Home Affordable Refinance Program (HARP) Training

Transcription

1 3/19/2012 Home Affordable Refinance Program (HARP) Training Moderated By: Fowler Williams, CMB President Mike Perkins, VP Underwriting and Credit Policy David Attaway, VP Secondary Marketing Crescent Mortgage Company Celebrating Our 20 th Year of Service

2 Home Affordable Refinance Program (HARP) What is HARP Differences in HARP and HARP 2 How/ Why does Crescent Decide what HARP Options to offer Crescent DU Refi Plus and LP Open Access Basic Eligibility Original Loan Purchased by Agency Prior to June 1, 2009 Loan is currently owned by Fannie Mae or Freddie Mac See Loan Lookup Links Borrower cannot be 30 days late on mortgage in last 12 months (CMC Guide) Borrower is receiving a benefit from the transaction. Borrower(s) meet published Crescent Parameters

3 Refi Plus Same servicer as original transaction Crescent Doesn t Offer DU Refi Plus Can be different servicer, run in Desktop Underwriter (DU) Crescent Offers Example in DU Findings CMC Offered Terms 10,15,20,30 Year Fixed. At this time LTV over 105 must be greater than 15 year. Approve/ Eligible or E/A -1 Eligible (New) Property Inspection Waiver (PIW) and 2075 Accepted!! (If offered in DU findings)

4 Open Access Same servicer as original transaction Crescent Doesn t Offer LP Open Access Can be different servicer, run in Loan Prospector (LP) Crescent Offers Example in LP Findings CMC Offered Terms 15,20,30 Year Fixed. LP Accept Only HVE Y7 (No Appraisal) accepted if offered in LP Findings (NEW!)

5 DU Refi Plus Crescent Eligibility

6 LP Open Access Crescent Eligibility

7 DU Refi Plus / LP Open Access Transaction Eligibility - CMC Adding / Removing a Borrower Rate Term Only No Cash Out Differences in DU Refi Plus and LP open Access Max Loan Amount Calculation Subordinate Financing Existing New (Not Allowed)(CMC) Acceptable Property Types SFR Condo (DU Only) 2-4 Unit (Primary Only) PUD Income/ Asset Documentation Follow AUS Findings!

8 Property Assessment CMC Does NOT Charge the $75 PIW Delivery Fee!!! DU Refi Plus Property Inspection Waiver (PIW) or 2075 Accepted if offered in DU Findings. LP Open Access Message Code Y7 Accepted if offered in LP Findings.

9 Property Assessment Best way to receive PIW or Y7 finding if available Check Your Processing!!! Loans that must be re-run in AUS to correct errors can LOSE the PIW or Y7!!! Use a Realistic Value Estimate No benefit to estimate a high value A Low LTV is NOT more likely to get a PIW if value is inflated Use EXACT Property Address USPS.COM for accurate address with ZIP+4!! Have access to the last transaction address / DU / Note/ Title? Other Factors Lower Risk Factors DTI less than 36% 20 Year term 1.5X more likely / 15 Year 2X more likely Derogatory Credit / Mortgage/ Credit Score

10 Mortgage Insurance Transfer Crescent will currently accept Mortgage Insurance Transfer ONLY from the following: MGIC Radian Guaranty GE Mortgage Insurance / Genworth/ GEMICO RMIC Mortgage Insurance **Crescent will obtain transfer from MI Company Financed / Single Premium No increase in factor/ payment Monthly MI - Same Factor, Same Coverage. Only increase would be loan amount increase when including closing costs in new refinance.

11 Submission to Crescent Register/ Lock loan under correct Program Code DU LP Follow the Crescent Parameters and AUS Findings for Income/ Asset/ Appraisal Use Quality Loan Processing and Loan Submission Portal for Automated, Step by Step Submission Checklist!! (NEW) Include Current Mortgage Statement to Show Borrower Not 30 Day Late at Closing! Include PIW/ Y-7 Disclosure (CMC)

12 HARP TRAINING DU Refi Plus & LP Open Access Wholesale and Correspondent Lending questions to with HARP as subject line. CMC will send all attendees a Q and A based on the questions received. Thank You!!!

