FMC Product FMC Product Update Update PresentationPresentation

Desktop Underwriter is a registered trademark of Fannie Mae Loan Prospector is a registered trademark of Freddie Mac This presentation is a summary and is not complete Contact Loan Help (FMC AE for WS) for complete program guidelines This information is for mortgage professionals only and should not be distributed to or used by consumers or other third-parties Information is accurate as of the date shown below and is subject to change without notice 0692009

Agenda

bull Product Update - Whatrsquos new at FMC

ndash CalHFA Program Updatendash $100 Down Program Highlightsndash CalSTRS Program Updatendash $8000 Tax Credit Updatendash Property Flipping Update ndash FHAVAConventionalndash FMC FHA credit overlays

bull FREE Online Homebuyer Education Programndash Upcoming Fannie Mae changes

bull Whatrsquos coming next

ndash USDA Programndash ACCESS Program

FIRST MORTGAGE

CALHFA PRODUCT UPDATE1ST MORTGAGE PRODUCTS

Cal30 ndash Conventional SMART ProgramCSHLP Program

2nd MORTGAGE PRODUCTSCHDAPAHPPSFF

FIRST MORTGAGE

CalHFA Eligibility

Topic DescriptionFirst Time Home-Buyer

Borrower must a 1st Time Home Buyer Defined as a person who has not had an ownership interest in their primary residence (a home in which they lived) during the 3-year period prior to the execution of the loan Exception

Properties in Targeted areas (Requirement is waived if property is located in a Federally Designated Targeted Area)

Other Properties Borrower can own any other properties

Occupancy Property must be owner occupied for term of the loan or until sold

Loan Purpose Purchase transactions ONLY

Down Payment Have enough money to cover the down payment (usually 3 - 5) plus closing costs To help with this restriction CalHFA offers Down Payment Assistance programs

Income Limit Have an Annual HouseholdFamily Income that does not exceed Income Limits for the family size and county in which the home is located

CalHFA Income Calculations

Income Calculations

Eligibility Income (CalHFA) Qualifying Income (Lender)

1 Household count ndash includes all people residing in the home (1-2 or 3 or more)

2 Household Eligibility Income is based on ALL INCOME from only those person(s) who is expected to live in the property be vested on title and be liable for the mortgage

1 Qualifying Income is based on the annualized gross income of any person(s) who is expected to live in the property be vested on title and be liable for the mortgage

2 Qual Income must meet FannieFHAVA guidelines

Difference between the two income calculations is the types of income used in each calculation

Eg OT Bonus Commission with lt 2 year history or Child Support payments that doesnrsquot continue for 3 years will be excluded from the Qualifying Income but will be included in the Eligibility Income to see if they

qualify for a CalHFA loan

Cal30 Program

Program Description Cal30 Conventional using Fanniersquos MyCommunityMortgage (MCM) with CalHFA variances

Term Conventional 30-year Fixed

Loan Amount Fannie Mae Conforming Loan Limits (High-balance limits not available)

Sales Price Limit Max must be within CalHFA sales price limits based on county where property is located

Max LTV CLTV 95 LTV 102 CLTV (subject to MI availability) 90 LTV 90 CLTV based on available MI

Income Limit Borrowerrsquos Income cannot exceed Cal30 Income Limits based on county where property located

Mortgage Insurance Any Fannie approved MI (CalHFA MI not currently available for the Cal30 Program)bull PMI Radian MGIC to max 90 LTVCLTV 720 fico minimum 45 max DTI

AUS UW Fanniersquos MCM option in DU with an ApproveEligible recommendation acceptable

Manual UW Acceptable with a minimum 640 and max 45 DTI

Eligible Properties Existing 1-Unit SFR PUDs1-Unit Fannie approved CondosManufactured Homes ndash NOT ALLOWED

Other property Borrower may NOT own any other property at closing

Homebuyer Education Required for each borrower with or without subordinate financing

CalHFA Income Calculations

Income Calculations

Eligibility Income (CalHFA) Qualifying Income (Lender)

1 Household count ndash includes all people residing in the home (1-2 or 3 or more)

2 Household Eligibility Income is based on ALL INCOME from only those person(s) who is expected to live in the property be vested on title and be liable for the mortgage

1 Qualifying Income is based on the annualized gross income of any person(s) who is expected to live in the property be vested on title and be liable for the mortgage

2 Qual Income must meet FannieFHAVA guidelines

Difference between the two income calculations is the types of income used in each calculation

Eg OT Bonus Commission with lt 2 year history or Child Support payments that doesnrsquot continue for 3 years will be excluded from the Qualifying Income but will be included in the Eligibility Income to see if they

qualify for a CalHFA loan

Cal30 Program

Program Description Cal30 Conventional using Fanniersquos MyCommunityMortgage (MCM) with CalHFA variances

Term Conventional 30-year Fixed

Loan Amount Fannie Mae Conforming Loan Limits (High-balance limits not available)

Sales Price Limit Max must be within CalHFA sales price limits based on county where property is located

Max LTV CLTV 95 LTV 102 CLTV (subject to MI availability) 90 LTV 90 CLTV based on available MI

Income Limit Borrowerrsquos Income cannot exceed Cal30 Income Limits based on county where property located

Mortgage Insurance Any Fannie approved MI (CalHFA MI not currently available for the Cal30 Program)bull PMI Radian MGIC to max 90 LTVCLTV 720 fico minimum 45 max DTI

AUS UW Fanniersquos MCM option in DU with an ApproveEligible recommendation acceptable

Manual UW Acceptable with a minimum 640 and max 45 DTI

Eligible Properties Existing 1-Unit SFR PUDs1-Unit Fannie approved CondosManufactured Homes ndash NOT ALLOWED

Other property Borrower may NOT own any other property at closing

Homebuyer Education Required for each borrower with or without subordinate financing

Cal30 Program

Program Description Cal30 Conventional using Fanniersquos MyCommunityMortgage (MCM) with CalHFA variances

Term Conventional 30-year Fixed

Loan Amount Fannie Mae Conforming Loan Limits (High-balance limits not available)

Sales Price Limit Max must be within CalHFA sales price limits based on county where property is located

Max LTV CLTV 95 LTV 102 CLTV (subject to MI availability) 90 LTV 90 CLTV based on available MI

Income Limit Borrowerrsquos Income cannot exceed Cal30 Income Limits based on county where property located

Mortgage Insurance Any Fannie approved MI (CalHFA MI not currently available for the Cal30 Program)bull PMI Radian MGIC to max 90 LTVCLTV 720 fico minimum 45 max DTI

AUS UW Fanniersquos MCM option in DU with an ApproveEligible recommendation acceptable

Manual UW Acceptable with a minimum 640 and max 45 DTI

Eligible Properties Existing 1-Unit SFR PUDs1-Unit Fannie approved CondosManufactured Homes ndash NOT ALLOWED

Other property Borrower may NOT own any other property at closing

Homebuyer Education Required for each borrower with or without subordinate financing

Cal30 Contrsquodhellip

Topic Description

Allowable Subordinate Financing

bull CHDAP (when available) may be usedbull AHPPbull SFF (School Facility Fee Program when available) eligible provided the

amount of the SFF conditional grant is disclosed and included in CLTV

Interest Rates Available on the FMC Rate sheet or the CalHFA website

Max Origination Fee 150 Origination Fee (or combination of Origination Fee amp Discount Points)

Discount Fee Allowed ndash See Origination Fee for maximum allowed

Max Fees Max $550 for Processing Underwriting Doc Prep fees allowed

Other Fees The following fees can be paid by the lender borrower or from seller contributionbull Funding Fee of $150 for servicer requiredbull Fannie Maersquos Adverse Market charge bull Fannie Maersquos LLPA is discounted for this Cal30 program

Compliance Review CalHFA will review all loan files for program and Tax Act complianceCalHFA will credit UW all loans with CalHFA subordinate financing

CSHLP REO Program

Topic DescriptionWhat is CSHLP

Community Stabilization Home Loan Program intended to help stimulate communities hit hard with the REO inventory and at the same time provide affordable housing to FTHB in California

How does it work

bull The CSHLB provides a special reduced interest rate on a 30-year fixed mortgage on certain REO properties located in selected counties and zip codes throughout CA

bull Special Sales Prices are at least 12 off the estimated appraised valuebull 1st Mortgage may be combined with the CHDAP for DP amp CC assistancebull CalHFA financing available up to 100 of contracted sales price or current

appraised value whichever is less

Additional Requirements

1 Property must be a selected REO from a participating financial institutionbull Fannie Maebull CitiMortgage Inc and its affiliatesbull Wells Fargo Premier Asset Servicesbull HomEq Servicing

