Correspondent Lending Division Seller Partner Eligibility Policy

Transcription

1 Correspondent Lending Division Seller Partner Eligibility Policy Overview Nations Direct Mortgage, LLC Correspondent Division (NDM Correspondent) is designed as an opportunity to partner with experienced mortgage professionals with the knowledge and ability to originate quality, compliant residential mortgage loans. An NDM Correspondent Partner is a qualified third-party originator that will deliver closed loans to NDM Correspondent for purchase consideration as a secondary market transaction. All NDM Correspondent Partners will be required to initially qualify under and maintain NDM Correspondent eligibility requirements. NDM Correspondent Partners will originate loans directly through their own loan origination platform; underwrite and close their loans in their own name using their own warehouse line; and deliver closed, saleable loans to NDM Correspondent for purchase consideration. The NDM Correspondent Team will perform a full pre-purchase review of each loan to ensure it meets the same high level of compliance and underwriting standards that we require of loans underwritten and closed by NDM directly. In addition to working with our seasoned Mortgage Lending Partners, NDM Correspondent will be looking to assist smaller Lenders and mortgage professionals looking to transition from Mortgage Broker to Banker through the use of our Prior-to-Close, limited-delegation delivery process. Although the Correspondent Partners are always responsible for the underwriting and approval of the loans they close, partners approved at the Integrity and Opportunity levels will enjoy the support of a full quality control and underwriting review prior to closing the loan in order to help ensure the salability of the file. Partner Eligibility Criteria The decision to approve or deny a NDM Correspondent Partner is based on NDM s Eligibility Criteria, business judgment, and the totality of each Partner s application and circumstances. The approval process involves a careful analysis of each Partner-applicant's financial condition, operational scope, operational methodology, experience level, industry reputation, delinquency statistics, and other background investigations. All applications will be submitted through Comergence Compliance Monitoring and then escalated for final review and consideration for approval by NDM Executive Management. The decision to approve or deny will be at NDM s sole discretion. General Criteria for all Partner Applicants: Complete the Correspondent Approval Application through the Comergence Compliance Monitoring system ( and submit all documents as required by the Application Procedure detailed below. Financial Responsibility. Financial and Credit criteria, as defined in the specific eligibility requirements below, must be maintained throughout the term of the Correspondent Partnership and this information will be verified through quarterly covenant reviews and annual recertification. o Note: Principal Officers, owners, and/or partners, and the broker of record (as applicable) must have an acceptable personal credit profile. Past credit difficulties will be reviewed on a case-by-case basis. Individual Credit Histories and Financials may be requested of entity principals as supplementary information to ensure the credit standing and financial responsibility of the Partner. o Any open liens, judgments, or other unsatisfied amounts owed in excess of $10,000 will be grounds for denial.

2 Quality Control: Each Seller must maintain an effective and thorough quality control program sufficient to accurately monitor the quality of its Loan production activities. The organization and application of the quality control program should, at a minimum, satisfy the requirements established by the appropriate GSEs and HUD. NDM will periodically request and review the Partner s Quality Control Reports and Management Responses. Highest-Level Lending Practices. All NDM Correspondent Partners, regardless of approval type/delegation level, will be expected to maintain the following best practices: o Maintain approval in good standing with all applicable investors, warehouse lenders, mortgage insurers, agencies, and prudential regulators. o Be a duly organized entity in good standing under all applicable federal, state, and local laws in the jurisdictions in which the entity conducts business. o All requisite registration and licensing, as determined by federal and state law, through the Nationwide Mortgage Licensing System (NMLS). o All Policies & Procedures as required by Federal and State law including, but not limited to, Anti-Money Laundering, Anti-Steering, Appraiser Independence, Fair Lending, Privacy and Consumer Information Protection, as well as general Federal & State Compliance policies covering TILA, RESPA, ECOA, HMDA, the FCRA, and all other regulations governing the origination of residential mortgage loans under the authority of the Consumer Financial Protection Bureau (CFPB) and any other applicable prudential regulators. o Utilize a process that guarantees Appraiser Independence on all mortgage loans sold to NDM. Our website, features a list of recommended Appraisal Management Companies. Partners should utilize AMCs on that list or submit information on the AMC for review and acceptance prior to attempting to sell a loan. o No principal or employee may be listed on any exclusionary list, including the HUD LDP or any other agency published roster of individuals or companies that are no longer eligible to participate in mortgage origination/lending. o The entity or its principals may not be involved in any material litigation or other enforcement action which may jeopardize the Partner s ability to originate and fund loans or perform under NDM s Correspondent Seller s Guide. Additionally, any correspondent who has been suspended or is currently under investigation by any governmental agency or regulator will not be approved unless satisfactory explanation and evidence of a positive outcome is provided. Third Party Origination. Partners must obtain special approval in order to sell Mortgage Loans originated by non-affiliated Third Party Originators. Seller shall not deliver any Mortgage Loans originated by third parties without the prior express written consent of NDM. Only Prosperity Partners will be considered for sell ing Third- Party Originated loans to NDM Page 2 of 6

