Property information is created by highlighting the Property field located on the menu tree and pressing
the Insert key or choosing the Add option with the right-click of a mouse. A property screen will
automatically be created for the borrowers’ address if “own” is selected in the General Information screen.
The property data is used to determine qualifying ratios, complete print forms, and for automated underwriting The process of evaluating a loan application to determine the risk involved for the lender. It involves an analysis of the borrower's ability and willingness to repay the debt and the value of the property. exports.
For the subject property, information on the right side of the screen relates to cash flow and will populate from the Mortgage a conveyance of or lien against property that is defeated upon payment or performance according to stipulated terms 2 a : the instrument evidencing the mortgage b : the state of the property so mortgaged c : the interest of the mortgagee in such property Data and Subject Property screens. Cash flow information for other properties should be entered item by item using the gross rental income and vacancy factor or can be entered as the net data, only if taken directly from the tax returns. Positive cash flow contributes to income, while negative cash flow counts as a monthly liability. The way the system calculates rental income can be changed by accessing the Options | Ratio Calculation Method choice from the Menu Bar of the Loan Overview screen.
Partial interest in a property can be accounted for by using the % Owned field. Certain Expense Line items contain a check box to the right of the entry to identify whether or not that item is currently impounded and therefore included in the existing mortgage payment shown in the Lien Payments field. Placing a check in the box indicates that the item is being impounded and will reflect in the cash flow calculations. Left-click the check box to toggle the check mark "on" or "off".
The Occupancy / Property Status field allows for two additional property occupancy types (in addition to the three standards; owner-occupied, second home, and investment). A property can be listed as "Pending Sale", which removes the property’s cash flow from income calculations and credits the borrower 93% of the sale price less the lien balance(s). A property listed as "Sold" will only remove the property’s cash flow from the income calculations. Properties listed as sold will not be reflected in the Real Estate Owned (REO) section of the 1003, while properties pending sale will.
When the first lien on a property is created (either by inserting or by drag and drop), it is set to the first lien position. Lien positions for any additional liens do not get defaulted. The idea is that if there is only one lien connected with the property, then it must be in the first position. If there is more than one lien, then we don't know the lien position. When a second lien is created, its lien position will be blank. If it is not corrected, the data check will report the problem as a Fail status item.
Lien information is created by highlighting the Lien Holders field located on the menu tree and pressing the Insert key or selecting the Add option with the right-click of a mouse. The lien data is used to determine qualifying ratios, cash to close, complete print forms, and for automated underwriting exports.
To manually input the lien holder you may select the LookUp Button to find the company name or create a new company.
Schedule of Real Estate Owned (FNMA 1003, Page 3)
When printing the 1003, each property associated with the applicant pair that signs the 1003 is examined. If the property meets all of the following conditions, the property is listed on the Schedule of Real Estate Owned:
1. If the property is the Subject Property, it is only listed if it was owned before the application was signed, i.e. the transaction is a refinance.
2. The property cannot be a property that the applicants currently rent. For example, if John Homeowner currently rents "123 Rental Street" but is in the process of purchasing a new home, "123 Rental Street" will not be listed on the schedule.
3. The property cannot be a previous address.
4. The Property Status cannot be 'Sold'. (Note: the Property Status is set on the Property Information screen. This means that the property must have a Property Status of "Investment", "Pending Sale" or "Owner". There is a bit of conflict here. While the 1003 provides a status code of 'S' for sold properties, the schedule is titled 'Schedule of Real Estate OWNED'. Once a person sells a property, the person no longer owns the property, so the property is not printed on the schedule.
5. The property must be associated with the applicant pair that is signing the 1003. This means that when there is more than one applicant pair on a loan, each 1003 can have a different Schedule of Real Estate Owned.
