fannie mae home path renovation loans

0 Copyright © 2011 Prospect Mortgage, LLC – Primary Series HomePath® Financing Overview

HomePath® Financing

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REO BOSS™ is a trademark of Prospect Mortgage, LLC – Primary Series.

The Home Buyers Scouting Report® (HBSR) is a free home finding service provided directly to homebuyers by Home Buyers Marketing II, Inc., a licensed real estate brokerage services company. The Preferred Real Estate Agent and Home Buyers Marketing II, Inc. (HBM Il) are cooperating, licensed real estate professionals. The Preferred Loan Officer’s role is to assist in determining a comfortable home price range for Home Buyers Marketing II, Inc. (HBM II) to use when it is searching for properties within the homebuyer’s search criteria.

Home Buyers Scouting Report®, HBSR®, and Contact Conversion® are registered trademarks of Home Buyer Marketing II, Inc. or Affiliated Companies.

Equal Housing Lender. Prospect Mortgage is located at 15301 Ventura Blvd., Suite D300, Sherman Oaks, CA 91403. Prospect Mortgage, LLC is a Delaware limited liability company licensed by the CA Dept. of Corps. under

CRMLA and operates with the following licenses: AZ Mortgage Banker License #BK0903027, #BK0909362, #BK0908046, #BK0908050, #BK0908056, BK#0908057, #BK0908058, #BK0908731, BK#0903112, BK#0903912,

BK#0906650, BK#0906913; To check the license status of your CO mortgage broker, visit www.dora.state.co.us/real-estate/index.htm; GA Residential Mortgage License #16984; IL Residential Mortgage Licensee #6424; MA

Mortgage Lender/Broker License #MC2011; MS Licensed Mortgage Co.; MT Residential Mortgage Lender Licensee #120; NV Division of Mortgage Lending Mortgage Banker #1173 and Mortgage Broker #3095; Licensed by

the NH Banking Dept.; Licensed Banker-NJ Dept. of Banking and Insurance #9932415; Operates as Metrocities Mortgage, LLC in NY (Licensed Mortgage BankerرNYS Banking Department); Operates as Metrocities

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the VA State Corp. Commission as MC-2195. This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any

time and without notice. This is not an offer to enter into a rate lock agreement under MN law, or any other applicable law. – 0509-63


Overview: HomePath®…What’s In It for Me?

Fannie Mae HomePath® loans provide you with a broader pool of potential buyers

− Fannie Mae HomePath® guidelines allow for easier underwriting and a faster closing

− Properties require no Appraisal or Mortgage Insurance

− Selling Agents can have more successful closed sales

− Listing Agents have greater success in closing a property with a HomePath® Mortgage versus other financing options

More closed sales = More Commissions ($$$ in your pocket)

Prospect Mortgage is the largest Retail Lender of HomePath® Financing in the Nation


Overview: Prospect Mortgage

Prospect Mortgage is the Nation’s Largest Independent Residential Retail Lender

− 9th largest Lender in the nation

− 2nd largest 203K Lender in the nation

− 7th largest in FHA loan origination nationwide, according to Mortgage Data Web.

− 12th largest in total purchase loan origination nationwide, according to Mortgage Data Web

• Purchase volume accounts for 62.7% of our total applications, reflecting our deep legacy and strong relationship with real estate agents.

Largest Retail Lender of Fannie Mae HomePath® Financing in the Nation

− There are two types of HomePath® Loans:

1. Normal Fannie Mae HomePath® Loan

2. Fannie Mae HomePath® Renovation Loan

- Prospect Mortgage does not provide financing for the HomePath® Renovation Loan at this time


Overview: Fannie Mae HomePath®

Fannie Mae has over 100,000 real estate owned (REO)

properties currently on their books

There is a need to find buyers for these properties and

lenders to provide financing to assist in stimulating

the economy

Fannie Mae owned properties eligible for the Fannie

Mae HomePath® Mortgage offer affordable housing

opportunities with up to 97% financing

Only 10% down on 1 unit investment properties

Note: Fannie Mae identifies properties eligible for the HomePath® financing on the HomePath® web

site. Prospect Mortgage is only offering the HomePath® Mortgage program – not the HomePath®

Renovation Mortgage


Overview: Indentifying HomePath® Properties

Eligible HomePath® Mortgage Financing

This identifies that the HomePath Property is eligible for either a

HomePath Mortgage OR a HomePath Renovation Mortgage

HomePath® Renovation Mortgage Financing

This identifies that the HomePath Property is eligible for a

HomePath Renovation Mortgage ONLY!

