2021 URLA in SPARC Frequently Asked Questions © Arc Home LLC | April 2021 | All rights reserved. This document was designed to answer questions related to the recent URLA enhancements within our SPARC portal. Navigate through the questions and answers by clicking on a topic below.

FAQ Topics 1003 – REAL ESTATE OWNED – WHOLESALE ONLY .................................................................... 2 BORROWER ORDER .................................................................................................................... 2 CALYX POINT 3.4 MISMO FILE IMPORT ERROR .......................................................................... 3 CURRENT HOUSING EXPENSE ..................................................................................................... 3

Non-Occupant Co-Borrower – Present Housing ....................................................................... 4 DATE OF BIRTH .......................................................................................................................... 5 DECLARATIONS .......................................................................................................................... 5 DELETE A BORROWER ................................................................................................................ 5 DEMOGRAPHICS ......................................................................................................................... 6 ENCOMPASS 3.4 MISMO FILE IMPORT ERROR – JOINT APPLICATION ........................................ 6 FILE IMPORT TO SPARC ............................................................................................................. 6 HOUSING HISTORY .................................................................................................................... 7 INCOME IN SPARC ...................................................................................................................... 8 INTERVIEW DATE ....................................................................................................................... 8 PROPOSED HOUSING EXPENSES – SUBJECT PROPERTY ............................................................. 9 RENTAL INCOME – SUBJECT ....................................................................................................... 9 TROUBLESHOOTING AUS (DU/LPA) ......................................................................................... 10

General AUS Eligibility........................................................................................................... 10 Credit Mismatch ................................................................................................................. 10 Eligibility ............................................................................................................................ 11 Internal Audit .................................................................................................................... 11 REO Schedule ..................................................................................................................... 11

Desktop Underwriter (DU) – Fannie Mae ............................................................................... 11 Casefile ID ......................................................................................................................... 11 Credit Link.......................................................................................................................... 11 Liability Type ...................................................................................................................... 12 Rate/Term Refinance ......................................................................................................... 12

Loan Product Advisor (LPA) – Freddie Mac............................................................................ 12 AUS Submission Error ........................................................................................................ 12 Housing History ................................................................................................................. 12 Homeownership Counseling ............................................................................................... 13

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1003 – REAL ESTATE OWNED – WHOLESALE ONLY

For transactions in which the borrower owns real estate, the Redesigned URLA 1003 within the Arc Home initial disclosures package may contain a clerical error with “Does not apply” checked for the “Mortgage Loans on this Property”. If you experience this, Arc Home will provide an updated 1003, as necessary.

BORROWER ORDER

The borrower order may be easily rearranged inside SPARC after loan import (i.e. flip the co-borrower to the borrower).

• Click on the “Application Management” button on the Borrowers tab of the SPARC Application Information screen

• Click on the “Swap borr & coborr” link to reorder the borrowers on the application • For technical assistance completing these steps, please contact our dedicated IT Help Desk at 215-

383-9220 or ITHelpDesk@archomeloans.com (include the loan number and borrower’s last name in the email communication).

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CALYX POINT 3.4 MISMO FILE IMPORT ERROR

Calyx Point users may experience a MISMO 3.4 error at the time of import into SPARC and receive the following message: This error is populating as a result of the Loan Originator’s contact info in the MISMO 3.4 export from Calyx Point. To clear this error, follow these quick steps for a successful 3.4 Calyx upload into the SPARC portal:

1. Delete the Loan Originator’s contact information (telephone number and email address) from the Originator tab in Section 9 of Calyx Point and save the file

2. Export the MISMO 3.4 from Calyx Point 3. Import this updated 3.4 file into the SPARC portal 4. Add the Loan Originator contact details back into Calyx Point and save the file

If the 3.4 MISMO error persists after completing the steps above, there are two other options available to troubleshoot the file corruption:

1. Export a 3.2 file from Calyx Point and import that 3.2 file into the SPARC portal. Validate all borrower and loan information within SPARC prior to loan registration. Important Note: Some fields will require manual entry within the SPARC Application Information screen, such as the Declarations tab, as SPARC will automatically convert the 3.2 upload to the new URLA format.

2. Rekey the entire loan into a NEW Calyx Point file to create a new/clean MISMO 3.4 for import to SPARC

CURRENT HOUSING EXPENSE

The borrower’s current housing expense MUST BE MANUALLY entered on the Borrowers tab of the SPARC Application Information screen. When a loan application includes multiple borrowers with the same primary residence address, enter the current housing expense for only ONE borrower at that address. If the data is entered for each borrower living at the same address, the Primary Residence payment shock calculation and Second Home/Investment Property DTI will NOT be accurate.

