Using the Encompass Compliance Service · The TILA-RESPA review applies to closed-end loans secured...

Compliance Service

e with Encompass Broker & Banker Editions

Using the Encompass

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rtgage Returns®, Prospect Manager®, Total d. Other company and product names may

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Using the Encompass Compliance Service - Encompass Broker and Banker EditionsRev. 9/22/2020

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Table of Contents

Chapter 1: Introduction ................................................................ 1

Chapter 2: Compliance Review Setup ...................................... 2Compliance Review Setup: User Access ................................... 2Accessing Compliance Review Setup ....................................... 2Report Types .......................................................................... 3What is Included in Each Review? ............................................ 3

TILA/TILA-RESPA Review ............................................... 3TILA-RESPA Review ...................................................... 3TILA Right of Rescission Review ...................................... 3HOEPA Review .............................................................. 3Higher Priced Mortgage Review ....................................... 3GSE .............................................................................. 4Consumer Credit Review ................................................ 4Home Mortgage Disclosure Act (HMDA) Review ................ 4Rate Spread Review ....................................................... 4FHA .............................................................................. 4Citi Mortgage Rules ........................................................ 4OFAC Review ................................................................ 4VA Review ..................................................................... 4LO Compensation Review ............................................... 5NMLS Registration Review .............................................. 5Ability to Repay/Qualified Mortgage Review ...................... 5Flood Zone Enterprise Rule ............................................. 5Licensing Tests .............................................................. 5

Completing the Compliance Review Setup Wizard ...................... 5Report Tab ..................................................................... 6License Tab ................................................................. 13Automatic Ordering Tab ................................................ 14Users Tab .................................................................... 15Fee Mapping Tab ......................................................... 16

Starting and Stopping Compliance Reviews ............................. 16Granting Permission to Use the ECS Data Viewer .................... 17

Chapter 3: Fee Mapping ............................................................. 18Managing Standard Fees ....................................................... 18How Does the Compliance Audit Interpret and Treat Fees? ........ 18

Specific Fees ............................................................... 19Fee Mapping Procedures ....................................................... 20

Adding Fees ................................................................. 20Restricting Entry of Free-Form Fees ........................................ 21Encompass Compliance Service Default Fees Table ................. 22

Chapter 4: Encompass Compliance Service......................... 38Ordering a Compliance Report ................................................ 38Viewing the Fields That Are Assessed During a Loan Check ...... 38Viewing the Report ................................................................ 39

Status Results .............................................................. 42Viewing a List of Compliance Issues ............................... 43View a List of Loan’s Fees ............................................. 43Compliance Review Log Alert ......................................... 43

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Chapter 1: Introduction
Chapter 1

IntroductionThe Encompass Compliance Service enables you to perform a loan check (i.e., order a compliance report) at any point during the loan process. During a loan check, loans are reviewed for compliance issues based on Truth in Lending (TIL), HOEPA, State and Local High Cost, State Consumer Credit, and other industry regulations and mandates. Once the check is complete, a compliance report is generated indicating the loan's compliance issues and exceptions, as well as data within the loan that successfully passed the review.

An individual with an Encompass admin user ID can use the Compliance Review Setup to configure the Encompass Compliance Service. This tool provides an instant loan file check and determines if a loan complies with selected state and federal regulations.

The following chapters provide detailed information about configuring and using your Encompass Compliance Service:

• Chapter 2, “Compliance Review Setup”, provides detailed instructions for completing the Compliance Review Setup. These settings determine the reviews that are included in a loan check, when loan checks are performed, and the users who are permitted to manually order a compliance report.

• Chapter 3, “Fee Mapping”, steps you through setting up your fees using the Itemization Fee Management tool. A description of each fee used by the Encompass Compliance Service is provided, as well as tips and best practices for managing your closing fees.

• Chapter 4, “Encompass Compliance Service”, discusses how to order an Encompass Compliance Service report, view a completed report (complete with a list of returned alerts, errors, and pass/fail messages), and go to a field where data has not passed the review.

To access all of the features described in the guide, you must be logged in to Encompass as the admin user.

2

e Review Setup

tup:ass, and then click Settings. al Services, and then click Compliance

cessing Compliance Review Setup, click the ght corner.

e setup but want to change the settings, click upper-right corner.

Chapter 2: Compliance Review Setup

Chapter 2

Compliance Review Setup Prior to using the Encompass Compliance Service, Encompass admins must complete the Compliance Review Setup where they can:

• Specify the type of compliance report your company will use.• Specify the types of reviews that will be included in the compliance report.• Identify your company’s lending classification and lending and broker licenses.• Enable the automatic ordering of compliance reports when selected loan

milestones are completed.• Specify loan criteria to determine when the specified compliance review should

be included in the compliance report.• Identify users who can manually order compliance reports.• Use the Itemization Fee Management tool to map closing fees on the 2010

Itemization form to matching fields in the Encompass Compliance Service.• Start or stop automatic report ordering.• Make changes to the Compliance Review Setup.Users with an Encompass admin User ID can also grant other users access to Compliance Review Setup, based on their persona.

Compliance Review Setup: User Access

To Grant Users Access to Compliance Review Setup:1 On the menu bar, click Encompass, and then click Settings. 2 On the left panel, click Company/User Setup, and then click Personas.3 Click to select a persona in the left panel, and then click the Settings tab.4 In the Company Settings section, select Compliance Review Setup.5 Click the Save icon.

Accessing Complianc

To Access Compliance Review Se1 On the menu bar, click Encomp2 On the left panel, click Addition

Review Setup. 3 If this is the first time you are ac

Get Setup button in the upper-ri

4 If you have already completed ththe Change Setup button in the

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closed-end loans secured by 1-4 unit where the application is taken on or after

to open-end HELOCS (field ID 1172 equals for personal, family, or household purposes

ce does not receive enough information to ed by real property, it will apply the TILA-s secured by 1-4 unit dwellings, made sehold purposes, where the application date here the Encompass Form Version (field ID CD.

-RESPA Review, refer to the Encompass eview Integration Guide.

eview tests a non-purchase money closed-end loan ng to determine whether it is in compliance ents. The Right of Rescission test compares n date and the loan disbursement date to the

t to cancel expiration date and returns an n the earliest allowable date.

r this review, input the last day of the RTC date.

ith HOEPA and applicable state and local liance Service calculates the high cost by applicable state and local jurisdictions to igh cost loan. The federal, state, and local calculations ensure proper classification of e is paid (for example, lender, affiliate, the fee is paid. The results of the review e compliance report.

eviewd ensures critical regulatory requirements are rtgage loans” (HPML). HPML thresholds are .F.R. § 226.35(a)(1) of the Regulation Z. n Z defines HPMLs to include loans with an

he threshold for a first-lien loan is 1.5% or rate for a comparable loan (which is not an


Report TypesThe following report types are available from the Report tab:

NOTE: The Standard Report (Subscription) option is still provided in the Compliance Review Setup wizard however this report type is a legacy product and not available to new Encompass Compliance Service customers. For more information please contact your Ellie Mae sales representative.

• Premium - The Premium reports (Subscription and Closed Loan Pricing) contain:• Federal Truth-In-Lending Act (TILA) Tolerance and TILA-RESPA tests• Federal Home Ownership and Equity Protection Act (HOEPA) State and

Local High Cost Thresholds tests• Approved Fannie Mae Points & Fees and “HUD-HOEPA” Mortgage

Thresholds tests• Higher Priced Mortgage review• State Consumer Credit Law review• Home Mortgage Disclosure Act (HMDA) review• Rate Spread review

• Custom - All Custom reports are set up by Ellie Mae based on your company's configuration and loan volume. All of the Premium reviews can be included in a Custom report, plus Licensing reviews and custom business rules to enforce internal compliance policies or investor-specific program requirements. Custom reports cannot be used unless you obtain a custom service code (e.g., excluding Saturdays from a report) from Ellie Mae Technical Support.

What is Included in Each Review?TILA/TILA-RESPA ReviewThis review includes comparisons, tests, functions and calculations based on the Truth In Lending Act and Mortgage Disclosure Improvement Act (MDIA). Specifically, the Encompass Compliance Service recalculates the finance charge amount, amount financed, APR, total of payments, payment schedule, and the amortization schedule. The MDIA test validates that the loan's disclosure dates are in compliance with the “3-7-3 rules” set forth in the MDIA. Note that the MDIA test is optional and you can choose to exclude it from your compliance reports. The results of the review display in the TILA-Tolerance and TILA-Payment sections of the compliance report.

TILA-RESPA ReviewThe TILA-RESPA review applies to dwellings attached to real property, October 3, 2015.

NOTE: This review does not apply HELOC) or loans not made primarily(field ID QM.X110).

If the Encompass Compliance Servidetermine whether the loan is securRESPA Rules to all closed-end loanprimarily for personal, family, or houis on or after October 3, 2015 and w3969) is RESPA-TILA 2015 LE and

For more information about the TILACompliance Service TILA-RESPA R

TILA Right of Rescission RThe TILA Right of Rescission reviewsecured by a 1-4 unit primary dwelliwith TILA rescission timing requiremthe disclosed right to cancel expiratiocompliance review's calculated righexception if either date is earlier tha

NOTE: When working with dates foexpiration regardless of the funding

HOEPA ReviewThis review checks for compliance wjurisdictions. The Encompass Compthresholds as defined in HOEPA anddetermine if a loan is considered a hAPR and Points and Fees thresholdfees by ascertaining to whom the feoriginator, or provider) and by whomdisplay in the High Cost section of th

Higher Priced Mortgage RThis review calculates thresholds anmet with respect to “higher priced mocalculated according to Section 12 CEffective October 1, 2009, RegulatioAPR above a specified threshold. Tmore above the average prime offer

http://help.elliemae.com/mavent/documents/ECS/TILA-RESPA_ECSIntegrationGuide.pdf

http://help.elliemae.com/mavent/documents/ECS/TILA-RESPA_ECSIntegrationGuide.pdf

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e Act (HMDA) Reviewoan data to HMDA requirements. The FFIEC sed against the HMDA fields. The results of tion of the compliance report.

g the lender of the HMDA Rate Spread on a Encompass Compliance Service uses the mpass APR, or calculated APR as the loan’s HMDA-LAR Rate Spread reporting nce between the loan's APR and the average nsaction is equal to or greater than 1.5% for ns. The results of this review display in the Review section of the compliance report.

s and identifies certain issues in the following Service Fee Prohibition, Late Charge and nt and Rate Restrictions, MSA Loan Limits, f this review display in the FHA Enterprise liance report.

tagage® policies available to approved eview display in the Citi Enterprise Rules port.

e loan's borrower names and aliases against l's (OFAC) Specially Designated Nationals, (i.e., the “SDN” list), Bureau of Industry and ined by the U.S. Department of Commerce, y the Canadian and British governments.

rules to test for some of the prohibited terms e following enterprise rules:

VA) (VA) Be Financed in a Purchase Money Loan (VA) Be Financed in a Cash-Out Refinance Loan


unusual interest rate). The threshold for a second lien is 3.5% or more. If the loan is classified as an HPML, the Encompass Compliance Service analyzes the loan's prepayment penalties to determine if they are prohibited under Regulation Z. The results of the review display in the Higher Priced section of the compliance report.

GSEThe Government Sponsored Enterprise (GSE) review includes the following:

• Fannie Mae Points & Fees - The review calculates the allowable Fannie Mae points and fees thresholds as defined in the Fannie Mae Lender Letter 03-00, issued April 11, 2000 (and codified in Fannie Mae’s Selling Guide Part VII, Section 104.11), as updated and amended based upon loan data.

• Freddie Mac Points & Fees - The review calculates the allowable Freddie Mac points and fees thresholds as defined in the Freddie Mac Industry Letter, issued December 28, 2000 (and codified in Freddie Mac’s Seller/Servicer Guide Section 22.32), as updated and amended based upon loan data.

• GSE HUD-HOEPA Mortgage High Cost Thresholds - The review calculates the high cost thresholds as defined in the Fannie Mae Selling Guide Part VII, Section 104.15, as updated and amended, and the Freddie Mac Single-Family Seller/Servicer Guide Chapter 22, as updated and amended, based upon loan data.

The results of the review display in the GSE section of the compliance report.

Consumer Credit ReviewThe State Rules review applies the requirements of over 340 US state laws for consumer residential mortgage loans secured by real property. It enforces the laws as they relate to:

• Usury rate ceilings percentage caps • Prohibited fees • Fee percentage or dollar amount limits • Higher-rate, higher-risk, higher-priced, sub-prime, non-prime, and rate spread

loans • Prepayment penalty prohibitions and limitations • Late fee dollar amount limits and length of late fee grace periods • Interest accrual start dates • Negative amortization prohibitions • Balloon payment prohibitions or term limitations • Payment and term limitations The results of this review display in the State Rules section of the compliance report.

Home Mortgage DisclosurThis review evaluates the pertinent lValidity and Quality edits are procesthe review display in the HMDA sec

Rate Spread ReviewThis review provides an alert advisinHigher-Priced Mortgage Loan. The greater of the Disclosed APR, EncoAPR for comparison purposes. The requirement occurs when the differeprime offer rate for a comparable trafirst liens or 3.5% for subordinate lieHMDA Rate Spread Loan Enterprise

FHAThe FHA review evaluates FHA loanareas: Seller Contribution Limit, TaxGrace Period Limits, ARM Adjustmeand Loan Term Limits. The results oRules Reviewer section of the comp

Citi Mortgage RulesThis review includes certain CitiMorcorrespondents. The results of this rReview section of the compliance re

OFAC ReviewThe OFAC review compares all of ththe Office of Foreign Assets ControBlocked Persons and Countries ListSecurity Denied Persons list maintaas well as similar lists established b

VA ReviewThe VA Enterprise Review contains on VA loans. This review contains th

• Federal - Late Charge Limitation (• Federal - Grace Period Limitation• Federal - Discount Points May Not• Federal - Discount Points May Not

(VA)

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ior lien secured by a 1 - 4 unit dwelling unless od faith determination of the consumer's the rule establishes certain protections for tgage”.

ortgage review is run on a loan file, a report s, fee assessments and discount points that

his will be reflected under the Ability-to-eading in the report.

leject property is in a flood zone. If the subject 366), an exception message will be returned charge mapped to "Insurance Impound - ement) is not included in the loan.

tabase of over 450,000 licensed mortgage rs, that is updated as frequently as state sing information available. The custom o determine the following:

licensed in a particular jurisdiction. tanding.

to originate this transaction type. the License section of the compliance report.

liance Review Setup

wizard to select a compliance report type, de in the loan check, specify your company's

eporting, enable users to manually run a the appropriate fields in the Compliance up wizard to configure the settings for the


• Federal - Discount Points Limitation in a Rate and Term Refinance Loan (VA) (Warning)

• Federal - Loan Origination Fee 1% Limitation (VA)• Federal - Unallowable Itemized Fees (1% Maximum) (VA)• Federal - Loan Origination Fee and Unallowable Itemized Fees Charged (VA)• Federal - Rate and Term Refinance Itemized Fees Charged (VA) (IRRL

Warning)

LO Compensation ReviewThis review provides a Warning message on a closed-end loan secured by a 1-4 unit dwelling with an Application Date on or after April 1, 2011 that includes the Mortgage Broker (loan originator) receiving any of the following fees from someone other than the Borrower:

• Loan Discount • Yield Spread Premium • RESPA - Your Charge/Credit (Points) amount • Prepaid Interest • Interest Rate Buydown Fee The Encompass Compliance Service provides a Warning message on a closed-end loan secured by a 1-4 unit dwelling with an Application Date on or after April 1, 2011 that includes the Mortgage Broker (loan originator) receiving compensation directly from the Borrower and from another person.

NMLS Registration ReviewThe NMLS (Nationwide Mortgage Licensing System) Registration Review review verifies an individual loan originator’s NMLS information against NMLS data using NMLS B2B Access. The review may be used to test for the applicable individual loan originator’s NMLS registration information on seasoned loans, with the applicable data and information at the time the loans were closed.