2 Must meet all CalHFA amp Fannie Mae repair inspection and health code inspection

3 Property must be vacant

Eligible Area Program focuses on several counties and dozens of zip codes

CSHLP REO Program Contrsquodhellip

Topic DescriptionEligibility 1 First-time homebuyer

2 Purchase3 Owner-occupied Primary Residence

Eligible Program Fannie Mae My Community Mortgage Only

Loan Term Conventional 30 Years Fixed ndash Fully Amortized

Eligible LTVCLTV 100 103

Interest Rate 550 as of June 10 2009 (Can change at any time)

Max Origination Fee 150 Origination Fee (or combination of Origination Fee amp Discount Points)

Income Limits Refer to CalHFArsquos income limits established for the county in which the borrower is purchasing

Sales Price Limits Cannot exceed maximum Fannie Mae loan limit in the area the property is located or CalHFArsquos Sales Price Limits whichever is less

Targeted Areas Borrowerrsquos purchasing a property in a Targeted area does not have to be a FTHB Additionally income sales price limits may be higher FTHB applies ifusing a CalHFA DAP

Eligible Properties

CSHLP REO Program Contrsquodhellip

Topic DescriptionMortgage Insurance

LTV Coverage Premium9701 - 100 20 849501 - 97 18 779001 - 95 16 728501 - 90 12 528001 - 85 6 38

Underwriting All CSHLP loans must meet Fannie Mae MCM underwriting standards CalHFArsquos Conventional Loan Underwriting Guidelines and this Program Credit Score Minimums

ndash LTV gt 95 - 680ndash LTV =lt 95 - 660ndash No score borrowers allowed up to 95 max LTV only ndash manual UW

DTI ndash MCM DU ndash 55 max MCM Manual ndash 45 max

Eligible DAP 1 CalHFArsquos CHDAP and 2 Fannie Mae eligible Community Secondsreg programs (which are designated

on CalHFArsquos AHPP list as ldquoCalHFA MBS Program Eligiblerdquo

Other Info bull Homebuyer Education required for all borrowers using the CSHLPbull No Minimum Borrower Contribution required

SMART REO Program

Topic Description

What is SMART

The SMART Program is reserved for CalHFA REO properties as selected by CalHFA This offers a conventional or government insured mortgage

How does it work

bull The SMART Program provides a special reduced interest rate on a 30-year fixed mortgage on selected CalHFA REO properties in CA

bull 1st Mortgage may be combined with the AHPP for DP amp CC assistancebull CalHFA financing available up to 100 of contracted sales price or current

appraised value whichever is less

Additional Requirements

1 Property must be a selected REO from a participating financial institutionbull Fannie Maebull CitiMortgage Inc and its affiliatesbull Wells Fargo Premier Asset Servicesbull HomEq Servicing

2 Must meet all CalHFA amp Fannie Mae repair inspection and health code inspection

3 Property must be vacant

Eligible Properties

SMART REO Program Contrsquodhellip

Topic Description

Eligibility 1 First-time homebuyer2 Purchase3 Owner-occupied Primary Residence

Eligible Program Conventional FHA or VA or USDA

Loan Term 30 Years Fixed ndash Fully Amortized

Eligible LTVCLTV Conventional 100 102FHA 9650 102VA 100 102

Interest Rate 550 as of June 10 2009 (Can change at any time)

Max Origination Fee 150 Origination Fee (or combination of Origination Fee amp Discount Points)

Income Limits Refer to CalHFArsquos income limits established for the county in which the borrower is purchasing

Sales Price Limits Cannot exceed maximum Fannie Mae loan limit in the area the property is located or CalHFArsquos Sales Price Limits whichever is less

SMART REO Program Contrsquodhellip

Topic Description

Mortgage Insurance

LTV Coverage Premium9701 - 100 35 127

9501 - 97 35 1109001 - 95 35 1068501 - 90 35 1058001 - 85 35 88

Underwriting All SMART conventional loans must meet CalHFArsquos Conventional Loan Underwriting Guidelines FHAVAUSDA loans must meet agency guidelines However when combined with CalHFA DAP CalHFArsquos Conventional Loan UW guidelines must be metCalHFA Credit Score Minimums

ndash 640 up to 720 depending on LTV DTI and UW methodCalHFA DTI

ndash 45 up to 55 depending on LTV Fico and UW method

Eligible DAP 1 Affordable Housing Partnership Program (AHPP)

Other Info bull Homebuyer Education required for all borrowers using the CSHLPbull No Minimum Borrower Contribution required unless otherwise required by FHA VA

or USDA

CHDAP

California Homebuyerrsquos Downpayment Assistance Program(Available with CalHFA or Non CalHFA 1st Mortgage)

Target Market Low to Moderate Income First-Time Home Buyers

Monthly Payments Silent 2ND loan with NO SCHEDULED MONTHLY PAYMENTS

Loan Amount 3 of Sales Price or Appraised Value whichever is less

CLTV Max 102 (Financed upfront MIP or guarantee fee included in base loan amount LTV calculation)

Term Matches term of 1st Mortgage

Minimum Borrower Contribution

A minimum contribution of 3 of the sales price is required from the borrower(s) own funds Must be sourced amp seasoned See Underwriting Guidelines for complete details

Use of Funds Can be used for additional Down Payment or Closing Costs as allowed by CalHFA

Interest Rate 325 Simple Interest

Due Date Deferred until the Note becomes due and payable paid in full refinanced or if the property is sold or transferred

Income Restrictions Borrowerrsquos Income cannot exceed HCD Moderate defined Income Limits

Sales Price Limit Cannot exceed CalHFArsquos Sales Price Limits for area where property is located

All CHDAP loans regardless of 1st Mortgage insurer must meet CalHFA Conventional Loan UW guidelines

AHPP

Affordable Housing Partnership Program(CalHFA partnerships with non-profit agencies amp municipalities)

AHPP is a joint effort between CalHFA and over 300 cities counties redevelopment agencies housing authorities and non-profit housing organizations

Target Market Low income first-time homebuyers however moderate income borrowers may also be eligible as determined by the AHPP partner

How does it work Allows borrowers to combine a CalHFA 1st mortgage with DP or CC assistance from an AHPP partner

Interest Rate Loan Amt

The AHPP program (loan grant etc) interest rate (if applicable) is determined by the individual AHPP partner for their respective program

CLTV Max 102 (Financed upfront MIP or guarantee fee included in base loan amount LTV calculation) 103 for CSHLP

Minimum Borrower Contribution

A minimum contribution of 3 of the sales price is required from the borrower(s) own funds Must be sourced amp seasoned See Underwriting Guidelines for complete details

How do I apply Borrower contacts the specific AHPP partner directly

CalHFA AHPP List See CalHFA AHPP List for approved program list

FIRST MORTGAGE

FHA $100 DOWN PROGRAM

FHA PROPERTY DISPOSITION SALES - HUD REOrsquoS($100 DOWN PROGRAM)

GOOD NEIGHBOR NEXT DOOR PROGRAM($100 DOWN PROGRAM)

AHPP

Affordable Housing Partnership Program(CalHFA partnerships with non-profit agencies amp municipalities)

AHPP is a joint effort between CalHFA and over 300 cities counties redevelopment agencies housing authorities and non-profit housing organizations

Target Market Low income first-time homebuyers however moderate income borrowers may also be eligible as determined by the AHPP partner

How does it work Allows borrowers to combine a CalHFA 1st mortgage with DP or CC assistance from an AHPP partner

Interest Rate Loan Amt

The AHPP program (loan grant etc) interest rate (if applicable) is determined by the individual AHPP partner for their respective program

CLTV Max 102 (Financed upfront MIP or guarantee fee included in base loan amount LTV calculation) 103 for CSHLP

Minimum Borrower Contribution

A minimum contribution of 3 of the sales price is required from the borrower(s) own funds Must be sourced amp seasoned See Underwriting Guidelines for complete details

How do I apply Borrower contacts the specific AHPP partner directly

CalHFA AHPP List See CalHFA AHPP List for approved program list

FIRST MORTGAGE

FHA $100 DOWN PROGRAM

FHA PROPERTY DISPOSITION SALES - HUD REOrsquoS($100 DOWN PROGRAM)

GOOD NEIGHBOR NEXT DOOR PROGRAM($100 DOWN PROGRAM)

