Feature Enhancements in Version 19.3

Encompass Consumer Connect in Encompass Broker Edition

HELOC Loan Enhancements

(Updated on 6/21/2019)

Why we made these updates: HELOC loan enhancements are being made to support additional HELOC loan features and to dynamically populate language on the Important Terms of Our Home Equity Line of Credit Disclosure form and the HELOC Agreement based on the HELOC configuration for each loan.

The HELOC loan enhancements include a new option in the Encompass settings for creating dynamic HELOC tables and a new HELOC Management input form with a tab that provides a central dashboard for HELOC loan program information and another tab that contains details used to dynamically populate language on the output forms for the Important Terms of Our Home Equity Line of Credit disclosure form and the HELOC Agreement.

You can view the Working with HELOC Loans guide here in the Resource Center. This guide provides comprehensive information about the enhanced support for HELOC loans introduced in Encompass 19.3 that enables lenders to configure the type of HELOC loans that they offer borrowers and dynamically generate content for each HELOC loan type on the HELOC Agreement and Important Terms Disclosure output forms.

HELOC Management Input Form

A new HELOC Management input form has been added to provide a central, consolidated location for entering and accessing HELOC loan information in Encompass. Access to the HELOC Management form can be controlled in the Personas setting. The form includes a HELOC Program tab and an Important Terms and Agreements tab.

Most of the fields on this form are populated by applying a preconfigured loan program or by using business rules or Dynamic Data Management triggers, but Encompass users can use this tab to adjust the terms for the HELOC, for example by capturing an index and margin, capturing adjustment caps if needed, defining an introductory teaser rate for a specified number of months, setting a minimum initial advance, or selecting a different predefined historical table.

The HELOC Program tab includes the following sections:

Program Management – Includes fields required for disclosing program terms and options.

HELOC Qualifying Payment Basis, HELOC Qualifying Payment, and HELOC Initial Payment – Sets the parameters for the qualifying payment basis and qualifying payment. Enables the configuration of the estimated first payment to be disclosed to the borrower. These sections were introduced with the Encompass 18.4 release. They also display on the RegZ-LE and RegZ-CD input forms.

HELOC Draw Period – Defines either an I/O payment or a principal payment for the draw period based on the number of payments (fraction of balance) or a percentage of the principal balance with a disclosed finance charge. This information is used to generate historical terms and minimum/maximum payment examples.

HELOC Repayment Period – (Updated 5/22/2019) Define either an amortizing payment or a principal payment based on the number of payments (fraction of balance) or a percentage of principal balance. If I/O is used, a balloon payment is generated at the end of the repayment term. Encompass Docs Solution (EDS) documents will not support this feature, but it will be used to generate historical terms and minimum/maximum payment examples.

Installment Loan Option – Used to disclose terms of any installment loan option a borrower can exercise on their HELOC after closing, including simple interest options. This section drives the installment loan option language on the Important Terms of Our Home Equity Line of Credit disclosure form and the HELOC Agreement form, but does not affect calculations, historical examples, or minimum/maximum payment examples.

HELOC Fees – Configures the fees the borrower is subject to for activity on the HELOC account. The fees listed in the section are an expanded version of the HELOC fees available prior to the Encompass 19.3 release.

The Important Terms and Agreement Language tab includes two sections:

An Important Terms Disclosure section for configuring language that will be populated to the Important Terms of Our Home Equity Line of Credit disclosure form.
An Agreement section for configuring language that will be populated to the HELOC Agreement form.

HELOC Table Setting

A new option for creating dynamic HELOC historical index tables has been added to the HELOC Table setting (Settings > Tables and Fees > HELOC Table). The setting continues to support static historical index tables as well as the new HELOC historical tables that are dynamically applied to the calculations and language used in the Important Terms of Our Home Equity Line of Credit disclosure form. Tables can be assigned to a loan through a loan program, business rules, or Dynamic Data Management triggers.

To Create a Dynamic Historical Table:

On the menu bar, click Encompass, and then click Settings.
On the left panel, click Tables and Fees, and then click HELOC Table.
Click the New icon.
Select Dynamic Table, and then click OK.
In the HELOC Table Name field, type a name, and then select an Index Name from the list.
Select the day and month when the index starts. You can configure multiple index start dates, for example by month or by quarter. If your company uses multiple index start dates depending on when loans are originated, you may configure multiple tables, each with different start day and month.
Enter a Default Historic Margin for the table. This margin is used with the historical index data entered in order to calculate the APR disclosed for each year in the historical example.
Click Add, use the Year and Index fields to create an entry for a specific year, and then click OK.
Repeat step 8 to add additional entries for each year that will be included in the example data. If your index has the same value in multiple years, the records can be duplicated, which copies the index value and allows you to enter the new year value. This is useful when setting up a Prime rate, which had a 3.25 % value for multiple years.
When finished, click OK on the Edit HELOC Historical Index Table window.

