Feature Enhancements for Version 18.1.0.4 Server Patch 3

An update has been made to enable financial institutions to correctly disclose total loan costs for applications to comply with 1003.4(a)(20). Financial institutions comply with 1003.4(a)(20) by reporting NA for the Total Loan Costs (field ID HMDA.X77) for the following loans:

• Covered loans that are not subject to Regulation Z, § 1026.43(c), § 1003.4(a)(17).

• Covered loans subject to Regulation Z § 1026.43(c) for which a disclosure is not provided pursuant to § 1026.19(f), § 1003.4(a)(17).

• Purchased covered loans for which applications were received by the selling entity prior to the effective date of Regulation Z, § 1026.19(f), Comment 4(a)(17)-2.

To implement this logic, NA is now populated to the Total Loan Costs (field ID HMDA.X77) is populated when the following conditions are met:

• The loan file uses the RESPA-TILA Form Version > RESPA 2010 GFE and HUD-1 forms.

• One of the following options is selected for the Action Taken (field ID 1393):

  • 2. Application approved but not accepted

  • 3. Application denied

  • 4. Application withdrawn by applicant

  • 5. File closed for incompleteness

  • 7. Preapproval request denied

  • 8. Preapproval request approved but not accepted

• The Transaction is exempt from Reg. Z Ability-to-Repay requirements based on checkbox (field ID QM.X103) is selected.

Updates have been made to the logic used to populate the property address (field ID HMDA.X88) correctly on the 2018 version of the HMDA Information input form to enable financial institutions to comply with § 1003.4(a)(9). A financial institution complies with § 1003.4(a)(9) by indicating that the property address requirement is not applicable if the address of the property securing the covered loan is not known and the loan has an adverse disposition.

Encompass now uses the following logic to populate the property address (field ID HMDA.X88) on the 2018 version of the HMDA Information form:

• NA is populated for the HMDA property address (field ID HMDA.X88) when all the following conditions apply. The HMDA property address cannot be edited manually.

  • The Sync address fields with subject property address checkbox (HMDA.X91) is selected

  • The Action Taken (field ID 1393) is not 1. Loan originated or 6. Loan purchased.

  • The Subject Property Address (field ID 11) is TBD or blank.

• For all other scenarios that occur when the Sync address fields with subject property address checkbox (HMDA.X91) is selected, the Subject Property Address (field ID 11) is copied to the HMDA property address (field ID HMDA.X88). The HMDA property address cannot be edited manually.

• When the Sync address fields with subject property address checkbox (HMDA.X91) is cleared, the HMDA property address (field ID HMDA.X88) is blank by default, but the field can be edited manually.

An update has been made to enable financial institutions to correctly disclose lender credits to comply with 1003.4(a)(20). Financial institutions comply with 1003.4(a)(20) by reporting, for covered loans subject to the disclosure requirements in Regulation Z § 1026.19(f) , the total amount of lender credits, as disclosed pursuant to Regulation Z § 1026.38(h)(3). Lender credits are amounts provided to the borrower to offset closing costs and are disclosed under Line J of the Closing Cost Details page of the current Closing Disclosure. Final § 1003.4(a)(20) applies to closed-end covered loans and purchases of such loans, but not to applications, open-end lines of credit, reverse mortgages, or commercial-purpose loans.

When a loan has lender credit, NA is populated in the HMDA Lender Credits field (field ID HMDA.X80) when the following options are selected on the HMDA Information input form:

• One of the following options is selected for the Action Taken (field ID 1393):

  • 2. Application approved but not accepted

  • 3. Application denied

  • 4. Application withdrawn by applicant

  • 5. File closed for incompleteness

  • 7. Preapproval request denied

  • 8. Preapproval request approved but not accepted

• The 1. Reverse Mortgage option is selected for Reverse Mortgage (field ID HMDA.X56).

• The 1. Open-end line of credit option is selected for Open End Line of Credit (field ID HMDA.X57).

• The 1. Primarily for a business or commercial purpose option is selected for Business or commercial Purpose (field ID HMDA.X58).

HMDA Lender Credits (field ID HMDA.X80) is left blank if there are no lender credits for the loan.

A new form, FHA Builder’s Certification of Plans, Specifications, and Site, is now available to generate and/or print in Encompass. (The form title on the printed form itself is Builder’s Certification of Plans, Specifications, & Site).

