Compliance Memo C2019-11: VA IRRRL Statutory Recoupment Calculation
This memo is in response VA Circular 26-19-22 and Ellie Mae’s LOS update that allows for the Statutory Recoupment Calculation.
Ellie Mae has added a second calculation called the “Statutory Recoupment” for VA IRRRLs. It is located under the VA Management screen, Qualification tab, Closing Cost Recoupment section. (See screenshot below.)
The initial calculation includes the VA Funding Fee in the P&I Payment. Closing Costs also include VA Funding Fee, special assessments and HOA fees.
The Statutory calculation removes the VA Funding fee from P&I payment and Closing Costs. If Special Assessments and HOA fees are entered in the itemization, they will have to be manually added to the highlighted field above to exclude from the calculation. The Statutory calculation reduces the recoupment months if 36 months or lower requirement is met.
We have added the statutory recoupment calculation to our VA IRRRL Veteran’s Statement and Certification Disclosure (attached). What follows are a few tips to ensure you obtain accurate calculations as well as proper disclosure.
- All fees listed on the itemization must be marked as financed. Reminder, if any fee changes throughout the process, you must also change the amount financed in fee details.
- When you receive the Preliminary CD, you need to update fees on itemization as the calculation is partially based on closing costs. Waiting until the CD is prepared could result in recoupment exceeding 36 months.
- Required data can been entered easily on the VA- Rate Reduction Certification Fields quick link located on the GS Application:
- For your convenience we have added the statutory section from the VA Management screen to the Quick link so you can easily see if loan is meeting recoupment. Reminder, results are based on the accuracy of the data you enter.