Feature Enhancements in Version 19.1.0.6 Server Patch 5

Internal Encompass testing revealed that the initial loading time of the Encompass Pipeline had increased in Encompass 19.1 when compared to Encompass 18.4. The cause of this performance degradation was identified and addressed so that Pipeline load times in this release are again comparable to the load times in Encompass 18.4.

• This update to the Pipeline load time requires updates to both the Encompass Server and the Encompass client machines (as described in the Additional Updates section below).

The Loan Comparison section enables the entry and calculation of loan comparison data for a proposed cash-out refinance loan and an existing loan on the subject property. Encompass captures values related to the veteran’s existing loan (the current loan being refinanced) and compares them to the proposed loan. A visual indicator on the input and output forms indicating the type of impact (Increase, Decrease, or None).

Some fields, notably the Total of the Remaining Scheduled Payments for the existing loan and the proposed loan, as well as the overall change in payments made during the life of the loan are subject to final guidance from VA and are included as data entry fields in the current phase.

The field IDs show in red below are new fields that have been created specifically for the Loan Comparison section of this tab.

The following table lists the fields used for the Loan Comparison section.

* Guidance from VA is incomplete and expected to change on these fields. For the Encompass 19.1 April Service Pack release, the Total of Remaining Scheduled Payments fields are being released as manual entry, with a calculated comparison between the fields. Lenders should review and consult with their internal compliance experts to assess appropriate procedures and controls.

The required comparison for VA Cash-Out Refinance includes existing and new Net Tangible Benefit (NTB) tests to be executed on the new loan. In line with the existing design of the Net Tangible Benefit tool in Encompass, these fields are not automatically calculated and should be reviewed by the lender. The Net Tangible Benefit table on the Cash-Out Refinance tab includes eight checkboxes that consolidate and expose all required tests.

The following table lists the Encompass field IDs for the Net Tangible Benefit checkboxes.

VA-Guaranteed Cash-Out Refinancing Home Loans Circular 26-19-05 requires the Lender to disclose to the borrower the amount of home equity being removed from the home as a result of the new loan within three (3) business days from the initial date of the loan application and at loan closing. A new estimated amount field (field ID VASUMM.X113) was created for this purpose.

(Updated on 4/3/2019)

The Refinance Closing Summary section provides the borrower with a summary of the proposed refinance loan benefits and costs.

Three new fields were created for the Refinance Closing Summary section.

• Amount of Cash Directly Disbursed to Borrower(s) (field ID VASUMM.X114) – If the Cash to Borrower (field ID 142) is 0 (zero) or a positive amount, then 0 is populated to this field. If the Cash to Borrower (field ID 142) is a negative amount, a corresponding positive amount is populated. For example, if the Cash to Borrower is -5.00, the Amount of Cash Directly Disbursed to Borrower(s) is populated with 5.00.

• Payoffs Disbursed, Excluding Mortgages, on Behalf of Borrower(s) (field ID VASUMM.X115) – For Standard Disclosures, this field is populated with the Third Party Payments Not Otherwise Disclosed (field ID LE2.X29) minus any Existing Lien (field ID 26) on the property. For Alternate disclosures, this field is populated with the Estimated Total Payoffs and Payments (field ID LE2.X31) minus any Existing Lien (field ID 26) on the property.

• Amount of Increase in Total Paid Over Life of Loan (field ID VASUMM.X122) – The amount of any Increase in the total paid over the life of the loan. Guidance from VA is incomplete and expected to change on this field. For the Encompass 19.1 April Service Pack release, this field is being released as manual entry. Review and consult with your internal compliance experts to assess appropriate procedures and controls.

(Updated on 4/5/2019)

One new field was created for the Previous Loan Information sub-section in the Recoupment section:

• Existing Loan First Payment Date (field ID VASUMM.X123) - Date field where the borrower's existing first loan payment date can be entered. The Encompass Compliance Service (ECS) reviews will use this value to calculate the borrower's VA loan seasoning requirements when determining if the loan qualifies for a streamline refinance.

Use the Refinance Type section to select a refinance type (field ID VASUMM.X125):

• TYPE I Cash-Out Refinance - The loan amount (including VA funding fee) does not exceed the payoff amount of the loan being refinanced.

• TYPE II Cash-Out Refinance - The loan amount (including VA funding fee) exceeds the payoff amount of the loan being refinanced.

For VA Refinances originated as Type 1, Encompass perform a different recoupment cost set of calculations. This test is not run on Type 2 cash-out refinance. If the loan is Type 2, the fields reflect blank for decrease in payments and recoupment. This section does not impact the calculations or the input form for VA IRRRL, which remains on the Qualification tab on the VA Management form.

The table below shows the Closing Cost Recoupment calculations.

Three new VA Cash-Out forms are now available to be provided in the Print window in Encompass:

• VA Cash-Out Refi Comparison – Proposed
  • Name printed on form: VA-GUARANTEED HOME LOAN CASH-OUT REFINANCE COMPARISON CERTIFICATION – PROPOSED REFINANCE LOAN
• VA Cash-Out Refi Comparison – Final
  • Name printed on form: VA-GUARANTEED HOME LOAN CASH-OUT REFINANCE COMPARISON CERTIFICATION – FINAL REFINANCE LOAN
• VA Cash-Out Refi Home Equity Disclosure
  • Name printed on form: VA CASH-OUT REFINANCE HOME EQUITY DISCLOSURE

To print one or more of these forms, click the Print icon. If you are currently viewing the Cash-Out Refinance tab in the VA Management input form when you click the Print icon, the three forms will be automatically listed in the Selected Forms list in the Print window. There you can preview, print or add the forms to the eFolder.

If you are not viewing the Cash-Out Refinance tab in the VA Management input form when you click the Print icon, click the Standard Forms tab in the Print window, select VA from the Look In list, and then click to select one or more of the forms in the list. Click the Add button to move the form(s) to the Selected Forms list, and then click Print or another button.

These forms are not available to print from the Pipeline. They are available to print only from within a loan file.

In order to make these new forms available in your Encompass system(s) to print or to include in document packages (eDisclosure, Closing Documents, etc.), the administrator or other authorized user must use the Documents tool in Encompass Settings to add the form as a new form. For instructions to add a new form, refer to the Documents topic in the Encompass online help.

• Updates have been made to the relevant code in the Encompass SDK to reduce the amount of system memory that is required when larger calls are performed such as “View Pipeline”. In earlier versions of the SDK, customers with a large number of files in a Pipeline View or a large amount of system data could experience slower performance in Encompass due to intermittent system “memory leaks” due to these calls. The reduction of these memory leaks results in improved performance for these customers.
• Internal Encompass testing revealed that the initial loading time of the Encompass Pipeline had increased in Encompass 19.1 when compared to Encompass 18.4. The cause of this performance degradation was identified and addressed so that Pipeline load times in this release are again comparable to the load times in Encompass 18.4.
  • This update to the Pipeline load time requires updates to both the Encompass Server (as described in the Update to the Encompass Server section above) and the Encompass client machines.