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Calyx Software Knowledgebase


6654 Incorrect DTI Ratios


Administrator
Point

There are several causes of a ratio to be incorrect. The most common cause is there are entries in the Anti-Steering Disclosure or a qualifying ratio entered for a second mortgage.

If neither is the case, please select the type of loan you are working on from the bottom of this article, for instructions on correcting the ratio.

 

Clearing the Anti-Steering Disclosure

  1. From the menu bar, select Forms > Anti-Steering Disclosure.
  2. Click the Clear button if it is available, from all Scenario columns.





  3. When all Scenario columns have been cleared, go to the Borrower Information screen.
  4. Remove the Note Rate and then press <Tab>.
  5. Re-enter the Note Rate and then <Tab>. This will force Point to re-calculate the ratios.


Remove the Qual Rate from Other Financing (applicable when there is a first and a second mortgage)

  1. Go to the Borrower Information Screen.
  2. Click the HE & Oblig button.
  3. From the Housing Obligations dialogue box, click Other Fin.


  4. From the Other Financing dialogue, remove the Qual Rate.



  5. Click OK.
  6. Remove the Note Rate and then re-enter it. This will force Point to re-calculate.


Select the appropriate tab whether the loan is a Purchase or a Refinance. Then select the appropriate drop bar for the type of loan you are processing. These instructions will guide you through the different aspects of a loan file that may cause the ratio to calculate incorrectly

 

Incorrect Ratios - Purchased Loans

Purchase of Primary Residence
  1. Go to the Borrower Information screen.
  2. Verify that the file is correctly marked as a Primary/Purchase/First or Second lien.

  3. Go to Page 3 of the Loan Application.
  4. In the Liabilities section, verify that you have not created an entry for the subject property mortgage.
  5. Also in the Liabilities section on Page 3, verify that any other mortgage is marked with an M and that the payment appears in parentheses.


  6. On Page 3 of the Loan Application, go to the Schedule of Real Estate Owned section.
  7. Verify that you have not created an entry for the subject property. Since the file is for a pending purchase, the property does not belong in this section.
  8. If there is a second home, enter the property address into the REO section and the total payment for the second home as a negative number in the Net Rent field.
  9. For any rental properties, be sure the entry is marked as an R and the Gross Rent and Mtg Payment fields have been entered to calculate the Net Rent.
  10. On the Truth-In-Lending screen, verify that the Customize checkbox is not checked.

Note: For second homes, the Net Rent field must be completed on the Schedule of Real Estate Owned section because the payment is not counted from the Liabilities section. Instead, enter a negative Net Rent to calculate the second home payment into the ratios.

 
Purchase of Secondary Residence
  1. Go to the Borrower Information screen.
  2. Verify that the file is correctly marked as Secondary/Purchase/First or Second Lien.
  3. Go to Page 2 of the Loan Application.
  4. In the Monthly Housing Expenses section, the Present column should reflect payments only for the primary residence.
  5. Go to Page 3 of the Loan Application.
  6. In the Liabilities section, verify that all mortgages are marked with M and that the payment appears in parentheses.
  7. Go to the Schedule of Real Estate Owned section and verify that you have not created an entry for the subject property. Since the file is a for a pending purchase, the property does not belong in this section.
  8. For any rental properties, be sure the entry is marked as an R and the Gross Rent and Mtg Payment fields have been entered to calculate the Net Rent.
  9. On the Truth-In-Lending screen, verify that the Customize checkbox is not checked.
  10. Go to the Transmittal Summary.
  11. In section III. Underwriting Information, be sure the lock box for the Neg Cash Flow Subj Prop field is not checked.

Purchase of Investment Property
  1. Open the Borrower Information screen.
  2. Verify that the file is correctly marked as Investment/Purchase/First or Second Lien.





  3. From the Borrower Information screen, click the Investment button at the bottom of the screen. Verify that the Gross Rent and Occ Rate fields have been completed.





  4. On Page 2 of the Loan Application, go to section V. Monthly Income and Combined Housing Expense Information and verify that the Present column reflects payments only for the primary residence.
  5. On Page 3 of the Loan Application, go to the Liabilities section and verify that you have not created an entry for the subject property.
  6. Also in the Liabilities section verify that all mortgages are marked with M and the payment appears in parentheses.



