Working with HELOC features
Your operations team and company decision makers determine your company’s HELOC policy:
Review the HELOC programs offered by you or your investors.
Set a credit policy regarding draw, repay, and types of HELOC loans to offer.
Review the HELOC Management Input Form section and HELOC Configuration
Worksheet later in this guide to determine how to configure each loan type. Create a plan your
Encompass administrator can use to configure templates and historical tables for each program.
Work with your secondary marketing team to review and define the rate and pricing for all the
HELOC loans you will offer. Initial/Teaser rates can be defined as well as loan level pricing
adjustments to the margin used on the loan.
Administrators implement and configure your company’s HELOC policy:
Create dynamic HELOC Historical Tables to use with your templates. Set a month and day of the
year for the annual change date. Research and enter the index values for the past 15 years.
Create a table for each margin used.
Create Loan Program templates for each HELOC loan type you will offer and assign the dynamic
HELOC Historical table that represents the index to be used for loans originated under the
configured program. Templates for the HELOC Management form are configured in the Loan
Templates setting (Encompass > Settings > Loan Templates > Loan Programs) which includes
sections that correspond with the HELOC sections on the HELOC Management input form.
Add business rules or Dynamic Data Management triggers as need, for example, to apply Loan
Program templates to loans that meet specific criteria or to apply HELOC Historical Tables to
loan templates under specified conditions.
Maintenance: Update the historical tables annually by adding entries for the current year.
Loan officers begin originating HELOC loans:
1. Take application by entering basic borrower and loan application data, including the loan
amount and draw amount. Loan can be created with a loan template set that includes the
HELOC Loan Program to be used. The template can also be applied through selecting a program
in pricing and confirming and locking the loan to apply the selected program. Alternatively, the
loan program can also be set through using business rules, DDM rules or via API. Depending on
how the template is configured, complete any additional information for the loan to complete
the application (i.e. the loan amount, draw amount, and borrower and property details.
2. Depending on the workflow created by your company, the selection for historical table may be
populated based on the template or business rule, or the loan officer may have to manually
select a historical table.
3. Price the loan. If your company is using a pricing service for HELOCs (such as the Encompass
Product and Pricing Service), the note rate, index and margin for the loan are returned from the
pricing service.
HELOC Dynamic Historical Tables
Encompass administrators can use the HELOC Table setting (Encompass > Settings > Tables and Fees >
HELOC Table) to create static or dynamic HELOC historical index tables. The HELOC historical index
tables are dynamically applied to the calculations and language used in the Important Terms Disclosure
output form, which provides a sample table of annual percentage rates and monthly payments for a
HELOC loan. Tables can be assigned to a loan through a loan program, business rules, or Dynamic Data
Management triggers. The use of HELOC historical index tables are intended to be used with adjustable
rate HELOC products. Fixed rate HELOCs do not require a historical index table.
Prior to the Encompass 19.3 release, HELOC loans used static historical tables, which displayed directly
on a custom Important Terms Disclosure output form exactly as the table was entered in the setting.
Static tables included one entry for each year and the data on the table did not adjust based on the loan
scenario. Static tables are no longer supported on the new dynamically generated HELOC output forms
and are maintained solely to support previously existing output forms for the custom HELOC Important
Terms Disclosure.
Dynamic tables are based on the exact scenario of the loan file to which they are applied and are used to
run complex calculations based on the payment scenario in a loan. When creating a dynamic table,
administrators can:
Select a day and month
Add a true margin for that date.
Fill in 15 years’ worth of data.
Create tables for different days and months of the year and for different indexes.
Encompass uses the data in the tables to populate payment options based on the selection made on the
HELOC Management input form. Tables can be assigned to loans through loan program, business rules,
or Dynamic Data Management triggers. Dynamic tables apply information in the table to the output
form based on the parameters of the loan. Administrators can create tables to cover a variety of HELOC
scenarios and can configure the tables to begin on selected months and dates.
NOTE: If a new HELOC plan code is applied to an existing loan that uses a static table, the loan switches
to the new documents with a dynamic historical table.
After creating the required dynamic historical tables, administrators will need to perform an annual
maintenance of the tables to ensure they are up to date for the current year.
To Create a Dynamic Historical Table:
1. On the menu bar, click Encompass, and then click Settings.
2. On the left panel, click Tables and Fees, and then click HELOC Table.
3. Click the New icon.
4. Select Dynamic Table, and then click OK.
5. In the HELOC Table Name field, type a name, and then select an Index Name from the list.
6. Select the day and month when the index starts. You can configure multiple index start dates,
for example by month or by quarter. If your company uses multiple index start dates depending
on when loans are originated, you may configure multiple tables, each with different start day
and month.
7. Enter a Default Historical Margin for the table. This margin is used with the historical index data
entered to calculate the APR disclosed for each year in the historical example.
8. Click Add, use the Year and Index fields to create an entry for a specific year, and then click OK.
9. Repeat step 8 to add additional entries for each year that will be included in the example data.
If your index has the same value in multiple years, the records can be duplicated, which will
copy the index value and allow you to enter the new year value. This is useful when setting up a
Prime rate, which had a 3.25 % value for multiple years.
10. When finished, click OK on the Edit HELOC Historical Index Table window.