The Encompass Compliance Service returns Warning or Failure messages if the loan originator's NMLS unique identifier, name, or license number does not match the NMLS registration data provided by NMLS B2B Access. The service also returns the name and license(s) associated with the individual loan originator’s NMLS unique identifier for easy reference.

Ability to Repay/Qualified Mortgage ReviewThis review checks loans to for compliance with the Consumer Financial Protection Bureau’s (CFPB) amendment to Regulation Z (taking effect on applications on or after January 10, 2014) that implements sections 1411, 1412, and 1414 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and prohibits creditors from making most residential mortgage

loans against a closed end first or junthe creditor makes a reasonable, goability to repay the loan. In addition,creditors who make a “qualified mor

Once the Ability to Repay/Qualified Mis provided that details rate thresholdcount towards the 3% QM ceiling. TRepay/Qualified Mortgage Review h

Flood Zone Enterprise RuThis review checks whether the subproperty is in a flood zone, (field ID 2if a Flood Insurance Reserve (i.e., aFlood" in the Itemization Fee Manag

Licensing TestsEllie Mae maintains a nationwide daentities, including lenders and brokeregulatory agencies make new licenLicense review uses this database t

• The lender assigned to the loan is• The license is active and in good s• The license authorizes the lender • The results of the review display in

Completing the CompWizardUse the Compliance Review Setup configure the types of reviews to inclulending licenses, set up automatic rreport, and map closing cost fees toService. Use the five tabs in the setCompliance Service.

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section, you can set up the review so that pulated to the HMDA Information form, printed on the Customer line at the top of the ded fee details in the compliance report, and

new compliance report results in the TQL

HMDA Information input form, select Import e report will be added to the appropriate fields m - MSA Number (field ID 699), County Code ield ID 1395), and Census Tract (field ID 700) elect Overwrite Existing Field Data to m the report into the loan fields even if the ing data will be overwritten.hat is entered in the Company Name field age 3 input form, select the Use Company

eck box. name entered on the 1003 - Page 3 to print only for loans going through specific loan ct the check box (or check boxes) for the mple, if you want this name to print to the loans going through the Banked - Retail or nnels, select the Banked - Retail and

e entered in the Name field on the Company mpass Settings to print to the compliance se Company Name from 1003 Page 3

l print to all compliance reports, regardless of (If the Use Company Name from 1003 Page elected, clear the check box.)

ails in the compliance report, select the ails in Compliance Report check box.nts to new compliance report results in the Automatically add comments to new in the TQL Services tool check box., select your reviews, based on your selection

bscription option agree to pay for Encompass forth in the Encompass Compliance Service ditions link on the Report tab in the Setup reement.


Report Tab1 On the Report tab, select a report type from the Report drop-down list.

NOTE: The Standard Report (Subscription) option is still provided in the Report drop-down list however this report type is a legacy product and not available to new Encompass Compliance Service customers. For more information please contact your Ellie Mae sales representative.

2 Select the check box to authorize the report purchase.3 The Channel option (field ID 2626) selected on the Borrower Summary form

indicates how your company is handling a specific loan, such as Brokered or Banked. l, and as you proceed through the Compliance Review Setup wizard, you will indicate how the loan's channel will be used to trigger certain compliance tests, to determine which milestone will be used to trigger compliance reports, and to determine which conditions to apply before running a compliance report. Use the Default Channel drop-down list to select the channel to use for loans where a channel has not been selected on the Borrower Summary.NOTE: If necessary, the Automatic Ordering tab provides a Loan Channel option where you can indicate that you do not want the system to run a compliance review if a loan channel has not been selected on the Borrower Summary form.

4 Using the Configuration Optionsgeocode data is automatically pocontrol the company name that iscompliance report, display expanautomatically add comments to Services tool.

• To import geocode data to theGeocode Data. Data from thon the HMDA Information for(field ID 1396), State Code (f— only if the field is blank. Sautomatically import data frofield contains data. The exist

• To print the company name t(field ID 315) on the 1003 - PName from 1003 Page 3 ch• If you want the company

to the compliance report origination channels, seledesired channel. For exacompliance report for all Brokered origination chaBrokered check boxes.

• To print the company namInformation page in Encoreport, do not select the Ucheck box. This name wiltheir origination channel. 3 check box is currently s

• To display expanded fee detDisplay Expanded Fee Det

• To automatically add commeTQL Services tool, select thecompliance report results

5 In the Reviews to include sectionin Step 1.NOTE: Companies using the SuCompliance Service fees as set contract. Click the Terms & ConWizard for details about each ag

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nel Types section, if you want the TILA/TILA- included in the loan check only for loans in el, select the Channel check box, and then

for each loan channel you want to specify.l condition from the drop-down list if you do y conditions to the review.iew from being performed until a specific en finished, select Run Review only when a e is reached from the drop-down list, and ilestone from the appropriate drop-down list. e for each loan channel as needed. where a loan channel (field ID 2626) has not the Borrower Summary, the system uses the you selected on the Report tab when tarting milestone for the TILA Review.

iew from being performed until specific fields lect Run Review only when certain Fields the drop-down list, and then select the m the Required Fields list.

ILA-RESPA Review can be configured to essed for an individual loan review. You must omponent of the review at all, and at what ponent should be run.

ent only when a specific Milestone is a component to be run when a specific . A list of components is displayed.column, select which milestone will trigger to run.nable check box will be selected and the n when the specified milestone is reached. If

k box is cleared, that component will be

Charge Run Conditions section, if you want lerance portion of the review to run, select

hen a certain Milestone is reached from the


Standard Report (Subscription)The Standard Report (Subscription) is a legacy product and not available to new Encompass Compliance Service customers. For more information please contact your Ellie Mae sales representative.

This option includes the following reviews:

• TILA/TILA-RESPA Review• HOEPA Review• Higher Priced Mortgage Review• GSE Review• Consumer Credit Review• Home Mortgage Disclosure Act (HMDA) Review• Rate Spread Review• FHA Review• Citi Mortgage Rules• OFAC Review• VA Review• LO Compensation Review• NMLS Registration Review• Ability to Repay/Qualified Mortgage Review• Flood Zone Enterprise Rule For information on setting up these reviews, refer to the Premium Report (Subscription) or Premium Report (Closed Loan Pricing) section.

Premium Report (Subscription) or Premium Report (Closed Loan Pricing)

1 Clear the TILA/TILA-RESPA Review check box if you do not want to include the TILA/TILA-RESPA review in the loan check.If you are including the TILA/TILA-RESPA Review:

• Click the Edit icon to designate required channels, milestones, fields that must be satisfied before the TILA/TILA-RESPA Review will run, manage which components of the review is run, when the finance charge tolerance portion of the review will run, how a rebate will be treated, select whether the Loan Estimate or Closing Disclosure preview will be run, or select whether investment properties will be included in the TILA-RESPA rules.

Review Requirements Tab

• In the Required ChanRESPA Review to bea specific loan channselect the check box

• Select No additionanot want to apply an• To restrict the rev

milestone has becertain Milestonthen select the mSelect a milestonNOTE: For loansbeen selected onDefault Channel determining the s

• To restrict the revare populated, seare filled in fromdesired fields fro

Components TabEach component of the Teither be applied or supprselect whether to run a cpoint (milestone) the com

• Select Run componreached if you wantmilestone is reached• In the Milestone

each component• By default, the E

component will ruthe Enable checdisabled.

Additional Settings Tab• In the TILA Finance

the finance charge toRun Review only w

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en if the Amount Financed exceeds the or all Negative Prepaid Finance Charges

tive Prepaid Interest - A fee submitted as a finance charge offsets a fee submitted as a finance charge. If the sum of all prepaid es is less than $0.00, ECS allows all negative harge fees, except the negative prepaid se the Calculated Federal Amount Financed mount. not allow the prepaid interest to be less than

review Settings section, if you want to w (Loan Estimate or Closing Disclosure) for a specific loan channel, select the ppropriate drop-down list.nly consider this setting when there is one or

s included within Disclosure Tracking but no closures.

operty Applicability section, if you want to roperties in the TILA-RESPA (Know Before ct one or both of the check boxes.A-RESPA Rules to Investment Properties lude investment properties in the TILA-

A-RESPA Rules to Owner-Occupied s if you want to include owner-occupied

in the TILA-RESPA rules. Save.ply to loan reviews using the APR and e options.l loans to set up the report to note a violation between the disclosed APR and the current

25% when reviewing any type of loan.r regular loans... option to set up the report

there is difference between the disclosed APR greater than 125% when reviewing a ifference between the disclosed APR and than .25% when reviewing an irregular loant APR and Finance Charge Tolerances


drop-down list, and then select the milestone from the appropriate drop-down list. Select a milestone for each loan channel as needed.NOTE: The Select Additional Condition applies to the entire TILA/TILA-RESPA Review.

• The available milestones under each corresponding TILA Review finance charge run condition channel are ones that are equal to or later than the milestones selected in the TILA/TILA-RESPA Review run condition channels.

• The milestone selected in the corresponding channel under the TILA/TILA-RESPA Review run conditions is the default channel selected under the TILA Finance Charge run conditions for that channel.

• In the Prepaid Finance Charge Credit Settings section, if you want to indicate how a rebate should be treated, select an option from the drop-down list and then one of the radio button options. For more information on the available options, see Prepaid Finance Charge Credit Settings.NOTE: If you select Apply rebate until Amount Financed equals the Note Amount (Default), only the For all Negative Prepaid Finance Charges option is available.

• Apply rebate until Amount Financed equals the Note Amount (Default) - A fee submitted as a negative prepaid finance charge offsets a fee submitted as a positive prepaid finance charge. ECS allows this until the Calculated Federal Amount Financed equals the note amount.NOTE: ECS will not allow the sum of all fees characterized as a prepaid finance charge to go below $0.00.

• Apply rebate even if the Amount Financed exceeds the Note Amount - For all Negative Prepaid Finance Charges - A fee submitted as a negative prepaid finance charge offsets a fee submitted as a positive prepaid finance charge. If the sum of all prepaid finance charge fees is less than $0.00, ECS allows that negative amount to increase the Calculated Federal Amount Financed above the note amount.

• Apply rebate even if the Amount Financed exceeds the Note Amount - For Negative Prepaid Interest Only - A fee submitted as a negative prepaid finance charge offsets a fee submitted as a positive prepaid finance charge. If the sum of all prepaid finance charge fees is less than $0.00, ECS allows only negative prepaid interest fee to increase the Calculated Federal Amount Financed above the note amount.

• Apply rebate evNote Amount - Fexcluding Neganegative prepaidpositive prepaid finance charge feprepaid finance cinterest, to increaabove the note aNOTE: ECS will$0.00.

• In the TILA-RESPA Pindicate which previeshould be performedmilestone from the aNOTE: You should omore Loan Estimateincluded Closing Dis

• In the Investment Princlude investment pYou Owe) rules, sele• Select Apply TIL

if you want to incRESPA rules.

• Select Apply TILRental Propertierental properties

• When finished, click• Select the tolerance to ap

Finance Charge Toleranc• Select 0.125% for al

if there is a differenceAPR greater than .1

• Select the 0.125% foto note a violation if APR and the currentloan or if there is a dcurrent APR greater

More Information Abou

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efinance transactions, Disclosed Total of sidered accurate if it: (1) is understated by no % of the face amount of the note or $100, ter; or (2) is greater than the amount required

efinance transactions, Disclosed Total of sidered accurate, after the initiation of consumer’s principal dwelling, if it: (1) is o more than $35; or (2) is greater than the to be disclosed.lerance - If checked, the following rule will be

f Payments considered accurate if it: (1) is o more than $100; or (2) is greater than the to be disclosed.x if you do not want to include the heck.

check box is selected, the MDIA review will , including investment properties.

f Rescission check box to include the r loan check.review, click the Edit icon to designate lestones that must be satisfied before the on the loan.

want the TILA ROR to be included in the loan in a specific loan channel, select the Channel select the check box for each loan channel

from being performed until a specific finished, select Run Review only when a reached from the drop-down list, select the ppropriate drop-down list, and then select a an channel as needed. ere a loan channel (field ID 2626) has not Borrower Summary, the system uses the

selected on the Report tab when determining e for the TILA ROR.

ting required loan channels or milestones,

ates for this review, input the last day of the rdless of the funding date.


When the APR and Finance Charge Tolerance option is included in the TILA/TILA-RESPA Review, the Encompass Compliance Service does not test for APR over disclosure unless it is configured as part of a Custom Report. In addition, the Encompass Compliance Service does not receive sufficient information to determine whether the APR is closer to the "actual APR" and therefore does not test for tolerances pursuant to 12 C.F.R. § 226.22(a)(5).

Regulation Z defines the "accuracy" of the closed-end APR in 12 C.F.R. § 226.22. As a general rule, the disclosed APR is considered accurate if it is not more than .125% above or below the APR determined in accordance with 12 C.F.R. § 226.22(a)(1). In an "irregular transaction", the APR is considered accurate if it is not more than .25% above or below the APR. An "irregular transaction" is one that includes one or more of the following features (as defined in 12 C.F.R. § 226.22(a)(2) and (3)):

• Multiple advances• Irregular payment periods, or • Irregular payment amounts (other than an irregular first period or

an irregular first or final payment)Because most creditors and secondary market purchasers prefer a more conservative test, you have the option of using the more restrictive 0.125% for all loans option or applying "the benefit of the quarter" to irregular transactions (i.e., the 0.125% for regular loans and 0.25% for irregular loans option). If you chose to apply the more liberal test to irregular transactions, the Encompass Compliance Service uses the following criteria to determine the loan's status as irregular:

• A closed-end loan secured by a 1-4 unit dwelling that has:• More than one advance in the payment stream• More than three payment streams• Payments that are not equal in amount (except for the first

and/or last payment), or• Payment periods that are not equal (the first payment period

can be different).• Select the tolerance to apply to the Closing Disclosure Total of

Payments to loan reviews either generally or for purposes of a consumer’s right of rescission:• $100 Disclosure and Rescission Tolerances - Checked by

default. If checked, the following rules will be applied to the loan:

• For rescindable rPayments is conmore than ½ of 1whichever is greato be disclosed.

• For rescindable rPayments is conforeclosure on a understated by namount required

• $100 Disclosure Toapplied to the loan:• Disclosed Total o

understated by namount required

• Clear the MDIA check boMDIA review in the loan cNOTE: When the MDIA be performed on all loans

2 Select the TILA Right oTILA ROR review in youIf you are including this required channels or mireview will be performed

• To indicate that you check only for loans check box, and thenyou want to specify.

• To restrict the reviewmilestone has been certain Milestone ismilestone from the amilestone for each loNOTE: For loans whbeen selected on theDefault Channel youthe starting mileston

• When finished indicaclick Save.

• When working with dRTC expiration rega

10

y when a certain Milestone is reached - tricts the review from being performed until a

e has been finished. Select a milestone for el (default setting is “Submittal”) as needed. where a loan channel (field ID 2626) has not the Borrower Summary, the system uses the you selected on the Report tab when tarting milestone for the HMDA Review

y when certain Fields are filled in - This the review from being performed until specific ted. Select the desired fields from the list.

n HMDA Review option if the Exclude loan heck box (field ID HMDA.X24) is checked

MDA Information input form.xpanded HMDA details in Compliance splay expanded HMDA details in the Selecting this option will display all the HMDA running the HMDA review

Save.Review check box to include the Rate Spread k. If you are including this review, click the e rate spread run conditions that must be w will be performed on the loan.ulate the Rate Spread (field ID HMDA.X15) ation form during a loan check, select Import ata from the report will be added to the Rate e field is blank.isting Field Data to automatically import into the Rate Spread field even if the field ta, and then select an option for the Rate

ead - The rate spread is rounded to two ased on the value in the third decimal place. al place is 0 to 4, the value is round down. If place is 5 to 9, the value is round up.e rate spread is 10.254, then it should be .25. If the rate spread is 10.299, then it

up to 10.30.e default option.


