As previously announced, new “VA Non-IRRRL Refinance Comparison Certification” (Cx22999) will print by default in place of Cx14501 for Non-IRRRL VA refinances. Part of this change is to print Cx22999 in Redisclosure document packages, as lenders are encouraged to in VA Circ. 26-19-5.
Global Optional Net Tangible Benefit Field Prompts in Redisclosure Package for VA Non-IRRRL Refinance
The existing global optional field prompts for the following fields will be added to the Redisclosure package:
- 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 Rate (Field 41275)
- Net Tangible Benefit – Lower Monthly Payment (Field 41276)
- Net Tangible Benefit – Increase in Monthly Residual Income (Field 131833)
- Net Tangible Benefit – Cashout Benefit – Home Improvement (Field 41268)
- Net Tangible Benefit – Convert from ARM to Fixed Rate (Field 41284)
These field prompts will continue to only appear when applicable and when none of the benefits are already selected.
Global Net Tangible Benefit Data Integrity Warning in Redisclosure Package for VA Non-IRRRL Refinance
This global data integrity warning will trigger for Redisclosure packages if applicable:
“Non-IRRRL VA Refis must satisfy one of the following net tangible benefits:
(A) Eliminates monthly mortgage insurance or monthly guaranty insurance;
(B) Term of the new loan is shorter;
(C) Interest rate is lower;
(D) Payment is lower;
(E) There is an increase in the borrower’s monthly residual income (see § 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% of home value; or
(H) Refinances an ARM to a fixed rate loan.”
This check is like the current data integrity check in place for Initial Disclosures and Closings, but will be a Warning instead of an Error.
Global “Previous Loan Total of All Remaining P&I + MI” Data Integrity Checks for VA Non-IRRRL Refinance
The existing global data integrity error that triggers in Initial Disclosures and Closings when new field “Previous Loan Total of All Remaining P&I + MI” has not be populated has been modified to replace the reference to form Cx14501. The first two sentences will read as follows:
“Field 131834 Previous Loan Total of All Remaining P&I + MI must be disclosed on the non-IRRRL VA refinance comparison form. Please enter the total remaining payments of Principal, Interest, and Mortgage Insurance for the loan being refinanced…”
A new coordinating global data integrity warning will now trigger in Redisclosure document packages as well.
Global Rate Reduction Data Integrity Checks for VA Fixed to VA No Cash Out Refinance
This series of global data integrity errors and warnings verify the new VA interest rate has decreased enough when the previous loan has a fixed interest rate:
“The loan being refinanced is a fixed rate loan, while the proposed loan is [a fixed][an adjustable] rate loan. New interest rate must be at least [0.5%][2.0%] lower than the old rate…”
These data integrity checks have been modified for non-IRRRL loans to only trigger when Loan Purpose (Field 1063) is “No Cash Out Refinance” and the VA Prior Loan type (Field 42408) is set to “VA-Fixed”. This means these checks will no longer trigger for Cash Out Refinances or loans that are refinancing something other than an existing VA Fixed Rate loan.
Global Loan-to-Value Discount Point Integrity Checks for VA Fixed to VA ARM No Cash Out Refinance
A new set of global data integrity checks has been added for VA ARM No Cash Out Refinances when the VA Prior Loan type is set to “VA-Fixed” if discount points are charged and the LTV does not meet the applicable criteria:
“Loan-to-Value must be [100%][90%] or less if discount points [of 1% or less][over 1%] are charged on a VA Fixed to VA ARM Type I Refinance, per 38 C.F.R. § 36.4306(b)(4)(ii)[(A)][(B)]. LTV on this loan is [Field 1075]% and Discount Points are [Field 1055]%
These are similar to the existing IRRRL versions of these tests. The checks are set up as hard stop errors in Closing document packages and warnings in other package types.
As with the other VA refinance data integrity checks in ConformX, all the global data integrity checks in this announcement may be turned off using the “Enable VA Refinance Data Integrity Checks” ConformX System Default (Field 121985).
As a reminder, new documents VA Non-IRRRL Refinance Comparison Certification (Cx22999) and VA Non-IRRRL Loan Recoupment Certification (Cx23000), will be in Production environments on March 13, 2019. The changes listed in this announcement will go out at the same time. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
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