• Enter the monthly rental payment amount for the borrower’s primary residence, OR • If the borrower owns the current residence, click on the calculator, enter the monthly PITIA expenses

exactly as reflected in the “Mtg Payment” and “Ins/Maint/Taxes” fields of the REOs tab, and select OK

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Non-Occupant Co-Borrower – Present Housing For transactions with a Non-Occupant Co-Borrower, the subject property occupancy in the Loan & Property Tab of the Application Information screen must be set to “Secondary Residence” for the Non-Occupant Co-Borrower to ensure the primary residence housing expense for this borrower is included in the qualifying DTI.

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DATE OF BIRTH

The “Date of Birth” field must be completed for ALL borrowers within the Borrowers tab of the SPARC Application Information screen, SPARC will prevent users from completing loan registration.

DECLARATIONS

The Declarations questions within the new URLA are significantly different from the current 1003. SPARC will prevent users from completing loan registration until the questions on the Declarations tab of the SPARC Application Information screen have been completed for ALL borrowers.

DELETE A BORROWER

A borrower deletion may be easily completed inside SPARC after loan import. • Click on the “Application Management” button on the Borrowers tab of the SPARC Application

Information screen • Click on the applicable “delete” link to remove the borrower from the application • For technical assistance completing these steps, please contact our dedicated IT Help Desk at 215-

383-9220 or ITHelpDesk@archomeloans.com (include the loan number and borrower’s last name in the email communication).

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DEMOGRAPHICS

Validate the Demographic tab is completed for ALL borrowers within the SPARC Application Information screen, SPARC will prevent users from completing loan registration.

ENCOMPASS 3.4 MISMO FILE IMPORT ERROR – JOINT APPLICATION

Encompass users may experience a MISMO 3.4 issue in which a joint application is split into separate loan applications at the time of import to SPARC. This is a result of a field not being accurately completed or updated within Encompass, which is affecting the MISMO 3.4 export. To avoid this error, follow these quick steps for a successful 3.4 Encompass upload into the SPARC portal for a joint application:

1. Open the 1003 URLA Part 3 page of Encompass 2. Within Section 2, select “Jointly” to identify the joint application

Important Note: These steps must be completed PRIOR to import into the SPARC portal. In the event the issue is identified after a SPARC import, a new MISMO 3.4 loan import will be required, and the initial loan submission will need to be cancelled via the Status and Agents screen of SPARC.

FILE IMPORT TO SPARC

To create a new loan in SPARC, the correct file type must be selected for import. • Select the “Import Fannie Mae file” radio button for 3.2 imports named “.FNM”

• Select “Import MISMO 3.4” radio button for 3.4 imports in XML format

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HOUSING HISTORY

The housing history fields within the new URLA are different from the current 1003, and additional data must be captured on the Borrowers tab of the SPARC Application Information screen for a fully completed URLA 1003 to generate within the Arc Home initial disclosures package.

• Verify the “Months” and “Start Date” fields are completed in the “Current Address” section to clear the orange warning symbol.

• Complete the “Start Date” and “End Date” fields in the “Prior Housing History” section, and SPARC will calculate the “Months” figure.

When the “Current Address” history exceeds two years on the Borrowers tab of the SPARC Application Information screen, the “Prior Housing History” section may require an edit to delete the blank data fields. Click on the blue minus sign button to remove the blank “Prior Housing History” data details.

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INCOME IN SPARC

To ensure all qualifying employment income is accurately considered in the qualifying Debt-to-Income (DTI) ratio:

• Complete the “Employment” section of the Borrowers tab in the SPARC Application Information screen Check the “Currently Employed” box for all current employers Ensure the “Job Start Date” field is completed For self-employed borrowers, check the “self-employed” box

• Click the blue plus or minus sign button to add or remove monthly employment income sources associated with the selected employer A new “Income Type” line will populate after the blue plus sign button is selected, open the menu

to select the appropriate income source for this employer and complete the monthly amount Important Notes

• Employment income entered directly into the “Income Editor” section of the Borrowers tab in the Application Information screen will not be included for qualifying.

• Non-employment income (disability, social security, trust, etc.) must be entered directly into the “Income Editor” section of the Borrowers tab in the Application Information screen.

INTERVIEW DATE

The Interview Date (your Loan Application Date) must be validated and completed within the FNMA Addendum tab of the Loan Information screen within SPARC. This step applies to all loans, even when

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an AUS is not required. Important Note: After updating the “Interview Date”, be sure to verify your doc type is accurate within the Property and Loan Info tab of the Pricing screen.

PROPOSED HOUSING EXPENSES – SUBJECT PROPERTY

The “Proposed Monthly Payment for Property” section of the Lender Loan Info tab on the Application Information screen of SPARC is currently under construction and does not accurately reflect the subject property PITIA for the transaction. The “Proposed Monthly Payment for Property” section of SPARC is not the source of information used to calculate the qualifying ratios on the transaction. The DTI and payment shock calculations are driven by other SPARC data points and are confirmed to be working correctly, both within SPARC and the AUS (DU/LPA). Verify the subject property taxes, insurance, HOA dues, etc. in the Non-P&I Housing Expenses tab on the Closing Costs screen of SPARC.

