UWM updates their EPO Policy
In an email sent out on January 12, 2022, UWM announced their updated policies for an Early Payoff (“EPO”) which was effective as of January 1, 2022.
UWM’s email stated that “correspondents with a new EPO within 151-180 days of the loan disbursement date are only required to reimburse UWM for 75% of all amounts paid by UWM to the correspondent in connection with the loan or 0.75% of the loan amount, whichever is greater. This is a change from our previous policy, which went into effect within 180 days of the loan-funded date.”
A Mortgage Loan Purchase and Sale Agreement (“MLPA”) or an investor’s Seller Guide will customarily be the documents that control the amount required to be reimbursed for an EPO. However, these documents can also provide that investor with the ability to reduce the amount payable in the event of an early payoff. It is common to require a correspondent to reimburse the purchasing investor for any premiums paid by the investor for mortgage loans that are prepaid in full on or before the 180th day after the date of purchase.
It is critical to understand and know the definitions contained within your MLPAs and Seller Guides because these will be the documents that govern how much the correspondent will need to reimburse the purchasing lender. However, it is possible to negotiate more favorable terms within these documents depending on your volume of business and the relationship between the parties.
At any rate, this is positive news for any UWM correspondents.
Sean A. Stephens, Esq., CMB®
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