3 Eligibility Tiers Nations Direct Mortgage knows that quality, consistent lenders come in all sizes and organizational structures, and that is why we have designed these Eligibility Requirements with multiple qualification tiers, allowing us to partner with seasoned, experienced lenders and with mortgage professionals who are just beginning to build a Correspondent Lending presence. Each Partner tier is defined below, explaining the minimum requirements needed to join us and the delegation level that will be granted to the Correspondent Partner when selling closed loans to NDM. Prosperity Partner The Prosperity Partner is an experienced Correspondent Lender with significant Net Worth and existing access to larger-limit warehouse facilities. Prosperity Partners maintain Delegated Underwriting Authority through FHA, may have additional agency approval, and have a proven track record of selling closed, high quality loans to other Correspondent Lenders. The Prosperity Partner will originate, underwrite, close the loan in their name, and fund the loan using their own warehouse line. They will then submit the loan to NDM Correspondent for Pre-Purchase Review and upon receipt of approved Purchase Advice, will sell the loan to NDM**. This Fully Delegated Correspondent Partner will: Maintain an Audited Net Worth > $1,000,000, of which 20% must be liquid assets comprised of unencumbered cash and equivalents. Maintain Warehouse Line(s) of Credit of at least $2,500,000. Be a duly organized legal entity. Sole Proprietorships are not eligible for Prosperity Partner Approval. Meet a minimum of two (2) years as a Correspondent Lender/Mortgage Banker, originating and selling closed loans of the type they intend to sell to NDM. Have maintained profitability for the previous fiscal year and year-to-date. Maintain Errors & Omissions Insurance with a coverage amount of $300,000. The deductible amount for each policy may not exceed $50,000. Additionally, Prosperity Partners must maintain a blanket Fidelity Bond in the amount of $1,000,000. (In the event the Partner is Federally Insured, NDM will accept confirmation that NDM is covered under the Financial Institution s blanket bond.) MERS Membership. All Partners will be expected to maintain an active MERS membership to facilitate the organized transfer of title on all loan files. To deliver FHA Loans, Partner must have: o Full Direct Endorsement Authority with HUD. o A minimum of 6 months experience originating, underwriting, and insuring FHA loans. o A 2-Yr DE Compare Ratio (as verified through Neighborhood Watch) of less than 150%. ***Until the Partner has either 1.) been approved for 6 months or 2.) successfully sold 10 loans or until such a time that NDM declares, the Partner may be required to submit all loans for Prior-to-Close Credit Risk and QC Review in addition to the Pre-Purchase review, until such time that NDM is confident in the quality of loans being delivered by the Partner. Page 3 of 6

4 Integrity Partner The Integrity Partner level is intended for those Partners that wish to have their loans Prior Approved or those with a solid and consistent Net Worth and existing access to warehouse facilities. Integrity Partners do not meet the minimum net worth requirements to maintain Delegated Underwriting Authority through FHA, but they may have additional agency approvals. Integrity Partners will be approved to sell closed Loans through NDM Correspondent. In any case, Integrity Partners will be expected to have some history underwriting and selling closed loans to other Correspondent Lenders. The Integrity Partner will originate and underwrite the loan, but prior to closing the loan in their name; the Integrity Partner will submit the loan to NDM for Prior Approval. If approved, the loan will close and fund using the Partner s warehouse line. After funding, they will submit the loan to NDM Correspondent for a final Pre-Purchase Review and upon receipt of approved Purchase Advice, will sell the closed loan to NDM. This Prior Approval Correspondent Partner will: Maintain a Minimum Audited Net Worth of $250,000 of which 20% must be liquid assets comprised of unencumbered cash and equivalents. Maintain a Warehouse Line(s) of Credit of at least $1,000,000. Be a duly organized legal entity. Sole Proprietorships are not eligible for Integrity Partner Approval. Meet a minimum of one (1) year as a Correspondent Lender/Mortgage Banker, originating and selling closed loans of the type they intend to sell to NDM. Have maintained profitability for the previous fiscal year and year-to-date. Maintain Errors & Omissions Insurance with a coverage amount of $300,000. The deductible amount for each policy may not exceed $100,000 or 5% of face value, whichever is greater. All Correspondent Partners will be granted a concurrent approval through NDM Wholesale to broker loans that can t be closed through their own warehouse line. Opportunity Partner The Opportunity Partner status is designed for Mortgage Brokers making the transition from Broker to Banker, who have yet to obtain their HUD DE Authority, but are duly licensed and capable of underwriting, closing, and funding their own Conventional loans. Opportunity Partners must have existing access to warehouse facilities. The Opportunity Partner is not required to have significant experience selling closed loans to existing correspondent lenders, but they will have a strong and long history as a successful Mortgage Broker, with a reputation for responsible origination in the industry. The Opportunity Partner will originate and process Conventional loans themselves, but prior to closing the loans in their name, the Opportunity Partner will submit the loans to NDM for Prior Approval which will include an audit of their disclosures and review of their sample loan documents. If approved, the loans will then close and fund using the Partner s warehouse line. After funding, they will submit the loans to NDM Correspondent for the final Pre-Purchase Review and upon receipt of the approved Purchase Advice, will sell the closed loan to NDM. All FHA Production will be closed by NDM directly through our Wholesale Channel with the Opportunity Partner being named as an approved Broker. (continued on next page) Page 4 of 6

