Issue Description

Rate/Term refinance loans may incorrectly display as "Home Equity" instead of "Refi" on the Loan Estimate (LE).

Root Cause

The LE determines loan purpose based on liabilities in the system, not the Loan Purpose field. When no existing mortgages are marked as being paid off, the system defaults to "Home Equity" classification.

Resolution Steps

1. Verify Existing Mortgage Setup

   • Check that existing first lien mortgages are properly marked as being paid off in the loan origination system
   • Ensure the loan is correctly configured as a Rate/Term refinance

2. Submit Change Order

   • Put in a Change of Circumstances (COC) to update loan documentation type if needed
   • Update the system to reflect that existing mortgages will be paid off

3. Coordinate with Processor

   • Contact the loan processor to verify all parties are aligned on loan purpose
   • Confirm the borrower will receive no cash in hand (true Rate/Term refi)

4. System Update

   • Make necessary updates to ensure existing liens are properly marked for payoff
   • Verify the LE regenerates with correct loan purpose classification

Important Notes

• A "Home Equity" refi classification means the system believes no existing mortgage is being paid off
• Rate/Term refinances should show existing first lien mortgages being satisfied
• The borrower should receive no cash proceeds in a true Rate/Term refinance scenario