RENTAL INCOME – SUBJECT

To ensure the qualifying rental income for a subject property investment OR 2-4 unit transactions is accurately considered in the qualifying Debt-to-Income (DTI) ratio and AUS:

• For Purchase and Refinance transactions, enter the qualifying monthly rental income for the subject property into the “Expected Monthly Rental Income” field of the Loan & Property tab on the SPARC Application Information screen. Click the lock icon next to the “Expected Rental

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Occupancy Rate” field to update the qualifying percentage, as applicable for the transaction, to ensure the net rental monthly income is calculated appropriately.

• For Refinance transactions, click the lock icon next to the subject property “Cash Flow” field to unlock the box within the REOs tab of the SPARC Application Information screen, then enter the exact figure from the “Expected Net Monthly Rental Income” field of the Loan & Property tab on the SPARC Application Information screen. Important Note: Click the lock icon next to the “Expected Rental Occupancy Rate” field to update the qualifying percentage, as applicable for the transaction, to ensure the net rental monthly income is calculated appropriately.

TROUBLESHOOTING AUS (DU/LPA)

For issues running AUS (DU/LPA) inside SPARC, please review the most common errors identified below. Important Note: If these troubleshooting tips do not resolve the issue, escalate to SPARC Assist at 215-383-9220 or SPARCassist@archomeloans.com (include the loan number and borrower’s last name in the email communication).

General AUS Eligibility

Credit Mismatch If you receive an AUS “credit mismatch” error, ensure that your credit report data matches the SPARC details exactly (name, address, SSN, date of birth) for all borrowers.

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Eligibility Confirm the Borrowers/Income, Assets, Liabilities, and REOs tabs of the SPARC Application Information screen reflect complete and accurate details for all borrowers on the transaction.

• Does your previously run AUS match the data entry used within the SPARC Application Information screens?

• Are all required payoffs marked to be paid? • Are all mortgages linked to an REO? • Are all asset, income and liability details correct? Review the Income in SPARC topic to validate the

employment income is correctly entered for qualifying consideration.

Internal Audit If you receive an “AUS internal audit” finding for your FHA submission, the FHA Section of the Act field is missing or incomplete within the FNMA Addendum tab of the Loan Information screen of SPARC.

REO Schedule The “Mtg Amount” and “Mtg Payment” fields on the REOs tab of the Application Information screen must mirror the details for the linked liability(ies). If a property has multiple liens, the “Mtg Amount” and “Mtg Payment” fields must include the totals for ALL liens. Important Note: The “Mtg Payment” and “Ins/Maint/Taxes” details for the borrower’s current residence MUST be entered into the Borrowers tab of the SPARC Application Information screen for accurate calculations, refer to the Current Housing Expense topic in this document.

Desktop Underwriter (DU) – Fannie Mae

Casefile ID If you receive a DU error stating “Casefile ID not associated with institution ID”, findings were not assigned to Arc Home OR the Casefile ID field contains an email address or login name.

Credit Link If you receive a DU error stating that “credit needs to be linked”, your credit report must be reissued for your AUS findings; manual credit entry is not acceptable.

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Liability Type DU will return a liability description error when “Other Debt Liability” or “Other Expense Liability” is selected within the “Debt Type” field on the Liabilities tab of the SPARC Application Information screen. To clear the error and allow the DU to run correctly, change the “Debt Type” field selection to “Open”.

Rate/Term Refinance

• The “Loan Purpose” field in the Loan & Property screen must indicate “Refi Rate/Term” AND the “Refinance Type” field in the Lender Loan Info screen must show “Limited Cash-Out Rate/Term”.

• The cash back to the borrower may not exceed the lesser of 2% of the new refinance loan amount or $2,000. This may be validated on the Lender Loan Info screen, “Qualifying the Borrower – Minimum Required Funds or Cash Back”.

Loan Product Advisor (LPA) – Freddie Mac

AUS Submission Error If you receive an LPA “something went wrong” error:

• Ensure that your mortgage liabilities are linked to the REOs within the tab of the Application Information screen

• Confirm all debts in the Liabilities tab of the Application Information screen reflect a monthly “Pmt” and the “Mos. Left”

Housing History If you receive a generic LPA system error, ensure that the borrower housing history within the Borrowers tab of the SPARC Application Information screen is complete and accurate. Refer to the Housing History topic in this document.

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Homeownership Counseling If you receive an LPA audit error related to Homeownership Counseling, the counseling details may be edited or deleted, as applicable for the loan type, in the Lender Loan Info tab of the Application Information screen.