AFN Branch Processing Manual

AFN Branch Processing Manual© 2021. All Rights Reserved. American Financial Network, Inc. | Rev. 01/03/2021
BRANCH LOAN PROCESSING
Welcome Message .................................................................................... 1
Helpful Links ............................................................................................ 2
AFN Intranet .......................................................................................... 2
Quick Links ............................................................................................ 2
Human Resources ................................................................................... 2
Loan Programs ....................................................................................... 5
Logging In to Encompass ......................................................................... 6
Procedure: Encompass Log In ................................................................... 6
Pipeline .................................................................................................... 7
Additional Pipeline Views ........................................................................ 10
Loan Folders ........................................................................................... 13
Default File Contacts .............................................................................. 16
Channels of Business .............................................................................. 17
MILESTONES ................................................................................... 18
Loan Progress ....................................................................................... 18
Milestone Templates .............................................................................. 18
Default Milestones ................................................................................. 18
Milestones Retail ................................................................................ 19
Retail Workflow ..................................................................................... 19
Introduction ......................................................................................... 22
Milestones DPA 2nd ............................................................................ 26
Procedure: DPA Milestone ....................................................................... 26
ENCOMPASS LOAN PROCESSING .................................................... 28
File Log .................................................................................................. 28
Default Option for New Log Entries .......................................................... 30
Procedure: Viewing Notes in the Conversation Log ..................................... 30
Alerts and Messages ............................................................................... 30
Access to Alerts and Messages ................................................................ 31
OPERATIONS – CORPORATE
Worksheets .......................................................................................... 32
Tasks .................................................................................................. 32
Compliance Checks ............................................................................... 33
Fields Required to Run Mavent ................................................................ 34
Initial Disclosures .................................................................................. 34
Branch: 1003 ....................................................................................... 34
Disclosures Sent via Encompass eFolder ................................................... 35
Procedure: Document Retrieval ............................................................... 35
Disclosure Tracking Tool ......................................................................... 36
Disclosure Tracking: Multiple Entries ........................................................ 36
Intent to Proceed .................................................................................. 37
Receiving Signed Disclosures .................................................................. 37
App Received Milestone .......................................................................... 38
eFOLDER ......................................................................................... 39
Guide to Sorting Documents ................................................................... 39
eFolder: Initial Disclosures ..................................................................... 46
Placeholder: LE-Related Disclosures ......................................................... 47
eFolder: Re-Disclosures .......................................................................... 48
Non-Payroll Deposits ............................................................................. 49
eFolder: Income ..................................................................................... 49
Placeholder: Income .............................................................................. 49
Multiple Borrowers ................................................................................ 49
Review ................................................................................................ 50
1003 ................................................................................................... 50
OPERATIONS – CORPORATE
AUS .................................................................................................... 57
Appraisals .............................................................................................. 57
Policy .................................................................................................. 57
AVMs ...................................................................................................... 58
Verification Types .................................................................................. 59
Payoffs ................................................................................................... 60
Policy .................................................................................................. 60
File Contacts ........................................................................................... 61
Fraud Guard ......................................................................................... 61
Appraiser Information ............................................................................ 62
Buyer’s Agent ....................................................................................... 62
Seller’s Agent ....................................................................................... 63
Reg B Compliance ................................................................................. 64
Extending the Timeline .......................................................................... 64
Submittal Milestone................................................................................ 65
Processor Comparison ............................................................................ 67
Compliance Audits .................................................................................. 68
Procedure: Escrow/ Aggregate ................................................................ 71
Re-Disclosing/Change of Circumstance .................................................. 76
Additional Items ................................................................................... 78
Wait Periods ......................................................................................... 79
Policy .................................................................................................. 80
Closing Disclosure .................................................................................. 81
Special Considerations ........................................................................... 81
TRID ................................................................................................... 82
Handling a Denial ................................................................................... 89
Introduction ......................................................................................... 90
Clearing for Docs .................................................................................... 90
PTD Review Milestone ............................................................................ 90
Ordering Closing Documents .................................................................. 91
Funding .................................................................................................. 94
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AFN-P-Pro_BranchProcManual • Rev. 01/03/2021
WELCOME MESSAGE
Loan Processing for AFN
Welcome to American Financial Network (AFN)! AFN is a Direct Lender with delegated authority to underwrite and close Conventional, FHA, USDA, VA, and Alt-QM products in-house. The purpose of this manual is to provide basic operating information that will support your success as an AFN Loan Processor. If you have any questions about the information contained herein or to schedule new processing training, please contact the AFN processing management team (Branch Account Managers) at [email protected]. For general Encompass questions, you may also reach out to the Branch Relations Department as an additional resource ([email protected]). Loan Processors are responsible for maintaining a current file in Encompass and keeping the status up-to-date within the system using the tools made available. This manual will help Processors navigate through Encompass, provide guidance on common screens used within Encompass, and milestone management throughout the life of the loan. Information on how to process loans (i.e., calculating income, reviewing title reports and appraisals, etc.) is not covered here. It is assumed that Processors responsible for an active Pipeline already possess the skills required to process loans. Rather, this manual is a guide to workflow expectations and navigation through Encompass, and serves to educate Processors on AFN’s policies and procedures for specific loan types, programs, and third party services.
HELPFUL LINKS
AFN Intranet AFN Policies and Procedures may be centrally accessed from AFN's intranet site (on Command Center), where staff members may view and download program guidelines, details for specific loan products, Encompass procedures, compliance information, and additional tools. See frequently accessed links below.
Quick Links • AFN Props • AFN Web Mail (AFN email for your web browser)
• Bright Idea Suggestion Box • Underwriting Scenario Desk
Human Resources
• AFN Employee Handbook
Operations • AFN Operations o AFN Bulletins o Disaster Alerts o Encompass Newsflashes o Forms
Brokered Out Check Cover Sheet Canceled/Denied Loans – QC Checklist Check Request Compliance Review Checklist-TRID HOA Questionnaire HOA Questionnaire – Limited Review Power of Attorney Checklist – Funding/QC Power of Attorney Checklist - Underwriting Property Inspection Waiver
o Handbooks/Manuals o Matrices
o Technology Email Setup – iPhone Email Setup – Samsung
HELPFUL LINKS (CONTINUED)
Policies • Ops Policies Menu o Adding/Removing Applicants o Appraisal Transfers - Conventional o CU Risk Assessment o Disaster Alert Policy o Disputing Appraised Values o Employee Loans o FHA Appraiser Independence o HPML Loans o Mortgage Disclosure Improvement Act (MDIA) o Property Taxes o Real Estate Settlement Procedures Act (RESPA) o TRID Policy Manual - AFN AllRegs o Wage Earner Tax Transcripts
Procedures • Ops Procedures Menu o Adding Non-borrowing Spouse to Title o Bond/DPA Programs o Canceling Loans in Encompass o Conventional Condo Project Review o Denying Loans o FHA – Handling FHA Loans o FHA – Using FHA Connection o FNMA Homestyle Loans o HPMLs o Hybrid eClosing Process o LPMI Loans o Manufactured Home Loans o NY Co-Op Project Transactions o NY General Transactions o Ordering an AUS o Ordering Appraisals o Ordering CTI Services o Ordering FraudGuard o Ordering IR Services o Preparing a Post-consummation CD o Reg B – Handling Incomplete Files o Retail Initial Audits o Submitting for Investor Approval o TBD Credit Reviews o Tracking Brokered Out Loans o VA Certificate of Eligibility o VA – Handling VA Loans
Compliance and Quality Control (QC)
• Compliance & QC o Compliance Matters Bulletins o AFN Ability to Repay and Qualified Mortgage (ATR/QM) Policy o AFN Anti-Money Laundering Policy Manual o AFN Anti-Predatory Lending Policy o AFN Appraisal/Appraiser Independence Requirements (AIR) Policy o AFN Change Management Policy o AFN Clean Desk Policy o AFN COVID-19 Pandemic Policies and Procedures o AFN Disaster Recovery Plan o AFN Elder Abuse Prevention Policy o AFN Electronic Signatures (eSign) Policy o AFN Equal Credit Opportunity Act (ECOA) Reg B Policy o AFN Fair Credit Reporting Act (FCRA) Policy o AFN Fair Lending Policy o AFN Fraud Awareness and Prevention Policy o AFN Home Mortgage Disclosure Act (HMDA) Policy o AFN Loan Originator Compensation Policy o AFN Office of Foreign Assets Control (OFAC) Policy o AFN Pre-Qualification and Pre-Approval Policy o AFN Privacy Policy o AFN QC Manual – Objectives, Policies & Procedures o AFN Real Estate Settlement Procedures Act (RESPA) Policy o AFN Rules of Behavior and Ethics Policy o AFN Safeguards Policy o AFN Secure and Fair Enforcement of Mortgage Licensing (SAFE Act) o AFN Third Party Vendor Risk Management Policy o AFN TILA-RESPA Integrated Rule (TRID) Policy o AFN Truth in Lending Act (TILA) Policy o AFN Unfair, Deceptive or Abusive Acts or Practices (UDAAP) Policy o AFN AllRegs – TILA RESPA Integrate Disclosures (TRID) Policy
• Loan Programs Main Menu o AFN Investor Overlay Matrices:
~COVID-19 Interim Product Overlays Conventional FHA Standard FHA Streamline Refinance VA IRRRL VA Standard
o AFN Approved Down Payment Assistance Programs o Agency Underwriting Manuals
Fannie Mae Freddie Mac HUD VA Lenders Handbook
Educaton and Training
o Charts and Diagrams Encompass Milestone File Flow Mortgage Insurance Workflow Tutorial Non-Borrowing Spouse Diagram – Purchase Non-Borrowing Spouse Diagram – Refinance
o Quick Reference Guides AccountChek Guide Adding Borrowers to a Loan Changing Loan Officers eSigning the 1003 HPML Workflow and FAQ How to Lock a Loan How to Restart a Loan Lock Transfers Ordering The Work Number VOE
LOGGING IN TO ENCOMPASS
Procedure: Encompass Log In
An individual user name and password is required to access Encompass. User names and login IDs should never be shared. If you have not yet received login credentials, contact AFN's Help Desk for assistance.
