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DECEMBER 11, 2013ATR/QM Product Overview/TrainingThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Today’s Presenter John Haring, Compliance Enablement Manager Responsible for facilitating the implementation and maintenanceof residential mortgage lending compliance and industry changesacross Ellie Mae’s software applications and loan documents toensure compliance integrity, quality and uniformity.This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Safe HarborThis presentation may contain forward-looking statements under the safe harbor provisionsunder The Private Securities Litigation Reform Act of 1995. These forward-looking statementsmay include the company’s ability and timing to enhance the features and functionality ofEncompass software and services and of new product launches. Additional risks and uncertaintiesrelated to the company’s business are discussed in the company’s Securities and ExchangeCommission filings, including but not limited to the company’s most recent Annual Report on Form10-K and Quarterly Report on Form 10-Q. Unless otherwise required by applicable laws, thecompany undertakes no obligation to update or revise any forward-looking statements, whether asa result of new information, future events or otherwise.The content provided in this slide presentation is intended for Ellie Mae webinar attendees andtheir staff only and should not be distributed outside your company. Ellie Mae does not permit anyunauthorized copying, distribution or redistribution of this presentation. Specific authorization mustbe obtained in writing from Ellie Mae, Inc. Violations of copyright are subject to substantial penaltiesas provided by the law plus attorney's fees incurred as a result of violation. The content is intendedfor general information purposes only. It should not be construed as legal advice or opinion on anyspecific facts or circumstances. You are advised to consult your own compliance staff or attorneyregarding your specific residential mortgage lending questions or situation to ensure yourcompliance with applicable laws and regulations.This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Ability-to-Repay / Qualified Mortgage Standards (ATR/QM)Effective Date: Applications on or after January 10, 2014Thispresentationits contentare intendedfor general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 EllieMae.All rights andreserved.ConfidentialMaterial. 2013 Ellie Mae, Inc.
ATR/QM Standards ATR Covered Transaction Consumer purpose closed-end loan secured by a 1 - 4 unit dwelling ATR Exempt Transactions: HELOC (open-end credit plans)Time-share plansReverse mortgagesBridge loanInitial construction loanConstruction phase of construction-to-permanent loan 12 monthsCredit extended: under Housing Finance Agency administered program,by certain nonprofit creditors, by creditors designated as CDFI, DASFP,CHDO/HOME, or under EESA and HHF programs ATR/QM Record Retention Three (3) years after consummationMay maintain paper or electronic copiesThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Available NOW Encompass ATR/QM Management tool Appendix Q Worksheet and ATR/QM output forms Encompass Compliance Service (ECS) tests Encompass Product and Pricing Service (EPPS) support fordiscount point calculations eFolder contains: Automated underwriting results Credit report Pay stubs 4506-T reports Other documentation, for export to investors Total Quality Loan program (TQL) to document QM loans withsupporting informationThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Let’s Take a Look View the video tutorial on the ATR/QM Management Tool.This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Encompass Compliance Service Tests ATR Exemptions based on creditor type and loan typeCovered loans/typeStandard QM Loan term and featuresUnderwriting factorsPrepayment penalty limitationsAgency/GSE eligibilityPoints and fees Points and Fees Detailed Fee Assessments – aggregate categories, provider name,affiliates, inclusion/exclusionBona Fide Discount Points assessmentThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Encompass Compliance Service Tests Higher-priced covered transactions High Cost 2013 Federal high cost thresholds Prohibited practices Multiple state variations New HOEPA APR calculationsThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ECS ATR/QM ResultsChecks for ATR/QM type, payment underwriting and Non-standard toStandard RefisThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ECS QM Points and Fees TestDisplays a detailed Total Loan Amount calculation and checks for rate limitsThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ECS Fee WorksheetsFees are detailedinto categoriesThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ECS Results for Payment UnderwritingThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ECS Results for Payment Underwriting cont’d.This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Encompass Product & Pricing Service (EPPS) Determines bona fidediscount points andAPOR calculationsAutomaticallypopulates loan file with‘Starting Adjusted Rate’and ‘Starting AdjustedPrice’ andundiscounted rate fromEPPS into EncompassThese fields are usedin the Points and Feestests in the ATR/QMManagement toolThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Training SessionsVisit the Encompass Resource Center to Sign UpDayDateTimeDurationThursdayDec 191:00 PM (pacific)60 minutesThursdayJan 21:00 PM (pacific)60 minutesFridayJan 31:00 PM (pacific)60 minutesMondayJan 61:00 PM (pacific)60 minutesTuesdayJan 71:00 PM (pacific)60 minutesWednesdayJan 81:00 PM (pacific)60 minutesThursdayJan 91:00 PM (pacific)60 minutesFridayJan 101:00 PM (pacific)60 minutesThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Additional Resources:Encompass Resource Center Release Notes ATR/QM Video ATR/QM FAQs Encompass Compliance Center Compliance Education Webinar Series Encompass NewsFlash Encompass Compliance Service Alerts Compliance Blogs www.elliemae.com Compliance White PaperThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Questions?This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions What is Ability-to-Repay (ATR) / Qualified Mortgage (QM)Standards? Lenders making a special type of loan, known as a QualifiedMortgage, is entitled to presume that the loan complies with ATRrequirements (safe harbor). Establishes different types of QMs that are generally identified asloans with restrictions on loan features, limits on fees beingcharged, and underwriting requirements. Requires lenders to demonstrate they have made a reasonable andgood faith determination, based on verified and documentedinformation, that the consumer has a reasonable ability to repay theloan.This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions When does ATR/QM Standards go into effect? ATR/QM will apply to loan applications takenon or after January 10, 2014.This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions How will ATR be evaluated?To determine a borrower’s Ability-to-Repay, creditors must considereight (8) underwriting factors:1.2.3.4.5.6.7.8.Current or reasonably expected income or assetsCurrent employment statusMonthly payment on the covered transactionMonthly payment on any simultaneous loanMonthly payment for mortgage-related obligationsCurrent debt obligations, alimony, and child supportMonthly debt-to-income ratio or residual incomeCredit historyThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions What loans are covered under ATR/QM?Consumer purpose closed-end loans secured by a 1 - 4 unit dwelling. How are FHA, VA, USDA loans impacted by ATR/QM? Loan Term cannot exceed 30 years Cannot contain an Interest-Only Term Cannot contain Negative Amortization Higher-Priced Covered Transaction Threshold Safe Harbor vs. Rebuttable Presumption of Compliance3% Points & Fees LimitThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions What transactions are EXEMPT from ATR/QM? HELOC (open-end credit plans) Time-share plans Reverse mortgages Bridge loan Initial construction loan Construction phase of construction-to-permanent loan 12 months Credit extended: under Housing Finance Agency administeredprogram, by certain nonprofit creditors, by creditors designated asCDFI, DASFP, CHDO/HOME, or under EESA and HHF programsThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions What’s required for ATR/QM Record Retention? Three (3) years after consummation May maintain paper or electronic copiesThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions Is this same functionality provided in both Encompass Brokerand Encompass Banker editions? No – Broker Edition does not include the UnderwriterSummary since brokers do not underwrite loans. Is there an additional cost for this new functionality? No – It was provided with the Encompass Fall (9.0) Releasein November 2013 at no additional charge.This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions What items are INCLUDED in points and fees? Finance Charge Fees* (not otherwise excluded) Loan Origination Fee Commitment/Rate Lock Fee All Compensation paid to Mortgage Broker Credit Insurance Premiums and Impounds Maximum Prepayment Penalty Prepayment Penalty Payoff (Refinance) HELOC Transaction Fee [High Cost only] Assume one draw of maximum credit limitHELOC Participation Fee [High Cost only]This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
ATR/QM Common Questions What items are NEVER INCLUDED in points and fees? Prepaid Interest FHA Mortgage Insurance VA Funding Fee USDA/RHS Guarantee Fee Charges Payable in a Comparable Cash Transaction Creditor Paid Fees not paid to Mortgage Broker Sellers Points falling under 1026.32(b)(1)(i): Prepaid Interest Premium or guaranty protecting creditor against theconsumer’s default or other credit loss Third party charges paid to third party provider, creditor, oraffiliate (of creditor or mortgage broker) PointsThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
QM – Points and Fees LimitsIf Note Amount is:Threshold is: 100,000 or more 3% of the Total Loan Amount* 60,000 or more but less than 100,000 3,000 20,000 or more but less than 60,000 5% of the Total Loan Amount* 12,500 or more but less than 20,000 1,000 Less than 12,500 8% of the Total Loan Amount*This presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
Thank You for Attending!Recording available on the Encompass Resource CenterThis presentation and its content are intended for general information purposes only and should not be construed as legal advice or opinion on any specific facts or circumstances. 2013 Ellie Mae, Inc.
of residential mortgage lending compliance and industry changes across Ellie Mae's software applications and loan documents to . ATR/QM Training Sessions . Visit the Encompass Resource Center to Sign Up . Day Date Time Duration. Thursday. Dec 19 1:00 PM (pacific) 60 minutes.
