1. On the Report tab, select a report type from the Report dropdown list.

   The Standard Report (Subscription) option is still provided in the Report dropdown list, however this report type is a legacy product and not available to new Encompass Compliance Service customers. For more information please contact your ICE Mortgage Technology sales representative.

   Standard Report (Subscription)

   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.

   Premium Report (Subscription) or Premium Report (Closed Loan Pricing)

   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.

        • In the Fee Variance Applicability section, if you Fee Variance Applicability

        • In the Correspondent Channel Fee Variance section, if you Fee Variance Applicability

        • In the Disclosure Channel Fee Variance section, if you Fee Variance Applicability

        • 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.

          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.

          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 Report

   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.

2. Select the checkbox to authorize the report purchase.

3. Use the Default Channel dropdown list to select the default channel that the system will use for loans where a channel has not been selected on the Borrower Summary form.

   • The Channel option (field ID 2626) selected on the Borrower Summary form indicates how your company is handling a specific loan, such as Brokered or Banked-Retail, and as you proceed through the Compliance Review Setup wizard, you will indicate how the loan's channel will be used to trigger certain compliance tests, to determine which milestone will be used to trigger compliance reports, and to determine which conditions to apply before running a compliance report.

     If necessary, the Automatic Ordering tab provides a Loan Channel option where you can indicate that you do not want the system to run a compliance review if a loan channel has not been selected on the Borrower Summary form.

4. Using the Configuration Options section, you can set up the review so that geocode data is automatically populated in the HMDA Information form, control the company name that is printed on the Customer line at the top of the compliance report, display expanded fee details in the compliance report, and automatically add comments to new compliance report results in the TQL Services tool.

5. To import Geocode data to the HMDA Information input form, select Import Geocode Data. Data from the report will be added to the appropriate fields on the HMDA Information form — MSA Number (field ID 699), County Code (field ID 1396), State Code (field ID 1395), and Census Tract (field ID 700) — only if the field is blank.

   The Import Geocode Data option is not available with the Standard Report (Subscription) report type.

   1. Select Overwrite Existing Field Data to automatically import data from the report into the loan fields, even if the field contains data. The existing data will be overwritten.

   1. To print the company name that is entered in the Company Name field (field ID 315) on the 1003 - Page 3 input form, select the Use Company Name from 1003 Page 3 checkbox.

      1. If you want the company name entered on the 1003 - Page 3 to print to the compliance report only for loans going through specific loan origination channels, select the checkbox (or checkboxes) for the desired channel. For example, if you want this name to print to the compliance report for all loans going through the Banked - Retail or Brokered origination channels, select the Banked - Retail and Brokered checkboxes.

      2. To print the company name entered in the Name field on the Company Information page in Encompass Settings on the compliance report, do not select the Use Company Name from 1003 Page 3 checkbox. This name will print to all compliance reports, regardless of their origination channel. (If the Use Company Name from 1003 Page 3 checkbox is currently selected, clear the checkbox.)

   2. To display expanded fee details in the compliance report, select the Display Expanded Fee Details in Compliance Report checkbox.

   3. To automatically add comments to new compliance report results in the TQL Services tool, select the Automatically add comments to new compliance report results in the TQL Services tool checkbox.

6. In the Reviews to include section, select your reviews, based on your selection in Step 1.

   Companies using the Subscription option agree to pay for Encompass Compliance Service fees as set forth in the Encompass Compliance Service contract. Click the Terms & Conditions link on the Report tab in the Setup Wizard for details about each agreement.

7. In the Compliance Deviations section, select the New Jersey First Lien Third Party Fee Position or Washington First Lien Fee Position checkbox to deviate from the standard Encompass Compliance Service rules and apply modified rules to certain New Jersey first lien third party fee exceptions or certain Washington first lien fees.

   New Jersey First Lien Third Party Fee Position

   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.

