Servicing Guide

Published September 9, 2020

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SMDU™ UI User Guide 7.38 September 2020 (Evaluate for a Workout using SMDU - Borrower and Bankruptcy details)

See below for sub-topic: Evaluate for a Workout using SMDU - Borrower and Bankruptcy details 

To see other sub-topics for Evaluate for a Workout, please click on any of the topics below: 

Evaluate for a Workout using SMDU - Overview 

Evaluate for a Workout using SMDU - Property and Origination details

Evaluate for a Workout using SMDU - Delinquency & Foreclosure, Insurance & Escrow and Hardship

Evaluate for a Workout using SMDU - Prior Workout History and Litigation

 

Recommended Next Step: Borrowers

Click here to access the interactive Evaluate for a Workout eLearning module

Borrowers

Bankruptcy

E. From the left hand navigation bar select the Borrowers link.

1. Select “Yes” or “No” to indicate whether the borrower submitted a complete Borrower Response Package (BRP) before the 90th day of delinquency

2. If applicable, select “Y – Assumption Exempt Transfer of Ownership” to indicate it’s an assumption that qualifies as an exempt transfer of ownership or select “N – Assumption with Non-Exempt Transfer of Ownership” to indicate it’s an assumption that qualifies as a non-exempt transfer of ownership

  • Note: The assumption indicator will be used to inform SMDU if the transfer of ownership qualifies as an exempt transaction. If the loan is NOT being assumed then do not answer and leave the field showing “Select…”.
  • Note: If the Assumption Indicator provided is “Y – Assumption Exempt Transfer of Ownership”, the following message will be returned in the SMDU Response: “The servicer has reported that this is an Assumption Modification with an exempt transfer of ownership. If this is not accurate, please correct and resubmit. (Message ID 5586)”.
  • Note: If the Assumption Indicator provided is “N – Assumption with Non-Exempt Transfer of Ownership”, the following message will be returned in the SMDU Response: “Ineligible for Modification using SMDU; servicer has indicated this is an Assumption Modification with a non-exempt transfer of ownership. (Message ID 5584)”.

3. Enter borrower’s “Representative Credit Score

  • Note: SMDU will only allow a credit score value between 300 and 900, with the only exception being a credit score of 999 when it is submitted as part of a Trial Structuring and/or First-Time Final Structuring request.
  • If a servicer provides a credit score value less than 300 or greater than 900, except for 999, SMDU will return the following message in the SMDU Response: “Unable to evaluate; the Credit Score provided is not within the valid range; please correct and resubmit for evaluation. (Message ID 5568)”

4. For “Credit Score Type” select either “FICO9” or “VantageScore3from the drop-down box

5. Select “Yes” or “No” to indicate if the borrower currently occupies property as their primary residence

6. Select “Yes” or “No” to indicate if the borrower has ever filed for bankruptcy

7. Under “Assets” click the “+Add” button to enter any assets which have value in the market . You should select all that apply for this borrower. DO NOT enter any information about the subject property in this section; details for the subject property will be captured through other left hand navigation links (e.g., Property, Loan & Origination).

  • Note: If there is no asset select “Checking Account” and enter zero ($0.00) for the Asset Amount. Currently an asset type is required for an IDE.
  • Note: These asset types will be used in the IDE to determine total cash reserve amount: Checking Account, Savings Account, Money Market/Mutual Fund, Severance Package, Other Liquid Asset, Stock, Trust/Annuity Funds, Bond, Cash on Hand, and Certificate of Deposit, Gift.
  • Note: IDE will not consider the following asset types: Automobile, Boats RV, Life Insurance, Other no-liquid asset, Real Estate not for sale, and Retirements Funds IRA 401K.

The example below shows assets of a $750.00 checking account and a $250.00 savings account. As each borrower’s assets are added, the amount of that asset will be shown in the borrower’s total above assets.

8. Under “Income” click the “+Add” button to enter monthly gross income, unless description in drop-down says otherwise. You should select all that apply for this borrower. If for example you are entering Social Security Income you will need to remember to be sure to gross

  • Note: If you are evaluating the loan for a solicitation (no docs FLEX) then do not enter any income.

9. Under “Expenses” click the “+Add” button to enter any category or class of debts monthly amounts which must be paid monthly by borrower to pay down liability and keep accounts current. You should select all that apply for this borrower. Information from the credit report should be entered in expenses. You DO NOT enter any information about the subject property, other than, as applicable, the Subject Property Subordinate Financing P&I, all other details for the subject property will be captured through other left hand navigation links (e.g., Property, Loan & Origination).

  • Note: SMDU will return the following “Unable to Evaluate” message when the servicers indicates on the Property page the “Current Property Usage” is Principal Residence, on the Borrowers page “Yes” is selected for the field “Does borrower currently occupy property as primary residence?” and a Primary Residence HousingExpense” is provided with a dollar amount greater than zero: “Unable to Evaluate; servicer has reported the subject property is a Principal Residence and reported Primary Residence Housing Expense for a borrower who resides in the home or for a borrower whose occupancy declaration has not been reported. Primary Residence housing expense should only be reported for non-occupant borrowers. Please correct and resubmit. (Message 5730)”.
  • Note: The Primary Residence Housing Expenseshould only be used if the property is NOT a borrower(s)’ primary residence. You will need to report the monthly housing expenses associated with the location that is a borrower(s)' primary residence. This amount may be associated to rent, mortgage payments, or borrower(s) may be living rent-free. An amount will be expected, and should only be provided, in the following circumstances:
    • The subject property is a second home or an investment property.
    • The subject property is NOT the primary residence of ALL the borrowers who signed the mortgage note.
    • Use caution to ensure that “Primary Residence Housing Expenses” is only provided when the subject property is a second home or an investment property; or when the loan contains Non-Occupant Borrowers. Do not report any amount for the “Primary Residence Housing Expenses” associated to owner-occupant borrower(s).

Example when to use “Primary Residence Housing Expenses

Example when NOT to use “Primary Residence Housing Expenses

10. To add an additional borrower select the “+Add Borrower” link and then enter all details for each additional borrower by following steps 4-10above.

  • Note:  Each borrower is designated with a different color for servicer identification purposes
  • Note:  You can delete a borrower.  If you delete Borrower One, Borrower Two becomes Borrower One
  • Note:  You can enter up to six borrowers
  • Note:  It is acceptable to enter all expenses under Borrower One

 

Recommended Next Step: Bankruptcy

F. From the left hand navigation bar select the Bankruptcylinkto complete this page if the borrower(s) has ever filed for bankruptcy.

1. Select “+Add Bankruptcy”

2. Enter the bankruptcy “Filing Date” by entering the date (MM/DD/YYYY) or selecting the date by clicking on the calendar icon

               Note:  This cannot be a future date.

3. Select the bankruptcy “Type Filed” from the drop-down box

4. Select the current bankruptcy “Status” from the drop-down box

5. Select “Yes” or “No” from the drop-down box

6. Click the “Delete” link by the applicable row to remove abankruptcy

7. To add an additional bankruptcy select the “+Add Additional Bankruptcy” link and then enter all details for each additional bankruptcy by following steps 2-5  

  • Note:  All known bankruptcies should be entered.

Recommended Next Step: Property

 

To see other sub-topics for Evaluate for a Workout, please click on any of the topics below:

Evaluate for a Workout using SMDU - Overview

Evaluate for a Workout using SMDU - Property and Origination details

Evaluate for a Workout using SMDU - Delinquency & Foreclosure, Insurance & Escrow and Hardship

Evaluate for a Workout using SMDU - Prior Workout History and Litigation

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