OPERATIONS LOAN PROCESSING PROCEDURE REG B - HANDLING INCOMPLETE FILES

Transcription

1 PNP SPECIFICATIONS PNP Name/ History Procedure: Reg B - Handling Incomplete Files Date Issued: 02/05/2016 Date Effective: 02/05/2016 Date Revised: 02/02/2017 Production Channels Retail Correspondent Wholesale Accountable Personnel/ Department Loan Processors s Account Managers (Wholesale) Issuing Personnel/ Department Subject Matter Expert (SME) Purpose Executive Vice President, Operations Director of Processing Manager Account Managers The purpose of this procedure is to ensure absolute compliance with Regulation B and to demonstrate a good faith effort to handle each transaction expeditiously, meeting Regulation B requirements for making a credit decision within 30 days of receipt of a loan application. RELATED DOCUMENTATION Guide Forms Loan Processing Manual Notice of Incomplete Application (NOIA Letter; available in Encompass Custom Forms) Notice of Withdrawn Application Procedure Canceling Loans

2 RELATED DEFINITIONS Incomplete File Application Withdrawn Application Canceled File that is missing any number of items required to make a credit decision. The borrower has notified the lender that he/she is no longer interested in qualifying for a loan with the lender. The borrower did not withdraw his/her application, the loan was not decisioned (approved or denied) in underwriting, the borrower did not respond to requests for additional information. Table of Contents Prompting for Disclosures Due... 1 Proceeding without Signed Disclosures Returned... 1 Canceling Loans without Signed Disclosures Returned... 2 Proceeding with Signed Disclosures in the File... 4 Conducting Post NOIA Follow-up, Days Handling Withdrawn Applications with Signed Disclosures... 6 Canceling Loans with Signed Disclosures in the File... 6

3 REVISED 02/02/2017; PAGE 1 OF 6 Prompting for Disclosures Due 1. Generate the Need to Disclose report to see a list of loans for which disclosures must be sent to remain in compliance. 2. The day before disclosures are due, notify the branch Loan Originator and Loan Processor that disclosures must be generated and sent by 12:00 PM PST, or they must provide a completed Notice of Withdrawn Application if the borrower does not wish to pursue the loan. If the application is withdrawn by the borrower: a. Obtain a Notice of Withdrawn Application form, signed by the Loan Originator, or written withdrawal notification from the borrower ( from borrower qualifies as written notification). b. Upload the form or written withdrawal to the efolder under QC - Notice of Withdrawn Application. c. Go to the Encompass Canceled form (screen) and BORROWER S REQUEST as the reason). 3. Ensure these loans are either disclosed or canceled by the end of the business day. IMPORTANT NOTE: Before canceling a locked loan, contact the Loan Originator and ask if the lock will be transferred to a new loan for the same borrower with the same property address; this is important because when a loan is canceled in Encompass the lock is automatically canceled. The transfer must be done prior to canceling the first loan, or the loan will be subject to worst case pricing. Proceeding without Signed Disclosures Returned 4. Retail only: Each day, review your Encompass No Signed Disclosures report to see files with the application taken, disclosures sent, yet signed disclosures were not received from the borrower within 10 days.

4 REVISED 02/02/2017; PAGE 2 OF 6 Proceeding without Signed Disclosures Returned (Cont d) 5. Retail only: Send a status update request to the LO for all loans on the No Signed Disclosures report: Type Status Update Request and the loan # in the Subject field. Type the message as follows: This loan is at 10 days from the LE application date and signed disclosures have not been received from the borrower(s). If disclosures are not received by day 24, we will send the borrower(s) a Notice of Incomplete Application (NOIA) giving them 14 days to respond or we will cancel their application. If the disclosures are received after we issue the NOIA, we will have 60 days from the LE Application Date to render a decision on the loan. 6. Retail only: If file status does not change within 5 days of sending an update request to the LO, send a Notice of Incomplete Application (NOIA) to the borrower (on the 15 th day after initial disclosures sent to the borrower). a. Go to the Encompass NOIA form (screen) and click the [Disclosures Not Received] button at the top of the form to auto-populate the NOIA letter. b. Click the [Print] button in the upper right corner of the screen to generate a letter to the borrower. c. Upload a copy of the NOIA to the efolder under QC NOIA Letter. Canceling Loans without Signed Disclosures Returned 7. Retail only: If the application is withdrawn by the borrower: a. Obtain a Notice of Withdrawn Application form, signed by the Loan Originator, or written withdrawal notification directly from the borrower ( from borrower qualifies as written notification). b. Upload the form or written withdrawal to the efolder under QC - Notice of Withdrawn Application. (Continued)

