Encompass Dynamic Data Management

A better solution for managing Closing Costs in Encompass

Written by Paul Bates, Senior Technology and Capital Markets Consultant

Dynamic Data Management (DDM) has been available a few years now In the Encompass lending platform, but there are many Lenders who have not embraced this functionality to better manage closing costs.  There are many benefits to integrating DDM, from enhancing productivity when disclosing to mitigating the risks of providing inaccurate fee quotes to applicants.

What are DDM Fee Rules?

DDM Fee Rules provide a scenario-based application of Fees on the 2015 Itemization dependent on data elements entered on the application.  DDM rules can be conditioned on when to start (and stop), complete complex calculations for determining the fee amount, and scheduled in advance for anticipated fee changes.

Closing Cost Templates, and their limitations

Closing Cost Templates are the primary methodology for prefilling the  2015 Itemization screen.  Lenders set up multiple templates based on such characteristics as Loan Type, or Property State.  The user applies a template and a majority of the fees that need to be disclosed are prefilled to make for an efficient process.  What Templates lack though is an ability to automate fee calculation based on loan level data.   A Closing Cost Template cannot change the credit report fee based on the number of applicants, for example.  Alos, if a new Templated needs to be applied the fee amounts are appended to the loan, and any existing fee amounts remain if there is not a value in the new template.  The person disclosing has to perform a careful review for accuracy when applying a new Template.

Field Trigger Business Rules – Automation (with caveats)

Field Trigger Business Rules provided the only option for fee automation prior to the release of DDM Rules.  Fee amounts could be automated in a Rule by providing the calculations necessary to determine accurate fee amounts based on loan level data.  Administrators can create very complex Field Trigger Rules to calculate fees.  This methodology works well but has a couple of distinct disadvantages.  First, the calculations can get rather complex, and a certain amount of Visual Basic coding experience is required for creating more complex Fee scenarios. Second, there is not an elegant solution for making Field Trigger Business Rules stop firing, so fees could be updated when the user does not want them to be.

DDM – A Better Solution

DDM Fee Rules allow an Administrator to create easy to configure rules for a specific Fee Line on the 2015 itemization.  The Rule can be conditioned for both when to fire and when to stop.  Fee Scenarios are then configured to determine the correct fee amount dependent on the loan data in the file.  These calculations can be simple calculations up to complex user defined tables with up to 8 variables.

DDM provides the most elegant solution for fee generation where the amounts are not static.  You can configure when the rule starts, stops, and provide complex calculation scenarios.  You can even create scenarios that will fire as of a certain date, so if you know a price increase is coming from a vendor your administrator is not scrambling on December 31 to change a fee.

If you would like to learn more about DDM Rules and how they can make you a more efficient lender please Contact Us!