Download Report

Click to edit Master title style
Best-Practices for Underwriters
THE MORTGAGE PROCESS
Janet Fell – Manager, Solutions Engineering – Ellie Mae
Jamie Schroepfer – Business Analyst – LenderOne Financial Corp.
Rich Tucker – VP Operations – First Mortgage Company
Juliet Overton – Sr. Compliance Analyst – Ellie Mae
Lori Wahl – Technical Support Program Manager – Ellie Mae
©2015 Ellie Mae. All rights reserved.
Safe Harbor
This presentation may contain forward-looking statements under the safe
harbor provisions under The Private Securities Litigation Reform Act of
1995. These forward-looking statements may include the company’s
ability to enhance the features and functionality of the Encompass
software, the timing of the introduction and acceptance of additional
services and the timing of new product launches. Additional risks and
uncertainties related to the company’s business are discussed in the
company’s Securities and Exchange Commission filings, including but not
limited to the to the final prospectus relating to its initial public offering
[and the company’s most recent Quarterly Report on Form 10-Q]. Unless
otherwise required by applicable laws, the company undertakes no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
©2015 Ellie Mae. All rights reserved.
Agenda
•
•
•
•
•
•
•
•
Solution overview – Janet Fell
Client Example: Jamie Schroepfer
Client Example: Rich Tucker
AllRegs – Joy Gilpin
TQL – Lori Wahl
ATR/QM – Juliet Overton
Summary and takeaways – Janet Fell
Questions
©2015 Ellie Mae. All rights reserved.
LeaderOne Financial Corporation
Jamie Schroepfer
Business Analyst
©2015 Ellie Mae. All rights reserved.
About My Company
•
LeaderOne Financial Corporation
•
Mortgage Banker
•
Headquartered in Overland Park, KS, with offices in 18 states
(licensed in 38 states)
•
Annual loan volume: $677,000,000
•
360 employees
•
Founded in 1992
•
Ellie Mae client since 2011
©2015 Ellie Mae. All rights reserved.
LeaderOne
•
Business challenge
>
>
>
>
>
Accommodating remote Underwriters
Paperless workflow
Consistency
Data Integrity
Driving efficiencies / reducing costs
•
Solution overview: Maximize use of eFolder features and use
Underwriting Snapshot
•
Best practices
>
>
>
>
Numbered Documents & Conditions
Automatically Assign all Documents to Conditions
Automated Conditions
Underwriting Snapshot
©2015 Ellie Mae. All rights reserved.
Metrics
Improvements in Underwriting Touches and First Time Purchases
attributed to Encompass system changes aligned with better
processes.
•
Underwriting Touches
>
>
>
•
6.62 in 2013
2.67 in 2014
3.95 Improvement in Underwriting Touches
First Time Purchases
>
>
>
46.4% with 20+ Average Suspense items in 2013
68.3% with an average of 13 Suspense items in 2014
First Time Purchases improved 21.9% and average suspense items decreased by 7
©2015 Ellie Mae. All rights reserved.
Demonstration
eFolder Documents Tab (when UW starts working on file)
©2015 Ellie Mae. All rights reserved.
Demonstration
Document/Condition Naming Convention
•
•
•
•
•
•
•
•
•
•
000-099
100-199
200-299
300-399
400-499
500-599
600-699
700-799
800-899
900-999
–
–
–
–
–
–
–
–
–
–
Post Closing Docs/Internal Documents Only (such as Investor Submission Sheets, Trash, etc.)
Underwriting Docs (such as Decision, Transmittal, etc.)
Credit Docs (such as VOM, VOR, Payoffs, Credit Reports, etc.)
Government Loan Items (such as Case Numbers, FHA, VA, RD, etc.)
Income Docs (such as Paystubs, Tax Returns, VOE's, etc.)
Asset Docs (such as Bank Statements, Earnest Money, etc.)
Property Docs (such as USPS, Condo, Flood, etc.)
Legal Docs (such as ID, POA, Divorce Decree, etc.)
Closing Conditions
Disclosure Miscellaneous (not actual disclosure names)
•
eDisclosures (will all be properly named – based on names that populate when the
eDisclosures are generated using the eDisclosure Button)
•
Settlement Services – Use Encompass Delivered Names (such as Appraisal, Flood
Certificate, Mavent, 4506T, etc.)
•
Closing Docs (will all be properly named – based on names that populate when the
Closing Docs are generated by Closing Department)
*NOTE that while we used 3 digit number codes, recommend using 4 digits to allow
yourself more room to expand/grow your eFolder.
©2015 Ellie Mae. All rights reserved.
Demonstration
Preliminary Conditions (when UW starts working on file, Processor has
split out the disclosures to appropriate conditions)
©2015 Ellie Mae. All rights reserved.
