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214 214 Fannie Mae DU REFI PLUS 08 20

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214 214 Fannie Mae DU REFI PLUS 08 20 Powered By Docstoc
					214: Fannie Mae DU REFI PLUS (08/20/11)

DESCRIPTION      DU Refi Plus is a limited cash-out refinance program that allows for expanded
                 eligibility criteria, as well as reduced documentation requirements. Loans must be
                 underwritten through DU and receive an acceptable finding. Fannie Mae must
                 currently own all loans; however they do not have to be serviced by PacificBanc.
                 Eligibility for DU Refi Plus is determined and identified in the DU Underwriting
                 Findings Report. Standard Limited Cash-out refinances must not be coded as DU
                 Refi Plus loans.


                     Available ONLY for loans with no Mortgage Insurance on the existing loan.

SPECIAL
CRITERIA
CURRENT          •       Since eligible loans may not contain mortgage insurance, PacificBanc is not
SERVICER                 required to be the current servicer of the existing mortgage.



SPECIAL          Note: DU cannot determine if the following requirement is met, so Lender must
CRITERIA         represent and warrant that the borrower is receiving a benefit from refinancing in
REQUIRED         the form of either:
BORROWER
BENEFIT          •       A reduced monthly mortgage principal and interest payment; or

                 •       A more stable mortgage product, such as:

                         ◊    Refinancing an ARM product to a Fixed Rate

                         ◊    Refinancing an Interest only product to a fully amortizing product

                         ◊    Refinancing a short-term ARM to a longer term ARM product (i.e., 3/1 to
                              5/1)

                         ◊    Refinancing a 30-year term to a 15-year term, whereby amortization is
                              accelerated and equity is built up faster

                         ◊    Refinancing from a shorter term to a longer term (i.e., 30-year fixed to a
                              40-year fixed) would only be considered a benefit if there is also a
                              payment reduction.

                 •       The required borrower benefit must be noted in the Underwriter approval
                         rationale on the 1008.



SPECIAL          Principal and interest payment for the new loan must be lower than the existing
CRITERIA         loan, unless the loan is being refinanced into a more stable product.
MONTHLY
PAYMENT
INCREASE
LIMITATION

SPECIAL             •     Borrowers on the existing mortgage must match the borrowers on the new
CRITERIA                  mortgage, except as indicated below.
BORROWER
ELIGIBILITY         •     A new borrower may be added to the new loan, provided the existing
                          borrower(s) is/are retained.

                    •     An existing borrower may be removed provided:

                    ◊     The remaining borrower(s) provide evidence that they have been making the
                          payments on the existing mortgage from their own funds for the most recent
                          12 months prior to the origination of the new mortgage. This 12-month
                          payment history must be for the existing mortgage only – it may not be
                          satisfied using multiple consecutive mortgages.

                    ◊     If the borrower is being removed due to death, the 12–month payment history
                          is not required; however, the remaining borrower must provide evidence of
                          the deceased borrower's death. In lieu of a death certificate, borrower may
                          provide a written statement confirming the deceased borrower’s death and
                          the date of the death.

                    ◊     The borrower being removed must also be removed from the deed (or provide
                          evidence of death, as applicable. Note: Removal of borrowers can be for any
                          reason, not solely due to death or divorce.


                    Trusts: If the existing loan was closed in the name of the individual borrowers, but
                    has been transferred to an inter vivos revocable trust, the loan is eligible provided
                    the borrowers on the existing mortgage are the only trustees to the trust and the
                    trust otherwise meets all eligibility requirements in Section 803.1 of this manual.
                    Note: Existing loan may have been in the name of one borrower, with title
                    transferred to a trust for borrower and spouse.

                    Social Security Number Messaging: Refer to the Borrower Eligibility section of
                    the Desktop Underwriting for additional requirements. Note: ITIN numbers are not
                    permitted.




                    SSN Correction: If an inaccurate SSN is preventing DU from underwriting a
                    casefile as a DU Refi Plus loan, the new lender no longer has to have the borrower
                    work with their servicer to get the number corrected; they can contact Fannie Mae’s
                    Customer Contact Center at 1-877-722-6757. The lender must provide the new DU
                    Casefile ID to Fannie Mae.

