Updates have been made in the method used to set the starting date for the minimum, maximum, FL, and historical schedules included in HELOC loan disclosures. All schedules now begin on January 1 of the year that is 14 years prior to the disclosure date (field ID 363) for the loan. If no disclosure date is entered, the schedules begin on January 1 of the year 14 years prior to the current date. For example, schedules for a HELOC loan with a disclosure date of December 15, 2021 will begin on January 1, 2007.

When the full loan term as defined by the combined total of the Draw Period plus the Repayment Period (field IDs 1889 and 1890) is less than 180 months, the starting date for the schedules is determined by subtracting the number of years in the loan term from the year of the disclosure date (or the current year when no disclosure date is selected). For example, schedules for a HELOC loan with a disclosure date of December 15, 2021 and a loan term of 120 months will begin on January 1, 2011.

To make the disclosure date accessible on the HELOC Management input form, a HELOC Disclosure Date field (field ID 363) has been added to the HELOC Program tab on the form. This date field uses the same field ID as the disclosure date fields used elsewhere in Encompass.

Updates have been made to enable lenders to submit data for PACE (Property Assessed Clean Energy) loans to Fannie Mae DU (Desktop Underwriter). These updates include new fields that display on the Verification of Liabilities (VOL) and Fannie Mae Additional Data input forms, plus new calculations to determine energy efficient loan amounts and PACE loan payoff amounts. The information from these new fields will be included in the MISMO 3.4 loan file when a loan is submitted to Fannie Mae DU.

On the VOL input form, in the Debt Information section, two new Energy Efficient Debt checkboxes (field ID FL0069) have been added to indicate whether a liability is a debt associated with a PACE Loan or an Energy Improvement loan.

On the Fannie Mae Additional Data input form, a new Existing Energy Improvements section has been added with calculated values for the Energy Improvement Amount (field ID 4785) and the PACE Loan Payoff Amount (field ID 4786) when appropriate. Both fields have a Lock icon that can be clicked to override the calculation and manually enter an amount. A Show all VOL button has been added to provide access to the VOL input form via a pop-up window.

The PACE Loan Payoff Amount (field ID 4786) is populated with the sum of all Payoff Amount fields (field ID FL0016) for all borrower in VOL records with all the following checkboxes selected:

• The PACE Loan checkbox (field ID FL0069)

• The Subject Property checkbox (field ID FL0027)

• The Will be Paid off checkbox (field ID FL0218)

If the PACE Loan checkbox is cleared, the Payoff Amount for the VOL is removed from the PACE Loan Payoff Amount total.

The Energy Improvement Amount (field ID 4785) is populated with the sum of all Payoff Amount fields (field ID FL0016) for all borrower in VOL records that match all the following criteria:

• The Energy Improvement checkbox (field ID FL0069) is selected.

• The Subject Property checkbox (field ID FL0027) is selected.

• The Will be Paid off checkbox (field ID FL0218) is selected.

If the Energy Improvement Loan checkbox is cleared, the Payoff Amount for the VOL is removed from the PACE Loan Payoff Amount total.

(Updated on 1/27/2022)

To address changes in Fannie Mae DU and Freddie Mac LP, the options that display in the following dropdown lists have been updated to match the revised Fannie Mae DU and Freddie Mac LP options. These updates affect only the options that display on the dropdown list. The field names and mapping of the fields has not changed.

• The other credits description (field IDs 202, 1091, 1106, and 1646) and the other credits Source (field IDs 4667, 4668, 4669, and 4670) for lines M3–M6 in the Total Credits section on the 1003 URLA - Lender input form and the Freddie Mac Additional Data input form.

• The Source of Funds (field ID URLARAL0133) in the Account Information section of the Verification of Additional Loans input form.

• The Source (field ID URLAGG0119 and URLAGG0219) in the Gifts and Grants Information section of the Verification of Gifts and Grants input form.

