Feature Enhancements in Version 18.4.0.3 Server Patch 3
Updates to the Encompass Client Machines
The Encompass 18.4 November Service Pack includes the following enhancements, which are client-side updates that are applied to users' Encompass client machines. This client update can be controlled manually via the Encompass Version Manager tool. If the tool has been configured to always apply new releases to users’ computers automatically, users will receive this update upon their initial log in of Encompass following the release.
HMDA Updates
Based upon the language in the 2018 HMDA Final Rule and the 2018 HMDA Filing Instruction Guide (FIG), the following logic is now being used to populate the HMDA Origination Charges field (field ID HMDA.X79):
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When option 1 is selected for the HMDA Reverse Mortgage (field ID HMDA.X56), Open-End Line of Credit (field ID HMDA.X57), or Business or Commercial Purpose (field HMDA.X58) OR when option 1 or 6 is not selected for the Action Taken field (field ID 1393), the HMDA Origination Charges field (field ID HMDA.X79) is populated with N/A.
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Otherwise, the field is populated based on the version of the Itemization form being used, as described below.
When the 2010 Itemization is being used:
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When the HUD-1 Your Adjusted Origination Charges (field ID NEWHUD.X796) value is greater than 0, the HMDA Origination Charges field (HMDA.X79) is populated with the HUD-1 Your Adjusted Origination Charges value.
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When the HUD-1 Your Adjusted Origination Charges value is less than 0, the HMDA Origination Charges field is populated with N/A.
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When the HUD-1 Your Adjusted Origination Charges value is blank or 0.00, the HMDA Origination Charges field is populated with 0.00.
When the 2015 Itemization is being used:
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If the Total Borrower-Paid Origination Charges (field ID CD2.XSTA) value is greater than 0, the HMDA Origination Charges field is populated with the value from the Total Borrower-Paid Origination Charges.
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When Total Borrower-Paid Origination Charges value is less than 0, the HMDA Origination Charges field is populated with N/A.
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When Total Borrower-Paid Origination Charges value is blank or 0.00), the HMDA Origination Charges field is populated with 0.00.
This calculation update applies to all loans with a HMDA Reporting Year (field ID HMDA.X27) of 2018, including loans created prior to the Encompass 18.4.0.1 update, regardless of disposition.
Updates have been made to the logic used to populate the HMDA Loan Amount (field ID HMDA.X31) when an applicant accepts a counteroffer different from the original loan amount per 12 CFR 1003.4(a)(7); Comment 4(a)(7)-1, which states that when an applicant accepts a counteroffer for an amount different from the amount for which the applicant applied, the financial institution reports the covered loan amount granted. If an applicant does not accept a counteroffer or fails to respond, the institution reports the amount initially requested.
The following logic now applies when the Counteroffer Date (field ID 4457) is populated:
- The Total Loan Amount (field ID 2) populates to the HMDA Loan Amount (field ID HMDA.X31) for any of the following four scenarios:
The Counter Offer Status (field ID 4458) is Accepted.
The Counter Offer Status (field ID 4458) is Pending.
The Counter Offer Status (field ID 4458) is Declined or Withdrawn, and the Action Taken (field ID 1393) option is 2. Application approved but not accepted or 8. Preapproval request approved but not accepted.
The Counter Offer Status (field ID 4458) is Declined or Withdrawn, the Action Taken (field ID 1393) option is 1, 3, 4, 5, 6, or 7, and the Total Loan Amount (field ID 2) is the same as the Initial Application Amount (field ID NMLS.X11).
- The Initial Application Amount (field ID NMLS.X11) populates to the HMDA Loan Amount (field ID HMDA.X31) when all of the following conditions are true:
The Counter Offer Status (field ID 4458) is Declined or Withdrawn.
The Action Taken (field ID 1393) option is 1, 3, 4, 5, 6, or 7.
The Total Loan Amount (field ID 2) is the different from the Initial Application Amount (field ID NMLS.X11).
The following updates have been made to the logic used to populate default values in the co-borrower fields for the Credit Score for Decision Making (field ID 4177) and Credit Score Model (field ID 4178).
When option 4, 5, or 6 is selected for the Action Taken (field ID 1393) regardless of whether the No Co-applicant checkbox (field ID 3840) is selected:
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8888. Not applicable is populated to the Credit Score for Decision Making (field ID 4177) for the co-borrower
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9. Not Applicable is populated to the Credit Score Model (field ID 4178) for the co-borrower. Editing is disabled and a Lock icon displays next to the field. Click the Lock icon to edit the value.
When option 1, 2, 3, 7, or 8 is selected for the Action Taken (field ID 1393) and the No Co-applicant checkbox (field ID 3840) is selected:
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9999. No co-applicant is populated to the Credit Score for Decision Making (field ID 4177) for the co-borrower
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10. No co-applicant is populated to the Credit Score Model (field ID 4178) for the co-borrower. Editing is not enabled and a Lock icon displays next to the field. Click the Lock icon to edit the value.
