Bulletin 2021-080 SmartEdge and SmartVest Product Updates

SmartEdge and SmartVest Product Updates

Newrez LLC "Newrez" Approved Correspondent Clients: Newrez is updating the SmartEdge and SmartVest products; updates are highlighted below.

 

Highlights

 

SmartVest Prepayment Penalty

 

The SmartVest product will now permit prepayment penalties subject to the following:

 

• Not permitted in the following states:
  • Minnesota
  • New Jersey
  • New Mexico
  • Pennsylvania: not permitted on 1- or 2-unit properties with a loan amount less than $263,975
• Prepayment Penalty Options
  • No prepayment penalty
  • One, two, or three year prepayment penalty options
  • Prepayment penalty is six (6) months interest on excess of 20% of the original principal
• The following forms are required
  • Prepayment Penalty Rider
• Buyout options may be available: refer to rate sheet
• Closing Disclosure
  

The CD must show the maximum Prepayment Penalty.  In order to calculate the maximum penalty, please ensure you follow the below steps:

1. 1. Multiply the principal balance by the interest rate on the note
   2. Divide that result by 12 to determine the monthly interest charge
   3. Multiply the monthly interest charge by the penalty calculation on the PPP rider
      
      

Example:

1. 1. $689,700 x 3.5% = $24,139.50
   2. $24,139.50 / 12 = $2011.625
   3. $2011.625 x 6 = $12,069.75

The CD shows a max penalty of $12,070.

 

SmartEdge

 

The SmartEdge product will now permit cash proceeds received from a cash-out refinance to be used for reserves.

 

Resources

Please reference the rate sheet for pricing and adjustments.