FIRST MORTGAGE

FHA $100 DOWN PROGRAM

FHA PROPERTY DISPOSITION SALES - HUD REOrsquoS($100 DOWN PROGRAM)

GOOD NEIGHBOR NEXT DOOR PROGRAM($100 DOWN PROGRAM)

HUD REO Program Highlights

Topic Description

Highlights HUD offerrsquos itrsquos REO properties for sale with FHA-insured financing Individualrsquos only Properties that require no more than $5000 in repairs to meet

MPRMPS is eligible for sale as-is under the FHA 203(b) Uninsured Properties are

o Properties offered for sale ldquouninsuredrdquo do not meet in their ldquoas-isrdquo condition FHArsquos MPRMPS or cost of repairs exceed $5000 qualify only under the FHA 203(k) program

Down Payment $100 minimum Down Payment

Eligible Properties

SFRrsquos PUDS Condos (must be prior approved by FHA or by spot approval process)

Property must meet MPRMPS at time of appraisal in their ldquoas-isrdquo condition without repairs being necessary

Minimum Property Requirements (MPR) for existing homes Minimum Property Standards (MPS) for new construction

Occupancy Owner Occupied

Guidelines Standard FHA guidelines apply

HUD REO Sales Contract

Topic Description

HUD Sales Contract

The ldquoRadon Gas and Mold Notice and Release Agreementrdquo must be included with sales contract and be fully executed by all purchasers of the property

In order to qualify for FHA financing follow these instructions for Sales Contract (SC) First block on Line 4 of sales contract as well as applicable block for FHA 203(b)

203(b) repair escrow or 203(k) must be checked Condos must be processed under Section 234copy even if 203(b) is specified on

the sales contract A specific DP and mortgage amount is no longer required on Line 4 of SC Should still indicate type of financing being sought by borrower

Line 5 of SC should be actual borrower financing amp CC to be paid by HUD on their behalf (the seller) out of the sales proceeds It does not represent an amount which borrower may finance in mortgage

Only actual amount of CC and financing costs will be paid by HUD at settlement Borrower will not be credited at settlement for any unused portion PP items may not be paid out of the amount on Line 5

Line 8 of SC will be the discount if any that will be applied to the sales price at settlement Where price will be discounted the mortgage amount will be based on that discounted sales price not the contract sales price

Line 9 of SC will be the of days normally 45 or 60 in which the sale must be closed

HUD REO Processing

Topic DescriptionCHUMS Processing

A new FHA case number must be obtained for financing involving REO properties When entering case information in FHA Connection select ldquoREOrdquo for processing type When processing CHUMS (Computerized Homes UW Management System the

question ldquoWas this case previously sold as a Property Dispositionrdquo should always Be checked ldquoYESrdquo Always complete the ldquoPrevious Case Numberrdquo field This will track REO

properties sold with FHA financing and whether they are subsequently sold by the individuals who bought them from HUD

If entry of the previous case number triggers an error message contact HOC to post the number in the CHUMS property disposition file

Note that the appraisal fields in the FHA Connection should be left blank when obtaining a new case number for REO loans

If REO is a condominium FHA Connection will require entry of the Condo ID If FHA financing was approved on the SC but the development is not approved and condo is in compliance with the spot loan procedure enter ldquoYesrdquo in the spot lot field Condo project must be approved and in compliance with FHA policies (eg 51 owner occupancy)

Program Codes

F30FH072 or F30FH007 F30FHW072 or F30FHW07 ndash If we have to withhold

HUD REO Inspectionshellip

Topic DescriptionTermitePest Inspection

Termite inspection is required on existing property When called for in the Sales or Purchase Agreement or When the appraiser recommends the inspection in the appraisal report

Termite inspection is no longer an automatic requirement

Home Inspection All HUD homes are sold ldquoAS-ISrdquo without warranty HUD will not make repairs nor pay to correct any problems Borrowers are encouraged to have the house inspected by a professional home

inspector after their offer is accepted The ldquoFor Your Protection Get a Home Inspectionrdquo form must be provided If inspection reveals repairs are needed which no longer makes the property

eligible contact MampM contractor to discuss alternatives to allow the sale to continue

Repair Escrow Allowed for properties that need lt $5000 in repairs to meet the intent of the MPS

Cash escrow established to ensure completion of repairs Must be financed in the FHA loan and is NOT to be taken from HUD proceeds at

closing Escrow account will be equal to 110 of the estimated cost of repairs All repairs must be completed within 90 days of closing

HUD REO List httpwwwhudgovhomesindexcfm

GNND Program Highlights

Topic Description

Highlights The FHA Good Neighbor Next Door (GNND) Sales Program Helps revitalize neighborhoods by encouraging borrowers in selected

professions to purchase and live in HUD-acquired single-family properties

Eligible Borrowers

Law enforcement Officers Firefighters Emergency medical technicians (EMTs) Private and Public School Teachers

Pre-kindergarten through 12th grade teachers

Extra Benefit HUD offers a substantial incentive in the form of a discount of 50 from the list price of the home

Down Payment

$100 minimum Down Payment Closing and finance costs may be included in mortgage amount

Eligible Programs

203(b) 234copy 251 203(k) 203(k) Streamlined

Occupancy Borrower must agree to occupy property as primary residence for 3 years continuously

GNND Program Highlights

Topic Description

Eligible Properties

1-Unit SFRrsquos PUDS FHA approved Condos only Borrower must agree to occupy property as OO for 3 years straight

Guidelines Standard FHA guidelines apply

Required Documentation

Certificate of Law Enforcement Officer Teacher Firefighter or EMT (HUD-9548-A)

Land Use Restrictions Addendum (HUD-9548-B) Assignment of Sales Contract (HUD-9548-C)

2nd Mortgage amp Note

HUD requires that borrower signs a 2nd Mortgage and Note for the discount amount

There is no interest or payments required on this ldquosilent 2ndrdquo provided borrower fulfills the 3-year occupancy requirement

Available Properties

See HUD REO list which changes weekly

More Info httpwwwhudgovofficeshsgsfhreogoodngnndabotcfm

FIRST MORTGAGE

OTHER UPDATESCalSTRS UPDATE

$8000 TAX CREDIT PROGRAM

PROPERTY FLIPPING RULES ndash FHAVACONVENTIONAL

FMC FHA CREDIT UW OVERLAYS

ON-LINE HOMEBUYER EDUCATION PROGRAM

UPCOMING FANNIE MAE CHANGES

WHATrsquoS NEXT

HUD REO Sales Contract

Topic Description

HUD Sales Contract

The ldquoRadon Gas and Mold Notice and Release Agreementrdquo must be included with sales contract and be fully executed by all purchasers of the property

In order to qualify for FHA financing follow these instructions for Sales Contract (SC) First block on Line 4 of sales contract as well as applicable block for FHA 203(b)

203(b) repair escrow or 203(k) must be checked Condos must be processed under Section 234copy even if 203(b) is specified on

the sales contract A specific DP and mortgage amount is no longer required on Line 4 of SC Should still indicate type of financing being sought by borrower

Line 5 of SC should be actual borrower financing amp CC to be paid by HUD on their behalf (the seller) out of the sales proceeds It does not represent an amount which borrower may finance in mortgage

Only actual amount of CC and financing costs will be paid by HUD at settlement Borrower will not be credited at settlement for any unused portion PP items may not be paid out of the amount on Line 5

Line 8 of SC will be the discount if any that will be applied to the sales price at settlement Where price will be discounted the mortgage amount will be based on that discounted sales price not the contract sales price

Line 9 of SC will be the of days normally 45 or 60 in which the sale must be closed

HUD REO Processing

Topic DescriptionCHUMS Processing

A new FHA case number must be obtained for financing involving REO properties When entering case information in FHA Connection select ldquoREOrdquo for processing type When processing CHUMS (Computerized Homes UW Management System the

question ldquoWas this case previously sold as a Property Dispositionrdquo should always Be checked ldquoYESrdquo Always complete the ldquoPrevious Case Numberrdquo field This will track REO

properties sold with FHA financing and whether they are subsequently sold by the individuals who bought them from HUD

If entry of the previous case number triggers an error message contact HOC to post the number in the CHUMS property disposition file

Note that the appraisal fields in the FHA Connection should be left blank when obtaining a new case number for REO loans

If REO is a condominium FHA Connection will require entry of the Condo ID If FHA financing was approved on the SC but the development is not approved and condo is in compliance with the spot loan procedure enter ldquoYesrdquo in the spot lot field Condo project must be approved and in compliance with FHA policies (eg 51 owner occupancy)

