When borrowers seek to leverage the equity accrued in their homes to address various financial requirements, lenders have many Encompass tools at their disposal. From the traditional first lien cash-out refinance to the versatile Home Equity Line of Credit (HELOC) and the subordinate home equity loan (HELOAN), options are plenty. The Encompass 19.3 release brought about a notable enhancement for working with HELOC loans in Encompass, empowering lenders with enriched support for these specific loan types.
Key Enhancements Introduced in Encompass 19.3 Release:
- HELOC Management Input Form:
- The cornerstone of the enhanced HELOC capabilities is the HELOC Management input form. This consolidated platform provides lenders with a centralized space to enter and access vital HELOC loan information within the Encompass ecosystem.
- Dynamic Generation of HELOC Output Forms:
- The release brings forth a groundbreaking feature – the dynamic generation of HELOC output forms. This includes both the HELOC Agreement and the Important Terms Disclosure forms, which are now populated with data and language tailored to the specific configuration of the HELOC loan.
- HELOC Tables Setting:
- The Encompass settings menu now features the “HELOC Tables” setting, facilitating the creation of dynamic historical data tables designed to populate illustrative loan payment data on the Important Terms Disclosure output form.
HELOC Management Input Form:
- HELOC Program Tab:
- This tab functions as a dashboard for HELOC loan program information. Here, lenders can input and manage essential program details, enabling streamlined access and control.
- Important Terms and Agreement Language Tab:
- Contained within this tab are options that dynamically populate language on the newly generated HELOC Agreement and Important Terms Disclosure output forms. This customization empowers lenders to ensure that the borrower receives accurate and relevant information.
Flexible Data Population Methods:
- Loan Program Templates:
- Many fields within the HELOC Management input form can be automatically filled using predefined loan program templates. This approach ensures consistency and efficiency.
- Business Rules and Dynamic Data Management Triggers:
- By harnessing the power of business rules and triggers, lenders can automate data entry, further enhancing accuracy and reducing manual effort.
- Manual Data Entry:
- For situations requiring nuanced adjustments, users have the option to manually enter data. This versatility accommodates scenarios where unique terms must be captured, such as index and margin values, adjustment caps, introductory teaser rates, minimum initial advances, and historical table selection.
Policy-Maker Involvement and Collaboration:
- Program Review and Determination:
- Prior to utilizing the new HELOC features, it’s essential for policy-makers within the lending organization to review and define the types of HELOC loans the company intends to offer.
- Collaboration with Encompass Administrators:
- Armed with the defined HELOC loan types, policy-makers collaborate with Encompass administrators to create loan templates, establish pricing structures, and formulate HELOC historical tables. These components are then applied to the HELOC Management form for seamless integration.
Tasks for Administrators to implement and configure the company’s HELOC policy:
- Create dynamic HELOC Historical Tables to use with the loan templates. Set a month and day of the year for the annual change date. Research and enter the index values for the past 15 years. Create a table for each margin used.
- Create Loan Program templates for each HELOC loan type that will be offered and assign the dynamic HELOC Historical table that represents the index to be used for loans originated under the configured program. Templates for the HELOC Management form are configured in the Loan Templates setting (Encompass > Settings > Loan Templates > Loan Programs) which includes sections that correspond with the HELOC sections on the HELOC Management input form.
- Add business rules or Dynamic Data Management triggers as needed. For example, add a business rule to apply Loan Program templates to loans that meet specific criteria or create DDM triggers to apply HELOC Historical Tables to loan templates under specified conditions.
- Maintenance: Update the historical tables annually by adding entries for the current year.
Looking for more information on working with HELOC loans in Encompass or need help with setting up the HELOC settings, leave us a message.