Logging in to Encompass: 1. Locate the Encompass icon on your desktop:
or
2. Enter User ID and Password:
3. Once logged in, Encompass will open on the Home Page. A variety of information is displayed, including AFN’s turn times and a link to AFN's Underwriting Management teams with contact information for Underwriting.
4. Click the Pipeline tab to access loans:
PIPELINE
Default Pipeline Views
From the Pipeline tab, Processors will have different options to set up a Pipeline view to see loans (typically, Processors will want to see loans assigned specifically to their name or to their branch).
Encompass has three default Pipeline views: 1. LP – Processing Queue 2. LP – Lock/State Disc Due 3. LP – Order Tracking 4. LP – NOIA Due 5. LP – Reg B Deadline 6. LP – Reg B Out of Compliance 7. LP – Funded 8. LP – Cancelled/Denied
Loan Processor, Processing Queue
The main default view is LP – Processing Queue. This view displays active loans not yet funded. Processors can manage their active pipeline, sort loan files by status, and quickly identify file progress without having to open individual loans.
OPERATIONS – CORPORATE LOAN PROCESSING MANUAL
Encompass Pipeline: LOAN PROCESSOR − PROCESSING QUEUE
Field Description Alerts Total number of alerts on a loan; click the number to view
specific alerts outstanding without having to open the file
Messages Number of messages on a loan (such as eDisclosures); identify when items sent directly through Encompass have been received
Last Finished Milestone Current loan status and milestone
Earliest Closing Date Earliest closing date for the loan based on TRID requirements
Est. Closing Date Estimated closing date in Encompass; helps identify past due closing dates that need updating
Original Closing Date from Purchase Contract
If purchase: original closing date from purchase contract (as entered in Encompass)
Compliance Conditions Approve Date
Date Compliance approved/cleared all conditions (blank if not yet cleared)
PTD Outstanding Date Date loan submitted to underwriting for review (blank if not in line for review)
PTD Rcvd Count Number of PTD Conditions marked as received (indicating ready for Underwriting review)
Final Approval Final Approval indicator marked to indicate to Underwriting the loan should be ready for final review/signoff
Milestone Date – Processing
Date processing milestone completed: within 24 hrs of receipt borrower documentation/initial stip package
Milestone Date – Submittal
Date submittal milestone completed (date submitted to UW for initial review; milestone triggers initial compliance review)
Milestone Date – Conditional Approval
Milestone Date – PTD Reviews
Date underwriting signed off on all PTD conditions and cleared the loan for closing
Milestone Date – Cleared for Docs
• Date loan is cleared for closing (both underwriting and compliance must sign off on the loan to be moved to this milestone)
• Wet states: QC must also clear prior to completion of this milestone
Milestone Date – Doc Request
Date Doc Request Milestone completed (indicates to the doc department that the loan is in line for closing review)
Loan Number Loan number identifier; use to locate a loan or identify the loan number without opening individual files
(Continued)
Field Description Borrower Name Borrower identifier and additional search method for specific
loans
Note Rate Current interest rate
Lock & Request Status Lock status and remaining days of lock (if locked)
Loan Purpose Identifies loan type (Purchase, Rate/Term Refi, Cash Out Refi, etc.)
Loan Program Displays selected program code (program code identifies loan type Conventional, FHA, VA, USDA, or other program type and loan term)
Occupancy Identifies primary residence, second home, or investment property
Total Loan Amount Total loan amount including MIP, if applicable
Subject Property Address
Useful when completing more than one loan for the same borrower (distinguishes property addresses)
Loan Team Member Name – Loan Processor
Identifies the Processor on the file; enter your name here to restrict the view to your loans only
Loan Team Member Name – Underwriter
Identifies the Underwriter, if assigned; quick access to contacts
Funder Identifies the Funder, if assigned; quick access to contacts
Loan Team Member Name – Loan Officer
Identifies the Loan Officer; quick access to contacts
Services Ordered Summary of Services Ordered (as marked on the Processing screen)
Services Received Summary of Services Received (as marked on the Processing screen)
(Continued)
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Additional Pipeline Views
Once funded, loans move from the Processing Queue to the Funded View; note, each view contains a different set of fields than the Processing Queue detailed above • LP – Funded - Funded and Post-closing loans • LP – Cancelled/Denied - Cancelled/Denied loans • LP – Lock/State Disc Due - Locked/Re-disclosure needed
loans o Use this view daily to track loans requiring a re-disclosed LE
for rate lock or required state-specific approval or rate lock disclosure
o Re-disclosure is required within 3 days of the applicable event to remain in compliance
NOTE: Some branches may utilize the corporate office to send certain state-specific disclosures on their behalf. Review the LP - Corp - Disclosures Due pipeline to see if the corporate office is handling a loan on behalf of the branch. Processors are still responsible for sending any re-disclosed LEs timely, even if the corporate office is sending state-specific disclosures on behalf of the branch.
• LP – Order Tracking – Tracks third-party orders (i.e. appraisal title, transcripts, verifications of employment, etc.). Order status and dates that appear on the pipeline view are based on entries on the Processing screen, so ensure the screen is updated regularly so the pipeline view is accurate).
• LP – NOIA Due – Loans approaching 30 days from app date and not yet decisioned (approved/denied) in Underwriting. The corporate office will prepare the NOIA and the Loan Processor will send it to the borrower.
• LP – Reg B Deadline – Loans approaching 60 days from app date and not yet decisioned (approved/denied) in Underwriting. o Use this view daily to ensure loans are moved forward and
either decisioned or canceled before the 61st day. • LP – Reg B Out of Compliance – Loans past 30 days from app
date and no NOIA issued, or 60 days from app date and no decision or cancellation. o Look at this pipeline daily to ensure it has NO LOANS. o If loans appear on this view, handle them immediately.
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PIPELINE (CONTINUED)
Custom Views Information and how it is displayed in a Pipeline view can be customized to the user's preference.
