Top 10 Things LPOs Want Lenders to Know

1. Top 10 Things LPOs Want Lenders to Know April 23, 2019

2. Ricardo Holloway, Atlanta Amy Berumen, Phoenix Peggy Wallace, Roanoke

3. #10 – Things To Know About COEs • You must get the COE prior to ordering a VA case number or an appraisal (not needed for IRRRL). New Chapter 5, section 1a. • The system will have an enhancement which prompts you to get a COE first. • Always use “Search” to check for a useable COE first. • If the “Search” produces an acceptable COE, simply view and print it.

4. #10 – Things To Know About COEs • If an existing COE needs correction, you now have the ability to correct it. • You can make corrections to the following: (Using “Correct COE” tab) • First Name, Middle Name and/or suffix • Contact Information • Branch of Service • Funding Fee exemption status • Date of COE • Note: Changes to the last name of a Veteran requires proof to be uploaded.

5. #10 – Things To Know About COEs • If your first attempt in ACE is unsuccessful while applying for a COE, submit an electronic application. • Note: After you certify and submit the application, the status will change to “Pending“ for VA processing. • If you are doing a back-to-back closing, please make sure your COE is updated prior to the guaranty of NEW loan.

6. #10 – Things To Know About COEs • Follow the Conditions on the COE • Funding Fee – Veteran is not exempt from funding fee. • Subsequent Use Funding Fee – The Veteran must pay a subsequent use funding fee on any future loan unless Veteran is exempt. • Funding Fee – Veteran is exempt from Funding Fee due to receipt of service-connected disability compensation of $???? monthly. • Note: The income on the COE may be used as verification of VA service-connected compensation.

7. #10 – Things To Know About COEs • Follow the Conditions on the COE • COE – Code 06 – Surviving Spouse – Funding Fee should not be charged. • Active Duty Service Member – Valid unless discharged or released subsequent to date of this certificate. A certification of continuous active duty as of date of note is required. • Reserve or National Guard Member – Valid unless discharged or released subsequent to date of this certificate. A certification of continuous service in the Selected Reserve or National Guard as of date of note is required.

8. #10 – Things To Know About COEs • How soon should you contact VA after submitting your electronic application for a COE? • Immediately after you hit the submit button. • Take a break, wait 20 minutes and dial 877-827-3702, option 2. • Wait 5 business days, then call.

9. #9 - Funding Fees • Documents required for a Funding Fee Refund: • Signed Closing Disclosure • Signed Note (maybe required) • Current mortgage statement • Disability award letter (if available)

10. #8 - FFLR Deficiencies • Closing Disclosures – Cash-Outs and IRRRLs • - Both initial and final with Cash-Out Refinances • - Only the final is required with IRRRLs • - The initial must be certified by the Veteran within • 3 business days of application • - Final must be certified by the Veteran • Credit Report Invoice(s) • NOV conditions - must be met and uploaded with the file.

11. #8 - FFLR Deficiencies • Unallowable fees • Stable/reliable and sufficient income for loan amount • All debts not considered • Child care expense not addressed

12. #7 - Non-Supervised Lender Renewals • Don’t be LATE! • Fees due within 120 days of FY end date • $200 Annual Renewal fee required • Audited Financials required • $100 for each Agent renewal (also required for Supervised lenders)

13. #6 - Underwriters • VA Credit U/W approval is not the same as SAR approval • Credit U/W approval is not required for Supervised lenders • Note: For Non-Supervised lenders – Failure to have a VA recognized U/W on staff could result in the loss of your automatic authority. (Chapter 1.6a)

14. #6 - Underwriters • VA Credit U/W Approval Requirements • Form 26-8736a • $100 Fee • Resume reflecting VA experience • Submit to home office of jurisdiction • https://www.benefits.va.gov/homeloans/lenders_nsaaa.asp (Also Chapter 1.6)

15. #5 - The Loan Is In Your Hands! Use your VA tools from the Lender’s Page! https://www.benefits.va.gov/homeloans/lenders.asp

16. #5 - The Loan Is In Your Hands! • Use the Common-Sense Approach • VA guidelines are flexible for a reason • DOCUMENT, DOCUMENT, DOCUMENT ! • It is hard to understand the logic if the file is not documented

17. #5 - The Loan Is In Your Hands! • Use GovDelivery regularly! • GovDelivery is a No-Cost service • Just requires an email address to sign up • You can select topics of interest • Encourage all staff to sign up for GovDelivery notifications! https://public.govdelivery.com/accounts/USVAVBA/subscribers/new?preferences=true

18. #4 - Prior Approval Loans • A loan must be entered in WebLGY. • Add the second Veteran at the time of prior approval input. • Veteran/Veteran Joint Loans • Dual Entitlement – married Veterans

19. #4 - Prior Approval Loans • A loan must be entered in WebLGY. • For Joint Veteran/Non-Veteran loan • Guaranty is limited to the Veteran’s portion • of the loan • Investor may require down payment for the • non-Veteran’s portion

20. #4 - Prior Approval Loans • Only 1 - 3 document uploads! • NO! • vs. • YES!

21. #4 - Prior Approval Loans • Cover Letter with POC information • Signed Loan Analysis • Underwriter for Non-supervised lender must be VA approved • AUS conditions do not apply

22. #4 - Prior Approval Loans • Rental verification must be provided • URLAs and 1802a must be signed • Initial Cash-Out Disclosures (if applicable) • Evidence of loan seasoning (if applicable)

23. #4 - Prior Approval Loans • Unmarried borrowers should have separate credit reports • Address all Credit issues • A well documented prior creates a fast Certificate of Commitment from VA!

24. #3 - Alteration and Repair Loans • https://www.benefits.va.gov/HOMELOANS/resources_circulars.asp • Note: Do NOT guaranty the loan prior to the alterations or repairs being completed!

25. #3 - Alteration and Repair Loans If the LGC was incorrectly issued prior to repairs completed: Contact the appropriate RLC in writing Ask for the LGC to be cancelled and why Contact the RLC once all repairs are completed Provide the RLC with evidence all repairs are completed RLC will reinstate the LGC Lender should put protocol in place to avoid future issues

26. #2 - Unreimbursed Employee Expenses • Handling Unreimbursed Business Expenses and Commissioned Income • Circular 26-19-9 • March 15, 2019

27. #2 - Unreimbursed Employee Expenses • IRS FORM 2106 Due to the tax reform laws that went into effect Jan 2018, those that previously used IRS Form 2106 most likely are unable to use it any longer. Circular is forthcoming.

28. #1 - Escalation Process • Contact RLC of jurisdiction for clarification • Do not contact all RLCs on your request • Escalate to LPO/ALPO (if necessary) • LPO/ALPO will escalate to VACO (if needed)

29. Top 10 Things LPOs Want Lenders To Know • Questions • ?

30. Top 10 Things LPOs Want Lenders To Know • Thank you • for your service to our • Veterans!