FHA Loans

Why we made these updates: This update enables the entry of a rehabilitation period for FHA 203k rehab loans other than the static six-month period that was previously populated on the form.

Temporary Buydown Support Enhancements

New Temporary Buydown Type Field and Settings Tool

A new Temporary Buydown settings tool is now provided in Encompass Settings that enables administrators and authorized users to create temporary buydown types (that contain specific rate percentages and terms (in months)). Authorized loan team members can then select from a list of these buydown types and apply one to the loan they are working on. The loan team members will select a buydown type from the new Buydown Type field that is now provided in the Buydown Mortgage section of the RegZ-LE and RegZ-CD input forms. The Buydown Type field includes a lookup ability that users can utilize to select a Temporary Buydown type that is created using this setting.

To Create a New Temporary Buydown Type:

On the menu bar, click Encompass, and then click Settings.
On the left panel, click Tables and Fees, and then click Temporary Buydown.
Click the New icon.
Type a name for the buydown in the Buydown Type field. (This is a mandatory field that must be populated in order to create and save this buydown type.)
Type a Description for the buydown.
Type the rate percentage and terms (number of months) for the buydown.

When done, click OK.

To edit a type, select a type in the list, click the Edit icon, and then update the details.

Note that non-administrator users must be granted access rights to this setting via their persona. To grant access to view and manage this setting, go to Encompass > Settings > Company/User Setup > Personas. Select the persona type, click the Settings tab, and then expand the Tables and Fees list. Select the Temporary Buydown checkbox to grant this persona access to the Temporary Buydown settings tool.

Enabling users to define temporary buydown type settings provides an efficient way for the user to refer to the settings when they need to add buydown information to the loan file.

To Apply a Buydown Type to a Loan:

On the RegZ-LE or RegZ-CD, select the Buydown checkbox in the Buydown Mortgage section.
Select the Contributor for the buydown (the individual contributing payments to the buydown). A contributor must be selected prior to the Buydown Type field being enabled.
Click the Lookup icon (magnifying glass).

Select a buydown type from the list, and then click OK.

Default buydown types that are stored in the Temporary Buydown setting, including 3-2-1, 2-1, and 1-0 buydown types are available to select and apply to the loan here. These types may have been modified by the administrator. Additional buydown types created by the administrator will also be listed here.

The rate and term of the buydown is applied to the loan.

The Buydown Type, Rate and Term information will be cleared when the user updates the Contributor field (CASASRN.X141) from Borrower to a non-borrower Contributor option OR from a non-borrower to a Borrower contributed buydown.

The Buydown Type, Rate and Term information will not be cleared if the user updates the Contributor field (CASASRN.X141) from a non-borrower to a different non-borrower option.

NICE-24149, 24152, NICE-24218

Added New Temporary Buydown Fields to the Lock Request Form

(Added on 6/8/2019)

In earlier versions of Encompass, temporary buydowns were not supported due to a lack of guidance from the Federal Reserve Board. With the Encompass 19.2 release, support for non-borrower temporary buydowns was enabled by default.

Temporary buydowns are not supported when the borrower is indicated as the buydown mortgage contributor.

With the Encompass 19.3 release, the ability to indicate the Buydown Contributor, Buydown Type, and Buydown Rate/Terms on a loan for a lock request is now supported.

Buydown Contributor (field ID 4631) – Indicates the individual or entity that is making contributing payments, such as the Seller.
This field is populated by field ID CASASRN.X141b but can also be manually selected.
If the selected value changes from a borrower to a non-borrower, the Buydown Type, Rate and Term data are cleared.
If the selected value changes from one non-borrower to another non-borrower, the Buydown Type, Rate and Term data remains.
Buydown Type (field ID 4632) – This field is populated by field ID 4645.
Use the Lookup (magnifying glass) icon to open a pop-up window with the Buydown Type and Description from the Temporary Buydown setting (located under Encompass>Settings>Tables and Fees).
The icon is only enabled if Buydown Contributor has a selection and there is at least one entry in the Temporary Buydown setting.
Selecting a record from the pop-up window populates the Buydown Type, Rate, and Term fields. The Rate and Term fields become read-only.

You can select a buydown type with no rate and term data.

If Buydown Contributor has a value, Buydown Type is blank, and the loan is priced, a message, “The Buydown Type field is blank and will not map to the correct Buydown Type value in the pricing engine. If Buydown pricing is required, please click Cancel and select the correct Buydown Type or click OK to continue.” is displayed.

Rate % (field IDs 4633 - 4638) – The percent by which the interest rate is reduced from the note rate.