Program Codes

F30FH072 or F30FH007 F30FHW072 or F30FHW07 ndash If we have to withhold

HUD REO Inspectionshellip

Topic DescriptionTermitePest Inspection

Termite inspection is required on existing property When called for in the Sales or Purchase Agreement or When the appraiser recommends the inspection in the appraisal report

Termite inspection is no longer an automatic requirement

Home Inspection All HUD homes are sold ldquoAS-ISrdquo without warranty HUD will not make repairs nor pay to correct any problems Borrowers are encouraged to have the house inspected by a professional home

inspector after their offer is accepted The ldquoFor Your Protection Get a Home Inspectionrdquo form must be provided If inspection reveals repairs are needed which no longer makes the property

eligible contact MampM contractor to discuss alternatives to allow the sale to continue

Repair Escrow Allowed for properties that need lt $5000 in repairs to meet the intent of the MPS

Cash escrow established to ensure completion of repairs Must be financed in the FHA loan and is NOT to be taken from HUD proceeds at

closing Escrow account will be equal to 110 of the estimated cost of repairs All repairs must be completed within 90 days of closing

HUD REO List httpwwwhudgovhomesindexcfm

GNND Program Highlights

Topic Description

Highlights The FHA Good Neighbor Next Door (GNND) Sales Program Helps revitalize neighborhoods by encouraging borrowers in selected

professions to purchase and live in HUD-acquired single-family properties

Eligible Borrowers

Law enforcement Officers Firefighters Emergency medical technicians (EMTs) Private and Public School Teachers

Pre-kindergarten through 12th grade teachers

Extra Benefit HUD offers a substantial incentive in the form of a discount of 50 from the list price of the home

Down Payment

$100 minimum Down Payment Closing and finance costs may be included in mortgage amount

Eligible Programs

203(b) 234copy 251 203(k) 203(k) Streamlined

Occupancy Borrower must agree to occupy property as primary residence for 3 years continuously

GNND Program Highlights

Topic Description

Eligible Properties

1-Unit SFRrsquos PUDS FHA approved Condos only Borrower must agree to occupy property as OO for 3 years straight

Guidelines Standard FHA guidelines apply

Required Documentation

Certificate of Law Enforcement Officer Teacher Firefighter or EMT (HUD-9548-A)

Land Use Restrictions Addendum (HUD-9548-B) Assignment of Sales Contract (HUD-9548-C)

2nd Mortgage amp Note

HUD requires that borrower signs a 2nd Mortgage and Note for the discount amount

There is no interest or payments required on this ldquosilent 2ndrdquo provided borrower fulfills the 3-year occupancy requirement

Available Properties

See HUD REO list which changes weekly

More Info httpwwwhudgovofficeshsgsfhreogoodngnndabotcfm

FIRST MORTGAGE

OTHER UPDATESCalSTRS UPDATE

$8000 TAX CREDIT PROGRAM

PROPERTY FLIPPING RULES ndash FHAVACONVENTIONAL

FMC FHA CREDIT UW OVERLAYS

ON-LINE HOMEBUYER EDUCATION PROGRAM

UPCOMING FANNIE MAE CHANGES

WHATrsquoS NEXT

HUD REO Processing

Topic DescriptionCHUMS Processing

A new FHA case number must be obtained for financing involving REO properties When entering case information in FHA Connection select ldquoREOrdquo for processing type When processing CHUMS (Computerized Homes UW Management System the

question ldquoWas this case previously sold as a Property Dispositionrdquo should always Be checked ldquoYESrdquo Always complete the ldquoPrevious Case Numberrdquo field This will track REO

properties sold with FHA financing and whether they are subsequently sold by the individuals who bought them from HUD

If entry of the previous case number triggers an error message contact HOC to post the number in the CHUMS property disposition file

Note that the appraisal fields in the FHA Connection should be left blank when obtaining a new case number for REO loans

If REO is a condominium FHA Connection will require entry of the Condo ID If FHA financing was approved on the SC but the development is not approved and condo is in compliance with the spot loan procedure enter ldquoYesrdquo in the spot lot field Condo project must be approved and in compliance with FHA policies (eg 51 owner occupancy)

Program Codes

F30FH072 or F30FH007 F30FHW072 or F30FHW07 ndash If we have to withhold

HUD REO Inspectionshellip

Topic DescriptionTermitePest Inspection

Termite inspection is required on existing property When called for in the Sales or Purchase Agreement or When the appraiser recommends the inspection in the appraisal report

Termite inspection is no longer an automatic requirement

Home Inspection All HUD homes are sold ldquoAS-ISrdquo without warranty HUD will not make repairs nor pay to correct any problems Borrowers are encouraged to have the house inspected by a professional home

inspector after their offer is accepted The ldquoFor Your Protection Get a Home Inspectionrdquo form must be provided If inspection reveals repairs are needed which no longer makes the property

eligible contact MampM contractor to discuss alternatives to allow the sale to continue

Repair Escrow Allowed for properties that need lt $5000 in repairs to meet the intent of the MPS

Cash escrow established to ensure completion of repairs Must be financed in the FHA loan and is NOT to be taken from HUD proceeds at

closing Escrow account will be equal to 110 of the estimated cost of repairs All repairs must be completed within 90 days of closing

HUD REO List httpwwwhudgovhomesindexcfm

GNND Program Highlights

Topic Description

Highlights The FHA Good Neighbor Next Door (GNND) Sales Program Helps revitalize neighborhoods by encouraging borrowers in selected

professions to purchase and live in HUD-acquired single-family properties

Eligible Borrowers

Law enforcement Officers Firefighters Emergency medical technicians (EMTs) Private and Public School Teachers

Pre-kindergarten through 12th grade teachers

Extra Benefit HUD offers a substantial incentive in the form of a discount of 50 from the list price of the home

Down Payment

$100 minimum Down Payment Closing and finance costs may be included in mortgage amount

Eligible Programs

203(b) 234copy 251 203(k) 203(k) Streamlined

Occupancy Borrower must agree to occupy property as primary residence for 3 years continuously

GNND Program Highlights

Topic Description

Eligible Properties

1-Unit SFRrsquos PUDS FHA approved Condos only Borrower must agree to occupy property as OO for 3 years straight

Guidelines Standard FHA guidelines apply

Required Documentation

Certificate of Law Enforcement Officer Teacher Firefighter or EMT (HUD-9548-A)

Land Use Restrictions Addendum (HUD-9548-B) Assignment of Sales Contract (HUD-9548-C)

2nd Mortgage amp Note

HUD requires that borrower signs a 2nd Mortgage and Note for the discount amount

There is no interest or payments required on this ldquosilent 2ndrdquo provided borrower fulfills the 3-year occupancy requirement

Available Properties

See HUD REO list which changes weekly

More Info httpwwwhudgovofficeshsgsfhreogoodngnndabotcfm

FIRST MORTGAGE

OTHER UPDATESCalSTRS UPDATE

$8000 TAX CREDIT PROGRAM

PROPERTY FLIPPING RULES ndash FHAVACONVENTIONAL

FMC FHA CREDIT UW OVERLAYS

ON-LINE HOMEBUYER EDUCATION PROGRAM

UPCOMING FANNIE MAE CHANGES

WHATrsquoS NEXT

HUD REO Inspectionshellip

Topic DescriptionTermitePest Inspection

Termite inspection is required on existing property When called for in the Sales or Purchase Agreement or When the appraiser recommends the inspection in the appraisal report

Termite inspection is no longer an automatic requirement

Home Inspection All HUD homes are sold ldquoAS-ISrdquo without warranty HUD will not make repairs nor pay to correct any problems Borrowers are encouraged to have the house inspected by a professional home

inspector after their offer is accepted The ldquoFor Your Protection Get a Home Inspectionrdquo form must be provided If inspection reveals repairs are needed which no longer makes the property

eligible contact MampM contractor to discuss alternatives to allow the sale to continue

Repair Escrow Allowed for properties that need lt $5000 in repairs to meet the intent of the MPS

Cash escrow established to ensure completion of repairs Must be financed in the FHA loan and is NOT to be taken from HUD proceeds at

closing Escrow account will be equal to 110 of the estimated cost of repairs All repairs must be completed within 90 days of closing