(Not offered by Prospect Mortgage at this time)


Overview: HomePath® Financing Special Offers

HomePath® Buyer Incentive

– Fannie Mae is currently offering buyers up to 3.5% in closing cost assistance through June 30, 2011

– The HomePath property buyer must meet the following qualifications to be eligible:

Buyers and/or Selling Agents (the agent representing the buyer) must request the incentive upon submission of initial offer in order to be eligible

The initial offer must be submitted on or after April 11, 2011 and close by June 30, 2011. If an initial offer was made prior to the effective date, the offer is not eligible for the incentive

The sale must close on or before June 30, 2011. No exceptions will be made to this deadline

Only buyers purchasing a HomePath property as their primary residence may receive up to 3.5% in closing cost assistance. Second homes and investment properties are excluded from the incentive

Buyer must sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum

If a buyer's total closing costs are under 3.5%, the difference will not be available as a credit to the buyer


Overview: HomePath® Financing Special Offers (continued)

HomePath® Selling Agent Incentive

– Fannie Mae Offering Selling Agent Bonus through June 30, 2011: Selling Agents, representing clients who affirm they will become owner

occupants of a primary residence purchasing a HomePath property, may receive a bonus of $500 in Arizona and Texas OR $1,000 in California and Washington

– Selling Agent bonus must be requested in the initial offer in order to be eligible

– No bonus will be given for second homes or investment properties.

– No bonus will be given on any property not located in AZ, TX, CA, or WA.

Retail and public entities are eligible for the incentive; however pool and auction sales are not eligible.

The incentive may not be available for a property where Fannie Mae acquired the property in connection with financing under a reverse mortgage. Ask the listing agent for details

Fannie Mae reserves the right to remove any property from promotion or end the promotion at any time. Any dispute over the payment of the incentive shall be resolved by Fannie Mae in its sole discretion.

Note: Fannie Mae can give no assurance on the time required to close, but initial

Offers submitted after May 15, 2011 are particularly questionable for closing by the

incentive deadline of June 30, 2011.


Overview: Fannie Mae HomePath® Update

For HomePath® Mortgages only:

− Even though an appraisal is not obtained by the lender for

HomePath® Mortgages, a market-rent schedule from an

appraiser is acceptable for determining rent for qualifying

purposes in accordance with standard policy

For both the HomePath® Mortgage and HomePath®

Renovation Mortgage, we will:

− Waive the investor property loan-level price adjustments for

investor purchase transactions that have both an LTV ratio of

70 percent or lower and a credit score of 740 or higher

Enhancements are effective for loans delivered on or after February 1, 2011.


Overview: Fannie Mae HomePath® Update (continued)

HomePath® Financing Changes Impact Desktop Underwriter®

(DU®). We will no longer label high-LTV or high-CLTV ratio

transactions as "Flexible Mortgages." DU will be updated to

remove all references to Flexible Mortgages and will permit the

following transactions up to a 97 percent LTV/CLTV/HCLTV ratio

under standard eligibility:

− One-unit – Fully amortizing fixed-rate and all standard ARM products

− Principal residence – Transactions with non-occupant borrowers as parties

− Purchase

The following transactions will be excluded from the standard 97

percent LTV/CLTV/HCLTV ratio eligibility:

− High-balance mortgage loans – Interest-only loans

− HomeStyle® Renovation mortgages – Manufactured homes

− Loan purpose of construction – Co-op properties

Enhancements are effective for loans delivered on or after February 1, 2011.