To add or remove columns: 1. Right click any column header and select Customize Columns
2. From Customize Columns > Selected Columns
• To remove a column, clear the corresponding check box • To add a column, select the corresponding check box • Click [OK]
To change column order:
• Click and drag a column to the desired location or
• From Selected Columns (steps 1 and 2, above, "To add or remove columns"), highlight the column header and use the arrows to change the order
• Click [OK] To save a customized view:
3. After making changes, click the [Save] icon located next to the dropdown options. (Note: The [Save] button will go "live" when changes are made to the standard default view)
4. Select [Save as].
5. Enter a name for the customized view ("My Pipeline" in the example below).
6. To make this your default view, check the box labeled Set as my default view.
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Custom Views (Continued)
7. Click [Save].
Note: Once a customized view has been created, it will appear
in the Pipeline View dropdown menu.
Custom Field Width
Due to space restrictions on most computer monitors, the user may wish to reduce the width of certain fields in order to make the view fit on one screen.
To change the field/column width: 1. Point the cursor to the line between two fields. 2. An icon will appear allowing the user to adjust the field to the
desired width. 3. Follow the steps in "Saving a Customized View" (above) to
save to an existing view or create a new view. 4. If changes are not saved for a customized option, the default
settings will be reinstated when the user changes a view or restarts Encompass.
Searching and Sorting Fields
The fields displayed in any view are searchable and may be filtered to restrict criteria (For example, if you only want to view purchase loans, you can do so by restricting the Loan Purpose field to "purchase."). Loans may also be sorted by milestone, allowing for easier pipeline management. Please keep in mind that if a current filter is set on an existing field when the view is saved with changes, that filter will be saved with any other changes made. Use care in changing view settings to make sure filters have not been added that should not be included in the general Pipeline view.
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Accessing Loan Folders
In addition to the different Pipeline views available, there are also different folders within Encompass where loans are housed. To access available folders, select the appropriate folder from the dropdown menu in the Pipeline tab in Encompass located underneath the dropdown for the Pipeline views.
Frequently Used Folders
FOLDER PURPOSE
Prospects 1. Origination; loan files begin in the Prospects folder. 2. From here, check loans for messages (disclosures received from
borrowers, loans that need to be moved to the Pipeline folder). 3. The file moves from the Prospects folder to the Pipeline folder
when the loan attains the App Received milestone (signed initial disclosures).
Pipeline 4. Active loans with completed disclosures. 5. Loans from App Received to Reconciled may appear here,
depending on the Pipeline view and filters used. 6. Main folder for use in Pipeline management.
Canceled- Denied
7. AFN Corporate Staff moves cancelled or denied loans here once all HMDA requirements have been confirmed for compliance.
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LOAN NUMBERS
Overview AFN loan numbers are assigned when a new loan is saved in Encompass. Loan numbers are typically 10 digits long with the first four digits being the branch ID. (For example, a loan officer associated with the corporate office will have a loan number beginning with 1001, identifying the loan as originated by corporate.) The following six digits of the loan number are unique to that loan. Note: If a loan number is tied to the wrong branch, update the branch ID and loan number (see Bulletin 14-020).
ENCOMPASS ICONS
Encompass Icons
ICON NAME AND DESCRIPTION
Edit – Open the selected item for editing
Duplicate – Create a duplicate of the selected item
Save – Save the currently open item
Delete – Delete the selected item
Reset – Discard changes, restore to previous settings
Refresh – Update data (such as a Pipeline view)
Find – Search for stored information
Excel – Exports selected data to an Excel spreadsheet
Print – Print selected information (or go to the Encompass Print Engine to generate forms)
(Continued)
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ENCOMPASS ICONS (CONTINUED)
ICON NAME AND DESCRIPTION (CONTINUED)
Copy – Copy the selected item
Cut – Remove an item (will place item on the Windows clipboard so it can be pasted to another location)
Paste – Paste an item from the clipboard to the selected location
Email Conversation Log – Open a conversation log dialog box and MS Outlook for the associated contact
Phone Conversation Log – Open a conversation log for the associated contact
Address Book – Open the Business Contacts address book to copy a contact to the file
Calculation Field Unlocked – Value recalculated if field unlocked and related fields changed
Calculation Field Locked – Value will not recalculate if field locked and related fields changed
Rate Lock – No lock activity on the file
Rate Lock – File is locked (if red, rated lock is expired)
Rate Lock – Initial rate lock requested
Rate Lock – Rate lock extension requested
Rate Lock – Rate lock extension requested on an expired lock
Rate Lock – Rate lock extension pending
Rate Lock – Lock cancelation requested
Rate Lock – Rate lock canceled
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EMAIL SIGNATURES
Introduction For users who send information via email directly from Encompass (such as eDisclosure notifications to borrowers), a personal email signature can be set up similar in manner to setting up signatures in Outlook.
Procedure: Setting Up an Email Signature
To set up an email signature: 1. From the Encompass menu (upper left corner of Encompass
screen) select Settings… 2. Click the “+” next to Personal Settings to expand the menu
and select My Profile. 3. Edit the Email Signature pane.
4. Click the icon [Save] (upper right corner of page). 5. Click the [Close] button.
DEFAULT FILE CONTACTS
Introduction Encompass has a Default File Contacts feature that allows individual users to enter commonly used service providers. For instance, if a dedicated escrow company is going to be used on most transactions for a branch processor, a default contact may be set up to associate the escrow company with the Processor’s Encompass information.
There is also a Line Item Number field for each default contact where the corresponding line item number of the LE/CD can be entered to ensure the contact is transferred to appropriate forms.
Procedure: Adding Default File Contacts
To set up or add default file contacts: 1. From the Encompass menu (upper left corner of Encompass
screen) select Settings. 2. On the left panel click the “+” next to Personal Settings to
expand the menu, then select Default File Contacts. 3. Click the Address Book icon next to the Company Name
field for the category of default file contact you want to add. • Categories that may be set up as Default File Contacts:
o Appraiser o Credit Company o Escrow Company o Flood Insurance o Hazard Insurance o Mortgage Insurance o Title Insurance Company o Underwriter
(Continued)
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Procedure: Adding Default File Contacts (Continued)
4. Contacts associated with the selected category will be displayed in a new window, Business Contacts.
5. Select a business contact and the contact information will be copied to the Default File Contacts list.
6. Click the [Save] icon (upper right corner of page), then click [Close].
CHANNELS OF BUSINESS
Commonly Used Channels of Business
Each channel of business has a set of unique milestones to be completed by various loan team members. The channels of business most commonly used in Encompass are:
• Banked – Retail • Banked – Wholesale (for use by Orion Lending Wholesale
Division only) • Brokered
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PROCESSING WORKFLOW AND ENCOMPASS MILESTONES
Loan Progress Loans progress in Encompass by attaining a series of milestones, one stage and one department to the next until completion.
Milestone Templates
Milestone templates frequently used in Encompass are: • Retail • Brokered Out • Reverse Mortgage • DPA 2nd
Default Milestones
New loans in Encompass default to the retail channel and follow the milestones below. If for any reason, the loan falls in to one of the other programs listed above, the milestone template must be changed accordingly.
Changing the Milestone Template
Once the loan is coded with the correct channel (for Brokered Out loans) or the correct program (for Reverse Mortgage or DPA 2nd) and saved, the milestone template should change accordingly. If the milestone template does not automatically change from within the loan in Encompass 1. Click the Loan menu header at the top of the page 2. Select the Manage Milestone Templates… option, then 3. Click the Apply Automatic Mode… option
4. The following message will appear:
5. Click [OK], then click [Save].
(Continued)
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Changing the Milestone Template (Continued)
6. The Milestone Log Change dialog box will open displaying current (default) and new (program/channel-specific) milestones.
7. Click [OK] to accept changes. 8. Click [OK] to confirm.
MILESTONES RETAIL
Retail Workflow
The Retail Channel is the most commonly used by AFN Loan Processors. The following table outlines the retail workflow and the Processor’s responsibilities in completing a loan. (Additional details are provided in later sections of this manual.)
