Underwriting Guideline Matrix

Transcription

1 Program / Product Codes: NewLeaf Jumbo PLUS 5/1 ARM (W603) NewLeaf Jumbo PLUS 5/1 ARM Interest Only (W604) Subject to Change Without Notice Valid as of: 3/23/2016 Copyright 2016 Skyline Financial Corp. dba Skyline Home Loans, Nationwide Mortgage Licensing System (NMLS) Company ID# Arizona Mortgage Banker License #927740, Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act File No: , Georgia Residential Mortgage Licensee, Oregon Mortgage Lender License ML 2797, Washington Consumer Loan Company License CL Refer to and input NMLS#12072 to see where Skyline Financial Corp. is a licensed lender. View full NewLeaf Wholesale footprint here.

2 Transaction Parameters NewLeaf Jumbo PLUS 5/1 ARM & 5/1 ARM Interest Only Purchase and Rate / Term Refinance Owner Occupied Units LTV/CLTV* Loan Amount Credit Score* DTI % (No MI) (No IO) $1,500, % 1 80% $2,000, % 1 80% $1,500, % 1 80% $1,000, % 1 75% $1,500, % 1 75% $1,750, % 1 70% $2,500, % 2 75% $1,500, % 2 70% $1,250, % Purchase and Rate / Term Refinance Second Home Units LTV/CLTV Loan Amount Credit Score* DTI 1 80% $1,000, % 1 75% $1,500, % 1 70% $1,750, % 1 65% $2,250, % 1 70% $1,250, % 1 65% $1,500, % Purchase and Rate / Term Refinance Investment Properties Units LTV/CLTV Loan Amount Credit Score* DTI 1 70% $1,000, % Cash Out Owner Occupied Units LTV/CLTV Loan Amount Credit Score* Maximum Cash Out DTI 1 70% $1,000, $250,000 42% 1 65% $1,250, $350,000 42% 1 60% $1,500, $350,000 42% 1 55% $1,500, $500,000 42% 2 65% $1,500, $250,000 42% Cash Out Second Homes Loan DTI Units LTV/CLTV Loan Amount Credit Score* Amount 1 65% $1,000, $250,000 42% Note * Interest Only ARMs maximum LTV is 80%; Interest Only ARMs require a minimum 720 credit score Subordinated Financing is not allowed for LTVs >80% Minimum Loan Amount Number of Units Contiguous States General Guidelines Hawaii 1 $417,001 $625,501 2 $533,851 $800,776 Eligible States AZ, CA, CO, CT, FL, GA, HI, ID, MD, NM, OR, TN, TX, UT, WA & WV (Not allowed in NE) Eligible Products Program Restrictions Qualifying Rate Ratios 5/1 ARM 5/1 ARM Interest Only (Max 80% LTV; Min 720 credit score) Texas (a)(6) refinance mortgages are not allowed Hawaii properties in Lava Zone 1 & 2 are not allowed 5/1 ARM Higher of the Note Rate + 2 or the Fully Indexed Rate 5/1 ARM IO Higher of the Note Rate + 2 or the Fully Indexed Rate calculated with a 20 year amortizing term Maximum 42% Income, Liabilities, DTI etc. must be calculated following Appendix Q The loan must meet QM standards where it is possible to apply except for IO ARM loans that will not conform to QM standards with respect to the IO feature ONLY, and must be qualified using the interest rate and amortization period stated above ARM Features LIBOR Index 5/1 Cap 2/2/5 Margin/Floor 2.250% Conversion Not Allowed Underwriting Method Loans are manually underwritten and fully documented. AUS submission is not required. All loans must be underwritten in compliance with the Ability to Repay standards. For topics not specifically addressed in the matrix, Fannie Mae underwriting guidelines should be followed Ability to Repay and QM Rule High Cost/HPML and Rebuttable Presumption All loans must meet the Ability to Repay and QM provisions of the Dodd Frank Act Not permitted (V6) Page 1 of 5 Last Updated 3/23/2016

