Feature Enhancements in Version 21.2.0.3 (Broker Edition)
This section discusses the updates and enhancements to existing forms, features, services, or settings that are provided in this release.
Updates to the Encompass Client Machines
The Encompass 21.2 Major Release Critical Patch 3 includes the following enhancement, which is a client-side update that is 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.
ATR/QM
New logic has been implemented for ATR/QM eligibility calculations used with subordinate lien conventional loans and with first lien conventional manufactured housing loans. Encompass compares the QM APR and APOR values for these loans to determine whether they meet the General QM Price Limit test and then displays the result on the ATR/QM Eligibility tab on the ATR/QM Management form. A green check mark displays on the Price Limit row under the General Qualified Mortgage column when a loan meets the standard. A red flag displays when a loan does not meet the standard.
The logic described below only applies when the following prerequisites are met:
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The Loan Application Date (field ID 745) is on or after the date for the Use Price Based General QM Definition Date policy setting in the Encompass Admin Tools.
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And the loan-level Use Price Based General QM checkbox (field ID QM.X383) is selected on the Qualification tab in the ATR/QM Management form.
If the prerequisites are met, Encompass ignores the results of the Debt to Income Ratio Test when displaying the results icon (green check mark or red flag) at the top of the General Qualified Mortgage column. If the prerequisites are not met, Encompass ignores the results of the Price Limit Test.
Subordinate Lien Loans
The following table describes ATR/QM eligibility for conventional subordinate lien loans. This logic applies to loans that meets all the following conditions:
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Conventional is selected for the Loan Purpose (field ID 1172)
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Any option is selected for the Property Type (field ID 1041)
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Subordinate Lien is selected for the Mortgage Lien Type (field ID 420)
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A value greater than 0 (zero) is entered for the note Rate (field ID 3)
Loan Amount (field ID 1109) | QM APR (field ID QM.X381) and APOR (field ID 3134) Values | Result |
---|---|---|
Greater than or equal to $66,156 | QM APR is less than APOR plus 3.5 | Meets ATR/QM Standard (green check mark) |
Less than $66,156 | QM APR is less than APOR plus 6.5 | Meets ATR/QM Standard (green check mark) |
Greater than or equal to $66,156 | QM APR is greater than or equal to APOR plus 3.5 | Does Not Meet ATR/QM Standard (red flag) |
Less than $66,156 | QM APR is greater than or equal to APOR plus 6.5 | Does Not Meet ATR/QM Standard (red flag) |
The following table describes ATR/QM eligibility for first lien manufactured housing loans. This logic applies to loans that meets all the following conditions:
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Conventional is selected for the Loan Purpose (field ID 1172).
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Manufactured Housing, ManufacturedHomeCondoPUDCoOp, MHSelect, or MHAdvantage is selected for the Property Type (field ID 1041).
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First Lien is selected for the Mortgage Lien Type (field ID 420).
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A value greater than 0 (zero) is entered for the note Rate (field ID 3).
Loan Amount (field ID 1109) |
QM APR (field ID QM.X381) and APOR (field ID 3134) Values | Result |
---|---|---|
Greater than or equal to $110,260 | QM APR is less than APOR plus 2.25 | Meets ATR/QM Standard |
Less than $110,260 | QM APR is less than APOR plus 6.5 | Meets ATR/QM Standard |
Greater than or equal to $110,260 | QM APR is greater than or equal to APOR plus 2.25 | Does Not Meet ATR/QM Standard |
Less than $110,260 | QM APR is greater than or equal to APOR plus 6.5 | Does Not Meet ATR/QM Standard |
CBIZ-40450, CBIZ-40341
Encompass Forms and Tools
The method used by Encompass to calculate present housing expenses has been updated to match the method used by Fannie Mae Desktop Underwriter (DU). Housing expenses housing expenses for current rent, mortgage payment, and taxes are now calculated for each borrower pair as described below.
