Confidential — Prepared for Novus Home Mortgage

Novus Home Mortgage

Strategic Encompass Initiatives · Non-QM Business-Purpose Channel

ProcessNon-QM / Business-Purpose Origination
Prepared byMortgage Workflow Partners
Pain point / problemInefficiency / riskAutomationEfficiency gainOutcomeRework loop
Current State
Business-Purpose Loans Forced Through the Agency Workflow
Manual WorkInconsistencyRework Loops
Future State
Dedicated Business-Purpose Channel, Built Around the Transaction
AutomatedStandardizedScalable
LOMANUAL

Loan Enters Consumer/Agency Application

Business-purpose transaction starts in the consumer/Agency pipeline — channel identified mid-stream

Misrouted from the start
LO / BorrowerMANUAL

Full Consumer/TRID Application Taken

Full consumer application completed; unnecessary consumer questions answered or skipped ad hoc

Wrong application for the transaction
ProcessingMANUAL

Entity & Guarantor Data Added at Closing

Entity added late — borrowing entity, signers, and guarantors patched in near closing instead of structured at origination

Entity retro-fitted at the end
OpsMANUAL

Standard Agency Milestones Apply

Agency milestone structure mirrors consumer flow — validation, entity review, and BP disclosure steps don't exist

Process built for a different loan type
Disclosure DeskMANUAL

LE/CD/TRID Disclosures Issued

TRID path applied to eligible business-purpose transactions; disclosure choices interpreted manually each time

Wrong disclosure regime
LO / SalesMANUAL

Prepayment Penalty Applied by LO Interpretation

PPP allowed/not allowed, term, and structure decided case-by-case from guidance docs

Manual interpretation every file
UW / CloserMANUAL

File Routed to Agency Underwriting & Closing

No dedicated personas or queues — file handled by Agency staff with manual workarounds to force it through

No dedicated channel
CloserMANUAL REWORK LOOP

Closing Docs Retro-Fitted to Entity/Guarantor Structure

Entity structure, guaranty, and PPP addenda retro-fitted into standard docs — rework and re-review cycles

Rework loop begins
Closer / Capital MarketsMANUAL REWORK LOOP

PPP Assumptions Reconciled Manually

Pricing, Encompass, and closing documents can disagree on PPP — closer re-interprets and escalates

Three systems, three answers
ComplianceMANUAL

Compliance & Investor Checks Manual

Compliance testing forced through consumer rules; investor/product combinations validated by hand

Consumer rules on business-purpose loans
SystemMANUAL

Loan Closes After Rework Cycles

Loan closes in entity name — late, after rework, with no clean path for Novus ONE to consume

Closes, but expensively
LO / SystemSYSTEM GENERATED

Initial Scenario — Business Purpose Identified

Loan identified as business purpose at intake; system indicator drives the entire downstream workflow

Determined at the front door
System / OpsSYSTEM GENERATED

Business-Purpose Validation Trigger

System-supported determination with supporting documentation, validation owner, and re-review when occupancy, purpose, or entity type changes

Early, controlled validation
SystemSYSTEM GENERATED

Business-Purpose Application Flow

Pared-down application collects entity, guarantor, and transaction data only — unnecessary consumer questions hidden, conditional, or bypassed

Application built for the transaction
OpsAUTOMATED

Entity / Guarantor Structure Captured at Origination

Borrowing entity, type, ownership, authorized signers, guarantors, ownership %, vesting, and title captured at origination — entity borrower → individual guarantor → entity closes and takes title

Structured from the start, not added at closing
SystemSYSTEM GENERATED

Purpose-Built Non-QM Milestones

Initial Scenario/Application → BP Validation → Entity Review → Disclosure → Processing → Non-QM UW → Conditions → CTC → BP Closing → Funding → Investor Delivery, with triggers, persona access, and required fields per stage

Milestones built for this channel
UW / CloserAUTOMATED

Dedicated UW & Closing Workflow

Dedicated non-QM personas, queues, assignment logic, and pipeline views — business-purpose files cannot unintentionally enter the Agency workflow

Agency entry blocked
Disclosure DeskSYSTEM GENERATED

Business-Purpose Disclosure Path

Business-purpose, state-specific, investor-specific, entity, and personal guaranty disclosures — Compliance/Legal validated before programming; no TRID on eligible BP transactions

Correct disclosure regime
SystemSYSTEM GENERATED

PPP Determined by System Controls

PPP matrix as single source of truth — state, investor, product, entity type, term, and restrictions drive hard stops, warnings, and auto-population; Optimal Blue, Encompass, and closing docs aligned on one PPP answer

Zero manual PPP interpretation
ComplianceSYSTEM GENERATED

ComplianceEase — Non-QM Compliance Review

Fully separate from the Agency/consumer process (Mavent unchanged) — data, test point, state and BP rules, warning vs. hard-stop logic, full audit trail

Right tool, right channel
CloserSYSTEM GENERATED

Closing Docs Auto-Generated for Entity/Guarantor

Note, Mortgage/Deed of Trust, entity certifications, borrowing resolutions, personal guaranty, riders, BP affidavits, and PPP addenda auto-reflect the entity/guarantor structure — simple closing validation point

Docs match the structure
SystemAUTOMATED

Investor / Product Controls Enforced

Hard stops prevent selection of unsupported investor/product/entity/state/PPP/DSCR combinations; exceptions documented through LO → AskNovus → Compliance/Capital Markets

Guardrails, not memory
SystemSYSTEM GENERATED

Novus ONE Data Handoff & Loan Closes in Entity Name

Clean, controlled loan record with classification, entity vs. guarantor fields, doc categories, attestation fields, and milestone/status mapping — Novus ONE designed around a controlled Encompass process

Novus ONE-ready by design
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