5 Opportunity Partner (cont). This Prior Approval Correspondent Partner will: Maintain a Net Worth of at least $75,000 of which 20% must be liquid assets comprised of unencumbered cash and equivalents. (Or a minimum of $25,000 whichever is lower). Unaudited financials are acceptable. Maintain a Warehouse Line(s) of Credit of at least $1,000,000. Be a duly organized legal entity or properly licensed sole proprietorship. Meet a minimum of two (2) year experience as a Mortgage Broker or Mortgage Banker, originating and brokering or selling closed loans of the type they intend to sell to NDM. Have maintained profitability for the previous fiscal year and year-to-date. Maintain Errors & Omissions Insurance with a coverage amount of $300,000. The deductible amount for each policy may not exceed $100,000 or 5% of face value, whichever is greater. Conventional ONLY Approval. If not already approved, the Correspondent will be granted a concurrent approval through NDM Wholesale to broker government loans on a wholesale basis. Application Procedure Applicants for all Partner Levels will be required to complete an application through Comergence Compliance Monitoring ( Once you have created an application for NDM Correspondent in Comergence, you will be able to download our Correspondent Loan Purchase Agreement Package for review and execution and upload all requisite documentation. A complete application submission will be comprised of all of the following documentation (this information is also found on the application checklist that is included in the Loan Purchase Agreement Package). Please note: Applications will not be reviewed until all items are properly uploaded in the system and the application has been officially submitted. **The Loan Purchase Agreement Package is a PDF file that must be downloaded from Comergence then completed, signed and re-uploaded to their system. Complete Submitted Comergence Application (the information submitted directly into the portal) **Fully Executed Loan Purchase Agreement Package which included the following items: o Loan Purchase Agreement [please submit an executed version, a countersigned copy will be uploaded upon approval] o Company Resolution o Limited Power of Attorney o Wire Instructions and Authorization to Verify Warehouse Line(s) o Authorization for Verification of Credit and Business References o Correspondent Contact List o A Copy of this Checklist Completed with the Vendor Information Requested Below Page 5 of 6

6 IRS W-9 Company Summary [Business Plan and/or Brief Overview of the Company s History and goals] Organizational Chart [detailing parent companies or any affiliated businesses] Management Chart Organizational Documents [e.g. Articles of Incorporation or Organization, Operating Agreements, etc.] Resumes for all Principals and Key Associates who oversee key production, operational, and capital market positions. Company Financial Statements [REQUIRED: TWO (2) Years Audited Financials following GAAP Accounting AND YTD Financials (Balance Sheet and Profit & Loss Statement) for Prosperity & Integrity] Unaudited Financials are acceptable for an Opportunity customer. Copy of Applicant s Quality Control Policies & Procedures Copy of Applicant s Appraiser Independence Policy Complete the AML Policy Certification in Comergence Profile [under My Profile link on Comergence page] Most recent QC Reports with Management Responses. E&O/Fidelity Bonds (declaration pages be uploaded and information should be entered into Comergence Portal) Most Recent Investor Scorecards (if available) Once all of these items have been uploaded in to Comergence and the full application package has been Submitted through the portal (Green Submit Application button has been completed along with the payment information), the application will be fully vetted by Comergence Compliance Monitoring via a comprehensive public record search on the entity and the principals of the entity. Once Comergence has completed their review, the application will then be reviewed by our Client Administration division and summarized for review and approval by Executive Management. Upon Approval the Lender will be sent a formal and informative Approval Letter, which will indicate your final Partner Level and delegation authority along with a countersigned copy of the Loan Purchase Agreement. Page 6 of 6