3 Clear the GSE Review check box if you do not want to include the GSE HUD-HOEPA Mortgage High Cost Thresholds review in the loan check.If you are including the GSE Review, click the Edit icon to designate required channels, milestones, or loan types that must be satisfied before the GSE Review will run.

• To indicate that you want the GSE Review to be included in the loan check only for loans in a specific loan channel, select the Channel check box, and then select the check box for each loan channel you want to specify.

• Select No additional condition from the drop-down list if you do not want to apply any conditions to the review.

• To restrict the review from being performed until a specific milestone has been finished, select Run Review only when a certain Milestone is reached from the drop-down list, select the milestone from the appropriate drop-down list, and then select a milestone for each loan channel as needed.NOTE: For loans where a loan channel (field ID 2626) has not been selected on the Borrower Summary, the system uses the Default Channel you selected on the Report tab when determining the starting milestone for the GSE Review.

• To restrict the review from being performed based on loan type, select Run Review only when certain Fields are filled in from the drop-down list, and then select the type of loans you want to be reviewed from the Required Loan Types list.

• When finished, click Save.4 Clear the HMDA Review check box if you do not want to include the

HMDA review in the loan check. If you are including the HMDA Review, click the Edit icon to designate required channels, milestones, or fields that must be satisfied before the HMDA Review will run.

Review Requirements Tab• To indicate that you want the HMDA Review to be included in the

loan check only for loans in a specific loan channel, select the check box for each loan channel you want to specify, or select the Channel check box to select all channels.

• Select an additional condition from the drop-down list:• No additional condition - This selection will not apply any

conditions to the review.

• Run Review onlThis selection resspecific milestoneach loan channNOTE: For loansbeen selected onDefault Channel determining the s

• Run Review onlselection restrict fields are populaRequired Fields

Additional Settings Tab• Select the Do not ru

from HMDA report cfor the loan on the H

• Select the Display eReports option to diCompliance Report. data points utilized in

• When finished, click5 Select the Rate Spread

review in your loan checEdit icon to designate thsatisfied before the revie• To automatically pop

on the HMDA InformRate Spread Data. DSpread field only if th

• Select Overwrite Exdata from the report currently contains daSpread value:• Round Rate Spr

decimal places, bIf the third decimthe third decimalFor example, if thround down to 10should be round NOTE: This is th

11

ay/Qualified Mortgage Review check box if de the ATR/QM review in the loan check.bility to Repay/Qualified Mortgage Review, ignate required channels that must be itions that must be met, before the review will n.

Tabwant the Ability to Repay/Qualified Mortgage d in the loan check only for loans in a specific the check box for each loan channel you want he Channel check box to select all channels.l condition from the drop-down list if you do y conditions to the review.iew from being performed until a specific en finished, select Run Review only when a e is reached from the drop-down list, and ilestone from the appropriate drop-down list. e for each loan channel as needed. where a loan channel (field ID 2626) has not the Borrower Summary, the system uses the you selected on the Report tab when tarting milestone for the Ability to

Mortgage Review.

bility to Repay/Qualified Mortgage Review er be applied or suppressed for an individual ect whether to run a component of the review milestone) the component should be run.

ent only when a specific Milestone is a component to be run when a specific . A list of components is displayed.column, select which milestone will trigger to run.nable check box will be selected and the n when the specified milestone is reached. If

k box is cleared, that component will be


• Truncate Rate Spread - The rate spread is truncated to two decimal places.For example, if the rate spread is 10.254, then it should be truncated to 10.25. If the rate spread is 10.299, then it should be truncated to 10.29.

Regardless of which option is selected, if the rate spread has less than two decimal places, zeros are added so the rate spread has two decimals. If the rate spread is a number less than 10.0 (e.g., 9.99), a leading zero is added so the ten's place always has a digit.

6 Clear the NMLS Registration Review check box if you do not want to include the NMLS review in the loan check.If you include the NMLS Review, click the Edit icon to indicate if the review is performed as of the application date, consummation date, or both.

• In the NMLS Review Date section, select the milestones at which the NMLS review should be run.NOTE: You can select either the Application Date, Consummation Date, or both.

• If only the Application Date is selected, the NMLS Review only checks the loan’s current finished milestone as of the application date.

• If only the Consummation Date is selected, the NMLS Review only checks the loan’s current finished milestone as of the consummation date.

• If you select both the Application and Consummation date for a milestone, select whether registration is required as of BOTH the Application Date AND Consummation Date or as of EITHER the Application Date OR Consummation Date in the drop-down field.• If both the Application Date and the Consummation Date are

selected and the drop-down selection is “Application Date AND Consummation Date”, the NMLS Review checks the loan’s current finished milestone as of the application date and the consummation date, and returns a failure if the loan officer is not registered/sponsored as of either date.

• If both the Application Date and the Consummation Date is selected and the drop-down selection is “Application Date OR Consummation Date”, the NMLS Review checks the loan’s current finished milestone as of the application date and the consummation date, and returns a failure if the loan officer is not registered/sponsored as of both dates.

• When finished, click Save.

7 Clear the Ability to Repyou do not want to incluIf you are including the Aclick the Edit icon to dessatisfied, as well as condbe performed on the loa

Review Requirements • To indicate that you

Review to be includeloan channel, select to specify or select t

• Select No additionanot want to apply an• To restrict the rev

milestone has becertain Milestonthen select the mSelect a milestonNOTE: For loansbeen selected onDefault Channel determining the sRepay/Qualified

Components TabEach component of the Acan be configured to eithloan review. You must selat all, and at what point (

• Select Run componreached if you wantmilestone is reached• In the Milestone

each component• By default, the E

component will ruthe Enable checdisabled.

12

, read the Ellie Mae, Inc. Amendment to se of the Encompass Compliance Service. elect the I have read, fully understand, ox, and then click I Accept.ms, click I Decline, and then click Yes to osition will not be in effect when compliance

ew Jersey First Lien Third Party Fee position, sey Licensed Lenders Act (N.J. Rev. Stat. does not allow {(Fee Name) (Fee ID:__)} to NJ. will be included in the State Rules section t lien New Jersey loans if the borrower pays stration Fee, Annual Assessments-Impound, e, Bankruptcy Monitoring Fee, Bond Fee, CLO Access Fee, Closing Protection Letter, ent Assembly Fee, Escrow Account

ee, Funding Fee, HOA Certification Handling e, Loan Tie In Fee, MERS(R) Registration ee, Mortgage Insurance Application Fee, , Processing Fee, Program Participation Fee, inspection Fee, RESPA-Our Origination

nd Lender's Title Insurance, RESPA- Your , Servicing Release Premium, Signing Agent ordination Fee, Underwriting Fee, Unknown g Fee, Verification Fee, Wire Transfer Fee, praisal Field Review Fee, Appraisal Review , Document Redraw Fee, Notary Fee, Payoff ing Fee, Subordination Preparation Fee, and rge.

itionfrom the standard Encompass Compliance rules to certain Washington first lien fees.

, read the Ellie Mae, Inc. Amendment to se of the Encompass Compliance Service. elect the I have read, fully understand, ox, and then click I Accept.ms, click I Decline, and then click Yes to osition will not be in effect when compliance

requesting two modifications to the standard a definition of the standard rules and the


Additional Settings Tab• The Ability-to-Repay Loan Type field (field ID QM.X23) on the

ATR/QM Management tool’s ATR/QM Eligibility tab is automatically populated based on specific data in the loan file. The value populated to this field determines what type of ATR review the Encompass Compliance Service performs. In the Default Ability to Repay Loan Type section, select a default ATR loan type. For loans where the Ability-to-Repay Loan Type field (field ID QM.X23) on the ATR/QM Management tool’s ATR/QM Eligibility tab is blank, the compliance review will run the ATR/QM rules that apply to the ATR loan type selected here.

• The Qualified Mortgage Loan Type field (field ID QM.X24) on the ATR/QM Management tool’s ATR/QM Eligibility tab is automatically populated based on specific data in the loan file. The value populated to this field determines what type of QM review you want the Encompass Compliance Service to perform. In the Default Qualified Mortgage Loan Type section, select a default QM loan type. For loans where the Qualified Mortgage Loan Type field (field ID QM.X24) on the ATR/QM Management tool’s ATR/QM Eligibility tab is blank, the compliance review will run the ATR/QM rules that apply to the QM loan type selected here.

• When finished, click Save.8 Select any additional reviews to include in the loan check.9 Click Next.

Custom ReportsCustom reports are set up by Ellie Mae based on your company's configuration and loan volume. Contact your sales representative to determine the reviews to include the report. Custom reports cannot be used unless you obtain a custom service code (e.g., excluding Saturdays from a report) from Ellie Mae Technical Support.

For information on setting up the reviews, refer to the Premium Report (Subscription) or Premium Report (Closed Loan Pricing) section.

6 In the Compliance Deviations section, select the New Jersey First Lien Third Party Fee Position or Washington First Lien Fee Position check box to deviate from the standard Encompass Compliance Service rules and apply modified rules to certain New Jersey first lien third party fee exceptions or certain Washington first lien fees.New Jersey First Lien Third Party Fee Position Select this check box to deviate from the standard Encompass Compliance Service rules and apply modified rules to certain New Jersey first lien third-party fee exceptions.

• After selecting the check boxAgreement Governing the U

• If you agree with the terms, saccept and agree... check b

• If you do not agree to the terconfirm your decision. The preports are run.

NOTE: If you do not apply this Na Failure message The New Jer17:11C-23; N. J. ADC 3:1-16.2) be charged to the Borrower in of compliance reports run on firsany of the following fees: AdminiAssignment Fee, Assumption FeBond Review Fee, Broker Fees,Compliance Testing Fee, DocumServicing Fee, Escrow Waiver FFee, Interest Rate Buy Down FeFee, Modification/Amendment FOffice Expenses, Other ImpoundRecording Fees-Assignment, ReCharge RESPA-Title Services aCharge/Credit (Points), Rush FeeFee, Yield Spread Premium, SubFee-Finance Charge, VA FundinAppraisal Desk Review Fee, ApFee, Document Preparation FeeDemand Fee, Settlement or ClosUnknown Fee-Non Finance Cha

Washington First Lien Fee PosSelect this check box to deviate Service rules and apply modified

• After selecting the check boxAgreement Governing the U

• If you agree with the terms, saccept and agree... check b

• If you do not agree to the terconfirm your decision. The preports are run.

By selecting this option, you are compliance rules. See below forrequested modifications.

13

ed Rules will not fail a first lien Processed s, except for Loan Discount, paid by the der, exceeds 4% of the first $20,000 or 2%

cipal amount of the loan. Therefore, the user ges on first lien Processed Loans that would tandard Rule.

iews are not included in Custom Reports. stom Report setup, click Next to proceed to

ker Type from the drop-down list.

institution, select the company's Home State

here the company's main (or home) office is of the home state are applied to the loan. n Depository Institution (STLIC) was selected op-down list is disabled.ecific state, select the state from the License

ompany has by selecting the corresponding


• Standard Rule:The Encompass Compliance Service applies the Consumer Loan Act (“CLA”) to all loans made by a CLA licensee secured by real property located in Washington. The CLA regulator advised outside counsel that only fees expressly authorized under the CLA are permitted. RCW 31.04.105(2); WAC 208-620-555; WAC 208-620-560(6). As the regulator interprets this requirement strictly, and the Loan Origination Fee, Loan Discount Fee, and Commitment Fee are the only fees that a lender is expressly permitted to charge as of January 1, 2010, the Encompass Compliance Service will fail the loan if any fee other than a Loan Origination Fee, Loan Discount, or Commitment Fee is charged to the Borrower and paid to the Lender. The Encompass Compliance Service applies the CLA lender fee restriction to both first and subordinate lien loans.

Requested Modification:The Encompass Compliance Service user has requested the modification that all first lien Processed Loans be excluded from the Standard Rule. Pursuant to this request, a Modified Rule will be created that will exclude all first lien Processed Loans submitted by the user from the Standard Rule described above. The Modified Rule will not fail a first lien Processed Loan when any fee other than a Loan Origination Fee, Loan Discount, or Administration Fee is charged to the Borrower and paid to the Lender. Therefore, the user will not receive a failure message on first lien Processed Loans that would otherwise trigger the above Standard Rule.

• Standard Rule:The Encompass Compliance Service applies the Consumer Loan Act (“CLA”) to all loans made by a CLA licensee secured by real property located in Washington. The CLA regulator advised outside counsel that only fees expressly authorized under the CLA are permitted. RCW 31.04.105(2); WAC 208-620-555; WAC 208-620-560(6). The Revised Code of Washington provides: “Every licensee may...In connection with the making of a loan, charge the borrower a nonrefundable, prepaid, loan origination fee not to exceed four percent of the first twenty thousand dollars and two percent thereafter of the principal amount of the loan advanced to or for the direct benefit of the borrower, which fee may be included in the principal balance of the loan;” RCW § 31.04.105(2). The Encompass Compliance Service applies this CLA maximum lender fee restriction to both first and subordinate lien loans.

Requested Modification:The Encompass Compliance Service user has requested the modification that all first lien Processed Loans be excluded from the Standard Rule. Pursuant to this request, Modified Rules will be created that will exclude all first lien Processed Loans submitted by the user from the Standard Rule

described above. The ModifiLoan when the total of all feeBorrower and paid to the Lenpercent thereafter of the prinwill not receive failure messaotherwise trigger the above S

License TabNOTE: State rules and licensing revWhen you reach this point in the Cuthe Automatic Ordering tab.

1 On the License tab, select a Bro

2 If your company is a depository from the drop-down list.• The home state is the state w

located. The applicable laws• If State Licensed Lender - No

in step 1, the Home State dr3 To display only licenses for a sp

Type in drop-down list.4 Specify each license that your c

check box in the Select column.

14

u select this option, the Encompass ly the Kansas Usury Law to all first lien loans 100% or less and apply the Kansas Uniform C) to all subordinate lien loans and all fixed of more than 100%. All Loans - If you select this option, the vice will apply the Kansas UCCC to all loans ansas. the Borrower Summary form indicates how cific loan, such as Brokered or Banked. Use list to select the channel to use for loans elected on the Borrower Summary.

atically at the completion of the selected

select No to disable automatic ordering.

ring and saving report settings, automatic onfiguration settings are saved for future use.


• When you select a license, the Exempt check box displays. Select the Exempt check box if you do not want the Encompass Compliance Service to apply any license or compliance rules associated with that license in the property state.

• State Licensed Lender - Non Depository Institutions must be licensed in every state in which it lends unless it is exempt from licensing.

5 Select a statutory election for first lien, subordinate lien, junior, closed-end, and open-end loans in Maryland and Kansas. Statutory Election in MarylandMaryland law permits a lender to elect to make a loan under the Maryland Credit Grantor Law if the choice to do so is specified in the loan documents [MD COML §12-913.1 and §12-1013.1]. If this election is not made and documented in writing, then other laws in Maryland govern the loan.

• No Statutory Election - If you select this option, the Encompass Compliance Service will apply the Maryland Interest and Usury Provisions to all first lien loans and apply the Maryland Second Mortgage Loan Law to all subordinate lien loans secured by a 1-4 unit dwelling on real property located in Maryland.

• Credit Grantor Law Election (Junior Liens Only) - If you select this option, the Encompass Compliance Service will:• Apply the Maryland Interest and Usury Provisions to all first lien loans.• Apply the Credit Grantor Closed End Credit Provisions to all closed-

end subordinate lien loans secured by a 1-4 unit dwelling on real property located in Maryland.

• Apply the Credit Grantor Revolving Credit Provisions to all open-end subordinate lien loans secured by a 1-4 unit dwelling on real property located in Maryland.

