HARP DU REFI PLUS Training

Transcription

1 HARP DU REFI PLUS Training Offered by FIRST MORTGAGE CORPORATION JUNE 14, 2013 Desktop Underwriter is a registered trademark of Fannie Mae. Loan Prospector is a registered trademark of Freddie Mac. This presentation is a summary and is not complete. This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties. Information is accurate as of the date shown below and is subject to change without notice. 6/14/2013

2 AGENDA Introduction to the HARP DU Refi Plus Program DU Refi Plus Program Purpose of the Program Eligibility Guidelines Underwriting Guidelines Pricing FMC Support

3 Purpose and Goal HARP (Home Affordable Refinance Program) was designed to assist homeowners in refinancing their mortgages even if they owe more than the home s current value Goal: Provide refinancing opportunities for responsible homeowners to make their Fannie Mae mortgages more affordable Fannie Mae s contribution to HARP Refi Plus Program.

4 Purpose and Goal Borrower Benefit Requirement Expectation: Put responsible borrowers in a better position. Borrower must be receiving a benefit in the form of at least one of the following: A reduced monthly mortgage principal and interest payment A reduction in the interest rate A reduction in the amortization term A more stable product - moving them from a risky loan structure (ie IO or Neg Am) to a more stable product (ie fixed rate mortgage)

5 Highlights - DU Refi Plus Program Here are some of the highlights of the DU RefiPlus Program: Borrower(s) must have an existing Fannie Mae loan with an acceptable payment history (Loan acquired before 6/1/2009) Borrowers must benefit from the refinance MI flexibilities, with no additional coverage required No maximum LTV for FRM with terms up to 30 years Limited cash-out refinances only (maximum $250 cash to borrower) New loan must be underwritten with DU (Manual UW not allowed) LLPA s effectively eliminated for HARP loans with terms of 20 yrsor less; cap for other HARP loans is 75%.. Lenders can take advantage of some exceptions to standard reps and warrants

6 REFI PLUS Options DU RefiPlus RefiPlus (manual underwriting) Desktop Underwriting Solution Open to any lender using DU Originating lender not required to be the current servicer Manual Underwriting Solution Lender must be the current servicer Available through FMC DCM channel only Retail, Wholesale, and Correspondent Channels

7 Solicitation Rules May not specifically target borrower s whose mortgages are owned or securitized by Fannie Mae May solicit loans with LTV ratios greater than 80% Must apply the same advertising and solicationactivities to borrowers of mortgage loans owned or securitized by both Fannie Mae and Freddie Mac Must follow standard solicationrules for loans with LTVs less than or equal to 80% (Selling Guide, B ) Must use specific language outlined in the Selling Guide, B

8 Eligibility Guidelines Underwriting Guidelines Property Valuation Guidelines MI Guidelines ELIGIBILITY & UNDERWRITING

9 Eligibility Guidelines Eligible Existing Mortgage Ineligible Existing Mortgage Eligible new Mortgage Ineligible new Mortgage DU RefiPlus Any loan that Fannie Mae acquired prior to June 1, 2009 Any loan acquired on or after June 1, 2009 Certain loans subject to agreements with MI policies necessary to meet Fannie Mae minimum credit enhancement requirements, other than BPMI and LPMI Loans with outstanding repurchase requests; loans subject to recourse Reverse, second, and government mortgages No Max LTV FRM s with terms up to 30 years Mortgages with temporary interest rate buy-downs ARMs with Initial Fixed Periods < 5 years ARMS with potential for neg am HomeStyle Renovation mortgages Mortgage loans with an interest only feature MCM loans

10 DU RefiPlus Eligibility Guidelines Cont d Loan Purpose LCOR only with payoff of existing first mortgage, financing of closing costs, and no more than $250 cash back to the borrower The new loan amount can include: Payoff of the Unpaid Principal Balance on the existing first mortgage New Loan Amount The financing of the payment of closing costs, prepaid items, and points Cash back to the borrower in an amount of no more than $250 Tips: DU cannot reflect borrower receiving more than $250 back on the DOT section; otherwise the loan will notbe underwritten as a DU RefiPlus Any excess funds at closing must be applied as a principal curtailment

