Recommended Workflow
Receive loan application > Pre-qualify borrower > Receive borrower(s) income documents > Run Prism
It is recommended to run Prism prior to the loan being submitted to Underwriting, providing validated income upfront and eliminating issues or questions around the income later in the loan process.
Prism is designed to ingest, calculate and push all income types to Encompass. When income is synched, it natively pushes all income types from Prism back into Encompass, overwriting all existing data. For this reason, it is recommended that it be leveraged for all of the various income types an applicant may have, rather than selectively using Prism for some while entering other types directly into Encompass. For example, suppose that an applicant is both self-employed and receives a pension (fixed income). If a user enters only the self-employment income into Prism, but the pension is entered only into Encompass (and not into Prism), the sync functionality will push the calculated self-employment income as well as the empty Pension income back to Encompass.
Using Prism for all income types provides the following advantages:
- Income worksheet reflects all income used
- Reps and Warrants apply to all income types*
- Reduces risk of improper income calculation by using a single source
* R&W assumes use of Recommended Income and proper mitigation of all UW Advisories
How to Access Prism
Open the loan in Encompass
Click on **PRISM Income Analysis - LTK listed under the Forms tab, click "Yes" on the popup box, and allow the Prism screen to load.
Borrower Tab in Prism
The Borrower tab works as the order form for Prism. This is the screen the user will indicate what they want reviewed by the system. The first time Prism is accessed in Encompass, the Borrower tab will auto-populate the information (loan type, borrower(s), and income sources, including REOs).
Best Practice: complete the URLA as best as possible prior to accessing Prism - this will ensure continuity of information in Prism and the loan application.
Note: Prism will only load the URLA data on the original opening of Prism. If changes are made to the URLA subsequently, the user will need to make the same changes in Prism to be sure the data aligns. This is why the best practice is to complete the URLA prior to accessing Prism for the first time. If the loan type changes, a borrower is added, or income sources are added, those changes will need to be manually updated within the Borrower tab in Prism.
Guideline-Specific Income Analysis
Prism will analyze the income based on Agency guidelines. It is important to indicate the correct loan type on the Borrower tab:
Self-Employed Borrowers
When analyzing income for a self-employed borrower, the first step is to go to the Borrower tab and indicate the most recent tax year:
The user will also need to indicate the tax form type (1065, 1120, Sch C, etc.) before proceeding with uploading documents for review:
To select between a 1-year or 2-year analysis for self-employed borrowers, go to the income tab, open the calculator for the SE income, and scroll to the bottom where there will be a selection box for "2 yr analysis":
Uploading Documents for Income Review
Once the Borrower tab is complete, upload the income documents to be reviewed. To do this, click on the black cloud with the arrow:
From the Document Manifest screen, click on "Upload More Documents" and select the income documents from the popup screen.
Note: the documents will need to be indexed in the eFolder (not in the "File Manager" or Unassigned folder). The documents must also be in PDF format.
Supported Documents for Prism Plus
The full list of supported documents can be found here:
https://getblueprint.io/knowledge-base/incomexpert-plus-supported-documents/
Supported Income Types for Prism Plus
The full list of supported income types for Prism Plus can be found here:
https://getblueprint.io/knowledge-base/incomexpert-plus-supported-income-types/
SLA / Turn-times for Prism Plus Income Review
Calculations can take up to 4 hours to be finalized, and will be completed the same day submitted, as long as the submissions are completed before 6pm EST Monday-Friday.
Note: Prism will lock down all screens, so no changes can be made in Prism while the documents are being analyzed. The only thing a user can do during this time is upload more documents.
The user can exit the loan file, work in other screens within Encompass, etc. while the income is being reviewed by Prism.
Notification of Income Results / Review Complete
Once the income review is complete, the user will receive an email indicating the income results are ready to be viewed. The email will be sent to the user who uploaded the documentation.
If any documentation is lacking to complete the income review, that document list will be indicated within the QC Review Notes. For example, if a user indicated they wanted a 2-year review for a self-employed borrower, but only provided 1 year of tax returns, then the 2nd tax return will be needed before the review can be completed. The QC Review Notes will be in the email, and can also be accessed in the "Document Manifest" screen within Prism (where a user uploads documents).
The email will come from info=getblueprint.io@mg.getblueprint.io and will include the loan number in the subject line of the email.
Be sure to add this email to the directory to avoid the email going to Spam/Junk folder.
Reviewing Income Results
A user can view the income results by going to Prism in Encompass and viewing either the Income tab or Report tab.
On the Income tab, click on the magnifying glass to open up each calculator to view the results. A user can filter between borrowers and view all sources of income, as well as tab to the REO tab to view those income figures.
On the Report tab, a user can scroll through the report to view all income results. The report will list all borrowers in sequential order, starting with borrower 1.
REO Calculations
Prism Plus will review tax returns and/or lease agreements and calculate the income accordingly, based on Agency guidelines.
The user MUST complete the PITIA section for each property. If the mortgage is tied to the REO on the URLA, Prism will carry this information through automatically on the initial access of Prism. However, a user will still need to indicate if the mortgage includes escrow, and add in any additional cost (taxes, insurance, HOA, etc.). The system will NOT automatically complete this section. It is important to complete this prior to syncing Prism back to Encompass, to ensure the correct rent amounts get carried to the URLA.
Once the PITIA is entered, click the "Save/Calculate" button.
Obtaining "Recommended Income"
When the recommended income is used, the income is guaranteed (rep & warrant). Any income shown in blue is the amount the system is recommending. When a loan officer or processor runs Prism upfront and obtains recommended income, they can trust the income will stick with the loan through underwriting.