Overview: HomePath® Program Highlights

The Fannie Mae HomePath® Mortgage features:

− Up to 97% financing for owner occupied properties

− Up to 90% financing for investment properties

− Purchase transactions only

− No MI required – pricingadjustmentsinlieuofMIwillapplytoLTV’sgreaterthan 80%

− No appraisal is required – we will use sale price as the appraisal value

− Prospect Mortgage cannot order, see or receive an appraisal. Borrowers will be required to sign an appraisal disclosure form at application

− Fixed Rates, ARM options are available (I/O not available)

− Allows for a Loan score of 660 with 80% LTV or greater. For loans with less than 80% LTV, follow standard guidelines.

− High Balance transactions are allowed. Check with your Loan Officer about the specifics of this program.

− The more restrictive policy applies when combining Fannie Mae HomePath® with other programs.

− Non-traditional credit is not allowed


Overview: HomePath® Program Benefits (continued)

Program can be used for Owner occupied, Second Home and

Investment properties

− Down payment (at least 3%) can be funded by borrowers own savings; a

gift; a grant; or a loan from a nonprofit organization, state or local

government, or employer. DAPs (Down Payment Assistance Programs)

and subordinate financing are not allowed as a source of down payment for

LTV’sover95%atthistime.

− A5%minimumborrowerdownpaymentisrequiredforLTV’sfrom80.01to

95%.

− There are No appraisal fees. Collection of itemized Credit Report Fees

only, has been approved


Overview: HomePath® Program Benefits (continued)

First Look™ for Fannie Mae Homes − Fannie Mae's First Look period contributes to neighborhood stabilization by encouraging home

ownership. During this period, owner occupants, public entities, and their partners can submit offers

and purchase properties without competition from investor offers. This gives Buyers buying their

homeasa“primaryresidence”a“firstlook”atFannieMaehomes.

− The First Look period is typically the first 15 days a property is listed on HomePath.com. Properties

withintheFirstLookperiodnowincludea“countdownclock”onthepropertydetailspage,which

displays the number of days remaining for owner occupants and public entities to submit offers.

− If the property remains available for sale after the expiration of the First Look period, investor offers

may be submitted and will be considered along with all other offers.

Sample of a Listing

Showing


Fannie Mae HomePath®: Eligible Products

The following Conventional Conforming products are

eligible for this program:

− 30 year fixed

− 15 year fixed

− LIBOR 5/1 ARM


Fannie Mae HomePath®: Pricing Adjustments

The following pricing adjustments apply to all lenders and are

mandated by Fannie Mae for the Fannie Mae HomePath®

Mortgage:

− LoanlevelpriceadjustmentsinlieuofMIforLTV’s>than80%

− LoanlevelpriceadjustmentsspecifictoLTV’s>95%

− Loan level price adjustments for Investment properties

− Other standard conforming adjustments apply in addition to the above

exceptforinvestmentwhicharein“replacement”ofourstandardinvestment

property adjusters

− HomePath® Mortgage pricing adjustments will be listed at the bottom of the

HomePath® Rate Sheet.

Note: EspeciallyforhighLTV’s/higherrisktransactions– with pricing adjustments in lieu of MI – the overall pricing

under this program may not be favorable and could cause a transaction to be high cost as well. As always, compare

the HomePath® Mortgage to other options (FHA, VA, standard conforming) in order to assist the customer in

determining the best option for them. If at all possible do a Fannie Mae HomePath Mortgage.


Fannie Mae HomePath®: Additional Program Information

Appraisals or property inspections are NOT to be ordered or reviewed by the Lender

− Borrowers should not be discouraged from obtaining an appraisal or a property inspection for their own benefit but it is for their information, only

− The Borrower or lender cannot use the appraisal they paid for on their own if they end up switching to a non- HomePath® loan

If the loan does NOT qualify for the Fannie Mae HomePath® Mortgage, the loan may qualify under other program parameters − Appraisal impacts must be communicated to the customer. i.e., fees, issues getting

water turned on etc. when this occurs. The appraisal fee disclosure must comply with RESPA guidelines

Fannie Mae as a seller may require copy of the credit report or prequalification / preapproval letter

− The borrower is responsible to obtain and provide if required by Fannie Mae We cannot provide a copy of the credit report to the borrower

Fannie Mae will pay up to 6% in seller concessions on owner occupied HomePath Properties

– Asking for closing costs in the initial offer is recommended

– All that can happen is that they are accepted, reduced or not accepted


Fannie Mae HomePath®: Versus Alternative Financing

HomePath® Financing – Getting Buyers into Homes!