   If you do not apply this New Jersey First Lien Third Party Fee position, a Failure message The New Jersey Licensed Lenders Act (N.J. Rev. Stat. 17:11C-23; N. J. ADC 3:1-16.2) does not allow {(Fee Name) (Fee ID:__)} to be charged to the Borrower in NJ. will be included in the State Rules section of compliance reports run on first lien New Jersey loans if the borrower pays any of the following fees: Administration Fee, Annual Assessments-Impound, Assignment Fee, Assumption Fee, Bankruptcy Monitoring Fee, Bond Fee, Bond Review Fee, Broker Fees, CLO Access Fee, Closing Protection Letter, Compliance Testing Fee, Document Assembly Fee, Escrow Account Servicing Fee, Escrow Waiver Fee, Funding Fee, HOA Certification Handling Fee, Interest Rate Buy Down Fee, Loan Tie In Fee, MERS(R) Registration Fee, Modification/Amendment Fee, Mortgage Insurance Application Fee, Office Expenses, Other Impound, Processing Fee, Program Participation Fee, Recording Fees-Assignment, Reinspection Fee, RESPA-Our Origination Charge RESPA-Title Services and Lender's Title Insurance, RESPA- Your Charge/Credit (Points), Rush Fee, Servicing Release Premium, Signing Agent Fee, Yield Spread Premium, Subordination Fee, Underwriting Fee, Unknown Fee-Finance Charge, VA Funding Fee, Verification Fee, Wire Transfer Fee, Appraisal Desk Review Fee, Appraisal Field Review Fee, Appraisal Review Fee, Document Preparation Fee, Document Redraw Fee, Notary Fee, Payoff Demand Fee, Settlement or Closing Fee, Subordination Preparation Fee, and Unknown Fee-Non Finance Charge.

   Washington First Lien Fee Position

   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

   The Encompass Compliance Service applies the Consumer Loan Act ("CLA") to all loans made by a CLA licensee secured by real property located in Washington. The CLA regulator advised outside counsel that only fees expressly authorized under the CLA are permitted. RCW 31.04.105(2); WAC 208-620-555; WAC 208-620-560(6). As the regulator interprets this requirement strictly, and the Loan Origination Fee, Loan Discount Fee, and Commitment Fee are the only fees that a lender is expressly permitted to charge as of January 1, 2010, the Encompass Compliance Service will fail the loan if any fee other than a Loan Origination Fee, Loan Discount, or Commitment Fee is charged to the Borrower and paid to the Lender. The Encompass Compliance Service applies the CLA lender fee restriction to both first and subordinate lien loans.

   Requested Modification

   The Encompass Compliance Service user has requested the modification that all first lien Processed Loans be excluded from the Standard Rule. Pursuant to this request, a Modified Rule will be created that will exclude all first lien Processed Loans submitted by the user from the Standard Rule described above. The Modified Rule will not fail a first lien Processed Loan when any fee other than a Loan Origination Fee, Loan Discount, or Administration Fee is charged to the Borrower and paid to the Lender. Therefore, the user will not receive a failure message on first lien Processed Loans that would otherwise trigger the above Standard Rule.

   Standard Rule

   The Encompass Compliance Service applies the Consumer Loan Act ("CLA") to all loans made by a CLA licensee secured by real property located in Washington. The CLA regulator advised outside counsel that only fees expressly authorized under the CLA are permitted. RCW 31.04.105(2); WAC 208-620-555; WAC 208-620-560(6). The Revised Code of Washington provides: "Every licensee may ... In connection with the making of a loan, charge the borrower a nonrefundable, prepaid, loan origination fee not to exceed four percent of the first twenty thousand dollars and two percent thereafter of the principal amount of the loan advanced to or for the direct benefit of the borrower, which fee may be included in the principal balance of the loan;" RCW § 31.04.105(2). The Encompass Compliance Service applies this CLA maximum lender fee restriction to both first and subordinate lien loans.

   Requested Modification

   The Encompass Compliance Service user has requested the modification that all first lien Processed Loans be excluded from the Standard Rule. Pursuant to this request, Modified Rules will be created that will exclude all first lien Processed Loans submitted by the user from the Standard Rule described above. The Modified Rules will not fail a first lien Processed Loan when the total of all fees, except for Loan Discount, paid by the Borrower and paid to the Lender, exceeds 4% of the first $20,000 or 2% percent thereafter of the principal amount of the loan. Therefore, the user will not receive failure messages on first lien Processed Loans that would otherwise trigger the above Standard Rule.

1. On the License tab, select a Broker Type from the dropdown list.

2. If your company is a depository institution, select the company's Home State from the dropdown list.

   1. The home state is the state where the company's main (or home) office is located. The applicable laws of the home state are applied to the loan.

   2. If State Licensed Lender - Non Depository Institution (STLIC) was selected in step 1, the Home State dropdown list is disabled.

3. To display only licenses for a specific state, select the state from the License Type in dropdown list.

4. Specify each license that your company has by selecting the corresponding checkbox in the Select column.

   1. When you select a license, the Exempt checkbox displays. Select the Exempt checkbox if you do not want the Encompass Compliance Service to apply any license or compliance rules associated with that license in the property state.

   2. State Licensed Lender - Non Depository Institutions must be licensed in every state in which it lends unless it is exempt from licensing.

5. Select a statutory election for first lien, subordinate lien, junior, closed-end, and open-end loans in Maryland and Kansas.

   Statutory Election in Maryland

   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.