Milestone RETAIL
Milestone Details
File Started • Default milestone assigned to each new loan originated • Initial Disclosures are prepared and sent
App Received
(24 Hours)
• Initial Disclosures returned [via eDisclosures in Encompass, or with live signatures by the borrower(s)]
• Loan Officer or Processor completes the App Received milestone within 24 hours of receipt of signed disclosures
• Upon completion of App Received milestone, loan is moved from the Prospects to the Pipeline folder
• Disclosures are sorted into appropriate placeholders in the eFolder
Processing
(24-72 Hours)
• Within 24 hours of receipt of borrower’s initial paperwork (stips), the Processor completes the Processing milestone to confirm receipt and start the initial review of the file
• Confirm minimum required items received for review for the requested loan program (i.e. income for all listed jobs, credit report, legible ID, disclosures, current property expenses, and mortgage statements for all properties owned)
• Review documents received and organize all documentation into appropriate placeholders in the eFolder
• Confirm correct program code in Encompass • Run preliminary AUS (if program requires it) to confirm eligibility • Processor, or Junior Processor at Processor’s direction, confirms
compliance with disclosure requirements and orders all applicable third party items
• Complete the Processing screen in Encompass and track by marking the items requested from the borrower and third parties
• Complete any necessary re-disclosures within 3 days of changed circumstance
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MILESTONES – RETAIL (CONTINUED)
Milestone Details (Continued)
Submittal (48-72 Hours)
• Upon receipt of all needed items complete the Submittal milestone to send the file to Underwriting for review
• Compliance department will complete preliminary audit of disclosures and state-specific items needed prior to Underwriting approval (Processor to review upon completion)
• Complete any necessary re-disclosures within 3 days of COC • Underwriter to review the loan as submitted and issue decision
(Suspended/Decisioned or Conditional Approval), and list conditions needed in Encompass Underwriting Conditions tab (in eFolder)
Decisioned/ Conditional Approval (5-7 Business Days)
• If suspended, Underwriter shall complete the Decisioned milestone and provide all conditions needed on loan (for both approval and prior to docs and funding)
• If approved, Underwriter shall complete the Conditional Approval milestone and provide all conditions needed on loan (for both prior to docs and funding)
• Processor shall review underwriting and compliance audit conditions and prepare list of items needed
• If there are any items the Processor does not understand, clarify with the Underwriter or Compliance auditor
• Processor to complete any necessary re-disclosures within 3 days of changed circumstance
• Processor shall upload conditions in Encompass eFolder and attach/ mark as received to prompt Underwriter review
• Processor shall prepare the loan for closing, ensuring the estimated closing date is accurate, an accurate fee sheet is obtained from the settlement agent with the fees updated in Encompass for the correct loan amount, correct impound dates (if an escrow account is to be established), and a current payoff with the payoff balance updated in Encompass (if refinance) – changes after clearance in Underwriting will result in additional Underwriting touches and delays
PTD Review (24-48 Hours)
• If all conditions are satisfactory, Underwriter to complete the PTD Review milestone in Encompass (if Compliance is also approved, the loan should auto-complete the Cleared for Docs milestone as well, unless a wet state)
Cleared for Docs (24 Hours)
• Within 24 hours of submission into the Compliance Review queue, the Compliance Auditor shall review all submitted compliance conditions and clear in Encompass (if applicable)
• An automated email will be sent out by Encompass notifying the Processor that the file has been cleared in Compliance or if there are still outstanding conditions
• If all compliance conditions are cleared, the Compliance Auditor will complete the compliance approval in Encompass and the loan will automatically be moved to the Cleared for Docs milestone (if PTD Review has been completed)
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MILESTONES – RETAIL (CONTINUED)
Docs Request (24 Hours)
• Once cleared for docs, the Processor shall complete the Doc Order screen in Encompass and assign a Doc Drawer or Doc Drawer group for the file
• Processor shall confirm the signing date/time with the settlement agent when completing signing information on the Doc Order screen
• The loan will automatically be moved to the Docs Request milestone once the Doc Order screen is completed in full (including the Doc Request Checklist) and a Doc Drawer is assigned to the loan
• The Processor shall take care to confirm that all items addressed on the Doc Request Checklist are in fact in the eFolder for the Doc Drawer to review (otherwise the file may be kicked back to Processing for completion of necessary items and delays in docs may occur)
• Processor reviews the prior-to-funding conditions to confirm all items are timely addressed so there are no funding delays
Docs Out (24 Hours)
• The Doc Drawer will complete this milestone upon validation of all necessary items for docs (from the Doc Checklist) and submission of the loan docs to the settlement agent
• Processor to confirm receipt of docs with the settlement agent and verify that a signing appointment is set up for the proper date/time (most states have date-sensitive closing documents)
Doc Signing (24 hours)
• Funding Team completes this milestone when docs are received back and checked into the system for a Funder to review
Docs Review (24 Hours)
• The Funder will complete this milestone when they have completed the pre-funding review of the loan
• The Processor shall review and request all necessary funding conditions, then upload the items and notify the funder upon receipt
Funding • The Funder will complete this milestone once the wire is sent and funding confirmation has occurred
Shipping • The Shipper will complete this milestone when the loan has been shipped to the investor
Purchased • The Post Closer may contact the Processor if there are post-closing items needed by the investor in order to purchase the loan
• The Post Closer will complete this milestone when the loan has been purchased by the investor
Reconcile • Trailing Docs is assigned and will follow up on trailing documents needed to complete the loan file
Completion • Trailing Docs will complete this milestone when all trailing documents have been received and no more tasks are required on the file
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MILESTONES BROKERED OUT LOANS
Introduction In the event a loan cannot be closed in-house (through the retail channel), it may have to go through an exception process to be approved to be brokered out. For details on how to request an exception to broker out a loan, and procedures on handling brokered out loans in Encompass, please refer to the AFN Procedure Tracking Brokered Out Loans.
Brokered out approval requests should be submitted in Encompass and approved by the corporate office prior to sending a loan package to a lender for the purpose of brokering out.
Milestones – BROKERED OUT
Milestone Details
File Started • This is the default milestone assigned to each new loan when originated in Encompass
• Initial Disclosures are prepared and sent at this milestone
App Received • Initial Disclosures are returned [either via eDisclosures in Encompass or returned with live signatures by the borrower(s)]
• The Loan Officer or Processor shall complete the App Received milestone within 24 hours of receipt of the signed disclosures
• The loan should be moved from the Prospects to the Pipeline folder upon completion of this milestone
• Disclosures should be sorted into appropriate eFolder placeholders
Processing • Within 24 hours of receipt of borrower’s initial paperwork (stips), the Processor shall complete the Processing milestone to confirm receipt and start the initial review of the file
• Processor shall confirm the channel is reflected as Brokered in Encompass
• Processor shall confirm the Brokered Out screen is completed and exception to broker out is approved by corporate
• Processor shall confirm minimum items needed are received for review for the requested loan program
• Processor shall review the documents received and organize all documentation into their appropriate placeholders in the eFolder
• Processor shall confirm the program code is correct in Encompass • Processor shall run preliminary AUS (if program requires it) to
confirm eligibility • Complete the Processing screen in Encompass and for tracking
purposes, mark the items requested from the borrower and third party items
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Milestones – BROKERED OUT
Submit to Lender
• Upon receipt of all needed items, Processor shall complete the Submit to Lender milestone when the file is sent to the Lender for Underwriting
Approved by Lender
• Upon receipt of the approval from the lender, the Processor shall complete the Approved by Lender milestone and upload a copy of the Lender’s approval to the eFolder in Encompass
Lender Docs Out • Processor shall complete this milestone when docs are prepared and sent out by the Lender
• Any documentation received for conditions should be uploaded to the eFolder by the Processor to ensure the file is completely documented
Lender Funded • Processor shall access the Brokered Out screen in Encompass and complete the Closing section of the screen once confirmed that the Lender has funded the loan
• Processor shall enter the funded date and the anticipated broker check information on the Brokered Out screen
• The Lender Funded milestone will automatically complete once this information has been entered in the Brokered Out screen
Completion • Corporate will review and audit the file to ensure completion and complete the audit review on the Brokered Out screen
• Processor shall comply with any requests for documentation needed to ensure the file is complete in Encompass
• Milestone will auto-complete once corporate has cleared the audit on the Brokered Out screen
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MILESTONES REVERSE MORTGAGE
Procedure: Reverse Mortgage Milestones
When the loan program is a reverse mortgage the Processor must: 1. Ensure the program code is entered correctly on the AFN
Borrower Summary – Origination screen for Encompass to recognize the loan is a reverse mortgage
2. Confirm the loan program selection reflects HECM30 to indicate the loan is a reverse mortgage
3. Milestone templates should then auto-update to the proper milestones for reverse mortgages If Encompass does not automatically change the milestone template, follow the steps for Changing the Milestone Template (page 20, above) to update the milestone template appropriately once the correct program code has been selected. For training materials and access to the portal for originating HECM loans, please contact Richard Fitzpatrick, CSA ([email protected]).