Important: DO NOT select this option unless you have confirmed that the loan documents contain a written election to use the Credit Grantor Law for subordinate lien loans. If you are electing to use the Credit Grantor Law for first lien loans, Ellie Mae must create a custom profile to accommodate this practice. Please contact your Ellie Mae sales representative for more information.

Statutory Election in KansasKansas law specifies the loan types subject to the Kansas Usury Law and to the Kansas Uniform Consumer Credit Code (UCCC). However, the Kansas Usury Law permits the parties to a loan to agree in writing to make the transaction subject to the UCCC for loans that would otherwise be subject to the Usury law. (See Kan. Stat. Ann. §16-207(i)(3).)

• No Statutory Election - If yoCompliance Service will appwith a loan-to-value (LTV) ofConsumer Credit Code (UCCrate first lien loans with a LTV

• Kansas UCCC Election ForEncompass Compliance Sersecured by real property in K

6 The Channel option selected onyour company is handling a spethe Default Channel drop-down where a channel has not been s

7 Click Next.

Automatic Ordering TabBy default, reports will be run autommilestones.

1 On the Automatic Ordering tab,

• If you select No after configuordering is disabled, but the c

15

ually order a report for a loan (all selected der a report at any point during the loan

to have rights to manually order reports or boxes. Click Yes when asked if you want to d.

er Report check box for each user to whom ng rights.

ts to all users, select the Order Report check eport column so that each user’s check box

e able to order a compliance report, clear the

pliance Review - Did Not Pass” alert that is nce report for a loan, select the Clear Alert

with a Clear Alert button on the Compliance g a completed compliance report, these remove the “Compliance Review - Did Not


2 If automatic ordering is enabled, select the Run an Audit Before Ordering check box to display the Compliance Review Audit Results window before a report is run. • If errors occur when the report is run, this window opens with a list of the

errors (typically due to inconsistent data). You can select a list item, and then click Go to Field to open a form with the field highlighted for entry.

3 In the Trigger Milestone section, click the Banked-Retail, Banked-Wholesale, Brokered, or Correspondent tab, and then select at least one milestone from the Milestone list. The report will run automatically at the completion of each selected milestone.

• Using the tabs provided, you can set up different trigger milestones for loans based on the loan's origination channel.

• To select a milestone, select the type of report to run: Preview or Review. NOTE: Preview reports enable you to test for compliance issues before ordering a full compliance review report or disclosing to the borrower. With a preview, the final loan data is not reviewed. The results are based on the loan's current APR and finance charge amounts, not the disclosed values.

• Click Copy these settings to all Channel tabs to copy the milestone selections you have made on the channel tab you are currently viewing to the other three channel tabs.

• For loans where a loan channel (field ID 2626) has not been selected on the Borrower Summary, the system uses the Default Channel you selected on the Report tab when determining trigger milestones.

• A report can be run on the same loan multiple times at no additional charge.

4 Optionally, select loan criteria to apply to the report. Reports will only be run on loans that match the selected criteria.• If you do not select any criteria, the report will be run on all loans.• If you do not want compliance reports to be run on loans that do not have

a loan channel selected, select Loan Channel, and then ensure that the No Channel Selected check box is clear (i.e., not selected). Then select the check box for each loan channel in which the Automatic Ordering settings will apply.

5 Click Next.

Users TabUse this tab to enable users to manusers will be allowed to manually orprocess) and to clear alerts.

NOTE: If you do not want any usersclear alerts, clear all selected checkcontinue to the next tab in the wizar

1 On the Users tab, select the Ordyou want to grant manual orderi

• To grant manual ordering righbox at the top of the Order Ris selected.

• If you do not want a user to buser’s check box.

2 To enable a user to clear a “Comreturned after ordering a compliacheck box for the user.

• Enabled users are provided Review screen. When viewinusers can click this button to

16

d fee will be categorized as Other - Non-) if the fee's APR indicator check box (field ID 15 Itemization form is not selected.egorized as Other - Finance Charge (fee ID r check box on the 2010 or 2015 Itemization

ail addresses in the Admin Email Address curs during the loan review due to a fee that incorrectly, an email alert message will be

ddresses, separate each one using a comma

ut how the Encompass Compliance Service well as tips and best practices for managing

3, “Fee Mapping”. This chapter also provides liance field available in the Encompass

Compliance Reviewse starts automatically after you have up wizard. If you have stopped the service,

e Service performs compliance reviews t of fees. In order for the review to return temization Fee Management tool in tion fees to specific fields in the Encompass t mapped these fees, be sure to do so mpliance Review Setup wizard.

the upper-right corner.

analyzing loans, you must exit Encompass,


Pass” alert that is added to the Log every time a loan does not pass a loan check. Note that even though the alert is removed, the loan's compliance issues remain until they are corrected.

• To enable all users to have access to the Clear Alert button, select the Clear Alert check box at the top of the Clear Alert column so that each user’s check box is selected.

• To hide this button from a user, clear the Clear Alert check box for the user.

3 Use the Search options to filter the Users list or search for users:• Select an option from the drop-down list to display only users with the

selected persona in the Users list.• Enter a user's name or other search criteria in the text box and then click

Search. User names matching the search criteria are displayed. • Click Clear to remove all search criteria.

4 Click Next.

Fee Mapping TabUse this tab to select the option to Use Encompass Finance Charge Indicator for Unmapped Fees and to enter email addresses for error notifications.

NOTE: All of your Itemization fees must be mapped to specific fields in the Encompass Compliance Service so that compliance reports contain complete and accurate results. Use the Itemization Fee Management setting in Encompass Settings to map these fees. The Itemization Fee Management help topic provides detailed instructions for using the Itemization Fee Management setting to map your fees to the corresponding Encompass Compliance Service fees. It also describes how fees are treated and interpreted by the Encompass Compliance Service and includes a description of each default fee used by the service.

1 On the Fee Mapping tab, select the Use Encompass Finance Charge Indicator for Unmapped Fees check box to enable the loan's APR setting to determine how unmapped fees are categorized by the Encompass Compliance Service.

• When selected, an unmappeFinance Charge (Fee ID 998SYS.X17) on the 2010 or 20

• An unmapped fee will be cat999) if the fee's APR indicatoform is selected.

2 Optionally, enter one or more emtext box. If a processing error ocwas not mapped or was mappedsent to these email addresses.

• When adding multiple email aor semicolon.

3 Click Finish.NOTE: For detailed information abointerprets and treats specific fees, asand mapping fees, refer to Chapter a description of each mapped compCompliance Service.

Starting and StoppingThe Encompass Compliance Serviccompleted all of the steps in the setfollow these steps to restart it.

NOTE: The Encompass Compliancbased upon a specifically defined lisaccurate results, you must use the IEncompass Settings to map ItemizaCompliance Service. If you have noimmediately after completing the Co

To Start Compliance Reviews:1 Click the Start Service button in2 Click OK.NOTE: Before the service can beginre-open it, and then log back in.

17
To Disable Compliance Reviews:1 Click the Stop Service button in the upper-right corner.2 Click Yes in response to the confirmation message.3 Click OK.NOTE: Your Compliance Review Setup settings are saved and will be available for use the next time you start the service.

Granting Permission to Use the ECS Data ViewerThe ECS Data Viewer tool enables users to view the fields that are exported to the Encompass Compliance Service and assessed based on the type of loan check being performed. The administrator can allow or deny access to the viewer based on persona.

To Configure Persona Permissions:1 On the menu bar, click Encompass, and then click Settings.2 On the left panel, click Company/User Setup, and then click Personas.3 In the Create a persona section, select a persona with access to the

Forms/Tools tab.4 Click the Forms/Tools tab.5 In the Tools section, select the ECS Data Viewer check box to grant the

persona access to the tool.• To deny access, clear the ECS Data Viewer check box.

6 Click the Save icon to save your changes.

18

ance Audit Interpret and

the Encompass Compliance Service makes eing reviewed, as well as how it manages

d, fees used in finance charge calculations threshold calculations under various federal, classified by analysis of the definition and, to ng to whom the fee is paid (e.g. lender, d by whom the fee is paid. When a Premium Compliance Service uses this same method-h state consumer credit fee limitations and

re treated as non-financed (POC /PTC) by ompliance Service's high cost and state

count whether or not each loan fee is -up window (for loans using 2010 Itemization loans using 2015 Itemization form) to indicate anced to ensure accurate treatment of each e Service. To indicate the fee or a portion of anced check box. For purposes of the

financed” means the fee amount is paid from tside of closing or paid separately in cash or

ice assumes, but does not verify, that all fees and necessary. Many state laws and regula-

of the actual cost for a service “unreasonable Encompass Compliance Service assumes ubmitted in the loan represents the “actual fee and does not verify that there is no up-e fee amount. The Encompass Compliance of the fee or percentage for “reasonableness”

Chapter 3: Fee Mapping

Chapter 3

Fee MappingOne of the most valuable features of the Encompass Compliance Service is that it provides a consistent review of loans based on consistent criteria. In order to maintain such consistency, the service uses a carefully analyzed, standardized list of fees which are specifically defined. In order for you to take advantage of this analysis and approach, you must maintain a consistent set of fees and then map each fee to the corresponding fee using the Itemization Fee Management tool.

Managing Standard FeesIt is highly recommended that you maintain a consistent list of fees used by your company and review it on a regular basis to ensure the list does not include redundant fees.

Create a Standard Fee ListYou can develop your own standard list of fees used by your company or simply use the default fee list available in the Itemization Fee Management tool. This fee list has been used for over 28 million loan reviews by a wide variety of lenders and investors, so it should be comprehensive enough to meet your needs.

Review your Standard Fee ListIf your fee list has not been reviewed recently, now is a good time to make sure the list does not contain redundant fees or use similar names or different variations for the same fee, such as Loan Processing, Processing, or process.

Once your list has been thoroughly reviewed, compare it to the Encompass Compliance Service fee definitions. Pay particular attention when there are two fees with similar names in this fee list.

For example, be sure you understand the difference between the Flood Certification Fee and a Flood Determination Fee. The Flood Certification Fee includes the life of loan monitoring, while the Flood Determination Fee does not, which means one is a finance charge and the other is not. Similarly, Recordation Tax/Mortgage Tax and Recording Fees - Mortgage/Deed of Trust have very similar definitions, but one is a tax and the other is a fee. As with all taxes, in certain jurisdictions there may be no tax of that variety so it will be included in the High Cost and State Consumer Credit Rule calculations because, if it is not a tax that exists, it cannot be bona fide and reasonable.

How Does the CompliTreat Fees?This section discusses assumptionsabout the fees included in the loan bthese fees.

• When a Standard report is ordereunder Regulation Z and high cost state and local laws, are properly the extent it is relevant, ascertainiaffiliate, originator, or provider) anReport is ordered, the Encompassology to determine compliance witrestrictions.

• All fees entered into Encompass adefault. Many of the Encompass Cconsumer credit rules take into ac“financed”. Use the POC/PTC popform) or a Fee Details window (for whether or not each loan fee is finfee by the Encompass Compliancthe fee is “financed”, select the FinEncompass Compliance Service, “the loan proceeds; it is not paid ouby check at closing.

• The Encompass Compliance Servincluded in the loan are reasonabletions deem any amount in excess and unnecessary.” Therefore, the that the dollar amount of any fee scost” of the service related to that charge or surcharge included in thService will not review the amount or “necessity”.

19

orrower Chosen fee is included in the loan, ce assumes, but does not verify, that the vided and that the borrower has made the s and choice have not been provided, the

ion or mapping should be used.mpliance Service assumes that the lender,

use of the courier for all Courier Fees. Thus, ce will treat this fee as a finance charge.compass Compliance Service assumes that ho requires the use of the closing agent in and that it is the lender who has selected the e Encompass Compliance Service will treat

Compliance Service assumes that all included in the loan are not bona fide with and assumes they are bona fide as used in Encompass Compliance Service to s should be treated as “bona fide” for certain also must check the “Bone Fide” box ts and provide an Undiscounted Rate. Service Contract Fee - The Encompass e fees include life of loan monitoring as well

e Encompass Compliance Service assumes, surance premium is included in the loan, the

iance with any limitations or restrictions tate law requires that for credit life insurance, in an amount not exceeding the loan amount

rm of the loan may be provided, the ssumes the credit life insurance plan for

ium is included in the loan does comply with

ewing the loan to determine whether the laws ting up or maintaining the account, the oes not address issues relating to the estab-of an Escrow Account. For example, the oes not address requirements to segregate

crue interest on the account in favor of the e report may include warnings concerning


• In general, the Encompass Compliance Service assumes all fees are allowed when a law is silent with regard to particular fees. If a law provides that all fees are prohibited except those specifically permitted by the statute, the Encompass Compliance Service will fail a loan that includes any fee not specifically itemized as a permitted fee in that law.

• If special disclosures, elections, waivers, or other documentation is needed in order to charge a particular fee, or to exclude such a fee from a calculation, the Encompass Compliance Service assumes, but does not verify, that the disclosure and documentation requirements have been met. Examples of some fees that fall within this assumption are:

• Property Insurance Premiums (hazard, flood, earthquake, windstorm, etc.)• Credit Insurance Premiums• Attorney's Fees - Borrower Chosen

• Services Performed By An Attorney - The Encompass Compliance Service assumes that fees for specific services performed by an attorney relating to the loan closing (such as document preparation or settlement services) will be included in the loan under those specific fee names. For example, if an attorney prepares the loan documents, the Encompass Compliance Service assumes the fee for that service will be reflected in the loan as a Document Preparation Fee rather than as an Attorney's Fee. The Encompass Compliance Service treats all fees designated as Attorney's Fees in the loan file as fees for general legal services performed by the attorney rather than fees attributable to a particular service.

• Fees Paid To A Provider - Unless information is included in the loan showing that a particular fee is being paid to an affiliate of the lender or broker, the Encompass Compliance Service assumes that fees paid to a third party provider are paid to individuals or companies that are not owned by, and that do not have directors, stockholders, or employees in common with the lender or broker. Although this assumption applies to all fees, some instances in which it is particularly relevant concern differing treatment of such fees as Appraisal Fee or Title Charges in some jurisdictions dependent upon whether the fees are paid to an affiliate of the lender or the broker.

Specific Fees• Application Fee and Application Deposit - The Encompass Compliance

Service assumes that the Application Fee or Application Deposit is refunded to the borrower if the loan is funded and therefore is not charged to all borrowers regardless of whether or not credit is extended. Thus, the Encompass Compliance Service will treat these fees as finance charges.

• Attorney's Fees - Borrower Chosen - Some jurisdictions will permit Attorney's Fees to be excluded from interest rate or high cost points and fees calculations (or be charged when Attorney's Fees are otherwise prohibited) if the borrower has the right to choose the attorney and that right has been disclosed to the

borrower. If the Attorney's Fees - Bthe Encompass Compliance Serviproper disclosures have been prochoice of attorney. If the disclosuregeneral Attorney's Fees fee select

• Courier Fee - The Encompass Conot the borrower, has required thethe Encompass Compliance Servi

• Settlement/Closing Fee - The Enit is the lender, not the borrower, wperforming the settlement servicesclosing agent to be used. Thus, ththis fee as a finance charge.

• Discount Fees - The EncompassDiscount Fees or Discount Points regard to high cost threshold testsvarious state laws. In order for thedetermine whether Discount Pointhigh cost thresholds tests, a user associated with the Discount Poin

• Flood Certification Fee and TaxCompliance Service assumes thesas initial determination.

• Credit Insurance Premiums - Thbut does not verify, that if a credit incredit insurance policy is in complprovided by law. For example, if a sonly decreasing term life insuranceand a period not exceeding the teEncompass Compliance Service awhich a credit life insurance premthis requirement.

• Escrow Account - Other than reviapplicable to it permit a fee for setEncompass Compliance Service dlishment or ongoing maintenance Encompass Compliance Service dfunds in escrow accounts or to acborrower (although the compliancsome of these issues.)

