Preparing Disclosures in Encompass (2015 LE & CD version)
It is very important to make sure that disclosures and forms are completed in full to keep us from having
costly errors later in the process. Make sure that you not only complete the required “blue” fields but
also any fields that would make a COMPLETE loan application and accurate automated findings.
*** If these sections are completed as much as possible, your AUS findings will be very accurate plus
you want have errors when you interface with LP, DO, or GUS. LP will want you to put a loan number
so you can put a “1” in the lender case number field.
These steps are to be followed when preparing disclosures and many of these steps can be used for
running a very accurate AUS approval. Many steps will have already been completed during the initial
conversation with the buyer and for running AUS approvals.
Make sure that you follow all steps & type in ALL CAPS!
Make sure that the Loan Program & Closing cost scenarios are in the format of “2015, property state,
and program type” such as “2015 NC FHA purchase”. If not in this format, follow instructions for
Toggling to 2015.
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Make sure you print out the fees before correcting because it will delete the taxes, insurance,
and costs you have entered!
Send E-Consent to all borrowers! Follow “E-Consent Instructions to Send and Receive E-Disclosures”
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You must have received the E-Consent for all borrowers before being able to E-Disclose
Do this right after the initial interview with borrower so this does not cause a disclosure delay!
Borrower Summary-Origination – ***
Borrower / Co-borrower Information:
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Input the application date in the top right. This and page 3 application date should match the
“LE application” date. Check “Disclosure Tracking” under “Tools” for the date to use
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Make sure that you choose “individual” for single or joint borrowers. Choose “co-signor” if a cosignor (like a non-occupying co-borrower)
Make sure that the legal full name is used. If borrower has a suffix like Jr, put it separately in
“suffix”
Complete the rest of this whole section
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Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
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For address, enter the full address and spell out the street. Ie. Avenue not Ave. If less than 2
years at current address, then complete previous address
Company’s Information & Company’s Agent Information: It must show the 30005 Ladyface address on
the right side or we have to get additional documentation signed.
Borrower can demonstrate a 12-month mortgage/rental history: Check if we can prove this history
Subject Property Information:
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Input the subject property exact address (spell out the address type)
If property is not known, input “TBD” for address (do not put any numbers like 123 or the
system will take it as an address that needs to be disclosed)
Choose the appropriate property type – if has HOA dues or in an HOA, choose PUD
Input both estimated and appraisal value as the same
Transaction Details:
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Make sure the correct “Loan Program” and “Closing Cost” options are chosen up-front – Make
sure that you use only 2015 forms & choose the correct state so the correct templates are
used. Ie. 2015 NC FHA Fixed Rate. If not, your e-disclosures will be wrong & if you have to
correct it later, you will lose all of your information in the Itemization
Make sure the correct purpose, property will be, loan type, lien position, amortization type are
chosen
Make sure that the purchase price matches the purchase contract on a purchase
Choose “estimated closing date” as the date of the purchase contract or a refi, choose
estimated closing date
If locked, put the rate lock disclosure date here “date of the disclosures”
Source: Make sure that the Referral Source is accurate. Spell the referral source’s name the same
always so reporting can track the amount of referrals accurately
1003 Loan Application - ***
Page 1: If a joint application, check the top box. Don’t check the 2nd box
I.
Types of Mortgage and Terms of Loan: Make sure the Loan Type, Lien Position,
Amortization Type, Purchase Price, Loan Amount, Interest Rate, Qualifying Rate (you can
leave this blank to avoid issues of changing the actual rate somewhere but the debt ratio is
being figured off the lower rate), term and due in
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
II.
III.
IV.
