Issue:
A loan with a subordinate HELOC did not trigger the Subordinate Financing adjustment, due to the HELOC having a $0 drawn amount.
Customer will sometimes believe that an adjustment should have fired based on the Fannie Mae grid which states that there is an adjustment when the CLTV exceeds the LTV. Example below:
This can be confusing because in Optimal Blue if there is a HELOC with a 0 drawn amount, we are showing the CLTV to be higher than the LTV. The reason for this is because some investors script rules based on line amount and some on drawn amount, so we needed to split out HCLTV (Line Amount) and HCLTV (Drawn Amount).
Delete above and send to customer:
When there is a subordinate HELOC involved, Optimal Blue uses HCLTV which is split out into HCLTV Line Amount and HCLTV Drawn Amount. This is because some investors script rules based on one or the other.
We calculate on the HCLTV (Drawn Amount) due to the FNMA guidelines. which state that the CLTV ratio is determined by the drawn portion of a HELOC (See seller guide info below).
Fannie Mae Selling Guide:
https://www.fanniemae.com/content/guide/selling/b2/1.1/02.html
You do have the ability to overlay the adjustment to fire off of the HCLTV (Line Amt) if you choose.