20

t Templatesith the fees from a selected Closing Cost ed to any existing entries on the Fee List and

he 2010 Itemization, 2010 HUD-1, or Closing cted from a drop-down list.

utomatically mapped to a fee on the nually map each entry to the appropriate fee.

d then click Import Fees from Closing Cost

Select.agement main window, select a fee from the Show All check box to display all available es list (select the Show All check box to nd drag it to one of the newly imported fees.ge to a black closed-link icon and the Not the name of the linked Compliance or UCD

on.

ual fees to the list of entries on the Fee List each new fee to the appropriate compliance with the sections of the 2010 Itemization and n which they can be selected from a drop-

ompass Fee Name, and then click OK.agement main window, select a fee from the Show All check box to display all available es list (select the Show All check box to and drag it to one of the newly imported fees.ge to a black closed-link icon and the Not the name of the linked compliance or UCD

ons of the 2010 Itemization and HUD-1 or new fee will be available for selection from a

on.


Fee Mapping ProceduresUse the Itemization Fee Management tool to set up and manage the fees used by the Encompass Compliance Service.

Access the Itemization Fee Management Tool:1 Log in to Encompass as the admin user, or a user who has been assigned

rights to the Itemization Fee Management tool. 2 On the menu bar, click Encompass, and then click Settings.3 On the left panel, click Tables and Fees, and then click Itemization Fee

Management.

Adding FeesYou can add fees by importing a standard list of compliance default fees or fees from closing cost templates. You can also manually create individual fees and map them to the appropriate compliance fee.

Import Compliance Default FeesThis is the quickest method of setting up your fees and mappings. The Fee List is populated with the entire list of compliance fees from the “Encompass Compliance Service Default Fees Table” (beginning on page 22 of this guide).

The imported fees are mapped to the appropriate fee on the Compliance Fees list and are associated with the sections of the 2010 Itemization and 2010 HUD-1 or the Closing Disclosure in which they can be selected from a drop-down list.

NOTE: All existing entries on the Fee List are cleared before importing the default list is of fees.

1 Click the Import Fees button, click Import Compliance Default Fees, and then click Yes in response to the confirmation message.

2 Click the Save icon.

Import Fees from Closing CosThis option populates the Fee List wTemplate. The imported fees are addare associated with the sections of tDisclosure in which they can be sele

NOTE: The imported fees are not aCompliance Fees list. You must ma

1 Click the Import Fees button, anTemplates.

2 Select a template, and then click3 Back on the Itemization Fee Man

Compliance Fees list (select thecompliance fees) or the UCD Fedisplay all available UCD fees) aThe red broken-link icon will chanMapped text will be replaced withfee.

4 When finished, click the Save ic

Add Individual FeesThis option allows you to add individas needed. You must manually mapfee and manually associate each fee2010 HUD-1 or Closing Disclosure idown list.

1 Click the New icon, type the Enc2 Back on the Itemization Fee Man

Compliance Fees list (select thecompliance fees) or the UCD Fedisplay all available UCD fees), The red broken-link icon will chanMapped text will be replaced withfee.

3 Select check boxes for the sectiClosing Disclosure in which the drop-down list.

4 When finished, click the Save ic

21
Restricting Entry of Free-Form FeesBy default, the Itemization and HUD-1 input forms allow users to either select pre-defined fee names from a drop-down list or type a fee name into a free-form text field. If a fee name is entered that is not already mapped, the Encompass Compliance Service will automatically treat the fee as a Regulation Z finance charge, possibly increasing the calculated finance charge amount as well as any applicable high cost points and fees amounts.

To force users to select fees from the pre-defined drop-down lists, select the Apply to Itemization check box at the top of the Itemization Fee Management screen. This will prohibit entry of free-form fee names in text boxes.

You can also grant specific personas the ability to overwrite the restriction as needed. This allows the specified persona to enter free-form fee names in designated section of the 2010 Itemization forms.

1 With the Apply to Itemization check box selected, click the Persona Overwrite tab.

2 Select the name of a persona, and then select check boxes for the specific Itemization sections in which the persona is permitted to enter free-form fees.

22

e descriptions when determining which field s. This table is for use with the fields on the ation for the Closing Disclosure input form,

iated with an FHA 203(k) mortgage loan. It after closing.

nce with FHA 203(k) mortgage loan program ngoing services during construction.

), the refinance portion of the mortgage.

when it involves insurance of advances. The

sed as a flat dollar amount.

t closing costs at loan closing for an approved

value without going out to the field to view the

erty securing the loan.

roperty and comparable properties.

rrower in the future under the same loan terms.

and delivering them to the existing lien holder.

.

.


Encompass Compliance Service Default Fees Table This table lists the standard fees used by the Encompass Compliance Service, as well as a description of each fee. Consult thesyou should map the fees on the 2010 Itemization and HUD-1 forms to using the Itemization Fee Management tool in Encompas2010 Itemization form and the Compliance fees provided in the Itemization Fee Management tool. For UCD field mapping informrefer to the table starting on page 32.

Mapped Compliance Field Description

HUD Section 800 – Items Payable in Connection with the Loan

203(k) Architectural and Engineering Fee Fee paid for architectural and engineering designs, services, review, and costs associncludes amount(s) for original design and review and ongoing supervision performed

203(k) Consultant Fee Fee paid to a consultant for visiting the property and other services to ensure compliarequirements. Includes amounts paid to the consultant for initial consultation and for o

203(k) Discount on Repairs The amount of discount points paid on the rehabilitation, repair, and (when applicable

203(k) Supplemental Origination Fee Fee collected by a Lender as compensation for making an FHA 203(k) mortgage loansupplemental origination fee is collected in addition to a loan origination fee.

Administration Fee Fee to cover the administrative costs of processing a loan request. This fee is expres

Application Deposit A deposit paid in advance for taking a loan application, which may be credited againsloan.

Application Fee Fee paid in advance for taking a loan application.

Appraisal Desk Review Fee Fee charged for reviewing an appraisal report and performing some basic research onproperty or the comparable properties included in the appraisal report.

Appraisal Fee Fee paid to an appraiser for appraising and preparing an appraisal report for the prop

Appraisal Field Review Fee Fee charged for performing an appraisal review in the field – actually inspecting the p

Appraisal Review Fee Fee charged to review the appraisal report.

Assumption Fee Fee paid by borrower in the current loan to allow the loan to be assumed by another bo

Attendance/Pickup Fee Fee charged by title agent or escrow company for the service of taking the payoff funds

Bond Fee Fee paid to a state or local housing agency to participate in a special lending program

Broker Fee General points or fees paid to a broker.

CLO Access Fee Fee charged to access a computer loan origination system.

Commitment (Rate Lock) Fee Fee charged for locking in a rate for the loan.

Compliance Testing Fee Fee paid for use of an automated compliance system for compliance testing on a loan

23

ey); also may be a fee for redrawing documents pare documents that are desired but not essential

ction or inaction by the borrower.

er electronic means.

t.

loan. Flood Certification includes both the original zard designations.

y securing the loan. Includes the original flood f the property.

ar amount.

Association, or Co-Op Association a Certification

n for the property securing the loan.

n.

ering) the loan. This fee is expressed as a

istration System.

surance included in the loan.


Courier Fee Fee paid for courier, messenger, or expedited delivery services.

Credit Report Fee Fee paid to a provider of a credit report for the cost of the report.

Document Assembly Fee Fee charged to prepare documents for review by someone else (such as an attornwhen the need to redraw was due to no fault of the borrower; also may be a fee to preto the closing of the transaction (such as an amortization schedule).

Document Preparation Fee Fee charged for preparing the loan documents.

Document Redraw Fee Fee charged because loan documents were required to be redrawn due to some a

Electronic Document Delivery Fee Fee for transmitting or receiving the loan documents through email or by some oth

Escrow Account Servicing Fee Fee to set up and service the escrow account for the loan.

Escrow Waiver Fee Fee charged because the borrower waives the establishment of an escrow accoun

Flood Certification Fee Fee charged to perform and provide flood certification for the property securing theflood hazard determination and the ongoing monitoring of the property for flood ha

Flood Determination Fee Fee charged to perform and provide initial flood zone determination for the properthazard determination, but DOES NOT include the ongoing life of loan monitoring o

Funding Fee Fee charged by the lender for making the loan. This fee is expressed as a flat doll

HOA Certification Handling Fee Fee charged to prepare and submit to the Home Owner’s Association, Condominiumfor the property securing the loan.

Homeowner’s Dues Amount of initial payment (paid at closing) for dues for the homeowner’s associatio

Inspection Fee Fee charged for an inspection of the property securing the loan.

Interest Rate Buy Down Fee Charge to reduce the interest rate on the loan for a given period.

Loan Discount Fee charged to reduce (buy down) the market rate of the note for the life of the loa

Loan Origination Fee Fee charged by lender (or paid to the broker) as compensation for making (or brokpercentage of the loan amount.

Loan Warehousing Fee Fee charged for the use of a Warehouse line of credit to fund the loan.

MERS® Registration Fee Fee charged for registering/transferring the loan onto the Mortgage Electronic Reg

Mortgage Insurance Application Fee Application fee required by a private mortgage insurance company for mortgage in

Mortgage Insurance Premium Credit Mortgage Insurance Premiums refunded from a prior loan.

Office Expenses Fee charged for general expenses such as fax fees, copy fees, and postage.


24

y charge for the specific rate chosen (points). cessing services performed by or on behalf of rpose/use; so the System ALWAYS treats it as ibited/limited fee in jurisdictions which prohibit

ount.

operated by state or local agency or authority.

lue of the servicing on the loan.

rrower, conducts the loan closing at a specific ).

sition to the lender in the current loan.

ing loan to the new loan being created.

yment research and life-of-loan monitoring. For

erty securing the loan. Includes upfront tax of the tax payments. For upfront payment

, the fee the borrower must pay to help defray

does not include amounts put into an escrow

.

unt.


Our Origination Charge All charges received by the loan originator (lender or mortgage broker), except for anIncludes but is not limited to amounts received for origination, administrative, and prothe loan originator. There is insufficient information to determine this amount's true pua finance charge under TILA, as a point and fee for high cost thresholds, and as a prohor limit certain fees.

Processing Fee Fee charged for processing the loan request. This fee is expressed as a flat dollar am

Program Participation Fee Fee paid to the lender as the result of the loan being part of a special lending program

Rebate to Borrower A rebate or credit to the Borrower.

Recording Service Fee Service fee related to sending documents to be recorded.

Rush Fee Fee charged to rush the loan process to obtain a quick closing.

Servicing Release Premium Premium, usually paid by the Lender to the broker or correspondent lender, for the va

Signing Agent Fee Fee charged for the services of a signing agent who, as an accommodation to the botime or at a location requested by the borrower (such as the borrower’s home or office

Subordination Fee Fee paid to a lien holder with an existing lien on the property to subordinate its lien po

Subordination Preparation Fee Fee charged for the preparation of a subordination agreement to subordinate an exist

Tax Related Service Fee Fee charged to research and monitor property tax payments. Includes both up front paupfront payment research only, see Tax Status Research Fee, below.

Tax Status Research Fee Fee charged for to research the status/currency of property tax payments for the proppayment status research only and DOES NOT include ongoing life of loan monitoringresearch and life-of-loan monitoring, see Tax Related Service Fee, above.

Underwriting Fee Fee charged by an underwriter to underwrite a loan file.

USDA/RHS Upfront Guarantee Fee In a loan guaranteed by the USDA Rural Development, Rural Housing Service (RHS)the costs of the USDA Rural Housing Service home loan program.

Verification Fee Fee for verifying such things as borrower’s income, employment, tax returns, etc.

Village Property Tax/County Property Tax Taxes on the property, due at closing; this reflects the amount due at closing only andaccount for future payment.

Wire Transfer Fee Fee for wiring funds in connection with the loan.

Yield Spread Premium/Rebate Premium, usually paid by Lender to the broker, for obtaining a higher rate for the loan

Your Credit for the Interest Rate Chosen A credit to the Borrower for the interest rate chosen, represented as a lump sum amo

HUD Section 900 – Items Required by the Lender to be Paid in Advance


25

at closing only and does not include amounts

osing only and does not include amounts put

unt due at closing only and does not include

closing only and does not include amounts put

only and does not include amounts put into an

e at closing only and does not include amounts

losing only and does not include amounts put

ce transaction.

losing only and does not include amounts put

e and the date from which accrued interest will

, the fee the borrower must pay to help defray

ust pay to help defray the costs of the VA home

foreseen circumstances during the

d and construction on an FHA 203(k) mortgage

ccounting and the sum of the deposits required e adjustment will always be a negative number he HUD-1.


Credit Disability Premium Cost of credit disability insurance premium due at closing; this reflects the amount dueput into an escrow account for future payment.

Credit Life Premium Cost of credit life insurance premium due at closing; this reflects the amount due at clinto an escrow account for future payment.

Credit Unemployment Premium Cost of credit unemployment insurance premium due at closing; this reflects the amoamounts put into an escrow account for future payment.

Insurance Premium - Earthquake Cost of earthquake insurance premium due at closing; this reflects the amount due at into an escrow account for future payment.

Insurance Premium - Flood Cost of flood insurance premium due at closing; this reflects the amount due at closingescrow account for future payment.

Insurance Premium - Hazard Cost of property hazard insurance premium due at closing; this reflects the amount duput into an escrow account for future payment.

Insurance Premium - Windstorm Cost of windstorm insurance premium due at closing; this reflects the amount due at cinto an escrow account for future payment.

Interest Due on Prior Loan The amount of interest due on the prior loan that will be paid off by the current refinan

Mortgage Insurance Premium Cost of mortgage insurance premium due at closing; this reflects the amount due at cinto an escrow account for future payment.

Prepaid Interest Amount of interest collected at settlement for the period between the disbursement datbe included in the first regular monthly payment.

USDA/RHS Upfront Guarantee Fee In a loan guaranteed by the USDA Rural Development, Rural Housing Service (RHS)the costs of the USDA Rural Housing Service home loan program.

VA Funding Fee In a loan guaranteed by the Department of Veterans’ Affairs (VA), the fee the veteran mloan program.

HUD Section 1000 – Reserves Deposited with the Lender

203 (k) Contingency Reserve An amount to be placed into a separate escrow account that is specifically held for unrehabilitation/construction period on an FHA 203(k) mortgage.

203(k) Repairs An amount for the cost of repairs and rehabilitation, including materials, labor, overhealoan.

Aggregate Adjustment An adjustment equal to the difference between the deposit required under aggregate aunder single-item accounting for deposits itemized in the 1000 series of the HUD-1. Thor zero. The amount of the adjustment is entered on a final line in the 1000 series of t


26

of amounts that are due annually in connection Service treats all amounts included as Annual

ent of city property taxes.

ent of county property tax.

ent of credit disability insurance premiums.

ent of credit life insurance premiums.

ent of credit unemployment insurance

ent of homeowner association dues.

ent of earthquake insurance premiums.

ent of flood insurance premiums.

ent of hazard insurance premiums.

ent of windstorm insurance premiums.

ent of mortgage insurance premiums.

s of amounts that are not identified specifically. ompliance Service treats all amounts included

ent of school taxes.

ent of state property taxes.

ts of the USDA/RHS premium (paid monthly)

ortgage loan.

hanic’s liens on the property on an FHA 203(k)

s and delivering them to the existing lien holder.


Annual Assessments - Impound Amount collected and held in an escrow, impound, or trust account for future paymentswith the property, but which are not specifically identified. The Encompass ComplianceAssessments as finance charges under TILA.

City Property Taxes - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

County Property Taxes - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

Credit Disability Insurance - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

Credit Life Insurance - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

Credit Unemployment Insurance - Impound Amount collected and held in an escrow, impound, or trust account for the future paympremiums.