HUD REO List httpwwwhudgovhomesindexcfm

GNND Program Highlights

Topic Description

Highlights The FHA Good Neighbor Next Door (GNND) Sales Program Helps revitalize neighborhoods by encouraging borrowers in selected

professions to purchase and live in HUD-acquired single-family properties

Eligible Borrowers

Law enforcement Officers Firefighters Emergency medical technicians (EMTs) Private and Public School Teachers

Pre-kindergarten through 12th grade teachers

Extra Benefit HUD offers a substantial incentive in the form of a discount of 50 from the list price of the home

Down Payment

$100 minimum Down Payment Closing and finance costs may be included in mortgage amount

Eligible Programs

203(b) 234copy 251 203(k) 203(k) Streamlined

Occupancy Borrower must agree to occupy property as primary residence for 3 years continuously

GNND Program Highlights

Topic Description

Eligible Properties

1-Unit SFRrsquos PUDS FHA approved Condos only Borrower must agree to occupy property as OO for 3 years straight

Guidelines Standard FHA guidelines apply

Required Documentation

Certificate of Law Enforcement Officer Teacher Firefighter or EMT (HUD-9548-A)

Land Use Restrictions Addendum (HUD-9548-B) Assignment of Sales Contract (HUD-9548-C)

2nd Mortgage amp Note

HUD requires that borrower signs a 2nd Mortgage and Note for the discount amount

There is no interest or payments required on this ldquosilent 2ndrdquo provided borrower fulfills the 3-year occupancy requirement

Available Properties

See HUD REO list which changes weekly

More Info httpwwwhudgovofficeshsgsfhreogoodngnndabotcfm

FIRST MORTGAGE

OTHER UPDATESCalSTRS UPDATE

$8000 TAX CREDIT PROGRAM

PROPERTY FLIPPING RULES ndash FHAVACONVENTIONAL

FMC FHA CREDIT UW OVERLAYS

ON-LINE HOMEBUYER EDUCATION PROGRAM

UPCOMING FANNIE MAE CHANGES

WHATrsquoS NEXT

GNND Program Highlights

Topic Description

Highlights The FHA Good Neighbor Next Door (GNND) Sales Program Helps revitalize neighborhoods by encouraging borrowers in selected

professions to purchase and live in HUD-acquired single-family properties

Eligible Borrowers

Law enforcement Officers Firefighters Emergency medical technicians (EMTs) Private and Public School Teachers

Pre-kindergarten through 12th grade teachers

Extra Benefit HUD offers a substantial incentive in the form of a discount of 50 from the list price of the home

Down Payment

$100 minimum Down Payment Closing and finance costs may be included in mortgage amount

Eligible Programs

203(b) 234copy 251 203(k) 203(k) Streamlined

Occupancy Borrower must agree to occupy property as primary residence for 3 years continuously

GNND Program Highlights

Topic Description

Eligible Properties

1-Unit SFRrsquos PUDS FHA approved Condos only Borrower must agree to occupy property as OO for 3 years straight

Guidelines Standard FHA guidelines apply

Required Documentation

Certificate of Law Enforcement Officer Teacher Firefighter or EMT (HUD-9548-A)

Land Use Restrictions Addendum (HUD-9548-B) Assignment of Sales Contract (HUD-9548-C)

2nd Mortgage amp Note

HUD requires that borrower signs a 2nd Mortgage and Note for the discount amount

There is no interest or payments required on this ldquosilent 2ndrdquo provided borrower fulfills the 3-year occupancy requirement

Available Properties

See HUD REO list which changes weekly

More Info httpwwwhudgovofficeshsgsfhreogoodngnndabotcfm

FIRST MORTGAGE

OTHER UPDATESCalSTRS UPDATE

$8000 TAX CREDIT PROGRAM

PROPERTY FLIPPING RULES ndash FHAVACONVENTIONAL

FMC FHA CREDIT UW OVERLAYS

ON-LINE HOMEBUYER EDUCATION PROGRAM

UPCOMING FANNIE MAE CHANGES

WHATrsquoS NEXT

GNND Program Highlights

Topic Description

Eligible Properties

1-Unit SFRrsquos PUDS FHA approved Condos only Borrower must agree to occupy property as OO for 3 years straight

Guidelines Standard FHA guidelines apply

Required Documentation

Certificate of Law Enforcement Officer Teacher Firefighter or EMT (HUD-9548-A)

Land Use Restrictions Addendum (HUD-9548-B) Assignment of Sales Contract (HUD-9548-C)

2nd Mortgage amp Note

HUD requires that borrower signs a 2nd Mortgage and Note for the discount amount

There is no interest or payments required on this ldquosilent 2ndrdquo provided borrower fulfills the 3-year occupancy requirement

Available Properties

See HUD REO list which changes weekly

More Info httpwwwhudgovofficeshsgsfhreogoodngnndabotcfm

FIRST MORTGAGE

OTHER UPDATESCalSTRS UPDATE

$8000 TAX CREDIT PROGRAM

PROPERTY FLIPPING RULES ndash FHAVACONVENTIONAL

FMC FHA CREDIT UW OVERLAYS

ON-LINE HOMEBUYER EDUCATION PROGRAM

UPCOMING FANNIE MAE CHANGES

WHATrsquoS NEXT

FIRST MORTGAGE

OTHER UPDATESCalSTRS UPDATE

$8000 TAX CREDIT PROGRAM

PROPERTY FLIPPING RULES ndash FHAVACONVENTIONAL

FMC FHA CREDIT UW OVERLAYS

ON-LINE HOMEBUYER EDUCATION PROGRAM

UPCOMING FANNIE MAE CHANGES

WHATrsquoS NEXT

CalSTRS Program Update

Topic Description

Eligible Borrowers1 Employees of a California public school district 2 Employees of a California Community College3 Member(s) of the California State Teachers Retirement System

Geographic Restrictions Properties within the State of California ONLY

Eligible Programs Conforming FixedNon Conforming FixedCalSTRS 8017 ndash Most popular CalSTRS program

Maximum LTV Up to 80 on 8017 ProgramUp to 95 on Regular program (90 due to MI restrictions)

Maximum CLTV Up to 97 CLTV on 8017 Program85 - 90 on Regular program due to MI restrictions

FTHB No First-Time Home Buyer requirement

Income Limits No Income Limits

Sales Price Limits No Sales Price Limits

Whatrsquos changed CalSTRS Employees Are Eligible Effective immediately CalSTRS employees are eligible to apply for CalSTRS home loans

$8000 Tax Credit

Topic Description

What is itThis is the result of the ARRA (American Recovery and Reinvestment Act) of 2009 which provides First Time Homebuyers with as much as $8000 tax credit to promote homeownership

Things to knowhellip bull Even though program is authorized by HUD they are not purchasing the anticipated tax credit FHA approved mortgagees FHA approved nonprofit organizations as well as Federal state and local governmental agencies are the ones purchasing the tax credit anticipated by the homebuyer at their discretion

bull Not available to all FTHB They must meet the AGI income limits set forth by IRS tax-exempt MRB financing non-resident aliens etc

bull Credit is limited to $7500 ($8000 for 2009)

bull Homebuyer required to sign a Certification that the tax credit is not subject to other indebtedness

Bottom line NOT AVAILABLE through First Mortgage at this time

Property Flipping Update - FHA

FHA GUIDELINE OVERVIEW

ndash Only owners of record may sell properties that will be financed using FHA insured mortgagesndash Any resale of a property may not occur within 90 days or less from the last salendash For re-sales that occur between 91-180 days where the new sales price exceeds the previous

sales price by 100 or more FHA will require additional documentation validating the propertyrsquos value FHA also has flexibility to examine and require additional evidence of appraised value when properties are re-sold within 12 months

EXCEPTIONS TO FHA 90-DAY RESTRICTION

The following sales are exempt from the time restriction

ndash FHA REO properties sold by FHAndash Re-sale of properties purchased by an employer or a relocation agency in connection to an

employee relocation (See Property Flipping training for more information)ndash A builder selling a newly built home or building a home for a homebuyer wanting to use FHA

financingndash Property inherited by the Sellerndash Single Family REO properties sold by all Federal Government Agencies (excludes

FannieFreddie)ndash See Property Flipping training for detailed list of exceptions

Property Flipping FHA contrsquodhellip

Whatrsquos New

bull FHA has expanded its anti-flipping policy by ldquowaivingrdquo the 90-day ownership rule when a mortgage lender sells a property acquired as a result of foreclosure This means state licensed mortgage lenders or the property disposition firms they use to market their foreclosed properties are exempt from the 90-day lock-out period that once made loans sold within 90 days of acquisition ineligible for FHA insured financing

bull Acquisition date is the date the lender acquired title to the foreclosed property

bull Expires with sales agreements signed by the seller and buyer after May 10 2010