Subject Property: Make sure the property address is completely spelled out (Street not ST,
Avenue not Ave)
a. Input correct # of units (1 for single family residences, 2 for duplex, etc)
b. Look up and input the actual year built of subject property. Use tax card, Zillow, etc
c. Make sure “purpose of loan”, “property will be” are completed accurately
d. If a refinance, fully complete the “Refinance Loan” section. Often a tax card will show
the original purchase price, existing liens is from the credit report in the beginning prior
to having the payoff, and choose the “purpose of refinance” – this must be accurate for
pricing and accurate approval (if run as rate/term and loan is actually cash out, then it
can be a big difference)
e. Make sure that full names for everyone on title or to be on title (purchases) is shown
and for married choose “Tenancy by entirety” for now
f. Source of down payment
i. On VA and USDA purchases, select “other type of down payment” because
there is no down payment for these loans
ii. Otherwise make sure you choose the actual source of down money
iii. On FHA, if down payment is a gift, make sure you choose the right FHA gift
source from the list or you will get erroneous AUS findings
Borrower Information
a. Fully complete including school, number of dependents, and ages (must complete for
both borrowers)
b. Spell out the addresses and make sure the time in the property is accurate
c. Enter mailing address (make sure you ask for the mailing address so docs are mailed to
the correct place
d. If in current residence less than 2 years, input addresses until you have 2 years total
Employment Information:
a. Make sure that the full employer name is input as well as the physical address
b. You can click on the address book to see if the employer is in the database. If not,
follow the tutorial “How to edit or add records to Encompass database”
c. Enter current time on job and years in line of work
d. If the borrower has worked at this employer for less than a year, add former employers
by the following steps:
i. Click on “show all VOE”
ii. Review all other employers input
iii. If you need to input another employer, click on the + in the top right, choose
“borrower” or “coborrower” and whether “current” or “prior” employer, and
enter all information including dates employed
e. If borrower is retired, disabled, or something else without an employer, you must still
complete this section. Enter “Retired”, etc for Employer and Position and the
borrower’s home address so that Encompass won’t give you an error
Page 2 of the Loan Application (1003)
V.
Monthly Income and Combined Housing Expense Information
a. Make sure that the income is broken down accurately for both borrowers
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
VI.
b. Input the current housing expense
i. For rent, input the correct amount. If rent free, put “1” to save from errors later
ii. If the borrower has a first mortgage, enter the PITI payment
iii. If the borrower has a 2nd mortgage, enter the payment
iv. If the first mortgage does not include escrows or the home is free and clear,
enter the actual insurance and property taxes
v. If the current home has HOA dues, follow the instructions in the tutorial called
“Entering PUD/HOA Fees Correctly in Encompass”
c. Make sure the Proposed housing expenses are correct
i. The first mortgage payment amount will be there already as a calculated. Don’t
manually change this!
ii. Make sure the actual insurance monthly figure is input if known and if not
known, put a good guess (if disclosing, try to get the quote so you are accurate)
iii. Make sure the actual property taxes are input or if a new build, estimate well,
find a similar property’s taxes to use, or ask the attorney for a good figure
iv. Calculate & verify the monthly PMI/Annual Fees and up-front
guarantee/funding fee or single premium PMI amounts. See the tutorial on
“How to Input PMI, USDA annual fee, and guarantee/funding fee in Encompass”
v. If the property has HOA dues, input the monthly amount
vi. “other” would be flood insurance, USDA annual fee, or other insurances carried
over from the fees entered on the Loan Estimate
d. Other income:
i. Make sure that B or C is chosen correctly, you must choose an appropriate
category for each other income, and put the calculated amount. If your loan is
a VA loan and you are looking to gross it up, follow the tutorial “How to gross
up income correctly in Encompass on a VA loan to flow from the 1003, to VA
Loan Analysis, and into DO/LP”
Assets and Liabilities:
a. Check either “jointly” or “not jointly” for the assets used
b. Assets:
i. Cash Deposit: Do not enter an amount here. It will be entered on page 3 of the
“Details of Transaction” and should read as “cash deposit on sales contract”
ii. For checking, savings, money market accounts, click on “Show all VOD”
iii. For each asset, choose if the asset belongs to the borrower, co-borrower, or
both per the statement
iv. Type in the bank name and click on the address book button to see if you can
pull in the information. If the bank is not in the address book, follow the tutorial
“How to edit or add records to Encompass database”.
v. Make sure that the type of account is chosen, the “account in the name of” is
complete, account numbers are entered if known, and the balances as well
vi. All loans besides FHA if run through LP: If an asset is a gift, make sure for the
VOD section of the 1003 that you choose the account type as “gifts total” like
below so it flows through LP correctly. If anything else is chosen, it doesn’t
pull through correctly into LP.