3 Eligible Borrowers US Citizens Permanent resident aliens Inter Vivos Revocable Trusts First Time Homebuyers (see FTHB section for requirements and restrictions) Non Occupant Co Borrowers (see Non Occupant Co Borrowers section for requirements and restrictions) All borrowers must have a valid social security number Ineligible Borrowers First Time Homebuyers Non Occupant Co Borrowers Non Permanent Resident Aliens (including Foreign Nationals) Irrevocable Trusts Land Trusts Limited partnerships, general partnerships, corporations and limited liability companies Borrowers with only an individual taxpayer identification number (ITIN) Maximum loan amount is $1,250,000. o Occupancy must be Primary Residence only. o One unit properties only. o See Reserve Calculation Table A First Time Homebuyer transaction is where no occupant borrower: o Has had an ownership interest (sole or joint) in a residential property in the U.S. during the past three years o First time homebuyers must have an acceptable rental payment history for at least 12 months Payment shock: Cannot exceed 250% over the borrower s current rental payment. Example: o Current rental payment = $1,000 per month o Current rent X 2.5 (250%) = $2,500 maximum increase (shock) o Maximum increase ($2,500) + $1,000 current rental payment = $3,500 maximum new payment Allowed. Must be family members only and occupant borrower themselves must qualify at 42% DTI maximum and make the minimum contribution from their own funds required for the program A family member is defined as the Borrower s spouse, child, or other dependent, or by any other individual who is related to the Borrower by blood, marriage, adoption or legal guardianship or a fiancé, fiancée, or domestic partner Identity of Interest and Non Non Arms Length Transactions Loans for transactions with identity of interest or non arm s length characteristics are not eligible if they are secured by second homes, investment properties, or 2 unit properties. Owner occupied primary residence one unit property transactions are subject to a 5% LTV/CLTV reduction from program matrix parameters, but in any case may not exceed a maximum LTV/CLTV of 75%. Examples of these types of transactions (not a complete list) include: sales of properties between family members or business associates OR involving a business entity and individual who is an officer or principal OR involving the builder/developer of the property and an employee or affiliate OR made in conjunction with any transaction involving an assignment of the sales contract. Identity of interest or non arms length transactions where there was a sale of the property within the 180 days prior to the subject purchase contract date are ineligible. Gifts of equity are not allowed Current seller may not have been 60 days or more delinquent in the past 12 months. Refinance Definition and Cash Out Transactions Rate and Term Refinance Max. Cash Back: Maximum cash to borrower allowed for a Rate and Term refinance transaction is $5,000. Payoff of Unseasoned Liens: Payoff of liens seasoned less than 12 months at time of Loan application, or HELOCs with a draw in excess of $2,000 in the 12 months preceding the Loan application date are considered cash out, unless the lien being paid off was used to acquire subject property. Documentation covering relevant time period is required. Seasoning and Eligibility for Cash Out: Cash out refinance not allowed unless there is six (6) months seasoning of all existing liens on subject property and 6 months of subject property ownership by borrower(s). Continuity of Obligation: Borrower(s) must meet Fannie Mae Continuity of Obligations requirements (See NewLeaf 2 guidelines) LTV Restrictions: For cash out refinance transactions, the maximum LTV/CLTV for rural properties and identity of interest or non arms length transactions is reduced by 5% from the maximum on the program eligibility table above. See Identity of Interest and Non Arms Length Transactions section All Refinances If subject property owned less than 12 months use lessor of appraised value or purchase price Maximum cash out is $500,000 See above LTV/Loan Amount matrix for maximum cash out per loan amount/ltv Delayed Financing Not allowed Second Homes Second Home property must be a reasonable distance away from the borrower s principal residence, and Borrower may not own any other properties near the second home, and Second home must not be subject to any agreement that give a management firm control over occupancy Maximum Number of Financed Properties The maximum number of financed properties a borrower can own is five (5) residential 1 4 unit properties, including the subject property. All additional financed properties that are residential 1 4 unit require an additional 2 months of the PITIA for each additional financed property owned. Commercial properties will not be counted Properties owned by LLCs may be excluded with evidence that the LLC pays the mortgage, along with confirmation of a satisfactory payment history. A CPA letter confirming this information may be acceptable Power Of Attorney Not allowed on loans to Trusts or on Cash Out transactions Age of Documents All credit file documents must be no more than 90 days old at the Note date, except that the appraisal may be 120 days old (V6) Page 2 of 5 Last Updated 3/23/2016