Property Flipping Update - Conventional

Fannie Mae Revised Policy (May 1 2005)

Fannie does not specifically call for a 90-day rule However

bull Lenders are required to confirm and document in the mortgage file that the property seller (purchase) or borrower (refinance) is the owner of the subject property

bull Lender must perform an underwriting analysis of the current contract for sale for the subject property and the sale (or transfer) history of the subject property and comparable sales

bull Lender is also required as part of the Loan Origination process to analyze and review the sale(s) of the subject property and the sale price trend in relation to the appraisers opinion of value to confirm that they are reasonable and representative of the market

bull Loan must be priced to Program hellip01 will be fully QCrsquod and go through Loan Committee

These sample documentations is especially important for transactions involving an assignment (or sale) of a contract for sale andor ldquoback to backrdquo ldquosimultaneousrdquo or ldquodoublerdquo transaction closings (or double escrows) to support the property acquisition financing and closing

Property Flipping Update - VA

VA has formally adopted a Property Flipping rule

o Loan must be priced to Program hellip07o Loan will be submitted to Loan Committee for approvalo Full QC will be performed

Some investors including investor 72 have adopted the FHA policy for VA loans therefore follow FHA rules with regards to Property Flipping

New FMC FHA overlayshellip

Topic Description

FICOrsquos lt 620

Max DTI ratio of 46 - regardless of AUS (DULP) approval Homebuyer educationcounseling certificate required Verification of rentcancelled checksbank statements to verify current housing payment history

(exceptions may be granted for borrowers living with family) Letters of explanation for all inquiries in the last 90 days Zero late pays in the last 12 months regardless of AUS (DULP) approval

FICOrsquos =gt 620 Letters of explanation for all derogatory credit in the last 24 months Letters of explanation for all inquiries in the last 90 days

ALL Loans with AUS (DULP) Approvals

Declining credit profile in the last 12 months - borrower must provide letter of explanation on all derogatory credit and a verification of rentcancelled checksbank statements to verify current housing payment history

Maximum DTI ratio with DULP approval 500 with 35 down payment Maximum DTI ratio with DULP approval 550 with 5 down payment Comps for property no more than 3 months old maximum (re-statement of current credit overlay) Compensating factors must be from HUD handbook 4155 (re-statement of current credit overlay) Max LTV for cash out refinances is capped at 850 regardless of the date of the case number

assignment Manual underwriting guidelines of maximum DTI ratio of 460 and no derogatory credit in the

last 12 months still in effect (re-statement of current credit overlay)

FREE Online Homebuyer Education option

Homebuyers Education Course

To help with the new Homebuyer Education requirement for our FHA loans lt 620 MGIC offers consumers FREE homebuyer

andor landlord education and certification with online training and testing Here are the instructions for doing Homebuyer

Education online through MGIC

Homebuyer Education Course can be taken online via the MGIC website you are no longer restricted to sit in a classroom or

do it by mail The easiest way to do it is to go online onto the following website and follow these simple steps

httpwwwmgiccomeducationbuyersedhtml

You as the originator (LOAE) sign up for a Buyers Ed Code You must use your email address to sign up and this e-mail

must be unique to you Do not use an e-mail address others you work with might also use It takes 2 business days to

activate your code and you only need to register once This is the code you will provide your borrowers to register for the

class

1 Direct your borrower to this website and they will need to register for the Buyer Ed Test using your code

1048707 The Homebuyers Education Course is available in both English and Spanish

1048707 The Landlord Education Course is available in English only

2 You will get emailed when they have completed the course as long as they use your Buyers Ed Code so make sure your borrower uses your Buyers Ed Code when registering

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

Property Flipping Update - FHA

FHA GUIDELINE OVERVIEW

ndash Only owners of record may sell properties that will be financed using FHA insured mortgagesndash Any resale of a property may not occur within 90 days or less from the last salendash For re-sales that occur between 91-180 days where the new sales price exceeds the previous

sales price by 100 or more FHA will require additional documentation validating the propertyrsquos value FHA also has flexibility to examine and require additional evidence of appraised value when properties are re-sold within 12 months

EXCEPTIONS TO FHA 90-DAY RESTRICTION

The following sales are exempt from the time restriction

ndash FHA REO properties sold by FHAndash Re-sale of properties purchased by an employer or a relocation agency in connection to an

employee relocation (See Property Flipping training for more information)ndash A builder selling a newly built home or building a home for a homebuyer wanting to use FHA

financingndash Property inherited by the Sellerndash Single Family REO properties sold by all Federal Government Agencies (excludes

FannieFreddie)ndash See Property Flipping training for detailed list of exceptions

Property Flipping FHA contrsquodhellip

Whatrsquos New

bull FHA has expanded its anti-flipping policy by ldquowaivingrdquo the 90-day ownership rule when a mortgage lender sells a property acquired as a result of foreclosure This means state licensed mortgage lenders or the property disposition firms they use to market their foreclosed properties are exempt from the 90-day lock-out period that once made loans sold within 90 days of acquisition ineligible for FHA insured financing

bull Acquisition date is the date the lender acquired title to the foreclosed property

bull Expires with sales agreements signed by the seller and buyer after May 10 2010

Property Flipping Update - Conventional

Fannie Mae Revised Policy (May 1 2005)

Fannie does not specifically call for a 90-day rule However

bull Lenders are required to confirm and document in the mortgage file that the property seller (purchase) or borrower (refinance) is the owner of the subject property

bull Lender must perform an underwriting analysis of the current contract for sale for the subject property and the sale (or transfer) history of the subject property and comparable sales

bull Lender is also required as part of the Loan Origination process to analyze and review the sale(s) of the subject property and the sale price trend in relation to the appraisers opinion of value to confirm that they are reasonable and representative of the market

bull Loan must be priced to Program hellip01 will be fully QCrsquod and go through Loan Committee

These sample documentations is especially important for transactions involving an assignment (or sale) of a contract for sale andor ldquoback to backrdquo ldquosimultaneousrdquo or ldquodoublerdquo transaction closings (or double escrows) to support the property acquisition financing and closing

Property Flipping Update - VA

VA has formally adopted a Property Flipping rule

o Loan must be priced to Program hellip07o Loan will be submitted to Loan Committee for approvalo Full QC will be performed

Some investors including investor 72 have adopted the FHA policy for VA loans therefore follow FHA rules with regards to Property Flipping

New FMC FHA overlayshellip

Topic Description

FICOrsquos lt 620

Max DTI ratio of 46 - regardless of AUS (DULP) approval Homebuyer educationcounseling certificate required Verification of rentcancelled checksbank statements to verify current housing payment history

(exceptions may be granted for borrowers living with family) Letters of explanation for all inquiries in the last 90 days Zero late pays in the last 12 months regardless of AUS (DULP) approval

FICOrsquos =gt 620 Letters of explanation for all derogatory credit in the last 24 months Letters of explanation for all inquiries in the last 90 days

ALL Loans with AUS (DULP) Approvals

Declining credit profile in the last 12 months - borrower must provide letter of explanation on all derogatory credit and a verification of rentcancelled checksbank statements to verify current housing payment history

Maximum DTI ratio with DULP approval 500 with 35 down payment Maximum DTI ratio with DULP approval 550 with 5 down payment Comps for property no more than 3 months old maximum (re-statement of current credit overlay) Compensating factors must be from HUD handbook 4155 (re-statement of current credit overlay) Max LTV for cash out refinances is capped at 850 regardless of the date of the case number

assignment Manual underwriting guidelines of maximum DTI ratio of 460 and no derogatory credit in the

last 12 months still in effect (re-statement of current credit overlay)

FREE Online Homebuyer Education option

Homebuyers Education Course

To help with the new Homebuyer Education requirement for our FHA loans lt 620 MGIC offers consumers FREE homebuyer

andor landlord education and certification with online training and testing Here are the instructions for doing Homebuyer

Education online through MGIC

Homebuyer Education Course can be taken online via the MGIC website you are no longer restricted to sit in a classroom or

do it by mail The easiest way to do it is to go online onto the following website and follow these simple steps

httpwwwmgiccomeducationbuyersedhtml

You as the originator (LOAE) sign up for a Buyers Ed Code You must use your email address to sign up and this e-mail

must be unique to you Do not use an e-mail address others you work with might also use It takes 2 business days to

activate your code and you only need to register once This is the code you will provide your borrowers to register for the

class

1 Direct your borrower to this website and they will need to register for the Buyer Ed Test using your code

1048707 The Homebuyers Education Course is available in both English and Spanish

1048707 The Landlord Education Course is available in English only

2 You will get emailed when they have completed the course as long as they use your Buyers Ed Code so make sure your borrower uses your Buyers Ed Code when registering