To access and print this form in Encompass, click the Print icon from a loan file or Pipeline view, click the Standard Forms tab, and then select FHA USDA/RHS from the Look In dropdown list. Locate the form in the list, and then click Add to move it to the Selected Forms list. Use the buttons at the bottom of the window to print or manage the form.

Decimal amounts are now supported in the Purchase Price (field ID 136) for FHA loans. After the Purchase Price is entered, the price is no longer rounded up to the nearest dollar. Two decimal values are retained for the cents amount. If the Purchase Price is populated by a calculation instead of by manual entry, the decimal amount is truncated after two digits, and the truncated amount is not rounded up. For example, a calculated value of $100,000.356 displays in the Purchase Price field as $100,000.35.

The Spanish-language version of the 1003 was retired in Encompass 17.4 and is no longer supported in Encompass, but it is still available to print in Encompass from the Archived Forms folder provided in the Print window. Please be advised that although it is available to print, this version was not updated with the Demographic Addendum changes required for the 1003 as of January 1, 2018 and is therefore no longer compliant. Starting in this 18.1.0.4 release, if a user selects the 1003 – All Required Pages (Spanish) form in the Print window, only Page 1 of the Spanish-language version of the 1003 will be generated and printed. Note that a blank version of the Spanish-language version of the 1003 can be found on Fannie Mae’s website here: https://www.fanniemae.com/content/guide_form/1003si.pdf

To access the Archived Forms folder in Encompass, click the Print icon from a loan file or Pipeline view, click the Standard Forms tab, and then select Archived Forms from the Look In dropdown list.

Important Note Regarding Access to 1003 Output Form

Changes were made to the calculation used for field 1191 (Points paid on purchase of principal residence) on the 1098 Mortgage Interest form. Previously, all “Points” charged to the borrower as entered on either the 2010 Itemization or 2015 Itemization were reflected in this field, regardless of who paid them. As of this Encompass 18.1 February Service Pack release, we have updated the calculation for Encompass field 1191 to subtract any portion of the “Points” charged to the borrower that the lender has indicated were paid directly by the lender on purchase transactions of principal residences. Encompass users can click the gold Lock icon provided for field 1191 to trigger a recalculation of the value to apply the new calculation that does not include the lender-paid origination or “Points.” If you have a practice or business requirement that requires a manual entry of this value, click the blue Lock icon to manually modify the value. Please review the data on the 1098 Mortgage Interest form to ensure the data provided on the form is as expected and update as needed.

When upgrading to Encompass version 18.1.0.4 Server Patch 3 (i.e., the Encompass 18.1 February Service Pack release) from an earlier Encompass version, the Points paid on purchase of principal residence amount (field ID 1191) will be locked for existing loans with a 1098 Interest for Tax Year (field ID 3614) of 2016 of earlier. This is done to maintain the data integrity of closed loans and disclosed loans.

This enhancement was implemented as part of the Ellie Mae Idea Center initiative.

The Yes and No checkboxes for Refinance with Original Creditor (field ID QM.X2) originally provided only on the Non-Standard to Standard Refi tab on the ATR/QM Management input form have now also been added to the input forms listed below:

• 1003 Page 1

• FNMA Streamlined 1003

• REGZ-CD

• REGZ-LE

• Rural Assistance URLA

The checkboxes have been placed next to the Purpose of Refinance dropdown list (field ID 299) on all of these input forms. The checkboxes now trigger a print rule condition that renders the correct Notice of Right to Cancel (RTC) form used for refinance transactions based on the selection in the dropdown list. Previously, the Purpose of Refinance field selection triggered the generation of the Notice of Right to Cancel (RTC) form. Placing these checkboxes near the dropdown list makes it easily accessible and more convenient for an Encompass user to complete the data entry.

If your company uses custom forms to take applications, it is recommended that you add the Refinance with Original Creditor checkboxes to forms and data templates where appropriate for your business process and work flow. Adding the checkboxes will help ensure that the data is available at the right time in the process for generating the correct Right to Cancel forms.

A new 320: Enhanced Relief Refinance option has been added to the dropdown list for the Offering Identifier field (field ID CASASRN.X163) to enable Encompass users to identify a loan for Freddie Mac as an enhanced relief refinance loan.