11 Eligibility Guidelines Cont d DU RefiPlus Maximum LTV NO Maximum LTV Applies to ALL occupancy and property types Maximum CLTV/HCLTV NO Maximum. Loan Limits Existing Jumbo-Conforming and High Balance loans are eligible New loan is subject to loan limits in place at the of delivery SFRs Property Types Condos PUDs 2-4 Units

12 Eligibility Guidelines Cont d Borrower Eligibility DU RefiPlus An existing borrower(s) may be removed from the new loan provided at least one of the original borrower(s) is retained on the new loan Borrower(s) may be added to the new loan, provided the existing borrower(s) is retained The following occupancy types are eligible for the DU Refi Plus Occupancy Types 1- to four-unit Principal Residence 1- unit Second Home 1- to four-unit Investment Properties (NOO) Non Occupant Co- Borrower Allowed to be added DU analyzes the risk factors in the loan casefilewithout benefit of the non-occupant co-borrower s income and liabilities

13 Underwriting Guidelines DU RefiPlus Minimum Credit Score No Minimum Fico Score not subject to standard fico score requirements for Fannie Mae Current credit score required only for pricing purposes Payment History No 60-day late in past 12 months (on any mortgage tradeline) Payment Increase No limit on payment increase Maximum DTI Follow DU approval Subordinate Financing New subordinate financing permitted only if it replaces existing subordinate financing and does not exceed existing UPB Simultaneous refinancing of subordinate lien permitted if new loan amount does not exceed existing UPB

14 DU RefiPlus Underwriting Guidelines Cont d Mortgage Modifications No. of Financed Properties Asset Documentation (Ckg, Svg, CD, MM, Stocks, Bonds, Trust, Retirement, Gift, etc.) Income Documentation A borrower who has applied for or received a mortgage modification is eligible, as long as the borrower benefit provision and mortgage payment history are met. The current terms of the modified loan must be used for this comparison. No limit Reserves and Assets must be verified to the extent that the DU Underwriting Findings Report requires such verification One recent statement showing asset balance (mo/quarter/annual) Fannie Mae permits grant-like unsecured financing provided to the borrower through a Housing Finance Authorities Hardest Hit Funds program for the purpose of paying down the outstanding mortgage balance or closing cost assistance Minimum Income documentation see next slide

15 Underwriting Guidelines Cont d Income Type / Eligible Income Sources Documentation Required ALL Employment Income Base Pay (Salary or Hourly) Bonus and OT Income Commission Income Self-Employment Alimony or Child Support Rental Income Verbal VOE One paystub Applies to primary employment, 2ndary employment (2 nd job and multiple jobs), and seasonal income One paystub or One year Personal Tax return Applies without regard to the % of commission earnings One year personal tax return Applies to primary and 2ndary self-employment Copy of divorce decree, separation agreement, court order or equivalent, and one month documentation of receipt Lease or one year personal tax return (Form 1007 not required) Applies to rental income from subject or other properties owned by the borrower

16 Underwriting Guidelines Cont d Income Type / Eligible Income Sources Documentation Required Retirement and Pension One of the following: Award letter, one year personal tax return, W-2 or 1099 form, or one month bank statement reflecting direct deposit Social Security One of the following: Award letter, one year personal tax return, Form SSA-1099, or one month bank statement reflecting direct deposit All other Income Eg., (Auto Allowance, Boarder Income, Capital Gains, Foreign, Foster, MCC, Interest Dividends, Notes Receivable, Public Assistance, Tip, Trust, VA Benefits, Unemployment, etc.) UW will determine appropriate documentation. Eg., award letter or equivalent documentation or agreement, one paystub or equivalent, one year personal tax return, IRS 1099 Form, or one month bank statement reflecting direct deposit

17 Underwriting Guidelines Cont d DU RefiPlus Property Valuation Tips to remember A property fieldwork waiver is offered on certain loan casefiles Property value representation and warranty relief available on loans with an exercised waiver There is a $75 fee for the waiver must be exercised by lender Deliver with code SFC 807 Types of loans eligible for waiver Properties in Disaster areas Use of the value provided by DU MI requested Appraisal report with Waiver per DU Multiple Submissions for Value Allowable values New Appraisal, Lender, Borrower, AVM, etc. Final Value Used Waiver expiration date 120 days Waiver not offered

18 Underwriting Guidelines Cont d DU RefiPlus Condo / PUD Project Review No new project review Must confirm property is not condo hotel/motel Lender must confirm hazard, flood and liability insurance per Selling Guide Condo / PUD Delivery Codes V Condo E -PUD