SPECIAL       Eligible Existing Loans:
CRITERIA
EXISTING      •      DU will determine if the existing loan is eligible for this program.
MORTGAGE LOAN
                  •     For loans submitted to DU prior to April 11, 2011, the existing loan must have
                        been delivered to Fannie Mae prior to March 1, 2009 for loans submitted to
                        DU on or after April 11, 2011, the existing loan must have been delivered to
                        Fannie Mae prior to June 1, 2009.



                  Ineligible Existing Loans:

                  •     Existing loan has mortgage insurance in place.

                  •     Any loan not currently owned by Fannie Mae

                  •     Borrowers may not be sourced via marketing campaigns that expressly single
                        out Fannie Mae loans for the purpose of refinancing existing loans.

                  •     Loan has Lender-Purchased MI.



SPECIAL      Eligible New Loans:
CRITERIA
NEW MORTGAGE •      Agency Conforming Loans – Fully Amortizing Fixed Rate and LIBOR ARM
LOAN
             •      Agency Jumbo Loans - Fully Amortizing Fixed Rate and LIBOR ARM

                  •     DU findings must indicate the loan is eligible as a DU Refi Plus loan, or, for
                        loan sizes above the standard conforming limit, if it is eligible as an Agency
                        Jumbo loan. (Refer to Maximum Loan Amount section below.)

                  •     Since mortgage insurance is not eligible, PacificBanc is not required to be the
                        current servicer of the existing mortgage.



                  Ineligible New Loans:

                  •     Mortgage insurance is required on the new loan

                  •     Loans that were previously submitted to DU and received a DU Refi Plus
                        finding are not eligible for manual underwriting

                  •     DU Expanded Approval

                  •     Flexible Mortgage Loans

                  •     MyCommunityMortgage® Loans

                  •     Bond Programs

                  •     Construction to Permanent
                •    Cash-Out Refinance

                •    Texas Section 50(a)(6)

                •    Products or programs not currently offered by PacificBanc, including balloon
                     loans, negatively amortizing ARM loans, Option ARM loans and HomeStyle
                     Renovation loans.

                •    Loans with amortization terms greater than 30 years that have resale
                     restrictions.

                •    PACE or ELTAP loans as shown in Section 808.

                •    Loans that do not meet the policies as outlined in this fact sheet.



LOAN PURPOSE    Limited Cash-Out Refinance (a.k.a. rate/term refinance), which includes:

                •    The payoff of the unpaid principal balance on the existing first mortgage (no
                     subordinate financing);

                •    The financing of the payment of closing costs, prepaid items, and points,

                •    Cash back to the borrower is permitted up to a maximum of $250 to allow for
                     changes in closing costs. Cash back on the final HUD-1 may only exceed
                     $250 by the amount that was paid outside of closing by the borrower, as
                     documented in the loan file. Note: Refunding an existing escrow account at
                     closing does not have to be included in the $250 restriction since these funds
                     are paid by the borrower.

                •    If changes exceed $250, the loan amount must be adjusted.

                •    Principal curtailments are only allowed as a result of at closing excess
                     premium rate credits. The amount must be identified on the HUD-1
                     Settlement Statement and is limited to the amount of the excess remium
                     rate credit.



OCCUPANCY       •    Primary Residence

                •    Second Home (1 unit only)

                •    Investment Property (excludes co-ops)

                Note: Although Fannie Mae permits multi-unit second homes, if borrower currently
                receives rental income or has ever received rental income from the property, the
                subject property must be treated as an investment property.

PROPERTY TYPE Eligible:
            •     1-4 Unit, including condominiums, PUDs (Type E only) and co-ops



            Ineligible:

            •     Manufactured homes

            •     Condotels

            •     Non-warrantable Condos




            * See Section 609 for flip tax on co-ops.

MULTIPLE    •     Primary home subject property: There is no limit on number of financed
MORTGAGES         properties held by the same borrower.

            •     Second homes and investment subject property: May not have a combined
                  total of more than 4 residential properties financed at the time of application
                  (applies to either a single lender or several different lenders, including
                  PacificBanc.)



PRODUCTS    Eligible - Fully Amortizing:

            •     Fixed Rate (10, 15, 20, 25, 30 and 40 year terms)

                  ◊       Note: Terms other than 15- and 30-years are permitted for Agency
                          Jumbo loans; however only the 15- and 30-year product codes are
                          used; the 40-year product is not available for Agency Jumbo.