Homeowner's Association - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

Insurance Impound - Earthquake Amount collected and held in an escrow, impound, or trust account for the future paym

Insurance Impound - Flood Amount collected and held in an escrow, impound, or trust account for the future paym

Insurance Impound - Hazard Amount collected and held in an escrow, impound, or trust account for the future paym

Insurance Impound - Windstorm Amount collected and held in an escrow, impound, or trust account for the future paym

Mortgage Insurance - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

Other Impound Amount collected and held in an escrow, impound, or trust account for future paymentOften, this is used as a catch-all impound itemization on the HUD-1. The Encompass Cas Other Impounds as finance charges under TILA.

School Taxes - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

State Property Taxes - Impound Amount collected and held in an escrow, impound, or trust account for the future paym

USDA/RHS Annual Fee Monthly Premium - Impound

Amount collected and held in an escrow, impound, or trust account for future paymenand due annually in connection with the property.

HUD Section 1100 – Title Charges

203(k) Permits Fee paid for building and other government permits associated with an FHA 203(k) m

203(k) Title Update Fee Fee charged by a title company to protect the validity of the mortgage position from mecmortgage loan. Includes both upfront and post-closing monitoring.

Abstract or Title Search Fee Fee charged to search an abstract of title or to perform a title search.

Attendance/Pickup Fee Fee charged by title agent or escrow company for the service of taking the payoff fund


27

h closing the loan. It is assumed that attorney’s ices are performed (i.e., services for preparing ing title work will be entered as appropriate title ing Fees).

rrower has been provided with a choice of the e been provided to the borrower.

ets forth an underwriter's responsibility for pproved attorneys.

n or inaction by the borrower.

ecuring the loan. Includes the original flood e property.

chase of the property with the closing of the for a combined (piggyback) transaction.

nd assessments on the property being secured

the loan.

ing loan to the new loan being created.

erty securing the loan. Includes upfront tax of the tax payments.

rrower are the beneficiaries) that relates to the

any to insure title to the property).


Attorney’s Fees General uncategorized fees paid to an attorney for services rendered in connection witfees for specific services will be entered under the specific category for which the servloan documents will be entered as Document Preparations Fees; services for performfees; and fees for closing or settlement services will be entered as Settlement or Clos

Attorney’s Fees - Borrower Chosen The same type of fee described in the Attorney's Fees description, but for which a boattorney to use and for which all necessary disclosures concerning such a choice hav

Closing Protection Letter Fee charged for a statement or document issued by title insurance underwriters that snegligence, fraud, and errors in closings performed by the underwriter's agents and a


Document Preparation Fee Fee charged for preparing the loan documents.

Document Redraw Fee Fee charged because loan documents were required to be redrawn due to some actio

Flood Determination Fee Fee charged to perform and provide initial flood zone determination for the property shazard determination, but DOES NOT include the ongoing life of loan monitoring of th

Lender’s Title Policy Fee for the cost of a title insurance policy covering the lender.

Loan Tie-in Fee Fee charged by the settlement/escrow agent either to tie together the closing of a purbuyer’s loan for that property or to tie together a 1st lien closing and a 2nd lien closing

Municipal Lien Fee Fee charged to obtain a municipal lien certificate from a municipality showing all taxes aby the loan.

Notary Fee Fee charged by a notary public to authenticate the execution of the loan documents.

Owner’s Title Policy Fee for the cost of a title insurance policy covering the owner of the property securing

Settlement or Closing Fee Fees paid to settlement or closing agents for their services.

Subordination Preparation Fee Fee charged for the preparation of a subordination agreement to subordinate an exist

Tax Status Research Fee Fee charged for to research the status/currency of property tax payments for the proppayment status research only and DOES NOT include ongoing life of loan monitoring

Title Endorsement Fee Fee charged for obtaining a title endorsement (for which the original lender and/or boclosing of the mortgage loan.

Title Examination Fee charged to examine the title and create a title report or opinion.

Title Insurance Fee for the cost of a title insurance policy.

Title Insurance Binder Fee to obtain a title insurance binder – a written commitment of a title insurance comp

Title Search Fee charged to perform a Title Search.


28

d to: title examination and evaluation, ration and issuance of polices, processing and ements, notary), and conducting a settlement.

reats it as a finance charge under TILA, as a h prohibit or limit certain fees.

ortgage loan.

r transfer title to the property or to obtain a sfer tax.

to the property or to obtain a security interest

g fees or recordation taxes.

oans.

age that is being paid off with funds from the

or deed of trust.

st.

iated with an FHA 203(k) mortgage loan. It after closing.

nce with FHA 203(k) mortgage loan program ngoing services during construction.

foreseen circumstances during the

ortgage loan.


Title Services and Lender's Title Insurance Amount for services involved in the provision of title insurance, including but not limitepreparation and issuance of commitment, clearance of underwriting objections, prepaadministrative services (e.g., document preparation or delivery, copying, wiring, endorsThis amount does not itemize the specific service it covers, so the System ALWAYS tpoint and fee for high cost thresholds, and a prohibited/limited fee in jurisdictions whic


HUD Section 1200 – Government Recording and Transfer Charges


Doc Tax Stamps for Note Fee or tax imposed by certain state or local governments on a promissory note.

Doc Tax Stamps/Transfer Taxes - City/County Fee or tax imposed by certain local governments upon recording a document to eithesecurity interest in the property. This may be either a documentary tax stamp or a tran

Doc Tax Stamps/Transfer Taxes - State Fee or tax imposed by certain states upon recording a document to either transfer titlein the property. This may be either a documentary tax stamp or a transfer tax.

Filing Fees Filing fees, such as UCC filing fees, paid to a public official. Does not include recordin

Intangible Tax Fee or tax imposed in certain states on instruments relating to real property secured l

Municipal Lien Certificate Recording Fee Fee charged to record a municipal lien certificate.

Reconveyance Fee Recording Fee to record the reconveyance, cancellation, or release of lien for a mortgcurrent loan.

Recordation Tax/Mortgage Tax Fee or tax imposed by certain state or local governments upon recording a mortgage

Recording Fees - Assignment Fees paid to a public official for recording an assignment of a mortgage or deed of tru

Recording Fees - Mortgage/Deed of Trust Fees paid to a public official for recording mortgages or deeds of trust.

HUD Section 1300 – Additional Settlement Charges

203(k) Architectural and Engineering Fee Fee paid for architectural and engineering designs, services, review, and costs associncludes amount(s) for original design and review and ongoing supervision performed

203(k) Consultant Fee Fee paid to a consultant for visiting the property and other services to ensure compliarequirements. Includes amounts paid to the consultant for initial consultation and for o

203 (k) Contingency Reserve An amount to be placed into a separate escrow account that is specifically held for unrehabilitation/construction period on an FHA 203(k) mortgage.

203(k) Initial Draw The initial amount drawn at loan closing in an FHA 203(k) mortgage loan.



29

when it involves insurance of advances. The

hanic’s liens on the property on an FHA 203(k)

artment of Commerce for each mortgage loan

to another lender, servicer, or purchaser.

s and delivering them to the existing lien holder.

rower.

or local agency to qualify for a special lending

er with the down payment on the property


203(k) Architectural And Engineering Fee

203(k) Consultant Fee

203(k) Discount On Repairs

203(k) Inspection Fee

203(k) Permits

203(k) Supplemental Origination Fee Fee collected by a Lender as compensation for making an FHA 203(k) mortgage loansupplemental origination fee is collected in addition to a loan origination fee.

203(k) Title Update Fee charged by a title company to protect the validity of the mortgage position from mecmortgage loan. Includes both upfront and post-closing monitoring.

AK Program Administration Fee A $10 program administration fee that the mortgage lender submits to the Alaska Deptransaction closed by the mortgage lender.

AL Interest Surcharge Fee permitted in Alabama but required to be separately itemized as a unique charge.

Application Fee

Appraisal Desk Review Fee

Appraisal Fee

Appraisal Field Review Fee

Appraisal Management Company Fee

Assessment Tax

Assignment Fee Fee charged to cover the costs associated with the transfer or assignment of the loan

Attendance/Pickup Fee Fee charged by title agent or escrow company for the service of taking the payoff fund

Bankruptcy Monitoring Fee Monitoring or Proof of Claim Fee charged as a result of a bankruptcy filing by the Bor

Bond Fee Fee charged for review of the terms of the bond documents relating to a federal, state,program.

CLO Access Fee Fee charged to access a computer loan origination system.


Down Payment Assistance Credit A credit in an amount equal to the funds supplied by a third party to assist the borrowsecuring the loan.


30

ent of holdbacks for improvement or

e paid by the borrower).

or the property securing the loan.

r the Iowa Title Guaranty program administered

ts for the Indiana Title Insurance Enforcement

as a lump sum.

the loan under the same terms.

nd assessments on the property being secured

t of how much is owed on the loan being

otal amount of fees paid by the borrower in the

charged to reinspect a home after construction ction is performed after loan closing.

ird party to assist the borrower in relocating to

sition to the lender in the current loan.

directly incident to the loan.

t if the property securing the loan is subject to


Escrow Holdback - Impound Amount collected and held in an escrow, impound, or trust account for the future paymconstruction.

GA Residential Mortgage Act Per Loan Fee Fee, imposed by the state of Georgia, on every mortgage loan closed in Georgia (to b

Homeowner’s Dues Amount of initial payment (paid at closing) for dues for the homeowner’s association f

IA Title Guaranty Fee Fee, imposed by the state of Iowa, going toward the funding and administrative costs foby the Iowa Finance Authority.

IN Title Insurance Enforcement Fund Fee Fee, imposed by the state of Indiana, going toward the funding and administrative cosFund.

Inspection Fee Fee charged for an inspection of the property securing the loan.

Lump Sum Lender Credit A credit from the lender to the borrower represented as a lump sum amount.

Lump Sum Seller Credit A credit from the seller to the borrower in a purchase-money transaction represented

Modification/Amendment Fee Fee charged for modifying, amending, or extending the terms of the loan or renewing

Municipal Lien Fee Fee charged to obtain a municipal lien certificate from a municipality showing all taxes aby the loan.

Payoff Demand Fee In refinances, fee paid to prior lender to prepare and provide a bookkeeping statemenrefinanced.

Pest Inspection Fee Fee paid to have a pest inspection performed on the property securing the loan.

Promotional Coupon Credit A promotional credit provided to the borrower by the lender or the broker to offset the tloan.

Reinspection Fee Fee charged for a reinspection of the property securing the loan. This fee is generally or improvements are completed and differs from an Inspection Fee in that the reinspe

Relocation Assistance Credit A credit in an amount equal to funds supplied by the borrower's employer or another tha new residence.

Subordination Fee Fee paid to a lien holder with an existing lien on the property to subordinate its lien po

Survey Fee Fee paid for a survey of the property securing the loan.

TN Service Charge Fee allowed to Tennessee Industrial Loan & Thrift licensees in lieu of other expenses

Water Allotment Payment Amount of initial payment (paid at closing) for irrigation reserve or other water allotmensuch a reserve.


Other Fees


31

ee. These fees are ALWAYS treated as finance

INANCE CHARGE and NOT A HIGH COST TH GREAT CAUTION! All fees mapped to this ey will be included in any prohibited fee rules s.


Other - Finance Charge Fee for which there is insufficient information to determine the true purpose/use of the fcharges, points and fees for high cost thresholds, and prohibited fees in jurisdictions.

Other - Non-Finance Charge Any fee that is not mapped to one of the existing compliance fees but that is NOT A FPOINT AND FEE under ANY Federal or State law. THIS FEE SHOULD BE USED WIfield will be excluded from ALL finance charge and high cost calculations. However, thor as part of any limited fee calculations in jurisdictions that prohibit or limit certain fee


32

escriptions when determining which fee you Closing Disclosure input form and the UCD

ut visual inspection of the actual premises of

perty and comparable properties.

nd supervising appraisers' work in completing

gage secured by the subject property to new

ker, correspondent lender, lender or lender's ted by the borrower(s).

pressed in numerical and possibly descriptive

ch is intended to pay electricity bills for street es, pools, and exercise rooms and may also

oyees and/or third party management fees.

apital improvements, utility service upgrades,

to pay common utilities, landscaping, and operative assets, the salaries of cooperative

located for capital improvements, utility service ebt service.

with the loan application, loan processing or

unpaid principal balance in the event of the er's temporary disability.


This table lists the UCD fees used by the Encompass Compliance Service, as well as a description of each fee. Consult these dshould map the UCD fees to using the Itemization Fee Management tool in Encompass. This table is for use with the fields on thefees provided in the Itemization Fee Management tool.

Mapped Compliance Field - UCD Description

Closing Disclosure Input Form

ApplicationFee Fee paid to broker or lender to receive loan application for mortgage financing

AppraisalDeskReviewFee Fee paid for a professional review of an appraisal, performed in an office setting withothe subject property or the comparable properties cited in the appraisal report.

AppraisalFieldReviewFee Fee charged for performing an appraisal review in the field actually inspecting the pro

AppraisalManagementCompanyFee Fee paid to an external third party for coordinating assignment of qualified appraisers aopinion(s) of value.

AsbestosInspectionFee Fee for an inspection and/or testing for the presence of asbestos within a building.

AssumptionFee Fee paid for processing, approving and facilitating the assumption of an existing mortborrower(s).

AutomatedUnderwritingFee Fee for use of an automated underwriting tool or system that assists the mortgage broagent in making a decision to approve, deny or counteroffer a loan application submit

AVMFee Fee paid for preparation of an automated estimate of value of the subject property, exterms.

CondominiumAssociationDues Fee payable to condominium association in which the subject property is located, whilights, landscaping, and maintenance and repairs to community facilities like clubhouscover insurance on community assets, the salaries of condominium association empl

CondominiumAssociationSpecialAssessment Fee payable to condominium association in which the subject property is located for cetc. that are assessed in addition to the regularly occurring condominium dues.

CooperativeAssociationDues Fee payable to cooperative in which the subject property is located, which is intendedmaintenance and repairs to cooperative facilities and may also cover insurance on coemployees and/or third party management fees.

CooperativeAssociationSpecialAssessment Fee payable to cooperative association or corporation in which the subject property is upgrades, etc. that are assessed in addition to the regularly occurring dues, fees or d

CopyOrFaxFee Fee for copies of documents and/or costs of faxes sent and/or received in conjunctionloan closing.

CourierFee Fee for delivery of loan application, loan processing and/or loan closing documents.

CreditDisabilityInsurancePremium Premium for insurance in which the lender is the beneficiary and proceeds payoff theborrower's permanent disability and/or pay recurring mortgage payment during borrow

33

unpaid principal balance in the event of the

any personal property used to secure the loan.

ing mortgage payment during borrower's

e debt upon certain events, such as death or

.

losing documents.

processing and/or loan closing by electronic

h would, had it been established, been held in r recurring costs.

onsideration and for storage in the court's files.

a, status of a structure on a given property.

examination of the condition of a home. Items AC systems, roof, foundation, permanently sements, insulation, smoke and fire detectors,

ment or neighborhood within which the subject g, and maintenance and repairs to community community assets, the salaries of HOA

ty is located for capital improvements, utility ation dues.


CreditLifeInsurancePremium Premium for insurance in which the lender is the beneficiary and proceeds payoff theborrower's death.

CreditPropertyInsurancePremium Fee payable for insurance that provides coverage from actions such as fire or theft of

CreditReportFee Fee for the credit report(s) used in assessing credit risk.

CreditUnemploymentInsurancePremium Premium for insurance in which the lender is the beneficiary and proceeds pay recurrtemporary unemployment.

DebtCancellationInsurancePremium Fee payable for insurance that provides for cancellation of some or all of the mortgagdisability of the borrower(s).

DisasterInspectionFee Fee for a report that documents the condition of the property after a localized disaster

DocumentPreparationFee Fee required by the Lender, title company and/or settlement agent for preparation of c

DryWallInspectionFee A fee that pertain to the inspection of the drywall within a building.

ElectricalInspectionFee A fee that pertain to the inspection of the electrical system within a building.

ElectronicDocumentDeliveryFee Fee for transmitting or receiving documents in conjunction with loan application, loan means.

EnvironmentalInspectionFee A fee that pertain to the inspection of the Environmental aspects within a building.