Milestones – REVERSE MORTGAGE
Milestone Details
• Initial Disclosures are prepared and sent at this milestone (HECM documents and disclosures must be sent)
App Received • Initial Disclosures are returned (HECM documents and disclosures) • The Loan Officer or Processor shall complete the App Received
milestone within 24 hours of receipt of the signed disclosures • The loan should be moved from the Prospects to the Pipeline folder
upon completion of this milestone • Disclosures should be sorted into their appropriate placeholders in
the eFolder Processing • Within 24 hours of receipt of borrower’s initial paperwork (stips), the
Processor shall complete the Processing milestone to confirm receipt and start the initial review of the file
• Processor shall confirm minimum items needed are received for review
• Processor shall review the documents received and organize all documentation into their appropriate placeholders in the eFolder
• Processor shall confirm the program code is correct in Encompass
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Processing • Processor (or Junior Processor, at Processor’s direction) shall confirm compliance with disclosure requirements and order all applicable third party items
• Processor shall complete the Processing screen in Encompass marking the third-party items requested
Submit to Lender
• Upon receipt of all needed items, Processor shall complete the Submit to Lender milestone and send to the Lender for Underwriting
Approved by Lender
• Upon receipt of the approval from the lender, the Processor shall complete the Approved by Lender milestone and upload a copy of the Lender’s approval to the eFolder in Encompass
Lender Docs Out • Processor shall complete this milestone when docs are prepared and sent out by the Lender
• Any documentation received for conditions should be uploaded to the eFolder by the Processor to ensure the file is completely documented
Docs Signing • The Funding team will complete this milestone when docs are received back and checked into the system for a funder to review
Docs Review • The Funder will complete this milestone when they have completed the pre-funding review of the loan; final prior to funding conditions will be issued at this time
• The Processor shall review and request all necessary funding conditions, then upload the items and notify the funder upon receipt so that the funder can review
Funding • The Funder will complete this milestone once the wire is sent and funding confirmation has occurred
Shipping • The Shipper will complete this milestone when the loan has been shipped to the investor
Purchased • The Post Closer may contact the Processor if there are post-closing items needed by the investor in order to purchase the loan
• The Post Closer will complete this milestone when the loan has been purchased by the investor
Completion • Trailing Docs will complete this milestone when all trailing documents are received and no more tasks are required on the file
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MILESTONES DPA 2ND
Procedure: DPA Milestone
If the loan falls under a DPA program, the Processor must ensure the program code is entered correctly on the AFN Borrower Summary – Origination screen in order for Encompass to recognize the loan has a Bond or DPA.
• Confirm the Loan Program selection includes DPA (i.e. FF30 DPA or CF30 DPA)
• Loans with an accompanying DPA must have an additional loan for the DPA funds generated in Encompass
• Refer to the AFN Procedure Bond/DPA Programs for details on handling DPA loans in Encompass
• Once the additional loan has been generated in Encompass for the DPA funds, ensure the program code is set to *Bond/DPA Subordinate Lien correctly on the AFN Borrower Summary – Origination screen in order for Encompass to recognize the loan is for DPA funds
Note: Once entered, the milestone templates should auto-update to the proper milestones for DPAs. If the template does not update automatically, follow the steps to Changing the Milestone Template (page 20) to update the milestone template.
Milestones – DPA 2ND
Milestone Details
• Initial Disclosures are prepared and sent at this milestone (if the DPA program requires disclosures such as an initial LE and/or 1003, the Processor should confirm they are properly generated)
App Received • The Loan Officer or Processor shall complete the App Received milestone within 24 hours of receipt of the signed disclosures
• The loan should be moved from the Prospects to the Pipeline folder upon completion of this milestone
Processing • The Processor shall complete this milestone upon initial review for the DPA
Doc Request • The Processor shall complete this milestone for both the 1st and the DPA 2nd when ready to request docs
Docs Out • The Doc Drawer will complete this milestone upon validation of all necessary items for docs (from the Doc Checklist) and submission of loan docs to the settlement agent (for both the 1st and DPA 2nd)
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Milestones – DPA 2ND
Docs Signing • The Funding team will complete this milestone when docs are received back and checked into the system for a funder to review (for both the 1st and the DPA 2nd)
Docs Review • The Funder will complete this milestone when they have completed the pre-funding review of the loan (for both the 1st and the DPA 2nd); final prior to funding conditions will be issued at this time (conditions issued on 1st only)
Funding • The Funder will complete this milestone (for both the 1st and the DPA 2nd) once the wire is sent and funding confirmation has occurred
Shipping • The Shipper will complete this milestone (for both the 1st and the DPA 2nd) when the loan has been shipped to the investor
Purchased • The Post Closer will complete this milestone (for both the 1st and the DPA 2nd) when the loan has been purchased by the investor
Completion • Trailing Docs will complete this milestone when all trailing documents have been received and no more tasks are required on the file
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ENCOMPASS LOAN PROCESSING
Procedure: Opening a Loan File for Review
To review in Encompass: 1. Open the loan by double clicking on the loan from the Pipeline
view. 2. Once opened, a banner will display at the top of the loan file
reflecting pertinent loan information [borrower(s) names, property address, loan number and amount, LTV/CLTV/HCLTV, DTI, rate, lock status, estimated closing date, and a dropdown of the assigned file contacts, loan program and purpose, earliest closing date (TRID), sales price/appraised value, occupancy/number of units, and FICO].
3. Under the borrower section, there is a dropdown menu that
allows the user to toggle back and forth between applications when there is more than one borrower pair listed.
FILE LOG
Introduction The File Log communicates historical, current, and future loan- related activities and events. It includes milestones with their anticipated completion dates and logged file activity. Note: A milestone in bold font has been completed; the corresponding date is the completion date. To view File Log activity: • Click the “+” sign in front of a milestone to view file activity
during that milestone. Note: When no “+” sign appears in front of a milestone, no activity has been logged.
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Introduction and Policy
The Encompass Conversation Log is used to track interactions with borrowers, service providers, and other contacts, and to leave important notes to fellow AFN personnel who will access the file. When instructed to “add a note” to the file, the Conversation Log is where the note should be added.
Each time the user adds a note in the Conversation Log, the notes are automatically dated and time stamped with the user’s information.
• Every time a loan is opened and touched the user must enter notes regarding actions and progress in the loan file.
• Notes must be in compliance with confidentiality requirements and used primarily to update status and maintain a record of contact that keeps all parties informed of work completed and items pending on the loan.
• Notes must be current and precise; Conversation Log notes may never be deleted and are a permanent internal record in the Encompass system.
Procedure: Adding Notes to the Conversation Log
To add a note to the Conversation Log:
1. Click the [Add] icon next to the File Log tab
or
2. Click on the Tools tab 3. Select Conversation Log
4. Type a subject in the Name field
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CONVERSATION LOG (CONTINUED)
Default Option for New Log Entries
If a Conversation Log entry is marked [] "Show entry in the loan log," a notation of the entry will be made in the file log once the Processor adds the name and comments detailing the notes to add to the file. This is the default option when adding a new entry.
Procedure: Viewing Notes in the Conversation Log
To view notes: 1. Click Tools 2. Select Conversation Log
Existing notes are listed from oldest to newest. Users are encouraged to read and review the conversation log when opening a file, particularly when the file is first assigned, as there may be pertinent information useful in processing the loan (i.e., settlement agent information, structure/set up notes, etc.).