13 Information Access Training Support Crescent HARP DU Refi Plus and LP Open Access Hyperlinks Agency Resources Click HERE for Fannie Mae loan lookup Click HERE for Fannie Mae Loan Lookup FAQ Click HERE for Fannie Mae HARP FAQ Click HERE for Freddie Mac loan lookup Click HERE for Freddie Mac HARP/ FAQ Click HERE for Making Home Affordable website Click HERE for USPS address confirmation Zip+4 Initial Eligibility Q. How can I tell if a prospective borrower s current loan is owned or guaranteed by Freddie Mac or Fannie Mae? A. You do not have to run a borrower s application through LP or DU to see if the loan is currently owned or guaranteed by Fannie Mae or Freddie Mac. You or a prospective borrower can access this information prior to loan application by visiting: Fannie Mae: or calling 800-7FANNIE (8 am to 8 pm ET) Fannie Loan Lookup FAQ Freddie Mac: or 800-FREDDIE (8 am to 8 pm ET) Crescent Mortgage Company Resources Crescent Parameters Fannie Mae DU Refi Plus Freddie Mac LP Open Access Crescent HARP Pricing Caps Click HERE Become a Partner of Crescent Mortgage Click HERE Crescent Website Quality Processing and Loan Submission Click HERE CMC Appraisal Waiver Disclosure Click HERE Mortgage Insurance Resources: Radian Mortgage Insurance MGIC Mortgage Insurance Genworth Mortgage Insurance RMIC Mortgage Insurance 3/16/2012

14 PROGRAM Fannie Mae D.U. REFI PLUS (Must have closed prior to June 1, 2009 and be an existing Fannie Mae eligible loan.) REVISION DATE 3/16/2012 PRODUCT CODES 10 Yr DU Refi Plus, 10 Yr DU Refi Plus PIW, 15 Yr DU Refi Plus, 15 Yr DU Refi Plus PIW, 20 Yr DU Refi Plus, 20 Yr DU Refi Plus PIW, 30 Yr DU Refi Plus, 30 Yr DU Refi Plus PIW PURPOSE A program designed for the borrowers who have demonstrated an acceptable pay history, but due to a decline in home prices or where mortgage insurance is not available have been unable to refinance to obtain a lower payment or take advantage of a better product. May be used to: - Pay off unpaid principal balance on existing first (cannot use to pay off existing subordinate financing). - Pay off closing cost, prepaid items and points. - Cash back to borrower - $ maximum (Texas $0 cash back). - If cash to borrower exceeds $250.00, loan may have principal curtailment at closing not to exceed the lesser of 2% or $2000. TERM 10, 15, 20 or 30-Year Term D.U. Approve/Eligible or EA-1/Eligible BORROWER BENEFIT ELIGIBILITY TRANSACTION TYPE A borrower is required to benefit when requesting a DU Refi Plus Loan. The borrower benefit requirement can be met in four different ways based on changes in the terms between the existing mortgage and the new mortgage loan. If any of the following are met, the borrower benefit provision has been satisfied: - Reduction in the borrower s monthly principal and interest payment; - Reduction in the interest rate; - Reduction in the amortization term; or - Movement to a more stable product. If the borrower s payment, interest rate or amortization period is staying the same or increasing, the borrower must be moving to a more stable product. The borrower may not extend their amortization period (although a shorter amortization period is considered to comply with the standard), or move from a fixed-rate mortgage to an adjustable-rate mortgage. - A borrower on the existing mortgage may be removed; however, documentation to reflect the remaining borrower has been making the payments from their own funds in the prior 12 month period will be required. Documentation must be in the file to reflect the borrower being removed is also removed from the deed and will not retain any ownership interest in the mortgage premises. If the borrower being removed is due to death, evidence of prior 12 month payments is waived. - A borrower can be added to the new loan, provided the existing borrower(s) is retained. Borrower added must not be a non-occupying borrower. - DU Feedback Offering DU Refi Plus (Refi Plus-manual underwrite not available). Rate / Term (cash-out not allowed). FNMA DU Refi Plus 1 3/16/2012

