OPERATIONS LOAN PROCESSING PROCEDURE ADDING NON-BORROWING SPOUSE TO TITLE

Transcription

1 PROCEDURE ADDING NON-BORROWING PNP SPECIFICATIONS PNP Name/ History Procedure: Adding Non-borrowing Spouse to Title Date Issued: 03/22/2017 Date Effective: 04/01/2017 Date Revised: 10/11/2017 Production Channels Retail Correspondent Wholesale Accountable Personnel/ Department Issuing Personnel/ Department Compliance Analyst EVP Operations Subject Matter Expert (SME) Purpose Director of Processing Branch Relations & Compliance Manager The purpose of this procedure is to explain the process for adding a non-borrowing spouse to Title, while offering instructions for completing screens in Encompass. Note that non-borrowing spouse regulations/requirements vary by state. RELATED DOCUMENTATION Guide Matrix Policy Procedure Branch Processing Manual State Requirements Matrix: Community Property/CO Detector/Water Heater Strapping/Termite None None

2 PROCEDURE ADDING NON-BORROWING RELATED DEFINITIONS Quitclaim Deed Warranty Deed A quitclaim deed is a legal instrument which is used to transfer interest in real property. The entity transferring its interest is called the grantor, and when the quitclaim deed is properly completed and executed, it transfers any interest the grantor has in the property to a recipient, called the grantee. [ A warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer). Table of Contents Completing Fields for Title Only Party or Non-borrowing Spouse... 1 Meeting CD Requirements... 4 Facilitating Exceptions to the Requirement... 5

3 REVISED 03/23/2017; PAGE 1 OF 5 Completing Fields for Title Only Party or Non-borrowing Spouse 1. Prior to generating the Closing Disclosure (CD), access the Encompass AFN - Borrower Summary Origination form (screen) and scroll down to the Title Only Spouse section. a. Read the default message that appears regarding the subject property state; it will indicate if the state is a Community Property/Homestead State that requires a spouse to be on title and receive a Closing Disclosure. (See State Requirements Matrix: Community Property/CO Detector/Water Heater Strapping/Termite.) b. Use the dropdown field to answer whether or not the spouse will be vested on title. NOTE: Adding a title only/non-borrowing spouse after the initial CD has been issued will reset the CD waiting period.

4 REVISED 03/23/2017; PAGE 2 OF 5 Completing Fields for Title Only Party or Non-borrowing Spouse (Continued) 2. a. Click the [Borrower Information Vesting] button. b. On the Borrower Information Vesting form, see the Vesting Information section; names of existing borrower(s) on the 1003 will be listed in the box with Individual as the borrower Type. c. Click the Add icon to add a non-borrowing party; a pop-up Borrower Vesting dialog box will appear. d. Type the party s name in the Name field. e. Click the Borrower Type dropdown field and select the appropriate option: (Continued)

5 REVISED 03/23/2017; PAGE 3 OF 5 Completing Fields for Title Only Party or Non-borrowing Spouse (Continued) 2. (Cont d) i. Select Title Only for a party to be included on vesting. ii. Select Non Title Spouse for a spouse who is added due to state requirements (and will not be included in vesting). f. Click the [OK] button to accept the entered data and close the dialog box. g. Select the Manner in which Title will be held option. h. Click the [Build Final Vesting] button. 3. Note changes that will occur within Encompass based on Vesting information entered in Steps 1. and 2. above. a. Vesting information will flow to the Doc Order Screen. b. Changes may also trigger a Compliance Comparison Difference, requiring a Compliance Analyst to re-review the loan (additional conditions may apply).

6 REVISED 03/23/2017; PAGE 4 OF 5 Meeting CD Requirements Compliance Analyst 4. Changes to vesting will trigger a Compliance Comparison Difference. a. Reference the State Requirements Matrix to determine how many borrowers are required on the CD. b. If a CD is required for the non-borrowing spouse, add a condition for a CD to be issued accordingly. c. Approve the loan for Compliance after CD is properly prepared and issued. 5. If the Compliance Analyst conditions the file for a CD to the title only/non-borrowing spouse, prepare and issue the CD accordingly. The Compliance Analyst must approve before you may proceed with processing the file.

7 REVISED 03/23/2017; PAGE 5 OF 5 Facilitating Exceptions to the Requirement 6. In a Community Property or Homestead state, adding a non-borrowing spouse to vesting as a Non Title Spouse is not required if there is a Quitclaim or Warranty Deed whereby the spouse releases his/her rights to the property. a. For Refinance Obtain a previously recorded Quitclaim or Warranty Deed, which shows previous release of marital rights to the property, and upload to the Encompass efolder under Escrow/Title Homestead/ Community Property Deed. b. For Purchase Obtain a prepared Quitclaim or Warranty Deed, which indicates the spouse is releasing his/her marital rights to the property and will be signed with closing documents, and upload to the Encompass efolder under Escrow/Title Homestead/Community Property Deed.