ALERTS AND MESSAGES
Timely Resolution of Alerts
An alert is notification of a pending, due, or overdue event (i.e., a re-disclosure is required). Processors must ensure the timely resolution of all alerts. Failure to meet time requirements may jeopardize the entire loan.
Note: A red flag next to an entry denotes a compliance alert.
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Access to Alerts and Messages
There are two methods to access alerts and messages: 1. LP – Processing Queue
The Alerts & Messages tab will appear in the first two columns of the Pipeline view when utilizing the Loan Processor. The number of alerts is shown in red; messages are shown in green,
Or
2. When opening a loan The Alerts & Messages tab is located next to the File Log on the upper left-hand side.
Note: A number appearing for either means an alert or message is outstanding that requires immediate review/action.
Common Alerts
Alerts include (but are not limited to): • ATR/QM Notifications • Compliance Review results (Alerts/Warnings/Did Not Pass) • Document Expected or Document Expired • eFolder Updated • Good Faith Fee Variance Violated • Changes to Loan Data After Lock • Lender Credit Not Approved by Branch • Rate Lock Activity • Re-Disclose LE or CD (APR/Fee Changes or Lock Activity) • Send Initial Disclosures • NOIA Due • NOIA Follow-Up
Unread Messages
A number in a green box indicates a loan file contains unread messages. To view a message listed on the Alerts & Messages tab, click on the line item and the message will appear in the right pane of the loan window. Messages will often indicate the receipt of e-consent, disclosures, or faxes from a borrower: checking messages regularly will help ensure the timely review of all received documentation.
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Clearing Alerts and Messages
For more information on how to clear alerts, please refer to the AFN Alerts/Messages Matrix.
MILESTONE WORKSHEET AND TASKS
Worksheets Every milestone has an associated Worksheet with areas for Documents, Tasks, Required Fields, and Milestone Comments.
To access the Worksheet go to the Log tab and click the milestone (i.e., Send to Processing).
Tasks Tasks are either programmed by the Administrator (Corporate) and must be completed prior to finishing the milestone, or can be added individually by the user. Tasks can help the user (or others with whom the user will interact while working the file) with required follow-up and other important file activity.
Procedure: Adding a Task
To add a task: 1. Click the [Task List] button 2. Click the [Add] icon 3. A Task dialog box will appear 4. Assign the task High, Normal or Low priority 5. Select the milestone at which it should be completed 6. Indicate the number of days to complete 7. Assign follow-up alerts, and 8. Leave comments on the task
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MILESTONE WORKSHEET AND TASKS (CONTINUED)
Procedure: Adding a Task (Continued)
Note: Once created, the task may appear as an alert to be cleared if it becomes past due based on the due date entered by the user.
MAVENT COMPLIANCE REVIEW TOOL
Compliance Checks
The Encompass Compliance Review tool (Mavent) is used during the loan process to run a compliance check of the file. This check reviews file data for compliance with TILA, RESPA, HOEPA, NMLS Licensing, High Cost Loans, Consumer Credit, and various other industry regulations. Reviews run automatically at certain milestones and can also be ordered manually. Note: When manually ordering a Compliance Review, order a Preview Report because the Preview Report is based on the loan’s current information, not the last disclosed information.
Mavent To access Mavent: 1. Click the Tools tab 2. Select Compliance Review
Compliance Review Audit Results
When Mavent is run, a Compliance Review Audit Results window may open with a list of warnings, alerts, fail messages, or possible fatal errors. If this occurs, review the results carefully and determine a resolution.
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Compliance Review Audit (Continued)
Fields Required to Run Mavent
At a minimum, the following Encompass fields are required prior to running a Mavent report:
• Loan Amount (Field ID 1109) • LE Date (Field ID 3972) or Application Date (Field ID 745) • Appraised Value (Field ID 356) or Estimated Appraised
Value (Field ID 1821) • Loan Term (Field ID 1347) • Note Rate (Field ID 3) • First Payment Date (Field ID 682) • If ARM: Index Value (Field ID 688) • ZIP Code (Field ID 15) Note: To go to a field using the Field ID, press [Ctrl] + [G] > enter the Field ID in the text box that opens > press [Enter].
INITIAL DISCLOSURES
Branch: 1003 The branch will start the loan in the Encompass Prospects folder and will complete all required fields for the 1003, including but not limited to: basic loan criteria for qualification, employment information, schedule of real estate for all properties owned, fees on the 2015 Itemization screen, and liabilities imported from the credit report.
(The credit report needs to be run at the time of application to ensure a credit score disclosure is correctly populated).
Branch: RESPA and 4506-T
The branch will have three days to generate and send initial disclosures once all six pieces of RESPA information are entered (detailed in the following table).
In order to send out disclosures at this time, 4506-T information must also be completed for all borrower pairs.
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INITIAL DISCLOSURES (CONTINUED)
RESPA Form (Screen) Field Name Field ID AFN Borrower Summary Origination or 1003 Page 1
1. Borrower Name First name Middle name (optional) Last name
4000 4001 4002
1003 Page 2 2. Gross Monthly Income Borrower: Total Co-Borrower: Total
910 911
65 97
4. Property Address Address City State Zip
11 12 14 15
AFN Borrower Summary Origination 5. Property Estimated Value 1821 AFN Borrower Summary Origination or 1003 Page 1
6. Mortgage Amount Sought Base Loan Amount or Loan Amount (on 1003)
1109
Disclosures Sent via Encompass eFolder
The preferred method to send disclosures is electronically through the Encompass eFolder. With this method, both the LO and the borrower(s) will sign disclosures electronically. Once signed by all parties, the Loan Originator or Processor can retrieve the disclosures via the eFolder.
Procedure: Document Retrieval
To retrieve disclosures and other documents sent via Encompass:
1. Click on the message indicator to clear the message alert, then go to the eFolder and click the [Retrieve] button.
2. The system will retrieve the documents and place them in the document placeholders that were created when the disclosures were generated.
3. Complete the App Received milestone to trigger auto-filing of the disclosures into AFN’s preferred placeholders (or trigger auto- filing by going to the AFN - Borrower Summary Origination form (screen) and clicking the [Disclosure Organizer] button.
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Procedure: Document Retrieval (Continued)
4. If there is no placeholder present, the documents will be placed in the File Manager and the user must move to the appropriate placeholders.
5. For more information on managing Encompass documents and attachments, see Encompass eFolder Quick Reference Guide.
Disclosure Tracking Tool
Encompass tracks what is disclosed to borrowers and when. The Disclosure Tracking Tool tracks the method of delivery (eSignature through Encompass, US Mail, In Person, or Email), APR at time of disclosure, the disclosures that have been sent (i.e., whether an LE or CD was sent out with the package), and stores copies of the sent disclosures so the user can see exactly what the borrower received.
Disclosures Sent via US Mail
When disclosures are not sent via Encompass eDisclosures, the default method for delivery of disclosures becomes the US Mail. In this case, the user must manually update the delivery method used and track the received date (which should match the borrower's signature date).
Note: Because this affects other closing dates in the loan file, the delivery method and receipt date must be 100% accurate.
Disclosure Tracking: Multiple Entries
When multiple entries are made in Disclosure Tracking:
1. Avoid making multiple entries in Disclosure Tracking for the same disclosure set (initial or re-disclosure); preview the disclosures to be sent out prior to printing or sending (both printing and sending will prompt the system to make an entry on the Disclosure Tracking screen); errors are caught by previewing in advance to avoid having to regenerate the disclosure(s).
2. Disclosures generated in error (with no intent to deliver to the borrower), must be excluded from the timeline so as not to affect tracking dates: click on the Disclosure History entry you wish to exclude and click the [Exclude from Timeline] button.
3. Included entries should match what is actually uploaded for that disclosure entry in the eFolder.
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Intent to Proceed
Completing the Intent to Proceed:
When initial disclosures are received, the Processor must complete the Intent to Proceed information accurately in the Disclosure Tracking tool.
Updating the Intent To Proceed date:
Click on the initial disclosure entry; enter the actual received date of the disclosures for each borrower, then click the [Intent to Proceed] box.