EscrowWaiverFee Fee imposed for waiving the requirement for an escrow account to be established whicreserve to pay periodic payments for homeowners insurance, property taxes and othe

FilingFee Fee paid when submitting a document to the clerk of a court for the court's immediate c

FloodCertification Fee paid to obtain a certificate that verifies the flood zone, or special flood hazard are

FoundationInspectionFee A fee that pertain to the inspection of the foundation of a building.

HomeInspectionFee Fee for inspection of subject property by professional (other than an appraiser) for aninspected may include but are not limited to electrical, plumbing, sewage disposal, HVinstalled appliances, drainage and grading, exterior finishes, decks, porches, attics, baand ventilation.

HomeownersAssociationDues Fee payable to homeowners or neighborhood association for the planned unit developproperty is located, which is intended to pay electricity bills for street lights, landscapinfacilities like clubhouses, pools, and exercise rooms and may also cover insurance onemployees or third party management fees.

HomeownersAssociationSpecialAssessment Fee payable to homeowners or neighborhood association in which the subject properservice upgrades, etc., that are assessed in addition to the regularly occurring associ


34

ually (but not always) including the structure, installed appliances, drainage and grading, ors, and ventilation systems.

on behalf of the lender.

he interest rate on a mortgage for the life of the

ecurity issuer that is passed onto the borrower,

s associated with the subject loan.

r, the property seller or any interested party to

y review loan processing documents, appraisal

is Can be both Airborne and surface and will

bject property is located in conjunction with a axes.

t property is located in conjunction with a axes.

rty is located in conjunction with a mortgage

roperty non-compliance have been completed.

elected, a description of the action type must

t infestations and visible damage caused by and exterior of the subject property structures

ification activities and/or using automated fraud vidual Tax Identification Number validation,


HomeWarrantyFee Fee for issuance of a warranty covering major systems within the subject property, uselectrical, plumbing, sewage disposal, HVAC systems, roof, foundation, permanently exterior finishes, decks, porches, attics, basements, insulation, smoke and fire detect

LeadInspectionFee Identifies that the fee type being requested is for testing of the existence of Lead.

LendersAttorneyFee Fee for services provided by attorney or law firm representing or performing services

LoanDiscountPoints A form of pre-paid interest, equaling a percentage of the loan amount, paid to reduce tloan.

LoanLevelPriceAdjustment Loan-level pricing adjustments and/or delivery fees charged by mortgage investor or sexpressed as a percent of loan amount or flat dollar amount.

LoanOriginationFee Fee charged by the lender or broker as compensation for providing origination service

LoanOriginatorCompensation The amount of any compensation of a loan originator paid by the creditor, the borrowethe loan.

ManualUnderwritingFee Fee paid to mortgage broker, correspondent lender, lender or lender's agent to manualland disclosures and make a decision to approve the loan application.

MoldInspectionFee Identifies that the fee type being requested is for testing for the existence of mold. Thneed to identify the number of samples to be taken for each.

MortgageSurchargeCountyOrParish Special assessment, surcharge or fee charged by the county or parish in which the sumortgage loan, which is levied in addition to regularly assessed property and school t

MortgageSurchargeMunicipal Special assessment, surcharge or fee charged by the municipality in which the subjecmortgage loan, which is levied in addition to regularly assessed property and school t

MortgageSurchargeState Special assessment, surcharge or fee charged by the state in which the subject propeloan, which is levied in addition to regularly assessed property and school taxes.

MunicipalLienCertificateFee Fee charged by a municipality to release a lien or injunction after payment of fines for p

Other Denotes that the action type is other than the ones listed above. When this option is sbe provided in the ActionTypeOtherDescription attribute.

PestInspectionFee Cost for inspection, testing and preparation of a report describing all infestations, pastermites, rodents, squirrels and other pests resulting from an inspection of the interiorby a qualified pest inspector.

PlumbingInspectionFee A fee charged to conduct an inspection of the plumbing system within a building.

PreclosingVerificationControlFee Fee to reimburse lender or mortgage broker for performing certain quality control or verdetection tools, which may include identity verification, Social Security number or Indiemployment and/or income validation, Federal Income Tax return validation, etc.


35

an application.

rty and preparation of an appraisal.

subject property and/or provides continuous

s in a residence.

certain terms of the loan to be closed at a later

ssional activities related to the purchase of the

sional activities related to the listing and/or sale

ther or not the loan is prepaid, such as a loan itorâ€™s security interest in the dwelling that

d under State or local law. Recording fees are , such as the number of pages. Unlike transfer .

riate government entity based on the nature of r value of the property or loan amount being

re of the physical document (typically number ing extended to the borrower.

as required under State or local law. Recording cteristics, such as the number of pages. Unlike amount.

der State or local law. Recording fees are , such as the number of pages. Unlike transfer .

r improvements.

eptic system.


ProcessingFee Fee charged by lender, mortgage broker or correspondent lender for processing of lo

PropertyInspectionWaiverFee Fee charged for waiving the requirement of a physical inspection of the subject prope

PropertyTaxStatusResearchFee Fee paid to a firm or individual who verifies the status of unpaid property taxes on themonitoring of the tax status on behalf of the lender of record.

RadonInspectionFee Identifies that the fee type being requested is for testing the Level of Radon emission

RateLockFee Fee to establish that the lender and borrower have fixed (locked), for a specific period,date.

RealEstateCommissionBuyersBroker Fee payable to licensed real estate broker representing the buyers' interests for profesubject property.

RealEstateCommissionSellersBroker Fee payable to licensed real estate broker representing the sellers' interests for profesof the subject property.

ReconveyanceFee Fees imposed for preparing and providing documents when a loan is paid in full, whepayoff statement, a reconveyance document, or another document releasing the credsecures the loan.

RecordingFeeForAssignment Fee assessed by a government authority to record and index an assignment as requireassessed based on the type of document to be recorded or its physical characteristicstaxes, recording fees are not based on the sales price of the property or loan amount

RecordingFeeForDeed Fee for recording trust deed, deed of trust, or other security instrument with the appropthe physical document (typically number of pages) and not based on the sales price oextended to the borrower.

RecordingFeeForMortgage Fee for recording mortgage with the appropriate government entity based on the natuof pages) and not based on the sales price or value of the property or loan amount be

RecordingFeeForMunicipalLienCertificate Fee assessed by a government authority to record and index a municipal lien certificatefees are assessed based on the type of document to be recorded or its physical charatransfer taxes, recording fees are not based on the sales price of the property or loan

RecordingFeeForRelease Fee assessed by a government authority to record and index a release as required unassessed based on the type of document to be recorded or its physical characteristicstaxes, recording fees are not based on the sales price of the property or loan amount

RecordingFeeTotal Fee total of all aggregated deed and mortgage taxes and government fees.

ReinspectionFee Fee for reinspection of the subject property after completion of construction, repairs o

RoofInspectionFee Identifies that the fee type being requested is for an detailed inspection of the roof.

SepticInspectionFee Identifies that the fee type being requested is for testing the operation of an installed s


36

tate closing transaction.

osition to the new first lien.

s of the land pertaining to the subject property uildings, fences, pools, etc.) and any

as been paid to the city for the mortgage.

as been paid to the county for the mortgage.

as been paid to the state for the mortgage.

rily reduce the interest rate on a mortgage for

ets forth the responsibility for negligence of an nd approved attorneys.

olicy/policies issued pertaining to the subject

bject property.

fer and other documents needed to perfect the

the lender in the event that clear ownership of

s the owner of real estate in the event that his (This coverage is optional.)

r loan amount being extended to the borrower.


SettlementFee Fee paid for settlement service provider to conduct the loan settlement and/or real es

SmokeDetectorInspectionFee Identifies that the fee type being requested is for inspection of Smoke Detectors.

SubordinationFee Fee paid to a holder of a lien secured by the subject property to subordinate its lien p

SurveyFee Fee paid to a professional surveyor to perform an inspection of the physical boundarieand to prepare a drawing and description of the boundaries, improvements (such as bencroachments and/or easements on the land.

TaxStampForCityMortgage Fee for a tax stamp to be affixed to a taxable lien to indicate that the appropriate tax h

TaxStampForCountyMortgage Fee for a tax stamp to be affixed to a taxable lien to indicate that the appropriate tax h

TaxStampForStateMortgage Fee for a tax stamp to be affixed to a taxable lien to indicate that the appropriate tax h

TemporaryBuydownAdministrationFee Fee paid to lender or lender's agent to administer a temporary buydown.

TemporaryBuydownPoints A form of pre-paid interest, equaling a percentage of the loan amount, paid to temporaa specific period of the initial term of the loan.

TitleClosingFee Fee paid to title company for conducting the loan closing on the subject transaction.

TitleClosingProtectionLetterFee Fee charged for a statement or document issued by title insurance underwriters that sunderwriter, fraud and errors in closings performed by the agents of the underwriter a

TitleEndorsementFee Fee paid to title company for preparation of any necessary endorsements to the title ptransaction.

TitleExaminationFee Fee paid to title company for conducting title search and preparing title abstract on su

TitleInsuranceBinderFee Fee paid to title company for preparation of the title binder (title commitment).

TitleDocumentPreparationFee Fee paid to title company for preparation of documents for the loan closing, deed transmortgage lien and complete ownership transfer of the subject property.

TitleLendersCoveragePremium Fee paid to title company for issuance of lender's title insurance policy that indemnifiesproperty is challenged by the discovery of faults in the title.

TitleNotaryFee Fee paid to the title company for the performance of notary services.

TitleOwnersCoveragePremium Fee paid to title company for issuance of owner's title insurance policy that indemnifieor her clear ownership of property is challenged by the discovery of faults in the title.

TitleUnderwritingIssueResolutionFee Fee paid to title company for research and resolution of title issues.

TransferTaxTotal Fee to jurisdictional government entity based on the sales price, value of the property o

VerificationOfAssetsFee Fee paid for verification of assets disclosed by the borrower on the loan application.


37

tion.

lication.

ber disclosed by the borrower on the loan

turns provided in conjunction with the loan


VerificationOfEmploymentFee Fee paid for verification of employment disclosed by the borrower on the loan applica

VerificationOfIncomeFee Fee paid for verification of income disclosed by the borrower on the loan application.

VerificationOfResidencyStatusFee Fee paid for verification of residency status disclosed by the borrower on the loan app

VerificationOfTaxpayerIdentificationFee Fee paid for verification of Social Security number or Individual Tax Identification numapplication.

VerificationOfTaxReturnFee Fee paid for verification of financial information reported by the borrower on the tax reapplication.

WaterTestingFee Identifies that the fee type being requested is for testing the Water Quality.

WellInspectionFee Identifies that the fee type being requested is for a well inspection.

WireTransferFee Fee for wiring funds in connection with the loan.


38

is not reviewed. The results are based on the arge amounts, not the disclosed values. features a message across the top that

t (and not a full compliance report).

ults Windowrt or preview report, compliance data is led in Compliance Review Setup), the indow opens with a list of Fatal errors. For t the error, and then click Go to Field to open ted for data entry. You can then enter a new

in the list, click the Refresh icon to update

, you can click Order to order a compliance

in order to order a compliance report. A red without correcting Warning messages. ce Review Audit Results window.

at Are Assessed During a

ou to view the fields that are exported to the d assessed based on the type of loan check ool are read-only and cannot be edited. The ess to the viewer based on persona.

Chapter 4: Encompass Compliance Service

Chapter 4

Encompass Compliance ServiceThe Encompass Compliance Service enables you to perform a loan check (i.e., order a compliance report) at any point during the loan process. During a loan check, loans are reviewed for compliance issues based on Truth in Lending (TIL), HOEPA, State and Local High Cost, State Consumer Credit, and other industry regulations and mandates. Once the check is complete, a compliance reports generated indicating the loan's compliance issues and exceptions, as well as data within the loan that successfully passed the review.

Using the Encompass Compliance Service, you can:

• Manually order a compliance report. • View a completed report, complete with a list of returned alerts, errors, and

pass/fail messages. • Jump directly to a field where data has not passed the review. • Clear the Compliance Review alert from the Log.

Ordering a Compliance Report• There are two methods for ordering a compliance report.• Automatic Ordering - An individual with an Encompass admin user ID can set

up compliance reports to be run automatically at the completion of selected milestones using Compliance Review Setup. The latest report is displayed on the Compliance Review screen in Encompass.

• Ordering Manually - Use the Encompass Compliance Service to order a compliance report at any point during the loan process:

To Order a Compliance Report:1 Open the loan to be checked, click the Tools tab, and then click Compliance

Review. 2 Click Order.

Ordering a Preview ReportYou can order a preview report in order to test for compliance issues before ordering a full compliance report or disclosing to the borrower. Click the Preview button to order a preview report.

• With a preview, the final loan data loan’s current APR and finance ch

• The preview report that is returnedindicates that it is a preview repor

Compliance Review Audit ResIf, when ordering a compliance repomissing or inconsistent (and if enabCompliance Review Audit Results weach error listed in the window, seleca form with the affected field highlighvalue to correct the error.

• After correcting one or more itemsthe list.

• Once all Fatal errors are correctedreport.

• All Fatal errors must be corrected compliance report can still be orde

• Click Close to close the Complian

Viewing the Fields ThLoan CheckThe ECS Data Viewer tool enables yEncompass Compliance Service anbeing performed. The fields on the tadministrator can allow or deny acc

39

sections for each review that was performed . When a compliance issue occurs, the data

is explained in the report.

ed in a report:

ce Review Setup configured by the ot be performed during the loan check.

areas of the loan file to determine ATR/QM

an designate whether the loan is an ATR R requirements because of the creditor type, ary loan purpose using the ATR/QM the ATR/QM Management tool’s ATR/QM is designated as exempt from the ATR/QM will not apply any Ability to Repay rules.ndard Rule provides eight specific factors a ing: cted income or assets

ed loan, monthly payment on any

age-related obligations imony, and child supportTI) and Residual Income (RI)

ew will look at the relevant fields in the vailable in Encompass Banker Edition only) were evaluated.

mpliance review will run rules to determine -Priced Covered Transaction, point and fee ibited loan terms and features, rules to derwriting factors were

to-Income and/or Residual Income rules, and as applicable based on the type of Qualified

ion of Compliance: The ATR Rule provides ortgages that are not higher-priced. Loans eet the definition of a QM have a different e presumption that the creditor complied with


To Access and Use the ECS Data Viewer Tool:1 Open a loan file, click the Tools tab, and then click ECS Data Viewer.2 Use the tool to view the data for the fields that are exported to the Encompass

Compliance Service.

3 Click the Fee Details, MIP/USDA or HMDA button on the tool to view a read-only popup screen of the form or tool where the field data was entered.

Viewing the ReportEvery time a compliance report is ordered, an entry is added to the Log. The last report that was ordered is available to view on the Compliance Review screen. Reports ordered earlier are stored in the eFolder. To view an earlier report, click the entry in the Log. You can also click the eFolder icon to view a list of reports on the Documents tab.

To View the Latest Report on the Compliance Review Screen:1 From the Pipeline, open the loan for which a compliance report was ordered.2 Click the Tools tab, and then click Compliance Review.

Compliance reports contain separateand provide the result of each review(or missing data) causing the issue

The following reviews may be includ

NOTE: Depending on the Complianadministrator, certain reviews may n

• ATR/QM - The ECS tests several Compliance:

• ATR Exempt Loan: Users cExempt Loan exempt from ATloan type, unit count, or primExemption Eligibility fields inEligibility input form. If a loanRules, the compliance review

• ATR Standard: The ATR Stacreditor must consider includ• Current or reasonably expe• Current employment status• Monthly payment on Cover

simultaneous loan• Monthly payment for mortg• Current debt obligations, al• Monthly Debt-to-Income (D• Credit historyNOTE: The compliance reviUnderwriter Summary tool (ato determine if these factors

• Qualified Mortgage: The cowhether the loan is a Higherlimitation rules, rules for prohensure that the necessary unconsidered/evaluated, Debt-Agency/GSE eligibility rules,Mortgage being made.