Rent
The present monthly rent (field ID 119) is now calculated as the sum of Mthly. Pmt. amounts (field IDs BR0016, CR0016) listed in the Verification of Residence (VOR) entries when the Rent checkbox (field IDs BR0015, CR0015) is selected and the Residence Type is Current.
The co-borrower’s rent is not included if both borrowers share the same primary residence. If they do not share the same primary residence, the combined total is used.
A Lock icon has been added to the present monthly rent field to enable an override of the value as needed.
First Mortgage
The present first mortgage amount (field ID 120) is now populated from the Mortgage Payment amount (field ID FM0016) for the primary residence. This amount is populated from the Verification of Mortgage (VOM) entry with Primary Residence selected from the Property is Used As list and with the VOM is for field populated with Borrower, Both, or a blank value. This amount is a combined total of all linked primary and subordinate liens.
If the co-borrower has a separate current residence with a principal and interest payment, that amount is also included in the present first mortgage amount. The co-borrower mortgage payment would be entered on a separate VOM with Primary Residence selected from the Property is Used As list and a VOM is for field populated with Co-Borrower.
A Lock icon has been added to the present first mortgage amount (field ID 120) to enable an override the value as needed.
Taxes
The present monthly property taxes (field ID 123) is populated from the Taxes, Ins, Other (field ID FM0021) for the primary residence. This amount is populated from the VOM with Primary Residence selected from the Property is Used As list. If the co-borrower has a separate primary residence, the taxes for that VOM entry would also be included in the calculation for the present monthly property taxes.
A Lock icon has been added to the present monthly property taxes (field ID 120) to enable an override of the value as needed.
When switching from the 2009 to the 2020 version of the URLA forms, the values for the present monthly rent, first mortgage, and taxes are locked when they are not blank.
Transmittal Summary Form
A Housing pop-up window has also been added to the Present Housing section on the Transmittal Summary input form to assist the underwriter in reviewing the values.
This pop-up window includes Lock icons for the fields for present rent, first mortgage, and taxes.
Migration
For existing loans, if the recalculated value in any of the affected fields (field IDs 119, 120, and 123) does not match the existing value, the field is not recalculated on migration and the field is locked after updating to Encompass version 21.2.0.3.
CBIZ-38841
For loans using the new URLA forms, a new Pending Sale Date field (field ID FM0059) has been added to the Verification of Mortgage (VOM) input form. Calculation updates have been made to exclude pending sales of a primary residences from the Net Income/Loss amount (field ID FM0032) on the VOM if the sale closes prior to the Closing Date (field ID 748) or Disbursement Date (field ID 2553) for a loan.
The Pending Sale Date is not available in the Encompass Reporting Database until the Encompass 21.3 release is available.
The table below describes calculations used for pending sales of a primary residence when using the new URLA forms after upgrading to Encompass version 21.2.0.3.
Property Status (Field ID FM0024) | Used As (Field ID FM0055) | Type of Property (Field ID FM0018) | Calculation |
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PS (Pending Sale) | Any option except Primary | Any option | Net Income/Loss is not calculated when the Pending Sale Date is earlier than the Disbursement Date or Closing Date. The Net Income/Loss is calculated when both the Disbursement Date and Closing date are empty. |
PS (Pending Sale) | Primary | Any option except 2-4 Units | Net Income/Loss is not calculated. |
PS (Pending Sale) | Primary | 2-4 Units | Net Income/Loss is not calculated when the Pending Sale Date is earlier than the Disbursement Date or Closing Date. The Net Income/Loss is calculated when both the Disbursement Date and Closing date are empty. |
S (Sold) | Any option | Any option | Net Income/Loss is not calculated. |
R or H | Any option except Primary | Any option | Net Income/Loss is not calculated. |
R or H | Primary | 2-4 Units | Net Income/Loss is calculated. * |
R or H | Primary | Any option except 2-4 Units | Net Income/Loss is not calculated. |
* Prior to Encompass 21.2.0.3, a Primary Residence was not included in the calculation of rental income, however, it is allowed for 2-4-unit properties.
CBIZ-38236
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