15 NOT ELIGIBLE OCCUPANCY PROPERTY TYPE - No Community Seconds. - Loans with new subordinate financing. - Loans with interest only feature. - Loans with adjustable rate mortgages with fixed rate periods less than 5 years. - Loans with balloon feature. - Loans through My Community - Loans with a credit enhancement. - LTV/CLTV > 80% (Texas Loans Only) that fall under 50(a)(6) Article XVI. - Refi Plus manual underwrite. Owner-Occupied, Investor and Second Homes. Texas Principal residence only. Principal Residence: Single Family Attached and Detached PUDs Condos (underwriter must verify property is not a Condotel) Multi-family (2-4 units) Second Homes and Investment Properties: Single Family Attached and Detached PUDs Condos (Underwriter must verify property is not a Condotel) MORTGAGE INSURANCE LTV / CLTV Original LTV < 80% mortgage insurance will be waived by D.U. Crescent will now allow a DU Refi Plus where the original loan had a LTV > 80% as long as the mortgage insurance was issued by one of the following companies: - Radian - MGIC - Genworth - RMIC DU findings must include the following information: - Mortgage Insurance Provider - Mortgage Insurance Certificate Number - Coverage Amount Crescent will facilitate the transfer of the mortgage insurance, please allow for additional processing time. Loan cannot close until we have confirmation of the transfer from the mortgage insurance company. PRIMARY RESIDENCE -SINGLE FAMILY: Max 105% LTV/125% CLTV/HCLTV (only re-subordinating existing Secondary Financing allowed) Debt to income ratios: LTV > 80% - max 45% (credit score 620 to 659) - max 50% (credit score 660 to 719) - max 55% (credit score at 720 or above) LTV 80% - max 55% (all credit scores) LTV above 105% allowed up to 125% (LTV/CLTV/HCLTV) for 20 or 30 year product codes (25 year terms must be locked under the 30 year product code), AND borrower must have a minimum 720 FICO score. NOTE: 15 year product code not currently available but can be delivered to FannieMae as of June 1, PRIMARY RESIDENCE MULTI-FAMILY: Max LTV/CLTV/HCLTV 90% (only re-subordinating existing Secondary Financing Allowed). ALL LTV s max 50% DTI with a Minimum Credit Score 700. FNMA DU Refi Plus 2 3/16/2012

16 LTV/CLTV (Continued) SECOND HOMES: Max 105% LTV/125% CLTV/HCLTV (only re-subordinating existing Secondary Financing allowed) Debt to income ratios: LTV > 80% - max 45% (credit score 620 to 659) - max 50% (credit score 660 to 719) - max 55% (credit score at 720 or above) LTV 80% - max 55% (all credit scores) LTV above 105% allowed up to 125% (LTV/CLTV/HCLTV) for 20 or 30 year product codes (25 year terms must be locked under the 30 year product code), AND borrower must have a minimum 720 FICO score. NOTE: 15 year product code not currently available but can be delivered to FannieMae as of June 1, INVESTMENT PROPERTIES: Max LTV/CLTV/HCLTV 90% (only re-subordinating existing Secondary Financing allowed). ALL LTV s max 50% DTI with a Minimum Credit Score 700. MAXIMUM LOAN APPRAISAL $417,000 (Super Jumbo Not Available). - D.U. to determine appraisal requirement. Property Inspection Waiver and accepted. (Texas loans require full appraisals). If DU findings reflect PIW or 2075 provide a signed PIW Disclosure (click for PIW guidelines & disclosure). - Must comply with Appraisal Independence. - If property is located in a natural disaster area, Crescent will require full appraisals. UNDERWRITING MUST HAVE PAYOFF STATEMENT FROM CURRENT SERVICER, MUST BE DATED FOR DATE OF CLOSING (WITH A PER DAY DIEM) AND MUST HAVE WHEN UNDERWRITING FILE OR FILE WILL BE SUSPENDED. - Income As determined from DU findings documentation requirements T completed and signed (must be checked with IRS). - Must have DU Refi Plus eligibility in feedback message. - If current loan has subordinate lien, you can not use funds from new loan to pay off, but can re-subordinate existing second. Must provide Subordination Agreement for underwriting. - An accurate address is critical to make sure it is matched in the FNMA system. Incomplete or inaccurate addresses can prevent loan from receiving DU Refi Plus eligibility. - No limit on number of loans financed through agency (Crescent will limit 2 loans per borrower to be financed with Crescent) application must be complete (i.e. income, assets, employment, etc.). - No late mortgage payments in the last 12 months. - Previous bankruptcy/foreclosures must have occurred over 4 years ago. - Underwriter must condition for a maximum of $ cash to borrower at closing. - No restriction on property being listed. SCC Codes Texas DU Refi Plus If LTV is greater than 80% & no MI obtained, may have an additional fee. IMPORTANT Loan must be Registered/ Locked under DU Refi Plus Product Codes!!! PROGRAMS SUBJECT TO CHANGE WITHOUT NOTICE FNMA DU Refi Plus 3 3/16/2012