When option 1, 2, 3, 7, or 8 is selected for the Action Taken (field ID 1393) and the No Co-applicant checkbox (field ID 3840) is not selected:
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The Credit Score for Decision Making (field ID 4177) and Credit Score Model (field ID 4178) fields are not populated with default values.
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No Lock icon displays next to the Credit Score Model (field ID 4178) field.
For loans created prior to the Encompass 18.4 November Service Pack update (18.4.0.3 Server Patch 3), the new logic is applied when a loan is opened and saved in this latest Encompass release (18.4.0.3 Server Patch 3).
An update has been made to the logic used to populate the Intro Rate Period (field ID HMDA.X84) to comply with § 1003.4(a)(26). The regulation states that, on a purchased loan, a financial institution reports that the requirement is not applicable for a covered loan with a fixed rate or for an application for a covered loan with a fixed rate. N/A is now populated to the Intro Rate Period field when the following two conditions are both true:
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Action Taken field (field ID 1393) is 6.
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Purchased loan and the Amortization Type (field ID 608) is Fixed. Previously, N/A was being populated to the field when only one of these conditions was true.
For loans created prior to the Encompass 18.4 November Service Pack update (18.4.0.3 Server Patch 3), the new logic is applied when a loan is opened and saved in this latest Encompass release (18.4.0.3 Server Patch 3).
Logic has been added to populate the five reason for denial fields (field IDs HMDA.X21, HMDA.X22, HMDA.X23, HMDA.X33, and HMDA.X34) on the HMDA Information input form to address scenarios where a loan was initially denied but was eventually originated. In these scenarios, an underwriter might complete the reasons for denial early in the process, but the fields might not be manually updated after a decision is made to originate the loan. This could result in a HMDA reporting conflict that shows an originated loan with denial reasons selected.
The following new logic is now applied to the five reason for denial fields. When a loan file has an Action Taken (field ID 1393) that is not Active Loan, 3. Application Denied, or 7. Preapproval request Denied, the following values are populated to the reason for denial fields:
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Not applicable is populated to the Reason for Denial #1 field (field ID HMDA.X21).
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A blank value is populated to the Reason for Denial #2 field (field ID HMDA.X22), Reason for Denial #3 field (field ID HMDA.X23), Reason for Denial #4 field (field ID HMDA.X33), and Other Denial Reason(s) field (field ID HMDA.X34).
Additionally, Lock icons have been added to all five reason for denial fields under the following conditions:
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When the Action Taken (field ID 1393) is Active Loan, 3. Application denied, or 7. Preapproval request denied, the Lock icons do not display next to the fields and the fields are editable.
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When the Action Taken (field ID 1393) is not Active Loan, 3. Application denied, or 7. Preapproval request denied, the Lock icons display next to the fields. Click the Lock icons to edit the fields.
Updates have been made to the logic used to populate values in the Intro Rate Period (field ID HMDA.X84) for HMDA reporting purposes for ARM loans. When the Disbursement Date (field ID 2553) or First Payment Date (field ID 682) is blank, the Intro Rate Period for HMDA reporting purposes for ARM loans is populated with the 1st Change months (field ID 696).
This update is applied to new loans as well as all applicable loans created prior to the Encompass 18.4 November Service Pack upgrade. Another update is being planned for the Encompass 18.4 December Service Pack to address additional logic changes for this field.
Encompass Forms and Tools
When Secondary or Investment is selected for the Property will be field (field ID 1811) for the primary borrower pair, the HOEPA Status field (field ID HMDA.X13) is now populated with N/A.
This updated logic does not affect other HOEPA fields such as the Section 32 qualification verbiage (field ID S32DISC.X51) on the Section 32 HOEPA input form or the Transaction is exempt from Reg. Z Ability-to-Repay requirements based on checkbox (field ID QM.X103) on the ATR/QM Eligibility tab on the ATR/QM Management form.
The following updates have been made to the descriptive text for the two checkboxes (field IDs NOTICES.X48 and NOTICES.X 49) at the top of the Notice of Special Flood Hazard and Availability of Federal Disaster Relief Assistance section on the Property Information input form.
Current text:
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NOTICES.X48 - Community in which the property is located participates in the National Flood Insurance Program (NFIP) where federal flood insurance is available.
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NOTICES.X49 - Community in which the property is located does not participate in the NFIP. Federal flood insurance is not available.
Previous text:
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NOTICES.X48 - Community in which the property is located participates in the National Flood Insurance Program (NFIP). Federal law will not allow us to make the loan that you have applied for if your do not purchase flood insurance.
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NOTICES.X49 - Flood insurance is not available for the property securing the loan because the community in which the property is located does not participate in NFIP.
The ZIP Code database used by Encompass has been updated to reflect the most recent data based on current census information.