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
LP – how gifts should be shown by doing the above step
vii. If you need to add more liquid assets in a different bank, click on the + and
repeat the above
viii. Input any stocks or bonds and/or cash value of life insurance where required
ix. For vested interest in a retirement fund, enter 60% of the vested amount unless
the program allows for 100%
c. Liabilities
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
i. If creditors are not listed, click on “import liabilities” to pull the debts from the
credit report
ii. If the debt is a collection, etc, choose the dropdown “collections, judgments,
and liens, so AUS know what these accounts are
iii. If you know that a debt is really a mortgage or Heloc when it is reporting as
installment or revolving, you can change it.
iv. If a debt is going to be paid off at closing, click “paid off” to the right
v. If a borrower pays child support or alimony, type which one it is, the payment
amount, and put 12 months for how many months it continues so it will be
counted in the debt ratio in AUS
Page 3 of the Loan Application (1003):
VII.
VIII.
IX.
X.
Assets and Liabilities (cont)
a. Schedule of Real Estate Owned (Should be blank if the borrower doesn’t own any
properties
b. If the borrowers own any real estate currently, click on “show all VOM”
c. If you need to add new properties, click on the +, then
i. choose the mortgage(s) that should be linked to this property
ii. enter the address, property is used as, present value
iii. “Property status” R for rental, S for sold, PS for pending sale (meaning will be
sold prior to the subject’s closing). If property is to just be retained, leave blank.
If you have a primary residence purchase and need to count the PITI payment of
the current residence in the debt ratios, make sure you choose rental &
complete as such
iv. Choose the property type
v. If will be a new rental property, follow the agency rules for how much can be
counted or you can put zero for “gross rental income” to approve without. If
you are using rental income from tax returns, use the rental income worksheet
and enter the calculated amount in the “net income/loss” box
Details of Transactions
a. Make sure that none of the boxes on the left are locked
b. Make sure that any earnest money deposit & due diligence are listed as “cash deposit
on sales contract”, DON’T type in due diligence
c. Make sure that you follow the tutorial for “Disclosing seller paid costs”
d. Make sure that none of the boxes on the right are locked unless you are breaking down
seller paid costs in two places (see instructions for seller paid costs)
Declarations
a. Enter completely for all borrowers
b. If a borrower is a Non-occupying co-borrower (NOOCB), for the question “Do you
intend to occupy the property as your primary residence?” choose “yes” for the primary
borrower and “no” for the NOOCB. For findings to be correct, this must be done!
Information for Government Monitoring: Ask the borrower all information, don’t guess
a. Make sure the correct loan officer’s name is input
b. Input the “Application Date” in the “1003 signature date”
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
c. For Bob Moyer, make sure that the office address is the Wilmington address & phone
d. “1003 signature date” should match the “LE application” date in Disclosure Tracking and
the top of the “Borrower Summary – Origination”
FHA Required Forms
There are forms that must be completed fully for the FHA disclosures and AUS findings to be correct
PMI Warning!!! When you lock the loan, the system often will change the PMI to be cancelled at 78%
and this must be removed on FHA loans unless the borrower is getting an FHA loan that allows this
HUD 1003 Addendum form:
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1. Agency Type: Choose HUD/FHA
2. Agency Case #: Setup will input the FHA case file once it has been received (not
needed for disclosures)
3. Lender’s case #: The loan number will be entered after setup
4. Section of the act: For regular FHA loans, choose 203B & for other types like 203k,
choose the appropriate option
Answer # 18
Answer 22 a and other is applicable.