Once clicked, the user can then select the date of receipt and the received method (as shown the example below).
COMPLETING THE APP RECEIVED AND PROCESSING MILESTONES
Receiving Signed Disclosures
If the borrower(s) completed disclosures via signature through Encompass, a message will appear upon completion notifying the user that the disclosures are ready to be retrieved.
The borrower is still responsible for sending in any accompanying state-specific “wet signed” disclosures; forms such as the borrower’s authorization and social security authorization form are not required by compliance but may be required during the course of processing the loan.
If the borrower elected to wet sign the entire package, the recipient must manually upload the signed disclosures if not sent back using an Encompass cover sheet or other method to upload directly to Encompass.
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App Received Milestone
Within 24 hours of receipt of signed disclosures, the Loan Originator or Processor must complete the App Received milestone. The loan will now appear in the Loan Processor’s Pipeline view.
The loan should automatically move from the Prospects to the Pipeline folder once the App Received milestone is reached.
Send to Processing Milestone
Upon receiving the loan in the Pipeline view and receiving preliminary items for review, the Processor will complete the Send to Processing milestone.
Completion of this milestone will start the Loan Processing turn time clock ticking. This is when initial review by the Processor should take place as well as the ordering of all pertinent third party items.
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Paperless System
The Encompass eFolder is a paperless system where electronic copies of all file documents are retained within placeholders.
Uploading Documents
The Loan Processor must ensure all required documentation is acceptable (completed properly, has required signatures, etc.) and uploaded to the Encompass eFolder in appropriate placeholders. Prior to submission to Underwriting, documents are to be rotated if necessary to face the proper direction for viewing.
Guide to Sorting and Placeholders
The following table is a general guide for sorting items and determining which placeholders should be used for the document type.
GUIDE TO SORTING DOCUMENTS Document Name Description
***Compliance Conditions for Review***
***Loan Doc Attachments***
Any documents to be signed by the borrowers with the closing documents
Acct - Appraisal & Payment Authorization
Appraisal Authorization form from the borrower to be used when ordering appraisal (when required; move to TRASH after the order is submitted)
Acctg - Appraisal Invoices
Credit invoices specific to vendor Informative Research
Acctg - Misc. Invoices Any third-party invoices other than Appraisal or Credit Asset - Bank Statements and All Other Asset Types
• One bucket per borrower pair per account (joint borrowers can be combined if both are on the account) and uploaded in the following order: o Bank statement #1 (most recent month) o Bank statement #1 (next consecutive month) o Source of funds/LOE for deposits #1 (if applicable) o Access letter, etc. #1 o Bank statement #2 (most recent month)
• Create an additional bucket for each separate account • Use description to notate different accounts for each bucket
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Asset - Gift Documentation
Asset - Misc. Assets • Miscellaneous asset items Compliance Report • Compliance report (Mavent)--most recent (the rest should be
removed to trash folder) Credit - Appraisals - Other Properties
• Appraisal for other property (not subject), if required for qualification
Credit - Bankruptcy Papers
Credit - Credit Report - Spouse
Credit - Credit Supplement
• Credit supplement(s) for any updated items on the credit report
Credit - Current Mortgage Statement (subject)
• Mortgage statement(s) for all existing loans on subject property
Credit - Divorce Decree/Marriage License
applicable Credit - Fraud Victim Cert
• Underwriting Assistant to complete and upload certification after speaking with borrower when there is a fraud alert on credit
Credit - Letter of Explanation
• Borrower LOE's (inquiries, addresses, derog. credit, and any other applicable letters)
Credit - Misc. Credit • Any other misc. credit items (credit card statements, etc.) Credit - Note (copy) from original loan
• Note with all pages for existing loan on subject property
Credit - Payment History/Cancelled Checks
• Cancelled checks/bank statements showing 12-month history of payments by party
Credit - Picture ID and SS Card
• Driver's license/passport • SS Cards and/or SS validation results
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Credit - Proof of Mtg/Taxes/Insurance - Other Properties
• Mortgage statement(s) for other property (separate bucket for each additional property, description should show property address)
• Insurance (hazard and flood, if applicable) for other property • HOA statement (if applicable) for other property • Tax bill for other property • Property profile report for other property
Credit Report • Credit report Credit - Utility Bill • Recent utility bill(s) if required for loan program or to support
occupancy Credit - Verification of Rent
• Completed Verification of Rent (VOR) form, canceled checks for rent on existing residence, and/or lease agreement for current residence when borrower is renting (as required)
Disclosures - LE/GFE (Initial)
• AFN Notice of Intent to Proceed • Initial LE • Settlement service list of providers
Disclosures - LE/GFE Re-Disclosed #__
• Re-disclosed LE and COC (separate bucket for each time re- disclosed)
Disclosures - Misc. Initial Disclosures
Disclosures - State Specific Disclosures
Escrow/Title - CD Fee Sheet Estimate
• Estimated settlement statement/CD from settlement agent-- most recent only (old versions should be moved to trash)
Escrow/Title - CD Initial • Initial CD disclosed by AFN Escrow/Title - CD Initial Re-disclosed #__
• Re-disclosed CD and COC (use a separate bucket each time the CD is re-disclosed)
Escrow/Title - Condo Master Insurance Policy
• Master insurance policy (if subject property is a condo/attached PUD)
Escrow/Title - CPL (Closing Protection Letter)
• CPL
• Settlement agent's E & O policy
Escrow/Title - EMD Receipts/Copy of Check
• EMD receipt from settlement agent and copy of check (front and back)
Escrow/Title - Escrow Instructions
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Escrow/Title - Flood Insurance Policy
Escrow/Title - Hazard Insurance Policy
Escrow/Title - HO-6 Insurance Policy
Escrow/Title - Homestead/Community Property Deed
• Prepared Deed or previously executed Deed for waiver or homestead or community property rights by spouse (if required per Non-Borrowing Spouse requirements)
Escrow/Title - Misc. Escrow/Title
Escrow/Title - Pay off Demand
• Payoff demand(s) for subject property--most recent only (old versions should be moved to trash)
Escrow/Title - POA - Authorized Signer List for PA
• Authorized signor list for purchase agreement (if applicable)
Escrow/Title - Power of Attorney
Escrow/Title - Prelim or Survey
• Preliminary Title Report • Any applicable title supplements • Survey or plat map, if applicable
Escrow/Title - Property Profile
Escrow/Title - Property Tax Rolls
Escrow/Title - Purchase Agreement/Addendums
Escrow/Title - Seller - LLC Documentation
• Seller LLC documentation (if applicable where seller is an entity)
Escrow/Title - Termite Report and Clearance
• Termite Report (original report and clearance)
Escrow/Title - Trust Documentation
Escrow/Title - Vesting • Vesting amendment/confirmation (if applicable) Escrow/Title - Wiring Instructions
• Wiring instructions for settlement agent
Flood Certificate • Flood Certificate (ordered through Encompass services tab); move/rename to Property – Flood Certification once completed
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Fraud/Audit Services • FraudGuard Reports Gen - 1003 (initial) • Initial 1003 signed by all parties Gen - 203k 92700a Borrower’s Acknowledgement
• 203k or HomeStyle Borrower Acknowledgement Disclosure Forms for Renovation Loans
Gen - 203k Contractor Bids
• Contractor Licensing Documents & Insurance for Renovation Loans
Gen - 203k Homeowner/Contractor Agreement
Gen - 203k HUD 92700 Maximum Mortgage Worksheet
• Maximum Mortgage Worksheet for Renovation Loans
Gen - 203k Misc. Documents
Gen - 92900 A or 26- 1802a (initial)
• Initial 92900A/VA 26-1802A signed by all parties
Gen - Bond/DPA Agency Final Approval Letter
• Bond/DPA agency notice of approval
Gen - Bond/DPA Misc. Disclosures
Gen - Bond/DPA Reservation Letter
• Reservation and rate lock letter
Gen - FHA Case Transfer Documentation
• Supporting Documentation (Case Query in previous lender’s name, proof of transfer from previous lender) to support FHA case was transferred from another lender
Gen - FHA /VA Case Number and CAIVRS
• FHA case (showing borrower validation cleared) or VA 26- 1805/LAPP appraisal order or VA IRRRL case
• CAIVRS for all borrowers • Refinance authorization (if FHA to FHA loan)
Gen - HECM Counseling Certificate
Gen - Homebuyer Education Certification
Gen - Maximum Loan Amount Worksheet
• Maximum mortgage worksheet (depending on loan type)
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Gen - MCC Commitment Notice
• MCC commitment letter
Gen - MCC Documents • Any required MCC agency disclosures Gen - MCC Reservation Letter
• MCC reservation letter
Gen - Misc Underwriting
Gen - Net Tangible Benefit Worksheet
• NTB form (depending on loan type)
Gen - Note and Deed for Subordinate Lien
• Note/credit line agreement w/all pages and deed of trust
Gen - NY CEMA Worksheet
Gen - Subordination Agreement
• GUS AUS Findings for USDA Loans
Gen - USDA Income/ Household Member Disclosure
• Completed Income/Household Member Disclosure required for USDA loans
Gen - VA Certification of Eligibility
• Certificate of Eligibility from VA
Gen - VA DD-214 Discharge Papers
• VA DD214 discharge paperwork
• Initial disclosure for VA IRRRL and cash out refinances
Gen - VA Nearest Living Relative/Child Care Statement
• Initial disclosure required for all VA loans (if corrections are required, they should be uploaded to this folder)
Income - Alive & Well Statement
Income - Income Calculation Sheets
Income - VOEs and Paystubs and W2's/1099's and Misc.
