How do I process a discharge statement?

Discharge Statements Process Playbook

Objective

This playbook ensures a standardized and efficient Discharge Statement process while maintaining compliance and accuracy across transactions.

Refer to the knowledge article for further clarification.

New

Step 1: Receive & Review Discharge Request (HubSpot)

Discharge requests typically arrive via email, fax, or as a result of a renewal deal not renewing.

By Email:
- Ensure the conversation is associated with the correct mortgage.
- If a ticket was created, move it to the Discharge Request pipeline.
By Fax:
- Save the fax as a PDF and associate it with the correct mortgage.
- If no ticket was created, create a ticket in the Discharge Request pipeline.
By Deal:
- If a renewal deal results in a state of discharge initiation, a Discharge Request ticket will be generated.
Note: Associating the ticket with the mortgage will automatically link all relevant contacts (Borrowers, Guarantors, Investors).

Change the ticket status to In Progress.

In Progress

Step 2: Review Discharge Request (HubSpot)

Review the details of the request carefully.
If a Registered Charge is attached, verify the property details (name, address, etc.) by previewing the property on the mortgage record.
If discrepancies exist, request the Charge document if it was not provided.
Confirm receipt with the sender and provide an estimated processing timeline.

Step 3: Gather & Save Supporting Documents (HubSpot)

Generate a ticket for Accounting Admin (Category: Payment, SubCat: Holdback) to confirm Reserve Funds.
Review mortgage document records and collect:
- Registered Charge: Ensure it is receipted and accurate.
- Charge Provisions: Locate Prepayment Penalties.
- Notice of Assignment of Rents (NOAR), Transfers, Name Changes, etc.
- Verify maturity date, mortgage amount, and interest rate in MA (and HubSpot for now only).
- For collateral properties, ensure they are linked and obtain relevant documents.

Step 4: Process Request in Mortgage Automator (MA)

Open MA via the mortgage record and navigate to the Discharge section.
Update the following fields:
- Pending D Date (Date in Discharge section): Same date as entered in HubSpot.
- Servicing Specialist: Ensure your name is assigned.
Update in Hubspot on Mortgage)
- Payout Type: Select External Refinance, Agreement of Purchase and Sale, Internal Refinance.
Update the Lawyer Section:
- Assign the correct lawyer (Loopstra Nixon & Jamie Anderson).
- For internal refinances, confirm the handling law firm with Fulfillment.
Under Payments, Adjustments & Charges:
- Click +Charge and enter:
  - Discharge Statement Fee: $350
  - Urgency Fee: $95 (if requested within seven business days)
- Click Confirm after each charge.
Verify:
- Discharge Date is accurate.
- Per diem total is correct.
  - Check distribution to Investors.
- All listed fees are valid.
Prepayment Penalty
- Calculate the penalty using:
- Formula: (Principal x Interest Rate ÷ 365) / 4 OR x # of Days (depending on how many days left in term)
- Enter the amount in the Prepayment Penalty field and add the # of days or months in the brackets. (e.g., "Four (4) Days, One (1) Month") or Post-Maturity Interest of 3-months, whichever is applicable.
  - Distribute correct amounts to Investors, if applicable.
- Verify listed fees:
  - If there is a collateral property, add Discharge Fee - Collateral Property: $200 for each additional property
  - Remove past charges if applicable.

Step 6: Generate Discharge Statement

In MA, navigate to the Documents Section.
Preview and select the LIVE template.
Verify total calculations and confirm the document.
If there are any discrepancies in the document, correct them within the Discharge Section of MA, and then re-preview the document and verify.
Sign and download the Discharge Statement.
Change loan status to Pending Discharge.

Step 7: Defer Future Payments

In MA, navigate to the Payments, Adjustments and Charges module.
Adjust payments:
- Click +Adjustment > Defer Payment.
- Set correct next payment date.

Step 8: Submit for Approval

Create a ticket for Approval (Category: Discharge)
Attach supporting documents, including the Discharge Statement.
Mark as High Priority, if necessary.
Update ticket status to Approval Pending

Approval pending

Managers use the Approval pipeline to manage their approval tickets.

When the tickets reach a stage of Approved, the related ticket will automatically be updated to a stage of "Approval received".

Approval received

Step 9: Final Steps Post-Approval

Send final documents to the Lawyer, including:
- Discharge Statement
- Discharge Request
- All Registered Documents
If PAD has processed, instruct the lawyer to apply a holdback for the $250 NSF Administrative Fee.
Send A&D(s), Investor Statements and Direction re Funds (if applicable) for signing via Adobe.
Upon receipt of Confirmation of Transfer of Funds & Registered Discharge of Charge:
- Ensure the Registered Discharge is Receipted.

Step 10: Finalize Discharge

On the mortgage record:
- Update Current Status to Discharge Pending.
- Clear Pending D Date.
- Enter Discharge Date as today’s date.
Calculate Payout Funds:
- Compare the Confirmation of Transfer of Funds with the Total Discharge Statement.
- If discrepancies exist, divide the remaining amount by the per diem rate to determine the number of days of additional interest.
Create a ticket in Accounting Admin (Category: Discharge):
- Attach Confirmation of Transfer of Funds, Total Discharge Statement and Registered Discharge of Charge.
- If additional investors are involved, attach their Discharge Statements.
- For internal discharges, reference Net Advance Funds instead.
Accounting confirms discharge by closing their ticket.

End of Playbook