Servion Mortgage Newsletter - July 2022

JULY 2022

In This Issue Partner Updates Servion’s Lending Conference Will be Held in September!

Ask the Underwriter Notice of Assignment for Portfolio Loans The Proper Way to Obtain Borrower Consent to E-Sign Documents Make Sure Your Closing Disclosures Print Correctly The Buzz: Recent Feedback

PARTNERnUPDATES

Amid rising interest rates and continuing home price increases, Servion Mortgage is always here to assist our partners, including the newest ones who joined us in May and June!

New Retail Lending Partners Audubon Federal Credit Union – Owensboro, KY Hurricane Creek Federal Credit Union – Benton, AR

New Correspondent Partners Atlantic Federal Credit Union - Portland, ME *Also signed up for wholesale FHA/VA and contract processing services

Relationship Expansions Credit Union 1 - Rantoul, IL *Now using delegated correspondent services Earthmover Credit Union – Aurora, IL *Now utilizing wholesale conventional channel First Trust Credit Union – Michigan City, IN *Now using wholesale FHA/VA services and contract processing services Old Missouri Bank - Springfield, MO *Now using delegated correspondent services ONB Bank - Rochester, MN *Now using wholesale FHA/VA services SMW Financial – Lino Lakes, MN *Now using conventional wholesale services

LEARN ABOUT OUR PRODUCTS & PARTNERSHIP OPPORTUNITIES

COMMERCIAL LENDING. Simplified.

2

Ready to grow your lending portfolio?

Few things help a financial institution grow better than commercial lending.

The Answer: The Question:

How do you overcome costs like infrastructure and talent and make your commercial lending program successful?

By taking advantage of Servion’s full suite of Commercial Loan Resources.

Full Portfolio Servicing ALLL Development Loan Policy Review and Development Risk Rating Assessment MBL Portfolio Auditing Tailored Portfolio Servicing Documentation Services A La Carte Services

Grow your credit union or community bank.

Serve your local business community. A true win-win. Visit myservion.com/CLR or contact our dedicated CLR account executive, Brian Mielke, at bmielke@myservion.com.

LENDING CONFERENCE

OUR

WILL RETURN IN 2022!

We are beyond excited to be hosting our lending conference just a few months from now!

For those who don’t know, we hosted a lending conference each year beginning in 2017, and it had grown into a multi-day event covering mortgage and business lending. Leaders and staff from our partner credit unions and community banks would come together to learn and explore ideas for growth. Of course, the pandemic forced us to cancel in 2020 and 2021. Now, we’re getting the event back underway!

We’ll have more details in the coming weeks, but here’s what you should know for now.

Mortgage Sessions SEPTEMBER 26 AND 27 Business/Commercial Lending Sessions SEPTEMBER 28 Location THE ST PAUL HOTEL 350 MARKET ST ST PAUL, MN

So, whether you’ve attended the conference before or this would be your first time, we are very excited to see all of you in September! Watch your emails for your official invitation, which we’ll be sending your way in the next few weeks!

We frequently receive questions from partners that revolve around citizenship and non-citizen eligibility for certain loan types. So this month’s edition of Ask the Underwriter is all about that topic.

There is no access by road to the subject property. It’s on an island, and you must access by boat. Is this acceptable for the secondary market? The current loan is with Fannie Mae. No, this is not acceptable. Fannie Mae and Freddie Mac require that the subject property be accessible by road. The current loan may be with Fannie Mae because the lender that did the loan represented and warranted that the loan met the guidelines.

This sometimes happens because not every lender is aware of this guideline.

The subject property is a hobby farm with 15 acres. The borrower has three horses and a few cows. Can we sell this loan on the secondary market?

Yes, you can. The appraiser must indicate that the highest and best use of the property is residential. A few animals shouldn’t impact that.

Realtors are calling me about berm homes. There is a neighborhood of 80’s berm homes that are going up for sale. Can you lend on that?

A berm home will require at least 2 berm home comps. We need to see that these are acceptable to the market, don’t have an impact on marketability, and are not unique to be able to proceed.

