Crescent Mortgage Company DU Refi Plus & LP Open Access Question and Answer Updated 4-16-2012 Fowler Williams, President Information Access Training Support Crescent I. Mortgage Insurance II. Appraisal III. Borrower Eligibility IV. Loan Amounts and LTV/ CLTV V. Pricing I. Questions related to Mortgage Insurance (MI) 1. Who will obtain the Mortgage Insurance transfer on loans submitted to Crescent? Crescent requires that we always obtain the transfer of MI Policy and will not accept a policy transfer obtained by any other party. 2. Which MI Companies will Crescent accept transferred MI from? Radian, MGIC, GE, RMIC, PMI, CMG 3. Why will Crescent not accept transfer of MI from United Guaranty? The current policy from United Guaranty (UG) is that they will often require the current servicer to submit the original loan package to them in order to transfer the MI Policy to a new servicer (Crescent). This policy is prohibitive to CMC since we would have no control over the original loan file. If UG changes their policy, we would consider at that time. 4. How do we know who is the current MI company? If the current loan has MI, the current MI Company and coverage information will be listed within the DU/ LP findings themselves. 5. If we have a borrower that has single premium MI (LPMI or BPMI) how do we get a pricing quote for the new loan? No additional fees or premiums will need to be paid to transfer a single premium MI policy. You would not lock the loan with CMC as an LPMI loan. Page 1 of 5
6. If the borrower is paying monthly MI, will the MI payment remain the same? The MI payment on monthly MI may increase if the borrowers elect to roll closing costs into the new loan. 7. Does a borrower have to get MI if the original loan was a 70% but is now 110%? No, MI is only needed when there is an existing policy in place. 8. What happens if a borrower had MI, but due to LTV it has been dropped by the original servicer? No new MI would need to be obtained or transferred if there is currently no MI certificate in force for the current servicer based on it being dropped for an acceptable reason. (Not dropped for non-payment, fraud, etc ) 9. What types of Mortgage Insurance policies will Crescent accept for transfer? Crescent will try to obtain transfer on any type of policy (BPMI, LPMI, Financed MI, etc..) so long as it is insured by a Crescent approved MI company. LPMI must have been purchased as a single premium policy. 10. What happens when a borrower had monthly MI to be transferred but the term of the new loan has changed? Example, original loan was a 30 year; new loan is 15 or, vice-a-versa? The policy transfers as the original loan closed. Example, if original loan closed as 30 year and new loan is 15 year, the existing 30 year MI policy would transfer. II. Questions related to Appraisal and Valuation 11. Does Crescent allow for Appraisal Waiver or PIW? Yes, Crescent will accept a PIW from DU or the Y7 Appraisal Waiver in LP. REMEMBER, if property is located in a FEMA Disaster Area, a full appraisal will be required regardless of AUS findings. 12. How do I know I received a PIW in DU? The Property Inspection Waiver (PIW) is listed in the DU findings. 13. Does Crescent charge the PIW delivery fee charged by Fannie Mae of $75 No, Crescent does not charge or collect the PIW delivery fee. We absorb this cost for our customers. 14. How do I use the Y7 Appraisal Waiver in LP? Page 2 of 5
IMPORTANT: When you estimate the value for your initial LP submission, you may receive the Y7 message allowing for Appraisal Waiver. HOWEVER, if the HVE Value returned by LP is different than the value of your submission, YOU MUST re-run LP using the HVE Value as the estimated value and still obtain the Y7 Feedback. 15. Should we disclose the cost of an appraisal in case one is required? It may be best to disclose the cost of an appraisal on your Good Faith Estimate. If a loan needs to be resubmitted due to changes in the loan, you may actually lose the PIW or Y7 finding and be required to obtain an appraisal. This may not be considered a valid CMC if no appraisal fee was disclosed to the borrower. III. Borrower Eligibility 16. We submitted a loan that we believe should have been approved for LP Open Access or DU Refi Plus. Why did we not get approval? There are many reasons the loan may not receive approval for LP Open Access or DU Refi Plus. Here are a few: LP: a. Loan was not DELIVERED to Freddie Mac on or before June 1, 2009. b. Loan may not be owned by Freddie Mac. See Freddie Mac Loan Lookup c. Ensure exact match of Address, SS Numbers