Alternative Financing – Creating Issues Where the Loan Will Not Close!

Key benefits of a HomePath® Loan: Detriments Using Alternative Financing:

- Only 3% down required on a primary residence

property and up to 6% in seller concessions

on owner occupied properties

- Greater down payment required with seller

concessions based on loan program

guidelines

- Flexible mortgage terms (Fixed-rate, ARM or

Interest-Only)

- Mortgage terms based on loan program and

availability

- Buyers qualify with less than perfect credit - Credit eligibility based on loan program

- Down payment (min. 3%) can be funded by

your own savings; a gift, grant or loan from a

nonprofit organization, state or local

government or employer

- Down payment sources are based on loan

program and underwriting guidelines

- No mortgage insurance required** - Mortgage insurance required

- No property appraisal required - Appraisal required

- Only 10% down on 1 unit investment

properties

- Greater than 20% down on 1 unit investment

properties

- Allows investors to finance up to 10 properties

- Investors with more than 10 properties will now

be considered on a “case by case basis”

- Limit on the amount of properties that can be

financed


Fannie Mae HomePath®: Versus Alternative Financing

Key benefits of a HomePath® Loan: Detriments Using Alternative Financing:

Minimal Condominium requirements Condominium requirements

- HOA Certification not required

- HOA Certification required – subject to Owner

Occupancy ratios, delinquent dues ratios and

FNMA project standards

- $1 million Liability Insurance coverage

required - Insurance to meet program guidelines

- HO6 coverage (20% of purchase price) –

- Master Policy/Binder must state verbiage,

"Walls‐In" or HO6 coverage will be required

- CC&R’s, Bylaws and Articles of Incorporation

requirements

- Master Policy Hazard Coverage to include

100% replacement cost - Insurance to meet program guidelines

- Fidelity Bond – 21 units or more - Fidelity Bond requirements

- Flood insurance (if in a flood zone) - Insurance to meet program guidelines

- HomePath listing or REO ID required

- Full review is not required

- Subject to FNMA guidelines, pending

litigation, commercial space requirements &

HOA Budgeted Reserve Requirement


Fannie Mae HomePath®: Automatic Notifications

Sign up for the “Automatic Notifications” on the HomePath website for the

zip codes in your geographic market at http://www.homepath.com

− It will get provide you with new listings and price reductions the moment they are activated

− Very useful information to connect with Fannie Mae HomePath Listing Agents.


Fannie Mae HomePath®: Marketing Materials

Here are instructions for Listing Agents on how to get information from Storefront.

Loan Officers should pass on this information in an effort to work more closely Realtors.


Fannie Mae HomePath®: Appendix

Appendix


Appendix: HomePath® Credit Policy Parameters

Credit Policy Parameters – HomePath®

Property Type LTV TLTV CLTV LTV TLTV CLTV

Primary Fully Amortizing Interest-Only

1 unit 97 97 97 80 95 95

2 unit 80 80 80 N/A N/A N/A

3 – 4 unit 75 75 75 N/A N/A N/A

Second Home 90 90 90 80 90 90

Investment Property

1 unit 90 90 90 N/A N/A N/A

2 unit 80 80 80 N/A N/A N/A

3 – 4 unit 75 75 75 N/A N/A N/A

Co-op and Manufactured Housing is NOT available


Appendix: HomePath® Property Types

Property Types

Property Type Primary Second/Vacation Investment

Single-family – detached or attached X X X

2 units X N/A X

3 units X N/A X

4 units X N/A X

Low-rise condo X X X

High-rise condo X X X

PUD X X X

Cooperatives (allowed in New York) N/A N/A N/A

Condotels N/A N/A N/A

Manufactured Housing N/A N/A N/A

Factory Built Housing (Modular) X X X


Appendix: Fannie Mae HomePath® Marketing Collateral

HomePath® Marketing - Provides HomePath® Flyers to

assist in your marketing efforts

- Increased Property exposure

- Increase loan closings with more

qualified HomePath® Buyers

- Sells faster because of greater

exposure

- Property can potentially sell at a

higher net price

fannie mae home path renovation loans

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