Answer 22f
Make sure that 25 is answered correctly
Lender’s Representative: Enter the loan officer’s actual name per their license, the
office phone number, and title as “loan officer”
Make sure that “mortgagee relationship” is “does not”
FHA Management:
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o
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there are a few items to enter that may not be in already
Choose the correct “property type” & if you know the “previous purchase date” and if a
foreclosure, enter this
Answer if a first time buyer
FHA Late Fees: (When the Case Assignment Date is prior to March 14, 2016)
 Effective on March 14, 2016, the language regarding the late fee must indicate that the late fee
percentage is based on the overdue principal and interest due to revisions in the HUD Handbook
(4000.1). For loans with a case assignment date on or after 3/14/16, Encompass will
accommodate this change by using the Get Late Fee button, the appropriate language regarding
“of the principal and interest overdue” for those FHA transactions. For any loans where the case
assignment date is prior to 3/14/16, you will need to change the default language (Field 1719) in
the dropdown list to “of the overdue payment”.
Regarding the FHA Notes, the appropriate language will populate the instrument based upon the case
assignment date input in Encompass.
Examples
The Late Charges Section for FHA loans using the Get Late Fee button, on 3/14/16, Encompass will
default to this display.
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
However, if the case assignment date is prior to 3/14/16, you will need to manually
change the language in the dropdown box to reflect the following:
Due to the time period in which case assignments are valid this notice will sunset on 9/30/16,
when the need to make this revision should no longer be necessary
VA Loans: Fully complete the following steps
There are forms that must be completed fully for the VA disclosures and AUS findings to be correct
VA funding fee: *** on page 2 of the application, click on the edit button next to the “Mtg. Ins” field
in the “Monthly housing expenses” section. At the bottom section where it says “Mortgage Insurance
(FHA and VA)”, choose the “Type of Veteran” (regular military, reserves, or National Guard) and check if
it a first time use so the appropriate amount is input for the funding fee.
On the same screen, input the percentage of the funding fee that applies at the top beside
“MIP/Funding/Guarantee” and make sure you are correct on this!!
Looking up the VA funding fee to use: go to www.TeamMoveMortgage.com, click on “resources”
and “VA funding fee tables”
Match up your scenario for the funding fee based on type of veteran, down payment amount, 1st
time use or not, and disabled or not
HUD 1003 Addendum:
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*** Complete in its entirety that applies
Agency Type: Choose “VA”
Agency Case #: will be entered when the VA appraisal is ordered
Lender’s case #: will be entered once a loan number is assigned in setup
Section of the Act: should be blank
18. First time buyer: answer this
19. Title will be vested in: Answer appropriately
20. Check the correct box that applies
22a: answer this
22f: answer this
23: answer this
25: answer this
Lender’s Representative: : Enter the loan officer’s actual name per their license, the
office phone number, and title as “loan officer”
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
o
Make sure that “mortgagee relationship” is “does not”
VA-0286 Loan Summary:
*** Complete this form in its entirety.
The following explains the form
1. Will be assigned after the VA appraisal is ordered
7. Enter code from Certificate of Eligibility
8. Enter entitlement available from the COE-if part or all of the entitlement is used (and not
reinstated from a sale prior to our closing), then subtract the amount from $36,000 and enter it here
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For instance, if $36,000 was used, you would put $0 here. Then the Veteran would be using
his/her bonus entitlement
9. Choose the branch of military
10. Status: you must choose one of these
11. Click if a first time buyer (not owned in last 3 years)
13. Must enter
14. Must enter
15. If had a mortgage before, must answer this
16. same as 15
18. must choose an option
22. If any energy efficient improvements are to be made with this loan, choose the right one
24. must answer. If not one of the choices, leave blank
25. For a regular VA purchase or cash out refinance, choose “LAPP-Lender”
26 - 28. must answer
30-36. must answer
54. Spouse income considered must be answered
60. choose whether the borrower is “exempt” or “not exempt” from the VA funding fee
VA 26-6393 Loan Analysis ***See Tutorial “Completing VA Loan Analysis Completely & Correctly”
VA Management: *** Complete in full – most will be completed already. Below are items that may not
be entered on prior forms
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Type of Veteran: choose which applies
Must choose if “borrower / co-borrower are married” and “one or more borrowers qualifies as a
veteran”
Building Status: choose one
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
o
Title will be vested in: choose the correct one
VA 26-8261-A Veteran Status: Must be completed
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Military Service Data: Enter information from VA COE if you have it
VA Claim Number if Veteran receives VA disability
Currently on military duty: answer correctly
On military duty on the day following separation: should be “No”. This would only apply with a
certain type of leave where there is still an obligation to the military but are separated usually
due to extended illness or other medical condition.
Certifications: must answer both
VA Certificate of Eligibility (complete per the DD214 if retired) – Processing would normally complete
this. If this is not completed, ask processing to do so if we have the COE
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Name(s) used during military service (if different from above): check the COE and if a different
name, enter it
Enter information from COE for the applicable section for active duty or Reserve or National
Guard
VA Claim #: If veteran receives VA disability and you have the number, enter it & check the next
box for “discharged/have any service connected disabilities”
Previous VA loans: the appropriate one must be entered so that the entitlement is figured
correctly
If you have a situation where both borrowers are active duty or veterans and one of the
borrower’s entitlement was used and both borrowers are on that existing mortgage, the
borrower’s entitlement that was not used would not check the box for “not applicable – I have
never obtained a VA Guaranteed home loan”. The reason is this borrower was obligated on a
VA loan even though the co-borrower’s entitlement wasn’t used.
VA 26-1820 Loan Disbursement: Must complete
o
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Enter Relative not living with Veteran: name, address, and phone number
7. Choose the appropriate answer
11-15: Must answer
27b. Occupancy: check the appropriate box. Must check one
27c. this should be completed
Check the last box if it applies
USDA Loans: Fully Complete the Following
Make sure that you confirm that the USDA funding fee of 2.75% and monthly annual fee of .50% are
used on page 2 of the 1003 in the Proposed Housing Payment Section
Make sure the correct Loan Type is Chosen on the 1003 & LE
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
Complete as much of the USDA Management screens for the tabs at the top: Rural Assistance URLA,
Req for SFH Loan Guarantee (it will make running GUS a little easier and accurate)
Down payment Assistance Loans: Fully Complete the Following ***
If your first mortgage will have down payment assistance, complete the following steps:
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The down payment type on the 1003, page 1 when using DPA is “secured borrowed funds”
You must go to the declarations section on page 3, of the 1003 and Letter H must be Y for Yes
the down payment is borrowed
Page 1 of the 1003, click on the “sub financing” button and input the 2nd mortgage amount so
the CLTV is figured correctly
Loan Estimate page 2: Put the amount of the DPA in the field “Adjustments and other credits”
NC Housing Home Advantage: Print the “Borrower’s Authorization for Counseling” NC Housing