Underwriting Advisories
Prism will provide Underwriting Advisories, specific to loan type, based on Agency guidelines. These Underwriting Advisories should be addressed and/or documented in the loan file to maintain the guarantee offered by utilizing the Recommended Income. The Underwriter should ensure all requirements have been met.
Underwriting Advisories will be listed for all income types, as necessary. Be sure to review each source of income being used to identify and address any Underwriting Advisories listed. They will be listed at the bottom of each income calculation, which can be viewed in the Income tab under each respective source of income, as well as listed on the Income Worksheet (Report tab).
Syncing to Encompass
Once the income review is complete, the user can sync the file to Encompass. This will update the income on the URLA to match the income in Prism, as well as automatically upload the income worksheet to the eFolder.
To sync the file, click on the Encompass icon on the Borrower tab in Prism:
Adjust Selected Income (override the recommended income amounts)
If a user needs to override the income that the system has recommended, simply click on the "Adjust Selected Income" button, which can be found on the Borrower tab or the Income tab.
Once this box is checked the income calculation fields will open up for editing.
Note: when a user elects to use an income amount other than what the system has recommended, the income is no longer guaranteed.
Also, if the box gets unchecked, the system will revert all income calculations back to the recommended figures.
When the Adjust Selected Income box has been checked, the user can now go to the Income tab and open up the calculator for the income in which they would like to adjust. In these cases, it will be up to the Underwriter to make the overall determination and it is advised the user should add comments in the Comments box at the end of the calculation screen.
Once the income has been selected and comments have been added, click "Save/Calculate" to ensure the changes get updated on the income worksheet.
Then sync the file to Encompass to update the income amounts on the URLA and upload the new income worksheet.
Lock For Underwriting
When an Underwriter has confirmed the income review is complete and matches what is in the loan file, the Underwriter will lock Prism down by clicking the "Lock for Underwriting" button found on the Borrower tab. This ensures no other user can adjust the income or make any changes (only another Underwriter or higher persona).
Gross Up Fixed Income
Prism will not automatically gross up income. The user will need to go into the income calculator on the Income tab, and select "Yes" to gross up income.
The user will then need to indicate the Gross Up %. If the tax returns are available, the user would enter the amounts as reflected on Line 6a and 6b of the tax return to determine the non-taxable percentage. Enter that amount into the gross up % box and then click "Save/Calculate".
If the tax returns are not available, the user can click on the blue "info" icon and use the gross up % as indicated per guidelines. Enter the percentage amount into the Gross Up % box and then click "Save/Calculate".
Linked Income Feature (calculating variable income for more than 1 employer)
When calculating variable income (bonus, commission, overtime, etc.) with a job change in the last two years and/or a borrower with multiple employers (such as a Union Worker or Travel Nurse), the user can utilize the Linked Income feature within Prism.
To calculate this variable income, either full written VOE/VOI(s) or year-end paystubs are needed from each employer.
Prism Plus: a user can upload all VOE/VOIs and the system will enter all start/end dates, income figures, etc.
Prism: a user can also enter the data manually into the calculators within the Income tab for each employer. Be sure to hit the "Save/Calculate" button after entering the data for each employer.
Note: be sure prior employers do not have the "Current Employment" box checked so the system will not recognize it as a Current Employer.
Users will need to link the employers (the system will not automatically do this part), as the user will need to determine if the employers/ job positions are the same line of work.
Once all income has been entered for all employers (either via Prism Plus or manually entered), the user can then begin linking the prior employers to the current employer so all income can be analyzed.
To link the employers, click the magnifying glass for the current employer to open up the income calculator. Then click on the "link" button on the far right of the column where the employer name is displayed.
Then select the prior employer from the dropdown and click "Link". Repeat this step for each employer. Once all have been linked, the income calculation for the current employer will update to account for the income figures from the prior job(s).
The current employer will now show "Linked Income" displayed at the top of the income calculation, along with the list of all employer(s) that have been linked to the current employer.
The income will be updated to account for prior employer(s) income figures in addition to the current employment, and an Underwriting Advisory will be displayed indicating one or more employment sources have been linked.
To unlink employers click on the prior employer you wish to unlink (click the magnifying glass next to the prior employer name) and then click the "Unlink" button.
Why is the recommended income zero?
Employed Income
- If a borrower’s income is declining in the most recent period, the correct income per guidelines is $0.00 (not qualified) until an underwriter can review the information and complete additional analysis. After review, the underwriter may or may not approve the income based on the additional data.
- When income documents are uploaded (our PLUS product) and we did not receive any current income data (IE YTD pay stubs). The only assumption that Prism can infer from the missing data is the employment is no longer active.
Self-Employed Income
- If a borrower’s income is declining in the most recent period, the correct income per guidelines is $0.00 (not qualified) until an underwriter can review the information and complete additional analysis. After review, the underwriter may or may not approve the income based on the additional data.
- For the K-1 income types (1065 and 1120S). The borrower may have taxable income, but no evidence the income was actually distributed to the borrower. Per the guidelines, evidence of cash distributions, or the business must pass the liquidity test are required. If both of these methods fail, Prism will set the income to $0 for underwriting review. NOTE this applies only to Fannie Mae / Freddie Mac loans..
- For 1065 and 1120S. The K-1 indicates “final”. This means the business no longer exists and the income can not be used.
Why are the Prism Income cells greyed out?
When you select different lending agencies Prism will review the guidelines and adjust what fields are allowed. Sometimes an agency may not permit a certain aspect of income to be used, such as Capital Gain Income as shown below.
Another example: REO income on an FHA loan as shown below.
Garnishments
Prism does not identify or call out garnishments. It’s solely reviewing income, not any possible debts (garnishments) that may be listed. Best practice with Prism is for the Underwriter to still review the documents in the eFolder for items such as this, as well as confirming that the documents in your eFolder are the documents that were uploaded to Prism.