17 PROGRAM LP OPEN ACCESS Must be existing Freddie Mac Loan REVISION DATE 3/16/2012 PRODUCT CODES 15 Yr LP Open Access, 20 Yr LP Open Access, 30 Yr LP Open Access PURPOSE A program designed for the borrowers who have demonstrated an acceptable pay history, but due to a decline in home prices or where mortgage insurance is not available have been unable to refinance to obtain a lower payment or take advantage of a better product. May be used to: - Pay off unpaid principal balance on existing first (cannot use to pay off existing subordinate financing). - Pay the lesser of 4% of current unpaid principal balance of the mortgage being refinanced or $5,000 in related closing cost, financing cost and prepaids/escrows. - Cash back to borrower - $ maximum (Texas $0 cash back). - If cash to borrower exceeds $250.00, loan may have principal curtailment at closing not to exceed the lesser of 2% or $2000. TERM 15, 20 or 30-Year Term LP Accept Only No Levels ELIGIBILITY BORROWER BENEFIT TRANSACTION TYPE - A borrower on the existing mortgage may be removed; however, documentation to reflect the remaining borrower has been making the payments from their own funds in the prior 12 month period will be required. Documentation must be in the file to reflect the borrower being removed is also removed from the deed and will not retain any ownership interest in the mortgage premises. If the borrower being removed is due to death, evidence of prior 12 month payments is waived. - A borrower can be added to the new loan, provided the existing borrower(s) is retained. Borrower added must not be a non-owner occupying borrower. - LP Feedback Offering LP Open Access (LP-manual underwrite not available). A borrower is required to benefit when requesting a LP Open Access Loan. The borrower benefit requirement can be met in four different ways based on changes in the terms between the existing mortgage and the new mortgage loan. If any of the following are met, the borrower benefit provision has been satisfied: - Reduction in the borrower s monthly principal and interest payment; - Reduction in the interest rate; - Reduction in the amortization term; or - Movement to a more stable product. If the borrower s payment, interest rate or amortization period is staying the same or increasing, the borrower must be moving to a more stable product. The borrower may not extend their amortization period (although a shorter amortization period is considered to comply with the standard), or move from a fixed-rate mortgage to an adjustable-rate mortgage. Rate / Term (cash-out not allowed). LP Open Access 1 3/16/2012

18 NOT ELIGIBLE - Loans with new subordinate financing. - Loans with interest only feature. - Loans with adjustable rate mortgages with fixed rate periods less than 5 years. - Loans with balloon feature. - Loans through Home Possible. - Loans with a credit enhancement. - LTV/CLTV > 80% (Texas Loans Only) that fall under 50(a)(6) Article XVI. - Open Access manual underwrite. OCCUPANCY PROPERTY TYPE Owner-Occupied, Investor and Second Homes. Texas Principal residence only Principal Residence: Single Family Attached and Detached PUDs Multi-family (2-4 units) No Condos Second Homes and Investment Properties: Single Family Attached and Detached PUDs No Condos MORTGAGE INSURANCE LTV / CLTV Original LTV < 80% mortgage insurance will be waived by LP. Crescent will now allow a LP Open Access where the original loan had a LTV > 80% as long as the mortgage insurance was issued by one of the following companies: - Radian - MGIC - Genworth - RMIC LP findings must include the following information: - Mortgage Insurance Provider - Mortgage Insurance Certificate Number - Coverage Amount Crescent will facilitate the transfer of the mortgage insurance, please allow for additional processing time. Loan cannot close until we have confirmation of the transfer from the mortgage insurance company. PRIMARY RESIDENCE -SINGLE FAMILY: Max 105% LTV/125% CLTV/HCLTV (only re-subordinating existing Secondary Financing allowed) Debt to income ratios: LTV > 80% - max 45% (credit score 620 to 659) - max 50% (credit score 660 to 719) - max 55% (credit score at 720 or above) LTV 80% - max 55% (all credit scores) LTV above 105% allowed up to 125% (LTV/CLTV/HCLTV) for 15, 20 and 30 year product code (25 year terms must be locked under the 30 year product code) AND borrower must have a minimum 720 FICO score. PRIMARY RESIDENCE MULTI-FAMILY: Max LTV/CLTV/HCLTV 90% (only re-subordinating existing Secondary Financing Allowed). ALL LTV s max 50% DTI with a Minimum Credit Score 700. LP Open Access 2 3/16/2012