form, 014 Program Certifications, 500 Dodd Frank Certification, and 018 Income Tax Affidavit for
the borrower to sign (see forms section of handbook)
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
2015 Itemization ***
It is important to put all known fees in the correct locations on this screen so that it flows correctly to
the LE and CD
List of where fees are to be entered on the 2015 Itemization so they flow to the LE correctly:
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Application Fees:
801 (always leave this as is)
Tax Transcript Fees:
801 (always leave as is unless you know the fee will be higher)
Lender credit:
802 b
Origination/Discount:
802 e (don’t check “bona fide”)
Appraisal:
804
Credit Report:
805 (includes all credit report fees / supplements)
Flood Certification:
807
Final inspection:
808 (good to have this just in case the appraisal is subject to)
Condo Certification:
809 – 835
Draw Inspections:
809 – 835
Construction underwriting:
809 - 835
Daily interest:
901 (this may not enter sometimes, like below). If the date
doesn’t populate, just delete your first payment date on the RegZ-LE, tab to the next field and
then re-enter the first payment date
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Single premium PMI:
FHA funding fee:
HOI: 1st year premium:
VA funding fee:
Flood Ins: 1st year premium:
Wind & Hail 1st year premium:
Total of escrows:
Escrow: Homeowner’s:
Escrow: Wind & Hail:
902
902 (name field should say “Housing & Urban Development”)
903 (input 12 months and the monthly premium)
905 (check COE and funding fee tables for accurate amount)
906 (input 12 months and the monthly premium)
907 (choose “insurance premium – wind & hail”), input 12 mths
1001 (will calculate from escrow totals 1002 – 1011)
1002 (purchase = 2 months, refinance calculate by due date)
1007 or 1008 (purchase = 2 months, refinance calculate by date)
Important for Wind & Hail: Make sure when you have Homeowners Insurance and then a Wind and
Hail policy that you show them as separate policies in Encompass. When you separate it out like this
it eliminates confusion with UW. Make sure to use the drop down field in line 1007 or 1008.
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
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Escrow: Mortgage ins:
1003 (leave months blank)
Escrow: Property taxes:
1004 (can add city and county together here)
Escrow: Flood ins:
1006 (purchase = 2 months, assuming & refi calculate by due
date)
Escrow: USDA annual fee:
1010 (leave months blank)
Aggregate Adjustment:
1011 (Do Not input an aggregate adjustment)
Owner’s Title Insurance:
1103
Lender’s Title Insurance:
1104
Attorney/Settlement Company: 1100’s section (put costs in the categories shown)
o Title Insurance binder fee should be added in 1100’s and click “apr” box
o Loan processing or other miscellaneous fees can be added to Attorney Fee line
If you remove a fee from the 1100 section, you must “clear” the name of the fee too like below
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Deed and mortgage recording: 1202 (will copy into section 1201 for total)
o South Carolina Recording Fees: $10 deed, $28 Mortgage
o If there will be a 2nd mortgage, DPA 2nd, or a POA, you should add $25 at least since
there will be extra recording costs
Transfer Taxes:
1203 – If a Virginia property, make sure to follow details below!
City/County stamps:
1204
State tax stamps:
1205
SC Transfer Tax (If the buyer must pay the tax per the contract): The transfer tax factor is in the
system, you click on the magnifying glass:
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
Click on SC transfer tax:
**** I will get Randy to map the transfer tax so they auto populate, but right now you will need to
do this until he does so because I do not know how. I am primarily getting this to you to get you off
the ground with these.
Virginia Tax Stamp/Transfer Tax: Must be disclosed as a borrower always has these fees in Virginia.
As long as you select a Virginia template, it will calculate the estimates for you. That can be used for
a rough estimate to a client, BUT make sure that you confirm the actual amount with the closing or
settlement company because there is ZERO tolerance on these fees!
Online fees quote to check: https://www.titlehoundonline.com/TitlePremiumRates.aspx
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Record POA:
1206-1208
Section 1302 – 1309:
Will be added into “Required Services You Can Shop For”
Termite/Pest Inspection:
1302
Survey (if required)
1302 – 1309
Foundation Certification:
1302 – 1309
Septic inspection (if required) 1302 – 1309
Well inspection (if required)
1302 - 1309
Section 1310 – 1315:
Will be added to “Section H – Other” Not Required Services
Property Taxes Due:
1310 – 1315 (If the tax bills are out, you can put the buyer’s
portion of current year’s property taxes here as close as possible. If you just disclose enough in
escrows to cover this too, you don’t have to disclose taxes due on a purchase.)