If the buydown program includes more than one buydown rate, list the rates in the order they will take effect.

If the Buydown Contributor selected is “Borrower”, these fields are populated by field IDs 1269 – 1274.

These are the same Rate % fields provided in previous versions of Encompass.
If the Buydown Contributor selected is any option except “Borrower”, these fields are populated by field IDs 4535 – 4540.
You can only manually enter values if the Buydown Type field is blank.

Term mths (field IDs 4639 - 4644) – The period of time, in months, that the associated buydown rate is in effect.
If the Buydown Contributor selected is “Borrower”, these fields are populated by field IDs 1613 – 1618.

These are the same Term mths fields provided in previous versions of Encompass.

If the Buydown Contributor selected is any option except “Borrower”, these fields are populated by field IDs 4541- 4546.
You can only manually enter values if the Buydown Type field is blank.

SEC-14895, SEC-15262

Added the New Temporary Buydown Fields to the Loan Snapshot, the Lock Request Snapshot Lock Tool, the Lock Confirmation, and the Reporting Database

(Added on 6/8/2019)

The new Temporary Buydown fields have been added to the Loan and Lock Request Snapshots on the Secondary Lock Tool, the Lock Confirmation, and the Reporting Database.

Loan Snapshot and Lock Request Snapshot
Buydown Contributor, Buydown Type, Rate %, and Term mths fields are read-only.

If the fields are blank on the RegZ LE/CD, they are also blank on the Loan Snapshot.

On the Loan Snapshot:
Buydown Contributor is populated by field ID CASASRN.X141.
Buydown Type is populated by field ID 4645.
Rate% and Term mths fields are populated based on whether the Buydown Contributor selected is a borrower or non-borrower.
If the Buydown Contributor selected is “Borrower”:
Rate % fields are populated by field IDs 1269 – 1274.
Term mths fields are populated by field IDs 1613 – 1618.

These are the same Rate% and Term mths fields provided in previous versions of Encompass.

If the Buydown Contributor selected is any option except “Borrower”, the Rate % fields are populated by field IDs 4535 – 4540.
If the Buydown Contributor selected is any option except “Borrower”, the Term mths fields are populated by field IDs 4541- 4546.

On the Lock Request Snapshot:
Buydown Contributor is populated by field ID 4631.
Buydown Type is populated by field ID 4632.
Rate% fields are populated by field IDs 4633 – 4638.
Term mths fields are populated by field IDs 4639 – 4644.
Lock Confirmation
Buydown Contributor, Buydown Type, Rate %, and Term mths fields are read-only.
Upon a lock confirmation (manual or auto-lock):
If the temporary buydown field values are the same on both the Lock Request Snapshot and the RegZ-LE or RegZ-CD, no further action is needed.
If the temporary buydown field values are different on the Lock Request Snapshot and the RegZ-LE:
Contributor (field ID CASASRN.X141) field is populated by field ID LOCKRATE.4631.
Buydown Type (field ID 4645) field is populated by field ID LOCKRATE.4632.
If the Buydown Contributor selected is “Borrower”, the Rate % (field IDs 1269 – 1274) fields are populated by field IDs LOCKRATE.4633 – LOCKRATE.4638 and the Term mths (field IDs 1613 – 1618) fields are populated by field IDs LOCKRATE.4639 – LOCKRATE.4644.
If the Buydown Contributor selected is any option except “Borrower”, the Rate % (field IDs 4535 – 4540) fields are populated by field IDs LOCKRATE.4633 – LOCKRATE.4638 and the Term mths (field IDs 4541 – 4546) fields are populated by field IDs LOCKRATE.4639 – LOCKRATE.4644.
The new fields have been added to the Reporting Database.

SEC-14896, SEC-14898

Encompass Forms and Tools

State-Specific Forms

Why we made these updates: Updates have been made to two state-specific forms to support required state disclosure information.

New Section Added to California State-Specific Disclosure Information Input Form

A new Notice of Right to Cancel Mortgage Insurance section has been added to the California State-Specific Disclosure Information input form to support the CA Notice of Right to Cancel Mortgage Insurance Disclosure. The section includes the following two checkboxes (field ID DISCLOSURE.X1209) to indicate the conditions under which mortgage insurance may be canceled:

The remaining principal balance on your loan reaches 80% of the original or current value of the property.
Other

When the Other checkbox is selected, the text field (field ID DISCLOSURE.X1210) below the checkbox is enabled to enter a description of the Other conditions (255-character maximum). Only one checkbox can be selected at a time.

Migration

When updating to Encompass 19.3, none of the checkboxes are selected for previously existing loans. Encompass user must select a value.

CBIZ-22661

Encompass Settings

Encompass Investor Connect Enhancements

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