As discussed in our previous announcement on the topic, the VA have posted new regulations applicable to all non-IRRRL refinance loans beginning on February 15, 2019. As part of the changes implemented, we created a new Data Integrity Warning regarding net tangible benefits that triggers when all of the following are true:
- Loan Type = VA
- Loan Purpose = CashOutOther OR NoCashOutOther
- Application Date On or After 02/15/2019 = Yes
- Document Package Type = Initial Disclosure or Closing
- VA Interest Rate Reduction Refinancing Loan (IRRRL) (does not equal) Yes
- Enable VA Refinance Data Integrity Check (does not equal) No
- All of the following:
- Net Tangible Benefit – Mortgage Insurance Rate Significantly Reduced (does not equal) Yes
- Net Tangible Benefit – Remove Mortgage Insurance by Lowering LTV (does not equal) Yes
- Net Tangible Benefit – Eliminate Mortgage Insurance or Monthly Guarantee Insurance (does not equal) Yes
- Net Tangible Benefit – Shorten Loan Term (does not equal) Yes
- Net Tangible Benefit – Lower Interest Rate (does not equal) Yes
- Net Tangible Benefit – Lower Monthly Payment (does not equal) Yes
- Net Tangible Benefit – Increase in Monthly Residual Income (does not equal) Yes
- Net Tangible Benefit – Cashout Benefit – Home Improvement (does not equal) Yes
- Is CLTV/LTV Greater Than 90% (does not equal) No
- Net Tangible Benefit – Convert from ARM to Fixed Rate (does not equal) Yes
This logic for this Warning checks to see whether any of the net tangible benefit fields are set to Yes. Since non-IRRRL VA refinances must satisfy at least one of these net tangible benefits, the Warning fires if none of them are set to Yes. The text of this Warning is as follows:
Non-IRRRL VA Refinances must satisfy at least one of the following net tangible benefits:
(A) Eliminates monthly mortgage insurance, whether public or private, or monthly guaranty insurance;
(B) Term of the new loan is shorter than the term of the loan being refinanced;
(C) Interest rate is lower than the interest rate on the loan being refinanced;
(D) Payment is lower than the payment on the loan being refinanced;
(E) The new loan results in an increase in the borrower’s monthly residual income as explained by § 36.4340(e);
(F) Refinances an interim loan to construct, alter, or repair the primary home;
(G) Loan amount is equal to or less than 90 percent of the reasonable value of the home;
(H) Refinances an adjustable rate mortgage to a fixed rate loan.
To help ensure that the information is properly populated, we are turning this Warning into a hard stop Error. Clients who do not wish to get this Error can change their System Setting “Enable VA Refinance Data Integrity Checks” to No, or, if they wish to be excluded from just this DI check, the field (Field 121985) can be mapped to “No” under the same conditions that trigger the Error.
In addition, we are creating a new Data Integrity hard stop Error to ensure that the field “Previous Loan Total of All Remaining P&I + MI” (Field 131834) is populated. The Error will be triggered under the following conditions:
- Loan Type = VA
- Loan Purpose = CashOutOther OR NoCashOutOther
- Application Date On or After 02/15/2019 = Yes
- VA Interest Rate Reduction Refinancing Loan (IRRRL) (does not equal) Yes
- Enable VA Refinance Data Integrity Check (does not equal) No
- Document Package Type = Initial Disclosure or Closing
- Previous Loan Total of All Remaining P&I + MI = 0 or empty
The text of this Error is:
Field 131834 Previous Loan Total of All Remaining P&I + MI must be disclosed on non-IRRRL VA refinance loan form Cx14501. Please enter the total remaining payments of Principal, Interest, and Mortgage Insurance for the loan being refinanced. If you are unable to do this within your Loan Origination System, please create a task in TaskWatch. Include the loan number and the value to map for Field 131834. For assistance please contact Client Support at [PHONE FIELD].
Similar to the first DI check Error, this one can also be turned off with the System Setting “Enable VA Refinance Data Integrity Checks”, or by mapping the field (Field 121985) to “No” under the desired conditions.
These Data Integrity checks will be in effect on February 15, 2019. If you have any questions or concerns about these DI checks, please contact Client Support at 1.800.497.3584.
TW 250568
Update:
Global optional field prompts have also been added to help support clients whose Loan Origination Systems may not send the following net tangible benefit fields:
- Net Tangible Benefit – Eliminate Mortgage Insurance or Monthly Guarantee Insurance (Field 131832)
- Net Tangible Benefit – Shorten Loan Term (Field 41277)
- Net Tangible Benefit – Lower Interest (Field 41275)
- Net Tangible Benefit – Lower Monthly Payment (Field 41276)
- Net Tangible Benefit – Increase in Monthly Residual (Field 131833)
- Net Tangible Benefit – Cashout Benefit – Home Improvement (Field 41268)
- Net Tangible Benefit – Convert from ARM to Fixed Rate (Field 41284)
These optional field prompts will appear when all of the following conditions are true:
- Loan Type (Field 1066) is VA
- Loan Purpose (MISMO) (Field 1063) is CashOutOther or NoCashOutOther
- Application Date On or After 02/15/2019 (Field 131836) is Yes
- VA Interest Rate Reduction Refinancing Loan (IRRRL) (Field 38642) is NOT Yes
- Document Package Type (Field 18215) is Initial Disclosure or Closing
- Net Tangible Benefit – Mortgage Insurance Rate Significantly Reduced (Field 118657) is NOT Yes
- Net Tangible Benefit – Remove Mortgage Insurance by Lowering LTV (Field 41286) is NOT Yes
- Is CLTV/LTV Greater Than 90%? (Field 38505) is NOT No
- NONE of these net tangible benefit fields are set to Yes:
- Net Tangible Benefit – Eliminate Mortgage Insurance or Monthly Guarantee Insurance
- Net Tangible Benefit – Shorten Loan Term
- Net Tangible Benefit – Lower Interest
- Net Tangible Benefit – Lower Monthly Payment
- Net Tangible Benefit – Increase in Monthly Residual
- Net Tangible Benefit – Cashout Benefit – Home Improvement
- Net Tangible Benefit – Convert from ARM to Fixed Rate
TW 250736