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
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Home Inspection
Survey (if not required)
Foundation Certification:
Septic Inspection:
Well Inspection:
HOA Working Capital:
HOA Transfer/Initiation Fee:
Home Warranty:
Owner’s Title Insurance:
1310 - 1315
1310 – 1315
1310 – 1315
1310 – 1315
1310 - 1315
1310 - 1315
1310 – 1315
1310 – 1315
1310 - 1315
If you change any of the fees as listed, you must click on the edit button to the left of the fee name,
correct the fees amount and mark it as APR or not as applicable.
If you add a fee, make sure that it is included in the Settlement Service Providers
Reg Z – LE
LE Date Issued: Must be the date you are disclosing the LE
1st Payment Date: Make sure that you choose the correct date based on the closing date and daily
interest option you are using (credit or collecting interest)
Days per year: Make sure it is 365 days
Loan Estimate – Initial Disclosure
Loan Estimate Page 1:
Loan Details: Input the date you are disclosing the LE (must be within 3 business days of application)
Make sure that all areas are completed that apply
Loan ID: See instructions below for “Create the loan number”
Loan Terms: This should automatically be filled in with the loan details and after completing the steps
for “Anti-steering Safe Harbor Disclosure” – see further down in instructions
Loan Estimate Page 2:
All fees should be correct if you have fully completed the 2015 Itemization BUT CHECK
Review “Calculating Cash to Close” Section to make sure that it matches your 1003 Details of
Transaction bottom line. Often this will not match and you will need to tweak it to make sure it does
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
Deposit: You will need to manually enter any deposits the borrower has made such as earnest money
or due diligence money as it does not flow over from page 3 of the application details of transaction
Other Deposits/Credits: If your file has a credit such as lot equity, trade equity, etc in the 1003 Details
of Transaction that will not flow correctly into the LE “Calculating Cash to Close” Section, you can , go to
adjustments and other credits, open the box (edit function), and enter lot equity (or other name of
credit) to offset the down payment amount
Seller Credits: Only the itemized seller paid costs will flow into this section of the LE. If you break down
the seller paid costs into two sections (PFC/pre-paids and non-apr items), you will need to do the
following for the LE to figure the full seller credit
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Click the lock button next to the seller credits and enter the full amount of the seller paid
costs
Loan Estimate Page 3:
License State: Enter the state in which the property is located and we are licensed for
Loan Officer State: Enter the state in which the property is located and the loan officer must be
licensed there
Check the correct boxes:
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
Settlement Service Providers
Make sure that the correct template is being used
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Click on “apply template” button and choose the correct state
Then follow the instructions below
Both fee names and fees examples have populated over (there cannot be a line without a fee)
If you have added a required service such as septic inspection, well inspection, etc, make sure that you
have a service provider listed and a fee for it
Survey Fee: If you do not wish to disclose this on your LE, remove it from the SSPL so that you are not
in a situation to be within a 10% tolerance if one gets done
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
South Carolina Service Provider List: Fees listed for settlement pulled from fee list
*** Currently these fees match the Settlement option on the Settlement Service Provider List. If you
change the fees here then do not forget to go into the SSPL list and correct for all THREE attorney
options listed.
Patriot Act (entering ID’s):
Go into loan file, select to print, custom forms, choose “patriot act information form”, then “preview”,
complete the form and print (processing does this)
Anti-Steering Safe Harbor Disclosure
Under “Tools”. It must be done or the disclosures will fail compliance.