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

Property Flipping FHA contrsquodhellip

Whatrsquos New

bull FHA has expanded its anti-flipping policy by ldquowaivingrdquo the 90-day ownership rule when a mortgage lender sells a property acquired as a result of foreclosure This means state licensed mortgage lenders or the property disposition firms they use to market their foreclosed properties are exempt from the 90-day lock-out period that once made loans sold within 90 days of acquisition ineligible for FHA insured financing

bull Acquisition date is the date the lender acquired title to the foreclosed property

bull Expires with sales agreements signed by the seller and buyer after May 10 2010

Property Flipping Update - Conventional

Fannie Mae Revised Policy (May 1 2005)

Fannie does not specifically call for a 90-day rule However

bull Lenders are required to confirm and document in the mortgage file that the property seller (purchase) or borrower (refinance) is the owner of the subject property

bull Lender must perform an underwriting analysis of the current contract for sale for the subject property and the sale (or transfer) history of the subject property and comparable sales

bull Lender is also required as part of the Loan Origination process to analyze and review the sale(s) of the subject property and the sale price trend in relation to the appraisers opinion of value to confirm that they are reasonable and representative of the market

bull Loan must be priced to Program hellip01 will be fully QCrsquod and go through Loan Committee

These sample documentations is especially important for transactions involving an assignment (or sale) of a contract for sale andor ldquoback to backrdquo ldquosimultaneousrdquo or ldquodoublerdquo transaction closings (or double escrows) to support the property acquisition financing and closing

Property Flipping Update - VA

VA has formally adopted a Property Flipping rule

o Loan must be priced to Program hellip07o Loan will be submitted to Loan Committee for approvalo Full QC will be performed

Some investors including investor 72 have adopted the FHA policy for VA loans therefore follow FHA rules with regards to Property Flipping

New FMC FHA overlayshellip

Topic Description

FICOrsquos lt 620

Max DTI ratio of 46 - regardless of AUS (DULP) approval Homebuyer educationcounseling certificate required Verification of rentcancelled checksbank statements to verify current housing payment history

(exceptions may be granted for borrowers living with family) Letters of explanation for all inquiries in the last 90 days Zero late pays in the last 12 months regardless of AUS (DULP) approval

FICOrsquos =gt 620 Letters of explanation for all derogatory credit in the last 24 months Letters of explanation for all inquiries in the last 90 days

ALL Loans with AUS (DULP) Approvals

Declining credit profile in the last 12 months - borrower must provide letter of explanation on all derogatory credit and a verification of rentcancelled checksbank statements to verify current housing payment history

Maximum DTI ratio with DULP approval 500 with 35 down payment Maximum DTI ratio with DULP approval 550 with 5 down payment Comps for property no more than 3 months old maximum (re-statement of current credit overlay) Compensating factors must be from HUD handbook 4155 (re-statement of current credit overlay) Max LTV for cash out refinances is capped at 850 regardless of the date of the case number

assignment Manual underwriting guidelines of maximum DTI ratio of 460 and no derogatory credit in the

last 12 months still in effect (re-statement of current credit overlay)

FREE Online Homebuyer Education option

Homebuyers Education Course

To help with the new Homebuyer Education requirement for our FHA loans lt 620 MGIC offers consumers FREE homebuyer

andor landlord education and certification with online training and testing Here are the instructions for doing Homebuyer

Education online through MGIC

Homebuyer Education Course can be taken online via the MGIC website you are no longer restricted to sit in a classroom or

do it by mail The easiest way to do it is to go online onto the following website and follow these simple steps

httpwwwmgiccomeducationbuyersedhtml

You as the originator (LOAE) sign up for a Buyers Ed Code You must use your email address to sign up and this e-mail

must be unique to you Do not use an e-mail address others you work with might also use It takes 2 business days to

activate your code and you only need to register once This is the code you will provide your borrowers to register for the

class

1 Direct your borrower to this website and they will need to register for the Buyer Ed Test using your code

1048707 The Homebuyers Education Course is available in both English and Spanish

1048707 The Landlord Education Course is available in English only

2 You will get emailed when they have completed the course as long as they use your Buyers Ed Code so make sure your borrower uses your Buyers Ed Code when registering

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

Property Flipping Update - Conventional

Fannie Mae Revised Policy (May 1 2005)

Fannie does not specifically call for a 90-day rule However

bull Lenders are required to confirm and document in the mortgage file that the property seller (purchase) or borrower (refinance) is the owner of the subject property

bull Lender must perform an underwriting analysis of the current contract for sale for the subject property and the sale (or transfer) history of the subject property and comparable sales

bull Lender is also required as part of the Loan Origination process to analyze and review the sale(s) of the subject property and the sale price trend in relation to the appraisers opinion of value to confirm that they are reasonable and representative of the market

bull Loan must be priced to Program hellip01 will be fully QCrsquod and go through Loan Committee

These sample documentations is especially important for transactions involving an assignment (or sale) of a contract for sale andor ldquoback to backrdquo ldquosimultaneousrdquo or ldquodoublerdquo transaction closings (or double escrows) to support the property acquisition financing and closing

Property Flipping Update - VA

VA has formally adopted a Property Flipping rule

o Loan must be priced to Program hellip07o Loan will be submitted to Loan Committee for approvalo Full QC will be performed

Some investors including investor 72 have adopted the FHA policy for VA loans therefore follow FHA rules with regards to Property Flipping

New FMC FHA overlayshellip

Topic Description

FICOrsquos lt 620

Max DTI ratio of 46 - regardless of AUS (DULP) approval Homebuyer educationcounseling certificate required Verification of rentcancelled checksbank statements to verify current housing payment history

(exceptions may be granted for borrowers living with family) Letters of explanation for all inquiries in the last 90 days Zero late pays in the last 12 months regardless of AUS (DULP) approval

FICOrsquos =gt 620 Letters of explanation for all derogatory credit in the last 24 months Letters of explanation for all inquiries in the last 90 days

ALL Loans with AUS (DULP) Approvals

Declining credit profile in the last 12 months - borrower must provide letter of explanation on all derogatory credit and a verification of rentcancelled checksbank statements to verify current housing payment history

Maximum DTI ratio with DULP approval 500 with 35 down payment Maximum DTI ratio with DULP approval 550 with 5 down payment Comps for property no more than 3 months old maximum (re-statement of current credit overlay) Compensating factors must be from HUD handbook 4155 (re-statement of current credit overlay) Max LTV for cash out refinances is capped at 850 regardless of the date of the case number

assignment Manual underwriting guidelines of maximum DTI ratio of 460 and no derogatory credit in the

last 12 months still in effect (re-statement of current credit overlay)

FREE Online Homebuyer Education option

Homebuyers Education Course

To help with the new Homebuyer Education requirement for our FHA loans lt 620 MGIC offers consumers FREE homebuyer

andor landlord education and certification with online training and testing Here are the instructions for doing Homebuyer

Education online through MGIC

Homebuyer Education Course can be taken online via the MGIC website you are no longer restricted to sit in a classroom or

do it by mail The easiest way to do it is to go online onto the following website and follow these simple steps

httpwwwmgiccomeducationbuyersedhtml

You as the originator (LOAE) sign up for a Buyers Ed Code You must use your email address to sign up and this e-mail

must be unique to you Do not use an e-mail address others you work with might also use It takes 2 business days to

activate your code and you only need to register once This is the code you will provide your borrowers to register for the

class

1 Direct your borrower to this website and they will need to register for the Buyer Ed Test using your code

1048707 The Homebuyers Education Course is available in both English and Spanish

1048707 The Landlord Education Course is available in English only

2 You will get emailed when they have completed the course as long as they use your Buyers Ed Code so make sure your borrower uses your Buyers Ed Code when registering

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

Property Flipping Update - VA

VA has formally adopted a Property Flipping rule

o Loan must be priced to Program hellip07o Loan will be submitted to Loan Committee for approvalo Full QC will be performed

Some investors including investor 72 have adopted the FHA policy for VA loans therefore follow FHA rules with regards to Property Flipping