4 Credit History/Tradeline Credit Depth of credit history: For each borrower whose income is used to qualify o Minimum of 3 open trade lines that show a 24 month history for each trade line is required, 2 of which must be reporting activity within the past 6 months, OR o Minimum of 8 satisfactory trade lines must be reported in total, of which 1 is for a mortgage, with a minimum of 1 open trade line reporting over the past 12 months or more. o Borrower must have at a minimum 7 years of established credit history. The following are not acceptable to be counted as trade lines: o non traditional credit, loans in deferment period, accounts discharged through bankruptcy, authorized user accounts, judgments, charge offs, collection accounts, foreclosures, deed in lieu of foreclosure, short sales or preforeclosure sales. Written explanation for all inquiries within 90 days is required. Credit Housing Payment History The occupant borrower(s) must have a complete, most recent, 24 months rental and/or mortgage payment history documented in the loan file (at least 12 months minimum rental history required for occupant borrowers who are First Time Homebuyers (FTHB) (see definition above). No 30 day late payments in the past 24 months on any rent payment or on any mortgage on ANY real estate owned by any borrower on the transaction. Mortgages must either be on the credit report or have the most recent 24 month s payment history (or as long as the property owned, if owned less than 24 months) documented to meet program requirements o Documented by cancelled checks or evidence of electronic transfers if a private party loan (VOM alone is not sufficient), or o Documented by cancelled checks, evidence of electronic transfers, or through an official statement produced by the lender, if a loan from an institutional lender. Rental history for 24 months or the portion of the last 24 months in which the borrower was renting (12 months minimum for FTHB) must be evidenced by: o for the most recent 12 months, either: (a) an Institutional VOR, or (b) cancelled checks or evidence of electronic transfers o for months 13 24, either: (a) an institutional VOR, or (b) cancelled checks or evidence of electronic transfers, or (c) private party VOR, which is only acceptable if not from a family member or interested party to the subject transaction Derogatory Credits Required time elapsed since serious derogatory credit event from event date as defined below to the disbursement date of the new loan: o Foreclosure 7 years measured from completion date of the F/C action o Short Sale, Deed in Lieu or pre foreclosure sale 7 years o Bankruptcy (Chapters 7, 11 & 13) 7 years Modifications Loan modifications are not permitted in the past seven (7) years for any borrower unless the modification was lender initiated, and documented proof is in the loan file showing the modification was not due to a distressed situation Collections / Charge offs Collections and charge offs exceeding $1,000 (either individually or aggregate) must be paid (including medical collections) All tax liens, judgments, and mechanics liens must be paid prior to or at closing Departing Residences Income: Rental income from departing residence may be used to offset PITIA only if it can be documented that the Borrower has at least 25% equity in the property, which must be documented by at minimum 2055 drive by inspection and is dated no more than 60 days prior to the Note date. Rental income will be calculated using rental agreement (75% gross rent minus PITI). Evidence of security deposit into Borrowers account is required in addition to a copy of the rental agreement. Reserves: In addition to the reserve requirements (see reserves section), an additional 6 months PITIA is required based upon the greater of subject property or the departing residence Landlord History is not required Secondary Financing Subordinate financing is not allowed on transactions where LTV or CLTV is >80%. CLTV thresholds shown in the matrix above may not be exceeded. Secondary liens must have terms and characteristics that are Fannie Mae eligible. They also must not permit negative amortization or contain a balloon feature or a prepayment restriction/penalty. They must be clearly subordinate to the Mortgage Loan being originated to these guidelines For HELOCs, the entire credit line limit based on the Note must be used to calculate the HCLTV and determine program eligibility. If a credit line is reduced without a permanent modification of the original Note, then the entire original line limit must be used to calculate the HCLTV. HELOC Payment Calculation: If the HELOC does not report a balance, there is no recurring monthly debt obligation so there is no need to develop an equivalent payment amount based on the line amount or otherwise. Paying Off Debt Installment debt allowed, payment excluded from qualifying ratios. Payoff of Revolving Debt is allowed subject to underwriter review of CahsDTI and reserves Account must be verified as closed. Gifts are permitted to pay off debt. Residual Income Tax Transcripts Employment/Income All Interest Only loan must meet the VA Residual Income Requirement PLUS an additional $1,200 A tax transcript must be obtained for each tax year covered by the income documentation used to qualify the Borrower(s). If not yet available, loan file must contain a copy of an IRS or vendor document showing that no transcript is available. Income variations in the current year s income > 15% from the most recent tax transcript must be adequately explained. (V6) Page 3 of 5 Last Updated 3/23/2016