• The Offering Identifier (field ID CASASRN.X163) on the Freddie Mac Additional Data input form.

• The Asset Type (field ID URLAROA0102) on the 1003 URLA - Part 3 and the Verification of Other Assets input forms.

• The refinance program dropdown list (field ID URLA.X166). This field displays as a series of checkboxes on the 1003 URLA - Lender input form, but it can be added to a custom form as a dropdown list.

A new Average Representative Credit Score field (field ID 4752) has been added to the Borrower Summary - Origination and Borrower Summary – Processing input forms to provide visibility into the average representative credit score rating that is being implemented by Fannie Mae DU (Desktop Underwriter).

The field is populated with a calculated value based on the credit scores of the first four borrowers in the loan only. A borrower with no credit score is excluded from the calculation, which is then based on the credit scores of the remainder of the original four borrowers. A recalculation of the value is triggered when any of the credit scores are updated for the original four borrowers. Click the Lock icon to overwrite the value if needed.

The value in this field is not directly integrated with Fannie Mae DU submissions, but it enables lenders to perform eligibility screening prior to a submission to identify whether a loan falls under the eligibility criteria for Fannie Mae DU.

Automated calculations have been implemented to ensure that Encompass uses the same logic as Fannie Mae Desktop Underwriter (DU) when determining the borrower and co-borrower combined present housing expenses for Rent (field ID 119), 1st Mortgage (field ID 120), and R.E. Taxes (field ID 123). These fields display in the Combined Housing section of the Loan Submission input form.

The following logic is now being used to populate values in these fields.

Rent calculation:

• The borrower portion is the sum of all monthly payments (field ID BR0016) in the borrower’s Verification of Residence (VOR) entries that have the Rent checkbox selected (field ID BR0016) and Current selected as the Residence Type (field ID BR0023).

• The co-borrower portion is the sum of all monthly payments (field ID CR0016) in the co-borrower’s Verification of Residence (VOR) entries that have the Rent checkbox selected (field ID CR0016) and Current selected as the Residence Type (field ID CR0023).

1st Mortgage calculation:

• The borrower portion is the sum of all Mortgage Payment fields (field ID FM0016) in Verification of Mortgage (VOM) entries that have Primary selected in the Property is used for dropdown list (field ID FM0041) and the selection in the VOM is for dropdown list (field ID FM0046) is Borrower, Both, or is blank.

• The co-borrower portion is the sum of all monthly payments (field ID FM0016) in the Verification of Mortgage (VOM) entries that have Primary selected in the Property is used for dropdown list (field ID FM0041) and Co-Borrower selected in the VOM is for dropdown list (field ID FM0046).

R.E. Taxes calculation:

• The borrower portion is the sum of all Taxes, Ins, Expenses fields (field ID FM0021) in the Verification of Mortgage (VOM) entries that have Primary selected in the Property is used for dropdown list (field ID FM0041) and the selection in the VOM is for dropdown list (field ID FM0046) is Borrower, Both, or is blank.

• The co-borrower portion is the sum of all Taxes, Ins, Expenses fields (field ID FM0021) in the Verification of Mortgage (VOM) entries that have Primary selected in the Property is used for dropdown list (field ID FM0041) and Co-Borrower selected in the VOM is for dropdown list (field ID FM0046).

To enable users to adjust the calculated amounts if needed, Lock icons have been added to the fields for Rent (field ID 119), 1st Mortgage (field ID 120), and R.E. Taxes (field ID 123). Click the icons to manually edit the amounts.

The values from these fields are used to populate the Payment (field ID 737) for present housing in the Underwriting Information section of the 1008 Transmittal Summary based on the borrower’s primary occupancy. An Edit icon has been added to the 1008 Transmittal Summary to enable underwriters to quickly access the Monthly Housing Expenses quick entry pop-up window to review the values.

Monthly Housing Expenses Quick Entry Pop-Up Window

Non-occupant borrower expenses continue to be populated to the present housing expenses for the Co-Mortgagors (field ID 1379).