New FMC FHA overlayshellip

Topic Description

FICOrsquos lt 620

Max DTI ratio of 46 - regardless of AUS (DULP) approval Homebuyer educationcounseling certificate required Verification of rentcancelled checksbank statements to verify current housing payment history

(exceptions may be granted for borrowers living with family) Letters of explanation for all inquiries in the last 90 days Zero late pays in the last 12 months regardless of AUS (DULP) approval

FICOrsquos =gt 620 Letters of explanation for all derogatory credit in the last 24 months Letters of explanation for all inquiries in the last 90 days

ALL Loans with AUS (DULP) Approvals

Declining credit profile in the last 12 months - borrower must provide letter of explanation on all derogatory credit and a verification of rentcancelled checksbank statements to verify current housing payment history

Maximum DTI ratio with DULP approval 500 with 35 down payment Maximum DTI ratio with DULP approval 550 with 5 down payment Comps for property no more than 3 months old maximum (re-statement of current credit overlay) Compensating factors must be from HUD handbook 4155 (re-statement of current credit overlay) Max LTV for cash out refinances is capped at 850 regardless of the date of the case number

assignment Manual underwriting guidelines of maximum DTI ratio of 460 and no derogatory credit in the

last 12 months still in effect (re-statement of current credit overlay)

FREE Online Homebuyer Education option

Homebuyers Education Course

To help with the new Homebuyer Education requirement for our FHA loans lt 620 MGIC offers consumers FREE homebuyer

andor landlord education and certification with online training and testing Here are the instructions for doing Homebuyer

Education online through MGIC

Homebuyer Education Course can be taken online via the MGIC website you are no longer restricted to sit in a classroom or

do it by mail The easiest way to do it is to go online onto the following website and follow these simple steps

httpwwwmgiccomeducationbuyersedhtml

You as the originator (LOAE) sign up for a Buyers Ed Code You must use your email address to sign up and this e-mail

must be unique to you Do not use an e-mail address others you work with might also use It takes 2 business days to

activate your code and you only need to register once This is the code you will provide your borrowers to register for the

class

1 Direct your borrower to this website and they will need to register for the Buyer Ed Test using your code

1048707 The Homebuyers Education Course is available in both English and Spanish

1048707 The Landlord Education Course is available in English only

2 You will get emailed when they have completed the course as long as they use your Buyers Ed Code so make sure your borrower uses your Buyers Ed Code when registering

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

New FMC FHA overlayshellip

Topic Description

FICOrsquos lt 620

Max DTI ratio of 46 - regardless of AUS (DULP) approval Homebuyer educationcounseling certificate required Verification of rentcancelled checksbank statements to verify current housing payment history

(exceptions may be granted for borrowers living with family) Letters of explanation for all inquiries in the last 90 days Zero late pays in the last 12 months regardless of AUS (DULP) approval

FICOrsquos =gt 620 Letters of explanation for all derogatory credit in the last 24 months Letters of explanation for all inquiries in the last 90 days

ALL Loans with AUS (DULP) Approvals

Declining credit profile in the last 12 months - borrower must provide letter of explanation on all derogatory credit and a verification of rentcancelled checksbank statements to verify current housing payment history

Maximum DTI ratio with DULP approval 500 with 35 down payment Maximum DTI ratio with DULP approval 550 with 5 down payment Comps for property no more than 3 months old maximum (re-statement of current credit overlay) Compensating factors must be from HUD handbook 4155 (re-statement of current credit overlay) Max LTV for cash out refinances is capped at 850 regardless of the date of the case number

assignment Manual underwriting guidelines of maximum DTI ratio of 460 and no derogatory credit in the

last 12 months still in effect (re-statement of current credit overlay)

FREE Online Homebuyer Education option

Homebuyers Education Course

To help with the new Homebuyer Education requirement for our FHA loans lt 620 MGIC offers consumers FREE homebuyer

andor landlord education and certification with online training and testing Here are the instructions for doing Homebuyer

Education online through MGIC

Homebuyer Education Course can be taken online via the MGIC website you are no longer restricted to sit in a classroom or

do it by mail The easiest way to do it is to go online onto the following website and follow these simple steps

httpwwwmgiccomeducationbuyersedhtml

You as the originator (LOAE) sign up for a Buyers Ed Code You must use your email address to sign up and this e-mail

must be unique to you Do not use an e-mail address others you work with might also use It takes 2 business days to

activate your code and you only need to register once This is the code you will provide your borrowers to register for the

class

1 Direct your borrower to this website and they will need to register for the Buyer Ed Test using your code

1048707 The Homebuyers Education Course is available in both English and Spanish

1048707 The Landlord Education Course is available in English only

2 You will get emailed when they have completed the course as long as they use your Buyers Ed Code so make sure your borrower uses your Buyers Ed Code when registering

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

FREE Online Homebuyer Education option

Homebuyers Education Course

To help with the new Homebuyer Education requirement for our FHA loans lt 620 MGIC offers consumers FREE homebuyer

andor landlord education and certification with online training and testing Here are the instructions for doing Homebuyer

Education online through MGIC

Homebuyer Education Course can be taken online via the MGIC website you are no longer restricted to sit in a classroom or

do it by mail The easiest way to do it is to go online onto the following website and follow these simple steps

httpwwwmgiccomeducationbuyersedhtml

You as the originator (LOAE) sign up for a Buyers Ed Code You must use your email address to sign up and this e-mail

must be unique to you Do not use an e-mail address others you work with might also use It takes 2 business days to

activate your code and you only need to register once This is the code you will provide your borrowers to register for the

class

1 Direct your borrower to this website and they will need to register for the Buyer Ed Test using your code

1048707 The Homebuyers Education Course is available in both English and Spanish

1048707 The Landlord Education Course is available in English only

2 You will get emailed when they have completed the course as long as they use your Buyers Ed Code so make sure your borrower uses your Buyers Ed Code when registering

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

Fannie Mae upcoming changes

Topic Description

Age of Credit Documents

bull Reduced from 120 days to 90 days for existing construction 180 days to 120 days for new construction Includes credit reports employment income assets etc

bull No change to the age of appraisal documentation

Credit Card Financing

bull Credit Card financing for payment of common and customary fees POC allowed to max 2 of loan amount if confirm borrower has sufficient liquid funds (reserves) to cover these charges OR

bull Re-calculate the credit card payment and include the new charges in DTI

HELOCs bull Will be allowed as 2ndary financing with Flex and MCM (if available)

Tip Income bull Will be allowed if verified receipt for last 2 years and continuance

Trailing Wage Earner bull Will be removed and NOT be eligible anymore

Verbal VOE bull Will now be required for all borrowers (was not required on Manual UW loans)

Stocks Bonds Mutuals Retirement

bull Retirement accounts reduced from 70 to 60 for reservesbull Stocks bonds mutual funds reduced from 100 to 70 for reserves

2 Unit Properties bull Will now be aligned with 3-4 unit eligibility guidelines

Effective Datebull These changes are recommended to be implemented immediately for manualbull Will be mandatory for all applications dated on or after September 1 2009

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

Whatrsquos Next

USDA Program coming July

Borrowerrsquos buyingrefinancing in rural areas Population of 10000 or fewer

or lt 20000 outside of a MSA Very low low and moderate

income Have lower ficos or non-traditional

credit No down or closing costs No monthly MI Finance the Guarantee Fee into

mortgage up to 102 financing No acreage limitation (30 of total

property value max)

NHF Access coming August

Unlimited funds ndash backed by Private Financing

NOT limited to First Time Homebuyers

No Sales Price Limits No Recapture Tax No ldquoCompliance Reviewrdquo required Access 2nd available for Down

Payment and Closing Costs CLTV up to 100 Purchase or RampT refinances Manufactured Housing Eligible Conventional available throughout

CA and 47 states FHA only in select areas of CA

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

FMC SUPPORT

WEB SITE

httpwwwfmcretaillpxcom

1 TRAINING MATERIALS

2 CALCULATORS

3 TOOLS

4 FORMS

5 MARKETING

TRAININGS

bull First Mortgage offers FREE Weekly ONLINE Trainings

bull Available every Thursday mornings 930 am PST

bull Next weekrsquos Training FHA 203(k)

SUPPORT

Contact Loan Help at

loanhelpfirstmortgagecom

for help with

1 Program Guidelines

2 Tough Scenarios

3 Pricing help

4 Training sign ups

Thank You

On behalf of First Mortgage thank you for joining todayrsquos

training and we hope the information provided will

help you build your business

FIRST MORTGAGE