Have Questions for Our Underwriters?

If you have questions you’d like our underwriters to answer in a future issue, please send an email to underwriting@myservion.com.

NOTICE OF ASSIGNMENT FOR PORTFOLIO LOANS

In early June, we sent an email to retail partners who have funded a portfolio loan(s) with Servion Mortgage at any point since January 1, 2021. It’s an important message about a required notice that must be provided to borrowers, so we wanted to reiterate the message here in the newsletter.

Here is a summary of the email, which you may be able to find in your inbox. It was sent on June 2 by Greg Schatzke, Vice President of Servion Mortgage.

The mortgage industry requires that every borrower be provided a “Notification of Assignment – Sale – Transfer of Your Mortgage Loan” by the investor on their mortgage.

You may already be providing this letter to your borrowers on first mortgage portfolio loans; if so, thank you. If not, please begin doing so right away.

Access a Fillable PDF of the Notice/Letter For your convenience, we have uploaded a fillable PDF version of the letter. This comes directly from Fannie Mae to a borrower when Fannie is the investor on the loan. You may use this Notice going forward. Click here to access the letter.

We will also provide this letter to you when our accounting department sends a request for funds upon closing a loan that your financial institution is putting in its portfolio.

MAIN TAKEAWAY If you are not already doing so, please provide this letter to borrowers on all mortgage portfolio loans moving forward.

QUESTIONS? You can always reach out to your Servion account executive or email Greg Schatzke at gschatzke@myservion.com.

Thank you for your attention to this matter!

The Proper Way to Obtain BORROWER CONSENT TO E-SIGN DOCUMENTS As the mortgage process becomes more and more digital, we all want borrowers to electronically receive and sign disclosure documents. After all, it makes the overall mortgage process quicker and easier for all involved. However, obtaining the borrower’s consent to electronically receive documents must be done in a particular way to ensure compliance.

PROBLEM We’ve noticed that an increasing number of partners are asking borrowers for consent to e-sign, but they are not asking correctly.

Specifically, partners are asking borrowers to physically sign a piece of paper stating that the borrower consents to receive and sign documents electronically. Or, partners are sending out disclosures electronically prior to obtaining the borrower’s consent.

SOLUTION The E-Sign Act requires that you send the e-sign consent request electronically and that you receive consent from the borrower electronically as well. By sending the consent request electronically and the borrowers confirming their consent in the same way, it proves that the borrowers can

access information in electronic form.

Don’t forget: obtain consent electronically and then send the disclosures to them electronically. Don’t put the cart before the horse.

KEY TAKEAWAYS • E-consent must be obtained before sending electronic disclosures • E-consent must given electronically, not in a physical or oral format • Ensure your electronic records can be reproduced for later reference as this may be subject to audit by investors, regulators, etc.

• Ensure your electronic consent disclosure includes the required statements and information references in the E-Sign Act.

PRINTING AND SCANNING CD’S TO SERVION MORTGAGE Page 5 of the Closing Disclosure contains this graphic:

Recently we have been getting closing packages in Post-closing where the “print” or “scan” settings are causing the “?” and the gray box of the graphic not to appear. This is viewed as “altering a closing document” and a Quality Control and Compliance defect.

Incorrect Graphic

Correct Graphic

Please increase the “intensity” setting on your printer or scanner to ensure that the question mark and gray box appears on Page 5 of your CD’s.

Thank you for your cooperation on this matter!

Servion has really become a 10-star organization and I am grateful to have you as an extension of our team!

I would like to say what a pleasure it has been to work with you on a few files I have going. These are my first two files with Servion, and my experience has been tremendous.

THE

BUZZ

Hear what our partners are saying about us!

I appreciate how quick everyone is responding.

Nothing gets in the way of your great service!

Servion cares about its customers and it shows.

I am so impressed at your responsiveness, warmth, efficiency, and competency. Servion makes you feel as you are part of the family.

We hope you had a wonderful July 4fourth weekend!

651-631-3111 • myservion.com Servion Mortgage is a DBA of Servion, Inc. NMLS #1037. Equal Housing Lender.