1003 URLA Part 4

This feature was introduced with Encompass 19.3. (View the release notes)

This topic describes the process for completing Part 4 of the redesigned Uniform Residential Loan Application (URLA) form that is required for all new loan applications in November 2020. For information about the pre-2020 version of the URLA, refer to 1003 Loan Application - Page 1, 1003 Loan Application - Page 2, 1003 Loan Application - Page 3, or 1003 Loan Application - Page 4.

Use the 1003 URLA Part 4 input form to enter data for sections 4 through 8 on the URLA 2020 output form. These sections include Loan and Property Information, Declarations, Acknowledgments and Agreements, Demographic Information, and Loan Originator Information.

Section 4: Loan and Property Information

Section 4 captures the borrower's view of the loan purpose and usage and any loans against the property being originated by other lenders, for example a piggyback transaction where the borrower is obtaining the first lien from one lender and a HELOC or other second lien from another lender. If the borrower is participating in a loan program where down payment assistance is provided in the form of cash gifts, gift of equity, or grants, this information is also captured. Gifts and grants are not automatically added to the adjustments and other credits and must be added manually. The information entered in this section is populated to section 4 on the URLA 2020 output form

Section 4a. Loan and Property Information

On the 1003 URLA Part 4 input form, section 4a captures loan and property information, including the property address, loan amount, occupancy type, estimated and appraised value, loan purpose, basic construction loan information, and checkboxes to indicate a mixed-use property, manufactured home or accessory dwelling unit (ADU).

Occupancy

For most loan scenarios only the first three checkboxes are enabled and only one checkbox can be selected at a time. The FHA Secondary Residence checkbox is typically disabled and cannot be selected. However, the Occupancy section supports a new occupancy type for the FHA Secondary Residence program, which allows qualified FHA borrowers to purchase a second home closer to their place of employment. If the loan type is FHA, then the FHA Secondary Residence checkbox is enabled and can be selected regardless of the selection made for the Primary, Secondary, and Investment checkboxes. Not all FHA loans for second homes qualify for the FHA Secondary Residence program, so this checkbox is not selected by default and must be manually selected when applicable.

The URLA 2020 output form has four radio buttons for the Occupancy type: Primary Residence, Second Home, Investment Property, and FHA Secondary Residence. The output form can have only one of these radio buttons selected for a loan. When the FHA Secondary Residence checkbox is selected along with another checkbox on the input form, only FHA Secondary Residence is selected on the output form.

Section 4b. Other New Mortgage Loans on the Property You are Buying or Refinancing

Section 4b displays additional new mortgage loans on the subject property aside from existing loan, for example down payment assistance loans or standalone piggyback loans closed with the current loan by either you or another lender. The total loan amounts and total applied to the down payment for the current loan display at bottom of the section. The total applied to the down payment is the total of all additional loans applied with the current loan.

Click the View All Additional Loans button to open the Verification of Additional Loans input form in a pop-up window to create, edit, or view the entries for Section 4b on the input form.

Existing liens to be retained are captured in the liabilities.

Section 4c. Rental Income on the Property You want to Purchase - For Purchase Only

If the property is a 2-4-unit primary residence or an investment property, enter the Expected Monthly Rental Income and Occupancy Rate to calculate the Expected Net Monthly Rental Income.

Section 4d: Gifts or Grants you have been Given or Will be Given

Use Section 4d to capture gifts or grants the borrower, co-borrower, or both are using for the loan. Click the Show all Gifts or Grants button to open the Verification of Gifts and Grants input screen in a pop-up window. Use the input form to create, view, and edit gifts and grants for the loan. The first two entries in the verification form are listed in Section 4d. Enter comments regarding the gifts and grants in the Comments text box.

Section 5. Declarations

Section 5 captures all relevant declarations from both the borrower and co-borrower that are populated to section 5 on the URLA 2020 output form. Section 5a includes declarations about the property and the borrower money for the loan. Section 5b includes declarations about borrower finances.

To Complete the Declarations:

Use the dropdown lists to select Yes or No options for each declaration.
When Yes is selected, an Add Explanation link displays below the dropdown list for the borrower or co-borower. Click the link to open a pop-up window where you can provide additional information for the borrower or co-borrower as needed.

After adding an explanation, the label for the link changes to Edit Explanation.
Select the checkbox to control whether the explanation prints on the Continuation Page through data entry, business rules, or Dynamic Data Management triggers.

Business rules or Dynamic Data Management (DDM) rules can be set up to configure header text for explanation box when the text is included in the new URLA Continuation Page output form.
In Section 5b, for declaration M, if a borrower has declared bankruptcy within the past seven years, the checkboxes listing the bankruptcy chapters are enable for selection. Multiple chapters can be selected at the same time. This data is provided to the AUS system.
In Section 5b, for declaration H, K, L, and M, click the Edit icon to open a pop-up window where you can select DU codes for confirmed inaccuracies in credit report data for Foreclosure, Deed in Lieu, Short Sales, Delinquency, or Bankruptcy as well as codes for extenuating circumstances. These codes pass to DU and are used to override negative credit information that has been verified as inaccurate.

Section 6. Acknowledgments and Agreements

This section provides a link to a pop-up window that contains the Acknowledgments and Agreements language used on the output form. Click the link to review the language. Borrowers sign the acknowledgments and agreements electronically or via wet sign when disclosures are sent.

Section 7. Military Service

There is no content in this section of the input form aside from text in the header indicating that the information for military service in entered in section 1a on the 1003 URLA Part 1 input form. The data is then populated to Section 7 on the 1003 URLA output form.

Section 8. Demographic Information

Section 8 enables the entry of demographic information for the borrower and co-borrower for HMDA reporting purposes. By default, using 1003 URLA 2020 input forms causes the 2018 Demographic Information to display on all forms that contain the Information for Government Monitoring section for HMDA reporting purposes. The checkboxes for selecting 2003, 2004 & 2005, 2006, and 2009 application print versions are disabled on input forms when URLA 2020 is used for a loan.

Section 9. Loan Originator Information

Section 9 captures loan originator information. Complete any sections of the form that are not already populated from loan data templates or other input forms in Encompass.