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Click “copy from loan data” & review to make sure the details match the loan terms & cost
Choose “Option 1” from the dropdown list
Answer the questions in the “Does this loan include” section which will flow to the LE
Click on the “Loan Option” that the borrower is choosing
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
ATR/QM Management ***
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Click on the “Qualification” tab at the top and then under “Residual Income Guidelines”, type
the family size and “south”, and then click on “Get Residual Income” (This could be a good
compensating factor on a loan if residual is much higher than guidelines)
Risk Assessment Section: Assuming that your file has an AUS accept, complete the following to
keep the file from having this compliance failure
o If a USDA loan, choose “other”, type “GUS” in the first line and on the 2nd line type
exactly with just the “A” in caps as “Accept”
o If LP, type exactly with just the “A” and “E” in caps as “Accept/Eligible”
o If DO, type exactly with just the A and E in caps as “Approve/Eligible”
If a VA loan, answer the two questions at the bottom
Section 35 HPML
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Click on “View Rate” button on the right
For Fixed rates, choose the top link and for adjustable choose the 2nd link
Go to the column on the spreadsheet that comes up called “AE” & scroll to the very bottom row
Enter this rate you see at the bottom of column AE in the blue box for “Enter the Average Prime
Offer Rate issued on the day you locked the rate
Look at the “the result of the higher priced mortgage loan test” and make sure it says “does not”
exceed the threshold
Sales Contract Date: Input last date of signatures on the purchase contract
Home Counseling List
Follow “Instructions for completing Homebuyer Counseling List in Encompass” – Date must be the
application date of the 1003
Freddie Mac – Additional Data ***
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Choose property type & building status
Additional Disclosures Information
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Check “occupancy statement” box and enter the same date as the LE is disclosed
Lock Request Form
Under “Tools”
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Make sure that the “Impound types” is chosen
Create the Loan Number
All LE’s must have a loan number, so follow these steps before sending LE
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
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Only assign a loan number if you are disclosing an LE!
At the top left, Click on “Log”, “Application Expected”
Choose the “loan officer” if not completed already
Click on the “finished” button
Click the “save” button on the file and the loan number will populate at the top of the screen
Confirm accuracy of Disclosures ***
Use this to see if there are any errors or missing data
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At the top left, Click on “Log”, “send to processing”
Don’t choose a processor yet (processing will do this when they push it to set up)
In the bottom left section of the screen, click the “go to fields” button
Click on the field showing as an error and then the “go to field” button at the bottom
Make the correction and once all errors are corrected, save the file and recheck accuracy
Remember that this does not check everything and is not a substitution for a complete
application and other forms
Sending E-Disclosures
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Once you have no errors, “save” the file and you have reviewed everything for correctness
Follow “Sending E-Disclosures to Borrower Instructions”
Remember you MUST have the confirmation of E-Consent received in Encompass
This is a good time to rerun your AUS approval as it should be very accurate
Move the file to “My Pipeline”: When a loan is disclosed, for it to show up on a report so loan officers
and LOA know to follow up on files (not in limbo status), make sure to left click on the file once and click
on the “move to folder” on the right and choose “my pipeline”. This will keep loans from not showing
on any report
Printing disclosures after E-Disclosure
Since it has been e disclosed already, you will have to go to disclosure tracking to print. This is important
since it will update the disclosure history.
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Tools - Disclosure Tracking
Under Disclosure History, select the disclosure entry you will be printing by double clicking
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16
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Go to the “Details” tab
Click on “View Document”
From this preview screen, print the documents
Next, select the E-Disclosures Tracking tab.
Select Print Documents and Manually Fulfill
On the Manually Fulfill window, enter the date printed & reason why the documents were
printed in the Comments window.
If a Refinance, make sure that you use the appropriate Net Tangible Benefit Worksheet
There is a different form for each state as well as for FHA or FHA streamline. These are in the forms
section of this book
Credit derogatory & inquiry letter: log directly into CTI online, search by reference number, under
“view report” choose “explanation letter” from the dropdown list, uncheck any sections that we don’t
need, print out and mark where borrower needs to explain and sign. Send to the borrower
Add contacts to file and to our group: in the loan file, go to “tools”, “file contacts” click on the line for
the contact you want to add, complete the information at the bottom, once complete, click on the book
picture, select “create new and”. Once added to the list above, click on “business contacts” in the tools
tab to the left and search by the name, click on “go to”, highlight the record and choose “add to group”
Preparing disclosures & making sure file is complete for accurate AUS findings 3/29/16