19 LTV/CLTV (Continued) SECOND HOMES: Max 105% LTV/125% CLTV/HCLTV (only re-subordinating existing Secondary Financing allowed) Debt to income ratios: LTV > 80% - max 45% (credit score 620 to 659) - max 50% (credit score 660 to 719) - max 55% (credit score at 720 or above) LTV 80% - max 55% (all credit scores) LTV above 105% allowed up to 125% (LTV/CLTV/HCLTV) for 15, 20 and 30 year product code (25 year terms must be locked under the 30 year product code) AND borrower must have a minimum 720 FICO score. INVESTMENT PROPERTIES: Max LTV/CLTV/HCLTV 90% (only re-subordinating existing Secondary Financing allowed). ALL LTV s max 50% DTI with a Minimum Credit Score 700. MAXIMUM LOAN APPRAISAL $417,000 (Super Jumbo Not Available). - A full interior/exterior appraisal is required unless you receive an acceptable appraisal waiver. - If an appraisal is required it must comply with Appraisal Independence. - Updates have been made in LP that will offer use of Freddie Mac HVE Estimate instead of appraisal on certain transactions. The LP Message Code is Y7. This message is returned when the Home Value Explorer (HVE) results for the Relief Refinance Mortgage-Open Access are in high or medium confidence range. The message states To use HVE results in lieu of an appraisal for Relief Refinance-Open Access, the property must be 1 or 2 units, attached or detached dwelling or a unit in a condominium (NOTE CRESCENT WILL NOT DO CONDOS) project or PUD, and may not be a manufactured home, dwelling in a leasehold estate, or a cooperative unit, if the seller is permitted to deliver Cooperative Share Mortgages under its Purchase documents. HVE point value estimate Forecast Standard Deviation must be between and Once you have run the LP for an Open Access loan and received the Y7 finding that allows you to use the HVE value instead of an appraisal, YOU MUST RERUN THE LP AT EXACTLY WHAT THE HVE VALUE STATES IN ORDER TO MOVE FORWARD. ALSO NOTE THAT ANY TIME YOU RERUN LP, THE VALUE COULD CHANGE AS WELL AS THE AVAILABILITY OF THE Y7 FINDING. - HVE cannot be utilized if the loan is a Texas 50(a)(6) UNDERWRITING - MUST HAVE PAYOFF STATEMENT FROM CURRENT SERVICER, MUST BE DATED FOR DATE OF CLOSING (WITH A PER DAY DIEM) AND MUST BE IN PACKAGE WHEN UNDERWRITING FILE OR FILE WILL BE SUSPENDED. - Income Follow LP findings T completed and signed (must be checked with IRS). - Must have LP Open Access eligibility in feedback message. To find out if borrower is eligible for Open Access go to Then go to the site: Does Freddie Mac own your mortgage? and input required fields. Freddie LP Open Access 3 3/16/2012

20 Underwriting (continued) Mac will respond if they have the mortgage. The loan can then be input into LP with a 310 offering identifier. If the LP responds with a code of Elv63 this means the LP system can t find a match. Double check all information when running LP names, addresses, SS#, etc. or Freddie Mac is showing a settlement date on or after June 1, 2009 or if the response of Elv64 this means loan could have been sold under a Credit Enhancement or existing mortgage being refinanced is ineligible for Open Access. If the LP feedback reflects loan not eligible for Open Access, the 310 offering code can be taken out and the loan can be resubmitted using the same AUS key number as a regular LP loan - If current loan has subordinate lien, you can not use funds from new loan to pay off, but can re-subordinate existing second. Must provide Subordination Agreement for underwriting and terms of 2 nd must comply with Freddie Mac guidelines. - An accurate address is critical to make sure it is matched in the LP system. Incomplete or inaccurate addresses can prevent loan from receiving LP Open Access eligibility. - Seasoning requirement: Texas loans require 12 months seasoning. - No limit on number of loans financed through agency (Crescent will limit 2 loans per borrower to be financed with Crescent) application must be complete (i.e. income, assets, employment, etc.).- - No late mortgage payments in the last 12 months. A separate VOM will be required if not on credit report. - Previous bankruptcy/foreclosures must have occurred over 4 years ago. - Underwriter must condition for a maximum of $ cash to borrower at closing. - When subject property is second home or investment property, borrower can own no more than 4 financed properties including the subject loan. SCC Codes 007-No cash-out. 95 If LTV is greater than 80% & no MI obtained, may have an additional fee. H08 Open Access. IMPORTANT Loan must be registered as a LP Open Access!!! PROGRAMS SUBJECT TO CHANGE WITHOUT NOTICE LP Open Access 4 3/16/2012