19 Refinance Solution for LTV s Greater than 80% MI Flexibility Refinancing opportunities for loans Fannie Mae currently holds or has guaranteed MI coverage flexibility for loans with LTV s greater than 80% Original Loan LTV ratio Existing MI Coverage MI Coverage for New Loan =< 80% None Not required > 80% None Yes Not required Current level of MI coverage or Standard coverage (Not available via Wholesale)

20 Miscellaneous Accurate Property Address Significant Derogatory Credit Events Converting DU Refi Plus to RefiPlus Manually underwritten loan Final DU DU DOT section Other Items to note An accurate property address is critical to determining if the subject property address on the loan casefilematches a subject property address for an existing Fannie Mae loan. Must comply with the waiting period and re-establishment of credit requirements for significant derogatory credit underwritten through DU A FMC serviced Fannie Mae loan that meets all requirements, but cannot get a DU approval, may be done as a RefiPlus loan provided it meets the Refi Plus manually underwritten guidelines The final DU submission must have the DU RefiPlus message. If its no longer on a subsequent submission including the final, it will not be eligible to be delivered as a DU RefiPlus Enter only the balance of the first mortgage being paid off with the new refinance on line d section of the application Must match the balance as shown in liability section

21 Interest Rates and Allowable Fees Pricing and Delivery Requirements Sample HARP Rate Sheet PRICING

22 Pricing and Delivery Requirements DU RefiPlus Interest Rates Interest Rates available on the FMC Rate Sheet effective Wednesday, June 19, 2013 Origination Fees No max required - Follow new HUD RESPA rules Rebate/Discount Pricing See FMC rate sheet Allowable Fees Must be reasonable and customary and fully disclosed to the borrower in accordance with all agencies, federal, state and local laws Follow FMC rules on limitation of fees for FHA loans

23 Pricing and Delivery Requirements Pricing HARP loans with terms: DU RefiPlus =< 20 years: NO LLPA s or AMDC > 20-year terms: LLPA s and AMDC capped at 0.75% 2% for NOO All others: See Pricing Matrix on Rate Sheet Special Feature Codes (SFCs) Use code 147 for DU RefiPlus 807 if DU RefiPlus property fieldwork waiver is exercised Use code SFC 118 if Community 2 nd is the subordinated 2 nd Plus all other applicable SFCs MI Delivery Requirement Deliver MI Absence Reason NO MI Based on Original LTV for all loans with LTV s over 80% and NO MI coverage

24 Sample HARP Rate Sheet

25 TARGET ROLL OUT DATE Wednesday, JUNE 19, 2013

26 FMC SUPPORT WEB SITE Go to FMC websites for: 1. RATE SHEET 2. TRAINING MATERIALS 3. GUIDELINES 4. FORMS 5. CALCULATORS 6. TOOLS 7. MARKETING TRAININGS First Mortgage offers FREE Weekly ONLINE Trainings See June Training schedule for upcoming trainings Trainings for June, 2013: 6/6: FMC Product Overview 6/12: CHF ACCESS 6/14: HARP DU Refi Plus Roll Out 6/18: HARP DU Refi Plus Repeat Training SUPPORT Retail: Contact Loan Help Wholesale/Correspondent: Contact your FMC A/E For help with your: Scenarios Pricing / Fees Guidelines Loan Submissions Trainings

27 THANK YOU FOR YOUR BUSINESS On behalf of First Mortgage, thank you for joining today s training and we hope the information provided will help you build your business! The main purpose of First Mortgage Corporation s (FMC) training documents is to assist real estate and mortgage professionals in developing entry-level competence with loan programs. While FMC staff, employees, contractors and contributors take care to ensure the accuracy of the content of training documents, FMC makes no warranties as to the accuracy of the information contained within these materials. Furthermore, every user of this material uses it understanding that he or she must still conduct his or her own original legal research, analysis and drafting. In addition, every user must refer to the relevant legislation, case law, administrative guidelines, rules and other primary sources. FMC specifically disclaims any liability for any loss or damage any user may suffer as a result of information contained within this training material. While the information contained in FMC s training material addresses guidelines and issues surrounding mortgage programs, these materials do not constitute legal advice. All non-legal professionals are urged to seek legal advice from a lawyer.