SmartEdge and SmartVest Product Updates
Newrez LLC "Newrez" Approved Correspondent Clients: Newrez is updating the SmartEdge and SmartVest products; updates are highlighted below.
SmartVest Prepayment Penalty
The SmartVest product will now permit prepayment penalties subject to the following:
- Not permitted in the following states:
- 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:
- Multiply the principal balance by the interest rate on the note
- Divide that result by 12 to determine the monthly interest charge
- Multiply the monthly interest charge by the penalty calculation on the PPP rider
- $689,700 x 3.5% = $24,139.50
- $24,139.50 / 12 = $2011.625
- $2011.625 x 6 = $12,069.75
The CD shows a max penalty of $12,070.
The SmartEdge product will now permit cash proceeds received from a cash-out refinance to be used for reserves.
Please reference the rate sheet for pricing and adjustments.