions (Title 12, Subtitle 9) to all Maryland open-end loans consummated on or after January 1, 2019.

  • Apply the Credit Grantor Closed End Credit Provisions (Title 12, Subtitle 10) to all Maryland closed-end loans consummated on or after January 1, 2019.

• Credit Grantor Law Election (for 1-4 unit, Junior Liens Only) - If you select this option, the Encompass Compliance Service will:
  • Apply the Credit Grantor Revolving Credit Provisions (Title 12, Subtitle 9) to all open-end, subordinate lien loans secured by a 1-4 unit dwelling on real property located in Maryland consummated on or after January 1, 2019.
  • Apply the Credit Grantor Closed End Credit Provisions (Title 12, Subtitle 10) to all closed-end, subordinate lien loans secured by a 1-4 unit dwelling on real property located in Maryland consummated on or after January 1, 2019.

• Credit Grantor Law Election (for 1-4 Unit Only) - If you select this option, the Encompass Compliance Service will:

  • Apply the Credit Grantor Revolving Credit Provisions (Title 12, Subtitle 9) to all open-end loans secured by a 1-4 unit dwelling on real property located in Maryland consummated on or after January 1, 2019.

  • Apply the Credit Grantor Closed End Credit Provisions (Title 12, Subtitle 10) to all closed-end loans secured by a 1-4 unit dwelling on real property located in Maryland consummated on or after January 1, 2019.

  DO NOT select any of the Credit Grantor Law Election options unless you have confirmed that the loan documents contain a written election to use the Credit Grantor Law for that type of loan. Please contact your ICE Mortgage Technology sales representative for more information.

Kansas law specifies the loan types subject to the Kansas Usury Law and to the Kansas Uniform Consumer Credit Code (UCCC). However, the Kansas Usury Law permits the parties to a loan to agree in writing to make the transaction subject to the UCCC for loans that would otherwise be subject to the Usury law. (See Kan. Stat. Ann. §16-207(i)(3).)

• No Statutory Election - If you select this option, the Encompass Compliance Service will apply the Kansas Usury Law to all first lien loans with a loan-to-value (LTV) of 100% or less and apply the Kansas Uniform Consumer Credit Code (UCCC) to all subordinate lien loans and all fixed rate first lien loans with a LTV of more than 100%.

• Kansas UCCC Election For All Loans - If you select this option, the Encompass Compliance Service will apply the Kansas UCCC to all loans secured by real property in Kansas.