Demonstration
Underwriter Adds Preliminary Conditions to Underwriting Conditions tab
©2015 Ellie Mae. All rights reserved.
Demonstration
Underwriter Adds Automated Conditions
©2015 Ellie Mae. All rights reserved.
Demonstration
Automated Conditions - Logic Based on Loan Level Data entry
Examples:
• Loan Type
• Loan Purpose
• LTV
• State Specific
• Documentation Type
• Type of Income (Employment, Self-Employment, Social Security,
etc.)
• Assets
• Property Type
• Declarations
• Flood Zone
Any data entry point in Encompass can be used to trigger an
Automated
Condition
©2015 Ellie Mae. All rights reserved.
Demonstration
Underwriting from the Conditions tab
©2015 Ellie Mae. All rights reserved.
Demonstration
Automated Conditions
•
Consistent Conditions from Underwriting
•
Minimizes Errors in Underwriting (less likely to miss condition)
Efficiency
•
Documents Attach to Conditions
•
Reduces Work for Processing (they don’t have to change UW
Condition status for UW to know what to review, they just have to
attach file to Document)
©2015 Ellie Mae. All rights reserved.
Demonstration
Handling Miscellaneous Conditions
•
Standard “Other” Conditions for each Category (Income, Assets, Property, etc.)
•
Underwriters free type Miscellaneous Condition details in Description field
•
Documents Automatically Attach to Conditions (Processors don’t have to manually
assign documents to free typed Conditions)
©2015 Ellie Mae. All rights reserved.
Demonstration
Underwriting Snapshot
•
Automatically Captures at Conditional Approval Milestone
•
Underwriter can manually Take Snapshot at any time (such as Resubmittal
being sent back to Processing)
•
Tracks Date/Time Snapshot was taken
•
Capture any fields important to Underwriting
•
Highlights Discrepancies in Red to be easily identified
©2015 Ellie Mae. All rights reserved.
Demonstration
Underwriting Snapshot (Screen Shot Example)
©2015 Ellie Mae. All rights reserved.
Summary and Takeaways
•
Carefully Plan eFolder Document/Condition Naming Convention
•
Automatically attach UW Documents to UW Conditions
•
Build Automated Conditions to improve consistency and prevent
errors
•
Use an Underwriting Snapshot to identify data changes if other
users can make changes to loan files after Conditional Approval
•
eFolder efficiency reduces number of UW touches and minimizes
suspense issues
©2015 Ellie Mae. All rights reserved.
First Mortgage Company
Rich Tucker
Vice President, Operations
Encompass System Administrator
©2015 Ellie Mae. All rights reserved.
First Mortgage Company LLC
•
First Mortgage Company, L.L.C.
•
Mortgage Banker
•
Corporate Office: Oklahoma City, Oklahoma – located in 10 states
•
Annual Volume - $1,000,000,000
•
Number of employees - 400
•
Founded in 1951
•
Ellie Mae client since 2013
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
Filling the
GAP
of Communication
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
Striving for Efficiencies through communication
1. The Milestone Comments
2. Conversation Log
i. “Bobble Head” communication
ii. Alert – Conversation Follow-Up
3. E-folder
i. Underwriting Conditions
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
Milestone Comments – the OMG’s of the file
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
Conversation Log
We train on utilizing the “Bobble Head” method.
Name – Who the conversation log pertains to
Company Name – The subject line of the conversation
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
E-folder- Underwriting Conditions
1.
2.
3.
4.
5.
Underwriters have the opportunity to free type any and all conditions
Owner Column
Status Column
Requested From
Expected Date
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
AllRegs and FMC
FMC combines the depth of knowledge of AllRegs with our focus of “Filling the
Gap of Communication”.
1. Investor Overlays
2. Regulations
3. Education
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
One is NOT Done!
©2015 Ellie Mae. All rights reserved.
First Mortgage Company, L.L.C.
29%
©2015 Ellie Mae. All rights reserved.
Documentation makes the difference
Joy K Gilpin
AllRegs Professional Services Manager
©2015 Ellie Mae. All rights reserved.
Documenting Underwriting – The ‘Why’
•
Various lending channels
>
>
>
•
•
•
Retail
Wholesale
Correspondent
Audience varies
Overlays and/or programs
vary
Single source of the truth
>
>
>
>
Processors
Underwriters
QA/QC
Examiners/Auditors
©2015 Ellie Mae. All rights reserved.
Documenting Underwriting – Common Challenges
•
Inconsistencies in calculations
>
Income
o
o
o
•
Self-employed borrowers
Investment properties/income
Trailing spouse income
Various tools/resources
>
“I brought this from my last
company”
•
Variations in underwriting
decisions
•
Frustration from Originators &
Processors
>
Variations in conditions
and/or approvals
©2015 Ellie Mae. All rights reserved.
