If a user chooses to copy liabilities to 1003 from the credit report, then any balances from the credit report will auto-populate to the Liabilities Tab.
If the borrower has additional monthly obligations that do not pull into the credit report (for example, Child support, maintenance, Real Estate paid in full), there is an Add Liabilities button on the bottom left of the Liabilities Tab. Users can select the appropriate obligation from the Account Type drop-down list.
Within each liability, there are several important check box and drop-down list selections:
When marked, the Paid At Closing from Loan Proceeds check box indicates that the liability will be paid off at closing with funds from the current transaction (for example, Refinance). The balance will also flow to Doc Packages > Closing Docs > Payoffs Tab.
When marked, the Omit Payment/Omit Reason check box will not include the monthly payment in the ratio calculations and pass to FNMA or FHLMC that the payment is omitted. Once the tab is saved, the liability will fall to the bottom of the Liability Tab under the Excluded Liabilities section. Note that when marked, there is not an additional field to enter the omit reason.
Tip: The omit reason can be added to Loan Notes or 1008 to track why a payment has been omitted. The Excluded Liabilities section will only appear at the bottom of the Liabilities Tab if the check box for Omit Payment/Omit Reason has been marked for one or more liabilities.
When marked, the Resubordinated Indicator check box indicates that the liability will be resubordinated rather than paid off at closing.
Note: The Account Type drop-down list must display Mortgage or HELOC to mark this check box.
When marked, the Delete Record check box will delete the liability completely from the Liability Tab once it is saved. Note that once a liability is deleted it is not recorded anywhere to state what was deleted or why.
The Subject Property Lien check box indicates that the liability is a lien from the subject property (for example, A transaction in which the property will be refinanced).
The Rental Property Lien check box indicates that the liability is a lien from an investment property.
When marked, the Exclude from Ratio Calculations in 1008 will remove the payment from the ratio calculations on the U/W Transmittal within the LOS.
When marked, the Paid Prior to Closing check box indicates that the liability will be paid in full prior to closing. The liability will not be included in ratio calculations.
The Select Property (Mortgage or HELOC) drop-down list will contain all properties entered into the 1003 > REO Tab. Select the appropriate address for the corresponding Mortgage or HELOC liability to tie the lien to the property.
The Lien Position (Mortgage or HELOC) drop-down list will need to be updated if the liability is a Mortgage or HELOC so that it displays the correct position. If it is neither a Mortgage or HELOC the box will be greyed out.
The Max Available Limit (HELOC) field is used if there is still an undrawn balance on the HELOC. The value in this field should be the difference between the current drawn amount and the HELOC limit.
The Prepayment Penalty Same Creditor field is available when the loan purpose is Refinance, the liability Account Type drop-down list displays Mortgage or HELOC and the Paid At Closing from Loan Proceeds and Subject Property Lien check boxes are both marked. The value in this field is used in the QM Points and Fees Test when the loan is a refinance paying off a mortgage with a prepayment penalty that must be included.