  7. Go to the Schedule of Real Estate Owned section.
  8. Verify that you have not entered the subject property address. Since this loan is a pending purchase, the subject property should not be entered into the REO section.
  9. If there are any other rental properties, be sure the entry is marked with an R and that you have filled in the Gross Rent and Mtg Payment fields to calculate the Net Rent.
  10. If there is a second home entered into the Schedule of Real Estate Owned section, go to the Net Rent field for the second home entry and enter the total payment as a negative number.
  11. On the Truth-In-Lending screen, verify that the Customize checkbox is not checked.





  12. Go to the Transmittal Summary.
  13. In section III. Underwriting Information, be sure the lock box for the Neg Cash Flow Subj Prop field is not checked.

 

Incorrect Ratios - Refinance Loans

Refinance of Primary Residence

  1. Go to the Borrower Information screen.
  2. Verify that the file is correctly marked as a Primary/Cash-Out Refi or No-Cash Out Refi/First or Second Lien.
  3. Go to the Liabilities section of Page 3 of the Loan Application.
  4. Verify that all mortgages are marked with an M and that the payment appears in parentheses.
  5. Also on Page 3 of the Loan Application, go to the Schedule of Real Estate Owned section.
  6. Verify that the subject property is the first entry. Be sure the Subject Property indicator is checked for the subject property address.
  7. If there is a second home, enter the total payment for the second home as a negative number in the Net Rent field.
  8. For any rental properties, be sure the entry is marked as an R and the Gross Rent and Mtg Payment fields have been entered to calculate the Net Rent.
  9. On the Truth-In-Lending screen, verify that the Customize checkbox is not checked.

Refinance of Secondary Residence
  1. Go to the Borrower Information screen.
  2. Verify that the file is correctly marked as Secondary/Cash-Out Refi or No-Cash Out Refi/First or Second Lien.
  3. Go to Loan Application Page 2.
  4. Go to the Monthly Income and Combined Housing Expense Information section and verify that the Present column reflects payments only for the primary residence.
  5. Go to Loan Application Page 3.
  6. In the Liabilities section, verify that all mortgages, including the subject property, are marked with M and that the payment appears in parentheses.
  7. Go to the Schedule of Real Estate Owned section.
  8. For any rental properties, be sure the entry is marked as an R and the Gross Rent and Mtg Payment fields have been entered to calculate the Net Rent.
  9. On Page 3 of the Loan Application, go to the Schedule of Real Estate Owned section and verify that the subject property is the first entry. Be sure the Subject Property checkbox indicator is checked for the subject property address.
  10. On the Truth-In-Lending screen, verify that the Customize checkbox is not checked.
  11. Go to the Transmittal Summary.
  12. In section III. Underwriting Information, be sure the lock box for the Neg Cash Flow Subj Prop field is not checked.

Refinance of Investment Property
  1. Go to the Borrower Information screen in Point.
  2. Verify the file is correctly marked as Investment/Cash-Out Refi or No-Cash Out Refi/First or Second Lien.





  3. From the Borrower Information screen, click the Investment button at the bottom of the screen. Verify that the Gross Rent and Occ Rate fields have been completed.





  4. Go to Loan Application Page 2.
  5. In the section V. Monthly Income and Combined Housing Expense Information, verify that the Present column reflects payments only for the primary residence.





  6. Go to Loan Application Page 3.
  7. In the Liabilities section, verify that all mortgages are marked with M and the payments appear in parentheses.





  8. On Page 3, go to the Schedule of Real Estate Owned and verify that the subject property is the first entry. Be sure the Subject Property checkbox indicator is checked for the subject property address.
  9. If there are any other rental properties, be sure the entry is marked as an R and the Gross Rent and Mtg Payment fields have been entered to calculate the Net Rent.
  10. If there is a second home, go to the second home entry and enter the total payment for it as a negative number in the Net Rent field.
  11. On the Truth-In-Lending screen, verify that the Customize checkbox is not checked.





  12. Go to the Transmittal Summary.
  13. In section III. Underwriting Information, be sure the lock box for the Neg Cash Flow Subj Prop field is not checked.


For second homes, complete the Net Rent field in the Schedule of Real Estate Owned section because the payment is not counted from the Liabilities section. Enter a negative Net Rent to calculate the second home payment into theratios.


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Last Modified: 8 Months Ago
Last Modified By: cswms
Type: Loans
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