• QM: Safe Harbor/Presumpta safe harbor for Qualified Mthat are higher-priced and mprotection, that of a rebuttablthe ATR requirements.

40

ILA-RESPA review applies to closed-end ellings attached to real property, where the er October 3, 2015. pply to open-end HELOCS (field ID 1172

made primarily for personal, family, or QM.X110).

e Service does not receive enough ther the loan is secured by real property, it will to all closed-end loans secured by 1-4 unit personal, family, or household purposes, on or after October 3, 2015 and where the TILA-RESPA 2015 LE and CD.

eview includes comparisons, tests, functions e Truth In Lending Act and Mortgage (MDIA). Specifically, the Encompass ates the finance charge amount, amount nts, payment schedule, and the amortization o validates that the loan's disclosure dates -7-3 rules” set forth in the MDIA. eview - The TILA Right of Rescission review closed-end loan secured by a 1-4 unit e whether it is in compliance with TILA ts. The Right of Rescission test compares the ration date and the loan disbursement date to ulated right to cancel expiration date and date is earlier than the earliest allowable

ates for this review, input the last day of the f the funding date.

r compliance with the Home Ownership and d applicable state and local jurisdictions. The alculates the high cost thresholds as defined and local jurisdictions to determine if a loan federal, state, and local APR and Points and proper classification of fees by ascertaining

le, lender, affiliate, originator, or provider) and rules, indices, and information are preserved ontrol audit.lates thresholds and ensures critical ith respect to “higher priced mortgage loans” culated according to Section 12 C.F.R. § ffective October 1, 2009, Regulation Z

ith an APR above a specified threshold. The


• QM: Loan Feature Limitations: The compliance review will determine whether the loan has a prohibited loan feature disqualifying the loan from QM eligibility. Depending on the QM Type, these loan features may include: an interest-only payment term, negative amortization, loan term greater than 30 years, or a balloon payment.

• QM: Points and Fees Limits: The compliance review will determine whether the loan exceeds the applicable points and fees threshold, disqualifying a loan from QM eligibility. • “Bona Fide” Discount Points - Users may use either the new Starting

Adjusted Rate (field ID NEWHUD.X1720) and the Points in Starting Adjusted Rate fields or the existing Undiscounted Rate field (field ID 3293) to designate whether the discount points are “Bona Fide” and to test whether to include them or exclude them as appropriate

• Underwriting: QM loans contain specific requirements around Payment Underwriting, Mortgage-Related Obligations, Income or Assets, Employment Status, Simultaneous Loans, Debt, Alimony, Child Support, DTI or RI, and Credit History. The existing system payment underwriting functionality has been revised to reflect the revised maximum payment underwriting requirements for loans eligible for General QM, Balloon-Payment QM, Small Creditor QM, or Small Creditor Balloon-Payment QM status. The compliance review will perform testing to ensure the DTI for a General QM does not exceed 43%. It will also perform DTI testing and/or Residual Income testing on other loan types, depending on the type of loan being made.

• QM: Agency/GSE Eligibility: The compliance review will use the AUS response and Risk Assessment information when determining the eligibility of Agency/GSE Qualified Mortgages to be sold to or guaranteed by government agencies and GSEs.

• Non-Standard to Standard Refinances: The ATR Rule contains special requirements for creditors refinancing their own customers into more affordable loans to help those customers avoid payment shock. The compliance review will run rules to determine whether the prior loan is eligible for a refinance into a Standard Loan Refinance and also to determine whether the Standard Loan meets the requirements under Ability to Repay.

• TILA/RESPA - The TILA/RESPA heading in the compliance report reflects the result of the TILA Tolerance Review (for loans made prior to October 3, 2015 and for loans that are exempt from the Integrated Disclosure requirements, TILA-RESPA Review (for loans with an application date on or after October 3, 2015 which are subject to the Integrated Disclosure requirements), and TILA-Right of Rescission Review. The most severe status will be reflected in the TILA/RESPA heading.

• TILA-RESPA Review: The Tloans secured by 1-4 unit dwapplication is taken on or aftNOTE: This review dos not aequals HELOC) or loans nothousehold purposes (field ID

If the Encompass Compliancinformation to determine wheapply the TILA-RESPA Rulesdwellings, made primarily forwhere the application date isEncompass Form Version is

• TILA Tolerance - This TILA rand calculations based on thDisclosure Improvement ActCompliance Service recalculfinanced, APR, total of paymeschedule. The review will alsare in compliance with the “3

• TILA Right of Rescission Rtests a non-purchase moneyprimary dwelling to determinrescission timing requiremendisclosed right to cancel expithe compliance review's calcreturns an exception if eitherdate. NOTE: When working with dRTC expiration regardless o

• High Cost - This review checks foEquity Protection Act (HOEPA) anEncompass Compliance Service cin HOEPA and by applicable stateis considered a high cost loan. TheFees threshold calculations ensureto whom the fee is paid (for exampby whom the fee is paid. Historicalto enable a retrospective quality c

• Higher Priced - This review calcuregulatory requirements are met w(HPML). HPML thresholds are cal226.35(a)(1) of the Regulation Z. Edefines HPMLs to include loans w

41

ble individual loan originator’s NMLS regis-ans, with the applicable data and information

ice will return Warning or Failure messages if identifier, name, or license number does not provided by NMLS B2B Access. The service se(s) associated with the individual loan r for easy reference.

d Enterprise (GSE) review includes the

- The review calculates the allowable Fannie lds as defined in the Fannie Mae Lender 2000 (and codified in Fannie Mae’s Selling 1), as updated and amended based upon

- The review calculates the allowable Freddie lds as defined in the Freddie Mac Industry 2000 (and codified in Freddie Mac’s n 22.32), as updated and amended based

e High Cost Thresholds - The review holds as defined in the Fannie Mae Selling 5, as updated and amended, and the Freddie rvicer Guide Chapter 22, as updated and ata. ss administrator can work with your

lop and maintain custom business rules to s or investor-specific program requirements. use enterprise rules to conduct a custom

d policies repay n oints ing high cost by changes to fees at closing

s SE requirements pertinent loan data to HMDA requirements. its are processed against the HMDA fields.


threshold for a first-lien loan is 1.5% or more above the average prime offer rate for a comparable loan (which is not an unusual interest rate). The threshold for a second lien is 3.5% or more. If a loan is classified as an HPML, the Encompass Compliance Service analyzes the loan's prepayment penalties to determine if they are prohibited under Regulation Z.

• State Rules - This review applies the requirements of over 340 US state laws for consumer residential mortgage loans secured by real property. It enforces the laws as they relate to:

• Usury rate ceilings percentage caps • Prohibited fees • Fee percentage or dollar amount limits • Higher-rate, higher-risk, higher-priced, sub-prime, non-prime, and rate

spread loans • This review analyzes loans for compliance with state laws and

regulations governing higher-rate, higher-risk, higher-priced, sub-prime, non-prime, and rate spread and similarly classified loans. Status messages in the report will explain why a loan triggered the applicable threshold and is classified as a state higher rate mortgage. The review will also determine compliance with critical aspects of higher rate mortgage regulations, including provisions relating to disclosures, foreclosure, predatory practices, and assignee liability.

• Prepayment penalty prohibitions and limitations • Late fee dollar amount limits and length of late fee grace periods • Interest accrual start dates • Negative amortization prohibitions • Balloon payment prohibitions or term limitations • Payment and term limitations

• License - The Encompass Compliance Service maintains a nationwide database of over 450,000 licensed mortgage entities, including lenders and brokers, that is updated as frequently as state regulatory agencies make new licensing information available. The custom License review uses this database to determine the following:

• The lender assigned to the loan is licensed in a particular jurisdiction. • The license is active and in good standing. • The license authorizes the lender to originate this type of transaction.

• NMLS Registration Review - The NMLS (Nationwide Mortgage Licensing System) Registration Review review verifies an individual loan originator’s NMLS information against NMLS data using NMLS B2B Access. The review

may be used to test for the applicatration information on seasoned loat the time the loans were closed.The Encompass Compliance Servthe loan originator's NMLS uniquematch the NMLS registration data also will return the name and licenoriginator’s NMLS unique identifie

• GSE - The Government Sponsorefollowing:

• Fannie Mae Points & Fees Mae points and fees threshoLetter 03-00, issued April 11,Guide Part VII, Section 104.1loan data.

• Freddie Mac Points & FeesMac points and fees threshoLetter, issued December 28,Seller/Servicer Guide Sectioupon loan data.

• GSE HUD-HOEPA Mortgagcalculates the high cost thresGuide Part VII, Section 104.1Mac Single-Family Seller/Seamended, based upon loan d

• Enterprise Rules - Your Encompacompany's representative to deveenforce internal compliance policieFor example, your company couldreview for the following:

• Enforce lending programs an• Evaluate borrower's ability to• Manage broker compensatio• Analyze bona fide discount p• Identify loans at risk of becom• Set over-disclosure tolerance• Conform to investor and/or G

• HMDA - This review evaluates theThe FFIEC Validity and Quality ed

42

ice will provide a Warning message on a unit dwelling with an Application Date on or Mortgage Broker (loan originator) receiving rrower and from another person.

all of the loan's borrower names and aliases ts Control's (OFAC) Specially Designated ountries List (i.e., the “SDN” list), Bureau of ons list maintained by the U.S. Department of established by the Canadian and British

cludes certain CitiMortgage® policies nts.

ion of reviews that are not included in any of M Mapper, Perform Mortgage Calculations,

oward the top of the report, under the Review e five possible status results that can be ort. These results are displayed above the

on. The possible results, listed in order of

when the Encompass Compliance Service n caused by a system failure or when key the loan. When a processing exception nder a compliance decision.n the Encompass Compliance Service

mpliance exception, thus failing the

hen the Encompass Compliance Service d on its findings, classifies the loan as a pecial” loans are sub-prime, non-prime, e loans. This status simply notifies you that ut is not indicative of any compliance issue.d when the Encompass Compliance Service e loan that you should investigate to xception exists. For example, a second lien rate a Warning status for the HMDA review. the Encompass Compliance Service e loan that you should investigate to xception exists. For example, certain states by the borrower be placed in interest bearing


• Rate Spread - This review provides an alert advising the lender of the HMDA Rate Spread on a Higher-Priced Mortgage Loan. The Encompass Compliance Service uses the greater of the Disclosed APR, Encompass APR, or calculated APR as the loan’s APR for comparison purposes. The HMDA-LAR Rate Spread reporting requirement occurs when the difference between the loan's APR and the average prime offer rate for a comparable transaction is equal to or greater than 1.5% for first liens or 3.5% for subordinate liens.

• FHA Review - The FHA review evaluates FHA loans and identifies certain issues in the following areas: Seller Contribution Limit, Tax Service Fee Prohi-bition, Late Charge and Grace Period Limits, ARM Adjustment and Rate Restrictions, MSA Loan Limits, and Loan Term Limits.

• VA Enterprise Review - The VA Enterprise Review contains rules to test for some of the prohibited terms on VA loans. This review contains the following enterprise rules:

• Federal - Late Charge Limitation (VA)• Federal - Grace Period Limitation (VA)• Federal - Discount Points May Not Be Financed in a Purchase Money

Loan (VA)• Federal - Discount Points May Not Be Financed in a Cash-Out Refinance

Loan (VA)• Federal - Discount Points Limitation in a Rate and Term Refinance Loan

(VA) (Warning)• Federal - Loan Origination Fee 1% Limitation (VA)• Federal - Unallowable Itemized Fees (1% Maximum) (VA)• Federal - Loan Origination Fee and Unallowable Itemized Fees Charged

(VA)• Federal - Rate and Term Refinance Itemized Fees Charged (VA) (IRRL

Warning)• LO Compensation Review - This review provides a Warning message on a

closed-end loan secured by a 1-4 unit dwelling with an Application Date on or after April 1, 2011 that includes the Mortgage Broker (loan originator) receiving any of the following fees from someone other than the Borrower:

• Loan Discount • Yield Spread Premium • RESPA - Your Charge/Credit (Points) amount • Prepaid Interest • Interest Rate Buydown Fee

The Encompass Compliance Servclosed-end loan secured by a 1-4 after April 1, 2011 that includes thecompensation directly from the Bo

• OFAC/SSN- This review comparesagainst the Office of Foreign AsseNationals, Blocked Persons and CIndustry and Security Denied PersCommerce, as well as similar listsgovernments.

• Citi Rules Review - This review inavailable to approved corresponde

• Other - This section is a combinatthe reviews above, for example ARand Index Review.

Status ResultsThe overall review status is located tStatus heading. In addition, there arreturned for each review within a repRequest Summary information sectiseverity, are:

• ERROR - This status is delivered encounters a processing exceptioelements or data are missing fromoccurs, the service is unable to re

• FAIL - This status is delivered whedetermines the loan contains a cocompliance review.

• ALERT - This status is delivered wexamines the loan data and, base“special” loan type. Examples of “snontraditional, or rate spread homthe loan is considered “special”, b

• WARNING - This status is delivereidentifies potential issues within thdetermine whether a compliance eloan amount of $300,000 will geneThis status is also delivered whenidentifies potential issues within thdetermine whether a compliance erequire that impound amounts paid

43

ensure the most accurate compliance report n click Go To Fee to jump directly to the field

e Details window that lists the fees remains en you jump to a field in Encompass.

lerteck, every review that was included in the ”. When a loan does not pass a loan check, s” alert is added to the Alerts & Messages tab n:

the report, and then order a new compliance s the loan check, the alert will be removed.

(if enabled by the administrator). Note that ved, the loan's compliance issues will remain


accounts. The Encompass Compliance Service will return a Warning because it is unable to determine if such funds have been placed in an interest bearing account.

• PASS - This status is delivered when the Encompass Compliance Service does not identify any exceptions with the loan data.

There are two additional status results that can be returned for reviews that are not run:

• Not Requested - The Encompass Compliance Service will show a status of Not Requested for a review type if that review type is either not selected as a review you want to run or the review was not run because it was set up to run only under certain conditions. Both of these characteristics are set by the Encompass administrator in the Compliance Review Setup wizard.

• Not Processed - This status is returned if the details of the specific loan being reviewed make certain laws non-applicable. For example, if the loan is a purchase loan for a California investment property, the Encompass Compliance Service will return a Not Processed status under the High Cost review because both the Federal and California High Cost tests do not apply to purchase loans for investment properties.

NOTE: For more information about these status results and additional details about the standard baseline review results, refer to the Understanding ECS Review Results document.

Viewing a List of Compliance IssuesTo view a list of all errors, failures, alerts, or warnings returned in a report, click the View Error List button. The list includes the specific review that returned the issue, as well as a message explaining why the issue was returned. For example, “There is no geocode data for the property address. Please verify the address is correct.”

If the issue was caused by data entered into a specific field in Encompass, the field ID is included in the list. Click this item in the list, and then click Go To Field to jump directly to the field in Encompass.

The window listing the compliance issues remains open until you click Close, even when you jump to a field in Encompass. To order a new compliance report from this window, click Order Review. The report is displayed on the Compliance Review screen.

View a List of Loan’s FeesTo view a list of all the fees processed during the loan check, click the Fee Details button. Fees that are not mapped correctly or have other issues are highlighted in red.

These issues should be corrected toresults. Click a fee in the list, and thein Encompass.

NOTE: The Compliance Review Feopen until you click Close, even wh

Compliance Review Log AIn order for a loan to pass a loan chreport must return a status of “PASSa “Compliance Review - Did Not Pasin the Log. To clear this alert, you ca

• Correct all the issues listed inreport. When the loan passeOR

• Click the Clear Alert button even though the alert is remountil they are corrected.

http://help.elliemae.com/DocumentationLibrary/360/UnderstandingECSReviewResults.pdf

http://help.elliemae.com/DocumentationLibrary/360/UnderstandingECSReviewResults.pdf

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