Documenting Underwriting – Common Challenges
•
Program management
>
Similar programs with
various investors
o
o
o
•
Onboarding new staff
>
>
•
Overlays
Credit requirements
Agency requirements (AUS
findings)
Training
Documented guidelines
Absence of a company
accepted methodology
©2015 Ellie Mae. All rights reserved.
Documenting Underwriting – Solutions
•
Integration of policies
>
Compliance impacts on
underwriting
o
o
o
Red Flags
Appraiser Independence
Fair Credit Reporting Act
•
Documenting Credit &
Underwriting policies
•
Documentation of
procedures
>
Keeping policy separate
from procedure
o
Benefits
©2015 Ellie Mae. All rights reserved.
Creating Efficiencies in Underwriting
Lori Wahl
Technical Program Manager
©2015 Ellie Mae. All rights reserved.
Driving Quality with
•
Total Quality
Loan Program
•
Provides a
single
location for
underwriters
to review key
services
>
4506T
>
Fraud
>
Compliance
©2015 Ellie Mae. All rights reserved.
4506T Income Comparison
©2015 Ellie Mae. All rights reserved.
Fraud: Leverage Scores and Alerts in Reviewing
©2015 Ellie Mae. All rights reserved.
Compliance: Ability to review results
©2015 Ellie Mae. All rights reserved.
Comments: Centralized Location to Address Quality
©2015 Ellie Mae. All rights reserved.
TQL Tool Summary: The Window to Loan Quality
•
Findings become actionable
>
•
Reportable Fields
Policy Creation
>
Consistency
•
Required reports in file reduces underwriting “touches”
•
Data Integrity
•
Ability to easily run updates
•
Management can assess risk by branch, originator, and more –
knowledge becomes power
©2015 Ellie Mae. All rights reserved.
TQL Roadmap
•
15.1 Release
>
Alert Level Comments (Fraud & Compliance)
>
CFPB Reporting User Guide
>
Ability to process a TQL tool service check in image export workflows
(export, send to lender)
>
Ability to identify data discrepancies between TQL report data and
current loan data
•
15.2 Release
>
Ginnie Mae PDD Integration
>
Automated Service Ordering for Fraud
>
Add additional Fraud vendor
©2015 Ellie Mae. All rights reserved.
Document, Verify, Track and Retain
Juliet Overton
Sr. Compliance Analyst
©2015 Ellie Mae. All rights reserved.
Best Practices in Underwriting – Complying with the
ATR/QM Requirement to Document, Verify and Track
•
1 of the provisions of the ATR/QM
Rule require creditors to
“Document, Track and Verify” the
consumer’s ability to repay
the Mortgage Loan. This
responsibility usually lies with the
Underwriter.
•
Using the e-folder enables
underwriters to quickly tag
electronic documents as ATR/QM
documents.
©2015 Ellie Mae. All rights reserved.
Best Practices in Underwriting – Complying with the
ATR/QM Requirement to Document, Verify and Track
•
Documents identified as ATR/QM in the eFolder will automatically create
tracking entries in the Verification and Documentation Tracking Tool
©2015 Ellie Mae. All rights reserved.
Best Practices in Underwriting – Complying with the
ATR/QM Requirement to Document, Verify and Track
•
Another area that assists in
complying with the ATR/QM rule is
the Underwriter Summary Tool.
•
This tool not only allows the
Underwriter to document their
underwriting decision it also
documents that they considered
and verified the following:
>
>
>
>
>
>
>
Employment History
Current Income
Assets
Debt Obligations
Additional Mortgage obligations
Credit History and
Debt to Income ratios
©2015 Ellie Mae. All rights reserved.
Best Practices in Underwriting – Complying with the
ATR/QM Requirement to Document, Verify and Track
©2015 Ellie Mae. All rights reserved.
Complying with the ATR/QM Requirement to
Document, Verify and Track
A creditor must verify and
document information used in
underwriting a transaction subject
to § 1026.43, the creditor shall
retain evidence sufficient to
demonstrate compliance with the
documentation requirements of
the rule. Although a creditor need
not retain actual paper copies of
the documentation used in
underwriting a transaction subject
to § 1026.43, to comply with §
1026.25(c)(3), the creditor must
be able to reproduce such records
accurately. For example, if the
creditor uses a consumer’s
Internal Revenue Service (IRS)
Form W-2 to verify the consumer’s
income, the creditor must be able
to reproduce the IRS Form W-2
itself, and not merely the income
©2015information
Ellie Mae. All rights reserved.
that was contained in
the form.
•
Complying with the ATR/QM Requirement to
Document, Verify and Track
•
Both the eFolder and the
Verification and Documentation
Tracking Tool supports
underwriting in a paperless work
flow, they also aid in complying
with the record retention
requirements of ATR/QM by linking
to and displaying the attached
document.
©2015 Ellie Mae. All rights reserved.
©2015 Ellie Mae. All rights reserved.