• One bucket per borrower (description should show borrower name to identify each one):
• Written VOE(s) • Paystubs (most recent on top) • W-2's (most recent on top) • Misc. Letters explaining job history, wage discrepancy, LOE
from employer, etc.
Revised 01/03/2021; Page 45 of 96
Income - P & L/Balance Sheet
Income - Tax Returns (personal)
• Federal tax returns and all schedules (most recent year on top)
Income - Corp Tax Returns
• Federal Tax Returns and all Schedules (most recent year on top)
Income - Partnership Returns
• Federal Tax Returns and all Schedules (most recent year on top)
Income - Signed Tax Returns
Income - Tax Transcripts
• IRS transcripts for all applicable years (most recent on top)
Income - Rental Agreement
• Rental/lease agreement with all pages (one bucket per property, description should show property address)
Income - Misc. Income • Alternative income documentation (if applicable) Income – VVOE's (Docs)
• VVOE performed by processor, to include: • AFN VVOE Form • Employer Verification Form (if applicable) • Yellow Pages listing or Internet printout showing contact
information Mortgage Insurance • MI quote (if MI is needed) to verify amounts used for
disclosing Property - AIR Appraisal Delivery Certification
• AIR Delivery Certification & AIR Lender Acknowledgment Forms
Property - AIR Appraisal Review (Desk/Field)
• Completed CDA or other Desk/Field Review (as required)
Property - Appraisals • First Generation Appraisal Report and Independence Certification (E&O Policy for Appraiser if not included in original report)
Property - 1004 D Inspection for Repairs
• 1004D/442, if applicable
Property - Condo Warranty and HOA Docs
• Completed HOA questionnaire form • By-laws, CC&Rs and any other accompanying documents
Property - Flood Certification
Revised 01/03/2021; Page 46 of 96
Property - Property Inspection Waiver
• Fully executed property inspection waiver form for conventional loans exercising an appraisal waiver from DU/LPA
Property - Submission Summary Report (SSR's)
• FNM and FRE submission summary reports or FHA submission summary report
Property - Misc. Property
• Miscellaneous Property Documentation
QC - AVM • AVM to support value (if required by program/investor)
QC - Credit Refresh (Funding)
QC - NOIA Letters • Completed NOIA letter detailing outstanding items needed
QC - Notice of Withdrawn Application
• Completed Notice of Withdrawal form for canceled loans
TRASH • Trash Folder--Items not to be used in underwriting decision-- items should still be labeled for easy retrieval in the event they need to be recovered
Underwriting • AUS findings--most recent only (the rest should be moved to the Trash folder)
Verification of Assets VOA • Completed AccountChek electronic asset validation report
EFOLDER: INITIAL DISCLOSURES
Document Organization
During the processing review, the Processor is required to ensure all documents in the eFolder are organized in accordance with AFN’s required placements (as above). Depending on the loan type, a particular file will have at minimum three disclosure folders for all initial signed disclosures (four if a government loan). All other individual placeholders for specific disclosures should be removed from the eFolder, with the exception of the initial 1003 (for all loans), and the initial 92900A/1802A (for government loans), to be filed in the following placeholders:
• Gen – 1003 (initial) • Gen – 92900 A or 26-1802a (initial)
Examples of the different disclosure placeholders follow.
Revised 01/03/2021; Page 47 of 96
Placeholder: FHA/VA Disclosures
Government loans: All FHA/VA disclosures are placed under the Disclosures – FHA/VA Disclosures placeholder. Example:
Placeholder: State Specific Disclosures
All loans: Any State-specific disclosures are placed under the Disclosures – State Specific Disclosures placeholder.
Example:
Placeholder: LE-Related Disclosures
All loans: All Initial LE-related disclosures are placed under the Disclosures – LE/GFE (Initial) placeholder. Example:
Revised 01/03/2021; Page 48 of 96
EFOLDER: INITIAL DISCLOSURES (CONTINUED)
Placeholder: Misc. Initial Disclosures
All loans: All other initial disclosures are placed in the Disclosures – Misc. Initial Disclosures placeholder.
Example:
All loans: Re-disclosed LE-related documents are placed in the Disclosures – LE/GFE Re-Disclosed #__ placeholder.
Example:
EFOLDER: ASSETS
Placeholder: Assets
All Asset documentation is placed under the Assets – Bank Stmts & All Other Asset Types placeholder: 1. Itemize within that placeholder for each borrower pair and
each separate account. 2. Combined statements can remain in one folder, but separate
statements should be placed in separate folders with a description detailing the account.
3. For separate borrower pairs, a new placeholder should be used if the assets are not jointly owned.
(Continued)
Revised 01/03/2021; Page 49 of 96
EFOLDER: ASSETS (CONTINUED)
Placeholder: Assets (Continued)
Letters of Explanation (LOEs)
When applicable, LOEs are to be placed in the same placeholder with bank statements.
Example:
Non-Payroll Deposits
All large non-payroll deposits must be documented and explained as part of the submission package to the Underwriter.
EFOLDER: INCOME
Placeholder: Income
All Income documentation is placed under the Income – VOEs & Paystubs & W2s/1099s & Misc. placeholder, with a separate entry for each borrower (even if borrowers are married); where there are multiple documents, order most recent to oldest:
• WVOE – Place at the top of the folder • Paystubs – Place below the WVOE • W-2s – Place below the Paystubs • Award Letter (if applicable) – Place below the W-2s
Example:
Multiple Borrowers
If more than one borrower, type the borrower’s name in the Description field. Entries for multiple borrowers will appear as shown in the example below:
Revised 01/03/2021; Page 50 of 96
LOAN PROCESSOR REVIEW
PROCESSING AND SUBMISSION REVIEW
Review Upon receipt of the loan file in the Processing milestone, ensure that all required documentation is in the eFolder; review thoroughly for accuracy and completeness.
Processing Checklist
Complete the steps in the Loan Processing checklist to ensure all items are addressed properly prior to Submission to Underwriting.
Updating Loan File Information
While reviewing and updating file documentation in the eFolder, update Encompass itself to ensure accuracy of all documentation. Resolve any discrepancies between the loan documentation and the application.
AFN – BORROWER SUMMARY ORIGINATION
AFN – Borrower Summary Origination
The AFN – Borrower Summary Origination form (screen) is the main screen in Encompass and includes an overview of the loan file from the 1003.
This first section shows the loan channel (Banked – Retail, Wholesale, or Brokered), the current loan status, branch ID and information, and the application date of the loan.
1003 This section contains basic borrower information from the 1003.

Date post:	28-Mar-2022
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