Feature Enhancements in Version 19.3.0.6 Server Patch 5

Updates have been made to the EEM section on the Qualification tab on the VA Management input form to capture the amount of Energy Efficient Mortgage (EEM) Improvements financed into the loan amount for VA IRRL loans originated on or after August 08, 2019. Encompass now removes these costs from the loan amount when calculating the statutory recoupment costs.

Field ID Changed for Energy Efficient Improvements Amount

The field ID used for the Energy Efficient Improvements amount has changed from field ID 1721 to field ID 961. This is the same field ID used for the Amount Spent on Energy Improvements on the VA 26-0286 Loan Summary input form.

New Fields Added

On the line below the Energy Efficient Improvements amount, a new read-only Energy Efficient Improvement Financed Amount field (field ID VASUMM.X132) with a Lock icon has been added, followed by a new EEM Included in Base Loan Amount checkbox (field ID VASUMM.X133).

Both the Energy Efficient Improvement Financed Amount and the EEM Included in Base Loan Amount checkbox are blank by default. They are disabled by default unless the loan is a VA IRRRL loan that meets one of the following conditions:

• A date of 08/08/2019 or later is enter for the Doc Signing Date, Mortgage Origination Date, Closing Date, or Est. Closing Date.

• No date is entered for the Doc Signing Date, Mortgage Origination Date, Closing Date, or Est. Closing Date.

  This behavior is not applied to VA IRRRL loans closed prior to 08/08/2019.

When a user selects the EEM Included in Base Loan Amount checkbox, Encompass copies the value from the Energy Efficient Improvements amount (field ID 961) to the Energy Efficient Improvement Financed Amount. This is a one-way copy. Subsequent changes to the Energy Efficient Improvements amount are also copied to the Energy Efficient Improvement Financed Amount, but changes to the Energy Efficient Improvement Financed Amount are not copied back to the Energy Efficient Improvements amount. When the checkbox is cleared, the Energy Efficient Improvement Financed Amount is also cleared.

Click the Lock icon to edit the Energy Efficient Improvement Financed Amount. This enables adjustments to the amount when not all the energy efficient improvement costs are allowable as financed amounts.

Edit Icon Removed

Additionally, the Edit icon that previously opened the Quick Entry - Energy Efficient Mortgage Calculation window has been removed from the EEM section.

Updates have been made to the user interface in the Recoupment section on the Qualification tab on the VA Management input form to support changes in the calculations for VA IRRRL recoupment costs announced in VA Circular 26-19-22.

Previous Loan Information

In the Previous Loan Information section, a new Existing Loan First Payment Date (field ID VASUMM.X123) has been added to the bottom of the section.

Clients should review VA guidelines on how to document the existing loan data, including documentation of the rate to use for ARM loans.

Proposed Loan Information

In the Proposed Loan Information section, the existing First Payment Date (field ID 682) and a new Rate Reduced Solely by Discount Points checkbox (field ID VASUMM.X131) have been added to the bottom of the section. Selecting the checkbox indicates that the lender has certified that a reduced rate on a refinance transaction is solely based on the payment of discount points.

Statutory Closing Cost Recoupment

At the bottom of the Qualification tab, a new Statutory Closing Cost Recoupment section has been added. This section is populated only for VA IRRRL loans.

The fields in this section are enabled only for loans with a Loan Type (field ID 1172) of VA and a VA Loan Code (field ID 958) of VA IRRL when the loan meets one of the following conditions:

• A date of 08/08/2019 or later is enter for the Doc Signing Date, Mortgage Origination Date, Closing Date, or Est. Closing Date.

• No date is entered for the Doc Signing Date, Mortgage Origination Date, Closing Date, or Est. Closing Date.

  This behavior is not applied to VA IRRRL loans closed prior to 08/08/2019.

This section includes the following new fields for VA statutory data for the applicable VA IRRRL loans:

• Closing Costs (field ID VASUMM.X127) – This is a calculated field that establishes the Total Borrower Paid closing costs (at and outside of closing) minus lender credits. This amount excludes the VA Funding Fee, Prepaid items, and Escrows documented in Sections F and G on the Loan Estimate and Closing Disclosure.

• Financed Closing Costs to Exclude (field ID VASUMM.X134) – This is a free entry field used to enter any closing costs included in the base loan amount that are to be excluded from the base loan amount for purposes of evaluating the statutory P&I payment.

  If your company policies do not allow financed closing costs to be excluded from the statutory closing cost recoupment calculation for VA IRRRLs, your Encompass administrator can use a Persona Access to Fields business rule to restrict access to this field.

• P&I Payment (field ID VASUMM.X128) – This is a calculated field that establishes the P&I payment using the base loan amount, note rate, and loan term minus any financed EEM amount. This amount excludes the VA Funding fee.

• P&I Reduction (field ID VASUMM.X129) – This is a calculated field that establishes the calculated reduction in payment from the current P&I payment excluding the VA funding fee and the financed EEM amount included in the borrower's full P&I payment.

• Recoupment Months (field ID VASUMM.X130) – This is a calculated field that establishes the calculated number of months to recoup closing costs based on the statutory closing cost and statutory P&I reduction.

The calculations for the fields listed above are applied only to VA IRRRL loans when a date of 08/08/2019 or later is enter for the Doc Signing Date, Mortgage Origination Date, Closing Date, or Est. Closing Date, or when all these date fields are blank.

Please review VA guidelines on what financed fees are appropriate to exclude from the statutory P&I calculation.

These calculations are not applied to VA IRRRL loans closed prior to 08/08/2019.