and Borrower Names d. We are seeing that a revolving debt where the balance is over 50% of available credit balance is often not being approved. e. We are seeing that DTI over 45% on LTV over 105% is often not receiving an approval. f. LP Open Access Error Message #63 Relief Refi-Open Access Mortgage must match active FM Loan. 1. This indicates that the liability that is shown as being paid off does NOT match the loan information on file with Freddie Mac 2. Check the spelling and account number in the liability to make sure it is correct and re-run the findings 3. Make sure that the mortgage indicated as being paid off goes with the subject property-correct and re-run the findings 4. Call Freddie Mac at 1-800-Freddie, choose Technical Support and give them the LP Key number and the error code they will advise why the feedback shows this error g. LP Open Access Error Message #64 Existing FM loan ineligible for Relief Refinance- Open Access 1. Call Freddie Mac at 1-800-Freddie, choose Technical Support and give them the LP Key number and the error code they will advise why the feedback shows this error Page 3 of 5
(original loan may have had credit enhancements such as premium pricing, pool insurance, or been a special negotiated product, etc.) 2. Current loan is a repurchase request from agency to current servicer. DU: a. You DO NOT have to enter any special identifier in DU (like you do in LP) to obtain the Refi Plus finding. b. Loan was not delivered to Fannie Mae on or before June 1, 2009. c. Loan may not be owned by Fannie Mae. See Fannie Mae Loan Lookup. d. Ensure exact match of Address, SS Numbers and Borrower Names e. Loan closes with a variance or credit enhancement. f. Current loan is a repurchase request from agency to current servicer. 3. We have a DU Approval but borrower has been late on his mortgage. Is this acceptable? Crescent will not approve a loan that the borrower has been 1X 30 days late on the mortgage in the past 12 months. IV. Loan Amounts and LTV/ CLTV 4. What are the allowable LTV/ CLTV for Crescent on LP Open Access and DU Refi Plus? LTV 125, CLTV 125. See parameters for FICO and DTI Requirements associated with certain LTV/ CLTV. 5. Why does Crescent not offer unlimited LTV/ CLTV on the LP Open Access and DU Refi Plus? FHFA along with Fannie Mae and Freddie Mac have made the lender (Crescent) assume a higher level of representations and warranties on the DU Refi Plus and LP Open Access than a same servicer transaction. Therefore, Crescent has to carefully consider and mitigate the risks associated with a loan to value over 100%. 6. What is different in how you calculate LP Open Access and DU Refi Plus maximum loan amount? Page 4 of 5
Fannie Mae DU Refi Plus allows you to roll in all closing costs associated with the loan. Freddie Mac LP Open Access has a calculation you must use. You take the unpaid principal balance (NOT THE PAYOFF, as this may include ancillary fees) plus the number of days interest collected at closing(up to 30 day max) (remember the settlement agent may add a day or two for delivery of funds) To this amount you can add the LESSOR of: a. Total closing costs on details of transaction (minus any lender or YSP credits) b. Unpaid Principal Balance x 4% c. $5,000 Crescent provides an interactive worksheet to assist you in calculating the Open Access loan amount You can access by clicking HERE 7. Can a borrower receive cash from the refinance on an LP Open Access or DU Refi Plus? Borrower cannot receive more than $250 cash back on the transaction. V. Pricing 8. Can you explain the Price Caps on DU Refi Plus and LP Open Access? The agencies place a cap on the loan level pricing adjustments (LLPA s) for DU Refi Plus and LP Open Access. These caps are for agency LLPA s and do not apply to Crescent specific LLPA s for items like state, loan amount, etc 9. Fannie Mae DU Refi Plus LLPA caps: Primary Residence LTV > 80% and Term > 240:.50% Price Cap Primary Residence LTV >80% and Term <= 240: 0.00% Price Cap 1.75% Price Cap for all other loans. 10. Freddie Mac LP Open Access Price Caps: Freddie Mac LP Open Access Price Caps: Primary Residence LTV > 80% <= 105% and Term > 240:.50% Price Cap Primary Residence LTV > 105% and Term > 240: 1.00% Price Cap Primary Residence LTV > 80% <= 105% and Term<= 240: 0.00% Price Cap Primary Residence LTV > 105% and Term <= 240:.50% Price Cap 1.75% Price Cap for all other loans. Fowler Williams, CMB President Crescent Mortgage Company 5901 Peachtree Dunwoody Rd NE Building C, Suite 250 Atlanta, GA 30328 800-851-0263 www.crescentexpress.net Page 5 of 5