A new Use for UCD Export indicator is now provided in the Disclosure Tracking Tool to enable users who send UCD (Uniform Closing Dataset) files to Fannie Mae or Freddie Mac to indicate the CD (Closing Disclosure) to send. Only one disclosure can be indicated as the disclosure to send for UCD.

The Use for UCD Export checkbox is provided in the Disclosure Details window for each CD record in the tool. Select this checkbox in the CD record you want to send to Fannie Mae or Freddie Mac.

For more information about this new option, please refer to knowledge article 40337 in the Resource Center that discusses how this checkbox impacts the CD in the eFolder.

Encompass administrators can create email notification templates that can be used when eConsent requests are sent for loans originated in Encompass for Encompass Consumer Connect. These templates can be configured so that different types of recipients receive different email notifications. For example, you can send notifications to the borrowers based on one template, while sending notifications based on another template to loan associates (Encompass users who are assigned to the loan). Encompass provides a preconfigured default template for eConsent in the setting.

The ability to create eConsent notification templates for loans originated in Encompass for Encompass Consumer Connect is available with the initial Encompass 21.4 release, but the notification emails themselves will be made available in a future release.

ICE Mortgage Technology Branding Updates

Ellie Mae, Inc. officially became ICE Mortgage Technology in May 2021 following the acquisition of Ellie Mae, Inc. by Intercontinental Exchange in 2020. In support of this company naming update, references to Ellie Mae have now been updated to ICE Mortgage Technology in the following user interfaces in electronic document management features:

• The error message that displays on the Company Status Online setting (Encompass > Settings > Additional Services > Company Status Online) when Status Online is not configured.

• The message that displays on the eDisclosure Fulfillment setting (Encompass > Settings > Additional Services > eDisclosure Fulfillment).

Miscellaneous Updates to Encompass Settings

To ensure that disclosure and closing timelines are scheduled correctly, June 19th (Juneteenth) has been added as a federal holiday on the Reg-Z Business Day Calendar and the U.S. Postal Calendar in the Encompass Compliance Calendar setting. Juneteenth, which celebrates the abolishment of slavery in the United States, was established as a Federal Holiday on June 17th, 2021. When a disclosure or closing date falls on Juneteenth, the date rolls to the next business date.

June 19, 2022, which falls on a Sunday, is recorded on Sunday, June 19 on the Reg-Z Business Day Calendar and on Monday, June 20 on the U. S. Postal Calendar.

Miscellaneous Updates to Encompass Settings

The Encompass ZIP Code database has been updated with the latest available ZIP Code data. This update includes current United States census data.

(Added on 12/6/2021) 

On November 30, 2021, the FHA announced the availability of new FHA County Limits for 2022. The URL for the 2022 FHA County Limits table is now provided in the Encompass Settings (and selected by default). Selecting the URL synchronizes this new table to apply the new limits to applicable loans in Encompass.

(Added on 12/6/2021) 

The FHFA Maximum Conforming Loan Limits for 2022, announced on November 30, 2021, have been incorporated into the Encompass Conventional County Limit tables. These changes will be effective on January 1, 2022. Encompass uses the Application Date (field ID 745) to determine the year to use when applying data from the Conventional County Limits table. If the Application Date is blank, Encompass uses the current date.

(Added on 12/6/2021) 

The updates described below have been made to the Points and Fees verbiage and the ATR/QM test calculation to reflect the 2022 TILA (Regulation Z) Annual Threshold Adjustments for HOEPA and ATR/QM.

Updated QM Threshold on ATR/QM Qualification Tab

For non-VA IRRRL loans that have a Document Signing Date (field ID 1887), Closing Date (field ID 748), or Estimated Closing Date (field ID 763) of 1/1/2022 or later, the calculations shown in the table below are used to populate the Current Qualified Mortgage Fee Threshold amount (field ID QM.X121) or Current Qualified Mortgage Fee Threshold percentage (field ID QM.X122).