5 Paying Down Debt Not permitted Age of Documents Credit Report, Income, Assets & Title Commitment 90 days Appraisal 120 days Assets Down Payment & Minimum Borrower Contribution Down payment, funds to close, and reserves must be documented in accordance with Fannie Mae Selling Guide Section B3 4.2, including but not limited to Verification of Deposits and Assets and Evaluating Large Deposits Minimum Borrower Contribution: In addition to required reserves, borrower(s) must contribute from their own funds a down payment and closing costs equal to: o 5% of the sales price for primary residences from the occupying borrower(s), o 10% of the sales price for second homes from the occupying borrower(s), o 15% of the sales price for investment properties from the borrower(s) on the transaction. Reserves Subject Property Type Occupancy Type 1 Primary Residence 1 Second Home or Investment Property 2 Units Primary Residence Loan Amount Reserves 5/1 ARM 5/1 IO ARM <= $1,000,000 6 (12 for FTHB) 12 >$1,000,000 $1,500,000 9 (12 if >80% LTV or FTHB) 15 >$1,500,000 $2,000, >$2,000, <= $1,000, >$1,000,000 $1,500, >$1,500,000 $2,000, >$2,000, <= $1,000, >$1,000,000 $1,500, >$1,500,000 $2,000, >$2,000, For departing residence or if the borrower s current residence is currently pending sale and will not close prior to or concurrently with the subject transaction, 6 months reserves is required for the greater of the PITIA of the current residence or the PITIA of the new/subject property For additional financed properties, 2 months reserves are required for each additional financed property owned Business Funds Gift Funds Interested Party Contributions Appraisal Properties in Declining Markets Properties Listed For Sale Use of Business Funds may be used if the borrower is 100% owner of the business and a letter from the business accountant is obtained to confirm that there is no negative impact to the business Properly documented gifts are allowed for down payment and closing costs only if minimum borrower contribution requirements are met Gifts must be from Family Members only (spouse, child, or other dependent, or by any other individual who is related to the Borrower by blood, marriage, adoption or legal guardianship or a fiancé, fiancée, or domestic partner) Gifts may not be used to meet reserve requirements Gifts of equity, grant funds, pooled funds, or funds from any employer assistance program are not allowed Loans with undisclosed interested party contributions are not acceptable Maximum interested party contributions (to be used for Fannie Mae permissible purposes only): o Owner occupied primary residences maximum 3% for CLTV 75%, 6% for CLTV < 75%, o Second home and investment properties maximum 3% o Excess amounts are considered concessions that must be subtracted from the sales price when determining LTV/CLTV Interest Rate Buy downs and Payment Abatements are NOT acceptable nor are other contributions/concessions that are not Fannie Mae eligible Refer to NewLeaf 2 matrices for details Collateral <= $1,500,000 One Full Appraisal >$1,500,000 Two Full Appraisal Appraisals must be dated 120 days prior to Note date, age of appraisal may not be extended with an update or recertification of value Transferred appraisals are not allowed When 2 appraisals are required: o Appraisals must be completed by two independent companies o The LTV will be determined by the lower of the two appraised values as long as the lower appraised value supports the value conclusion. The final inspection and/or recertification of value must be for the appraisal with the lower value o Any inconsistencies between the two reports must be addressed by the underwriter and all discrepancies must be reconciled. Properties owned < 6 months are based on the lesser of the appraised value or the sales price LTV is reduced by 5% in declining markets as indicated by appraiser If property is listed for sale within 180 days prior to the application date of the subject transaction, the loan is ineligible. (V6) Page 4 of 5 Last Updated 3/23/2016

6 Condominiums Eligible Properties Condos must be Fannie Mae Warrantable Low/Mid/High Rise condos and Detached (site) condos are eligible Limited Review is not eligible Minimum 650 square feet for unit size Maximum exposure is greater of 1 unit or 25% of project for NewLeaf Maximum ownership per borrower is the greater of 1 unit or 10% of project Condos cannot be in any of the ineligible condo project types (below) Ineligible Condo Project Types: o Non Warrantable Condos o Multi Dwelling unit condos o Condo projects with any units less than 400 square feet (subject unit must be >= 650 sq feet) o Co op projects, Condotels, Hotel Condos o Conversions from hotels or motels o No single entity may own > 10% of the project o No more than 30% of the project may be Investment property o Commercial or business use >20% of the square footage of buildings in project o Newly converted, non gut rehabilitation condo projects o Condo projects with unacceptable litigation, arbitration or mediation o Any other condo project features that are not agency eligible 1 2 unit owner occupied 1 unit second homes Condos PUDs Properties with <= 10 acres Properties in NE are ineligible Ineligible Properties Property Flipping 3 4 Unit properties; Manufactured homes, Coops, Condo hotels, Mixed Use, Leaseholds, Log Homes, Unique Properties, Properties (e.g. log homes, geodesic domes); Properties over 20 Acres, Hobby Farms, Agricultural Zoned, Investment Properties; Properties in HI that are Lava Zone 1 & 2; Properties held in business name; Properties with < 650 sq feet of living area; working farm and ranches; properties with values significantly in excess of the predominant value of the subject s market area may be ineligible If the Purchase Contract has been assigned to buyer from a previous purchaser, then the loan is not eligible If prior sale of subject property occurred within 90 days, then the loan is only eligible if: o Property seller is Relocation Agency or o Property seller obtained property through Foreclosure or Deed in Lieu, or o Property Seller obtained property through Inheritance or Divorce, o Subject transaction is for primary residence only o Transaction meets requirements that apply to Properties Recently Listed for Sale (above), and all requirements for properties re sold within 180 days (below): If there has been a sale or ownership transfer of the subject property within the previous 180 days : o Identity of Interest transactions are not eligible o If 10% or more value increase from the prior sale, a NewLeaf AVM is required If the NewLeaf AVMvalue is more than 7% below the original appraisal(s), additional BPO and value reconciliation requirements apply. o THE APPRAISAL(s) MUST SPECIFICALLY ADDRESS THE PRIOR SALE AND JUSTIFY THE PRICE INCREASE (V6) Page 5 of 5 Last Updated 3/23/2016