5 REVISED 02/02/2017; PAGE 3 OF 6 Canceling Loans without Signed Disclosures Returned (Continued) 7. (Cont d) c. Go to the Encompass Canceled form (screen) and BORROWER S REQUEST as the reason). d. Print a copy of the unsigned initial disclosures to the Encompass efolder NOIA Disclosures Only placeholder. IMPORTANT NOTE: Before canceling a locked loan, contact the Loan Originator and ask if the lock will be transferred to a new loan for the same borrower with the same property address; this is important because when a loan is canceled in Encompass the lock is automatically canceled. The transfer must be done prior to canceling the first loan, or the loan will be subject to worst case pricing. 8. Using the No Signed Disclosures report, monitor loans where borrower does not withdraw the application and does not respond to the NOIA by the 59 th day from the LE Application Date. For any such loans, do the following: a. Go to the Encompass Canceled form (screen) and CLOSED FOR INCOMPLETENESS as the reason). b. Print a copy of the unsigned initial disclosures to the Encompass efolder NOIA Disclosures Only placeholder. IMPORTANT NOTE: Before canceling a locked loan, contact the Loan Originator and ask if the lock will be transferred to a new loan for the same borrower with the same property address; this is important because when a loan is canceled in Encompass the lock is automatically canceled. The transfer must be done prior to canceling the first loan, or the loan will be subject to worst case pricing.

6 REVISED 02/02/2017; PAGE 4 OF 6 Proceeding with Signed Disclosures in the File Loan Processor/ Account Manager 9. Each day, review the Encompass NOIA report to see: Retail files with signed disclosures received; or Wholesale files that have 6 pieces of information; AND No decision (approved or denied) has been made within 25 days of the application date. Suspended loans are not considered decisioned for this procedure. 10. For each loan on the NOIA report aged 25 days after the LE Application Date, send a Notice of Incomplete Application (NOIA) to the borrower. Encompass will also fire an Alert when a NOIA is due on a file. Exceptions: Loans submitted to Underwriting do not need a NOIA; however, if they no approval or denial issued, NOIA must be issued the 29 th day. a. Go to the Encompass NOIA form (screen) and enter items needed in order to proceed with the file. o Do not use abbreviations, as this information will be merged with a letter to the Borrower. o Be precise (i.e. do not list as 2 mos. bank stmts; instead list as most recent 2 months bank statements, January and February, all pages ) b. Click the [Print] button in the upper right corner of the screen to generate a letter to the borrower. c. Upload a copy of the NOIA to the efolder under QC NOIA Letter. NOTE: Only one (1) NOIA may be sent to the borrower; ensure the information is accurate and complete before proceeding. d. Follow standard procedure for obtaining conditions from the borrower, requesting items, following up, etc.

7 REVISED 02/02/2017; PAGE 5 OF 6 Conducting Post NOIA Follow-up, Days Loan Processor/ Account Manager 11. Each day, review the Encompass NOIA report to see files for which the NOIA was issued to the borrower, yet the file is not ready for submission to Underwriting within 20 days of the NOIA issue date. Encompass will also fire an Alert when a NOIA follow-up is due on a file. 12. Follow-up with the Loan Originator, Manager, Broker and/or borrower via and telephone to request items needed (as detailed on the NOIA issued to the borrower). a. Inform them the file will be canceled if items are not provided to render an underwriting decision. b. Record all follow-up activity in the Encompass Conversation Log. Start each entry by typing your name, NOIA followup, and the day number (after NOIA sent to the borrower) in the Comments box of the Conversation Log. Example: Sally s NOIA follow-up, day 24: Called LO and she agreed to contact the borrower today to request missing items. If communication is done via , also copy and paste the text onto the Comments box. c. On the 24 th day, send a final notice via to the Loan Originator, Manager, or Broker that the file will be canceled if missing items are not received by 5:00 PM the following day so an underwriting decision can be rendered before the 30 th day.

8 REVISED 02/02/2017; PAGE 6 OF 6 Handling Withdrawn Applications with Signed Disclosures Loan Processor/ Account Manager 13. If the application is withdrawn by the borrower or the Loan Originator states the borrower wishes to withdraw: a. Obtain a Notice of Withdrawn Application, signed by the Loan Originator, or a written withdrawal notification from the borrower ( from borrower qualifies as written notification). b. Upload the Notice of Withdrawn Application or the borrower s written notification to the efolder under QC-Notice of Withdrawn Application. c. Go to the Encompass Canceled form (screen) and BORROWER S REQUEST as the reason). Canceling Loans with Signed Disclosures in the File Processing Manager or Account Manager 14. a. If an NOIA was issued within 30 days of the LE Application Date, if the loan is not decisioned (must be approved or denied) by day 60 from the LE Application date, the loan must be canceled. b. Go to the Encompass Canceled form (screen) and CLOSED FOR INCOMPLETENESS as the reason). IMPORTANT NOTE: Before canceling a locked loan, contact the Loan Originator and ask if the lock will be transferred to a new loan for the same borrower with the same property address; this is important because when a loan is canceled in Encompass the lock is automatically canceled. The transfer must be done prior to canceling the first loan, or the loan will be subject to worst case pricing.