   Statutory Election in Kansas

   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.

6. The Channel option selected on the Borrower Summary form indicates how your company is handling a specific loan, such as Brokered or Banked. Use the Default Channel dropdown list to select the channel to use for loans where a channel has not been selected on the Borrower Summary.

7. Click Next.

By default, Automatic Ordering is set to Disabled. Reports will not run automatically at the completion of the selected milestones.

1. On the Automatic Ordering tab, select Enabled to enable automatic ordering.

   1. After enabling automatic ordering and saving the additional setup settings, if you select Disabled later on, automatic ordering is disabled but the configuration settings you set up are saved for future use.

2. If automatic ordering is enabled, select the Run an Audit Before Ordering checkbox to display the Compliance Review Audit Results window before a report is run.

   1. If errors occur when the report is run, this window opens with a list of the errors (typically due to inconsistent data). You can select a list item, and then click the Go To Field button to open a form with the field highlighted for entry.

3. In the Trigger Milestone section, click the Banked-Retail, Banked-Wholesale, Brokered, or Correspondent tab, and then select at least one milestone from the Milestone list. The report will run automatically at the completion of each selected milestone.

   1. Using the tabs provided, you can set up different trigger milestones for loans based on the loan's origination channel.

      1. To select a milestone, select the type of report to run: Preview or Review.

         Preview reports enable you to test for compliance issues before ordering a full compliance review report or disclosing to the borrower. With a preview, the final loan data is not reviewed. The results are based on the loan's current APR and finance charge amounts, not the disclosed values.

   2. Click Copy these settings to all Channel tabs to copy the milestone selections you have made on the channel tab you are currently viewing to the other three channel tabs.

   3. 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 trigger milestones.

   4. A report can be run on the same loan multiple times at no additional charge.

4. Optionally, select loan criteria to apply to the report. Reports will only be run on loans that match the selected criteria.

   1. If you do not select any criteria, the report will be run on all loans.

   2. If you do not want compliance reports to be run on loans that do not have a loan channel selected, select Loan Channel, and then ensure that the No Channel Selected checkbox is clear (i.e., not selected). Then select the checkbox for each loan channel in which the Automatic Ordering settings will apply.

5. Click Next.

Use this tab to enable users to manually order a report for a loan (all selected users will be allowed to manually order a report at any point during the loan process) and to clear alerts.

1. On the Users tab, select the Order Report checkbox for each user that you want to grant with manual ordering rights.

   1. To grant manual ordering rights to all users, select the Order Report checkbox at the top of the Order Report column so that each user's checkbox is selected.

   2. If you do not want a user to be able to order a compliance report, clear the user's checkbox.

2. To enable a user to clear a "Compliance Review - Did Not Pass" alert that is returned after ordering a compliance report for a loan, select the Clear Alert checkbox for the user.

   1. Enabled users are provided with a Clear Alert button on the Compliance Review screen. When viewing a completed compliance report, these users can click this button to remove the "Compliance Review - Did Not Pass" alert that is added to the Log every time a loan does not pass a loan check. Note that even though the alert is removed, the loan's compliance issues remain until they are corrected.

   2. To enable all users to have access to the Clear Alert button, select the Clear Alert checkbox at the top of the Clear Alert column so that each user's checkbox is selected.

   3. To hide this button from a user, clear the Clear Alert checkbox for the user.

3. Use the Search options to filter the Users list or search for users:

   1. Select an option from the dropdown list to display only users with the selected persona in the Users list.

   2. Enter a user's name or other search criteria in the text box and then click Search. User names matching the search criteria are displayed.

4. Click Clear to remove all search criteria.

   1. Click Next.

Use this tab to select the option to Use Encompass Finance Charge Indicator for Unmapped Fees and to enter email addresses for error notifications.

1. Select the Use Encompass Finance Charge Indicator for Unmapped Fees checkbox to enable the loan's APR setting to determine how unmapped fees are categorized by the Encompass Compliance Service.

   1. When selected, an unmapped fee will be categorized as Other - Non-Finance Charge (Fee ID 998) if the fee's APR indicator checkbox (field ID SYS.X17) on the 2010 or 2015 Itemization form is not selected.

   2. An unmapped fee will be categorized as Other - Finance Charge (fee ID 999) if the fee's APR indicator checkbox on the 2010 or 2015 Itemization form is selected.

2. Optionally, enter one or more email addresses in the Admin Email Address text box. If a processing error occurs during the loan review due to a fee that was not mapped or was mapped incorrectly, an email alert message will be sent to these email addresses.

   1. When adding multiple email addresses, separate each one using a comma or semicolon.

3. Click Finish.