When the QM Fee Threshold is a percentage, the threshold amount (field ID QM.X121) is populated based on the threshold percentage and loan amount. When the QM Fee Threshold is an amount, the threshold percentage (field ID QM.X122) is populated based on the threshold amount and loan amount.

For VA IRRRL loans, regardless of the loan dates or loan amount:

• The Current Qualified Mortgage Fee Threshold percentage (field ID QM.X122) is 3%.

• The Current Qualified Mortgage Fee Threshold amount (field ID QM.X121) is 3% of the RegZ Total Loan Amount (field ID QM.X120).

Updated Verbiage on Section 32 HOEPA

For loans with a Document Signing Date (field ID 1887), Closing Date (field ID 748), or Estimated Closing Date (field ID 763) of 1/1/2022 or later, the following verbiage displays in the Points and Fees Test section on the Section 32 HOEPA Input Form:

For a loan amount of $22,969 or more total points and fees cannot exceed 5% of the total loan amount; For Loan amounts less than $22,969 the total points and fees cannot exceed the lesser of 8% of the total loan amount or $1,148; The dollar amounts used in this test may be adjusted each year, effective January 1.

Updated Section 32 Points and Fees Test

For loans with a Document Signing Date (field ID 1887), Closing Date (field ID 748), or Estimated Closing Date (field ID 763) of 1/1/2022 or later, the percentages shown in the second column below are now populated for the Maximum points and fees allowed percentage (field ID S32DISC.X100) and the calculations shown in the third column are now used to populate the Maximum points and fees allowed amount (field ID S32DISC.X101).

(Updated on 2/22/2022) 

When the first change in an ARM loan’s interest rate occurs after 5 years, the QM APR (field ID QM.X381) on the Qualification and ATR/QM Eligibility tabs of the ATR/QM Management input form is now populated with the Annual Percentage Rate for the loan (field ID 799).

For construction-to-permanent loans, the QM APR calculation change applies only to the permanent portion of the loan:

• The loan APR (field ID 799) will always be populated as the QM APR (field ID QM.X381) for construction-to-permanent ARM loans when:

  • The first interest rate adjustment on the permanent portion of the loan occurs after 5 years.

  • The permanent portion of the loan has an adjustable rate.

• Construction-to-permanent ARM loans will continue to use the previous QM APR calculation if the first interest rate adjustment on the permanent portion occurs in 5 years or less.

(Updated on 1/13/2022) 

To clearly indicate the purchase credit options that are applicable to Fannie Mae, Freddie Mac, or both, the dropdown lists described below now include additional text in parentheses at the end of each option to indicate when it is for:

• Fannie Mae - (FNMA)

• Freddie Mac - (FRE)

• Both Fannie Mae and Freddie Mac - (FNMA/FRE)

• Fannie Mae Retired - (FNMA Retired)

• Freddie Mac Retired - (FRE Retired)

The additional text now displays for options in the dropdown fields listed below:

• The other credits description (field IDs 202, 1091,1106,1646) and the other credits Source (field IDs 4667, 4668, 4669, 4670) for lines M3–M6 in the Total Credits section on the 1003 URLA - Lender input form and the Freddie Mac Additional Data input form.

• The Source of Funds (field ID URALARAL0133) in the Account Information section of the Verification of Additional Loans input form.

• The Source (field ID URLAGG0119) in the Gifts and Grants Information section of the Verification of Gifts and Grants input form.

• The refinance program dropdown list (field ID URLA.X166). This field displays as a series of checkboxes on the 1003 URLA - Lender input form, but it can be added to a custom form as a dropdown list.

(Added on 12/6/2021) 

On the 1003 URLA-Lender input form, a new Hybrid option has been added to the dropdown lists used to select the homeownership education program format (field ID URLA.X154 and URLA.X160) for the borrower and co-borrower.