            •     LIBOR ARMs (5/1, 7/1 and 10/1) (30-year terms)



            Ineligible:

            •     Interest Only Fixed Rate

            •     Interest Only ARM

            •     FHA or VA products

            •     ARM loans with initial fixed period less than 5 years (1/1 or 3/1)

            •     DU Expanded Approval

            •     All other products not listed above as eligible
MAXIMUM LOAN     •     Agency Conforming or Agency Jumbo loan size, depending upon eligibility.
AMOUNT


LTV/ CLTV/ HCLTV •     Maximum LTV/CLTV/HLTV is 105%/105%/105%, regardless of DU. (Over
                       80% LTV is only permitted if MI is not required

                 •     Florida Condos – LTVs/CLTVs and investment properties are not restricted
                       for this program as they are for other programs.

                 •     PacificBanc Declining Markets Policy does not apply to these loans.



SUBORDINATE      •     New subordinate financing is not permitted.
FINANCING
                 •     Existing subordinate liens must be re-subordinated; they may not be paid off
                       or paid down with the proceeds of the new mortgage.

                 •     Lenders must represent and warrant that Community Seconds meet Fannie
                       Mae requirements and approval guidelines.



HIGHER PRICED    HPML loans are permitted; income and asset documentation must be obtained as
MORTGAGE         defined in this fact sheet. In addition lending parameters per the Higher-Priced
LOANS (HPML)     Mortgage Loans fact sheet must also be met.

DOCUMENTATION Eligible:
PROCESS
              •      Desktop Underwriter (DU)



                 Ineligible:

                 •     All other documentation processes



UNDERWRITING     Underwriting Delegation Level             Eligible to UW this program
OPTIONS
                 Non-Delegated Correspondent               No

                 AUS Conforming Delegated                  Yes

                 AUS Non-Conforming $700,000               Yes

                 Full Delegation                           Yes
             Contract UW to $650,000                     Yes

BUY DOWNS    Not permitted.

ESCROW       •       Generally, the LTV must be 80% or less (unless state law dictates escrows
WAIVERS              are not required for mortgage loans with an LTV > 80%), however, escrows
                     on the new loan may be waived if the existing loan has escrows waived.



             HPML loans must still comply with all regulations in regard to escrow impound
             waivers, regardless of whether escrows were waived for the existing account. For
             more details and requirements on escrows, refer to Section 908 of this manual.

QUALIFYING   Determined by DU
RATE

MORTGAGE     Mortgage Insurance may or may not be required, depending on the current MI
INSURANCE    coverage on the existing loan (see table below).

             -       If MI is required per DU findings, the loan is NOT eligible for purchase by
                     PacificBanc Correspondent Lending.



                  ORIGINAL LTV       Existing loan has      MI required for
                 of existing loan      MI in force?              new              ELIGIBLE
                                                           refinance loan?

                      < 80%                  No                  No1                 YES

                                              No
                                       MI previously
                                        canceled or
                      > 80%           terminated per             No1                 YES
                                         Selling and
                                      Servicing Guide
                                       requirements

                      > 80%                 Yes                  Yes                  NO
             1
                     DU will indicate when MI is not required.




             Notes:

             •       DU Refi Plus loans will receive messages relating to MI coverage, but the
                     lender must confirm whether MI coverage is required or not.
               •    New loans with LTVs less than 80% do not require mortgage insurance.



               The following MI options are not permitted:

               •    Financed MI

               •    Lender-purchased MI.



DU DECISIONS   •    Submission to DU: An accurate address is critical to determining if the
                    subject property address on the loan casefile matches a subject property
                    address for an existing Fannie Mae loan. Incomplete and/or inaccurate
                    property address data may prevent a loan casefile from being underwritten
                    according to DU Refi Plus underwriting guidelines.

                    ◊     If DU is unable to match the borrowers and subject property address on
                          the loan casefile with an existing eligible Fannie Mae loan, the loan
                          casefile will be underwritten according to the standard DU eligibility and
                          documentation requirements.

               •    Underwriting Findings Report: DU will issue the following message when
                    the loan is identified as being eligible for DU Refi Plus. Loans must receive
                    this message to be eligible for this process type:

                          "This loan casefile was underwritten according to the DU Refi Plus
                          expanded eligibility guidelines offered on certain limited cash-out
                          refinance loan casefiles where the borrower's existing loan is identified
                          by DU as a Fannie Mae loan. This loan casefile must be delivered with
                          Special Feature Code 147."

               •    DU Recommendations: Loans must receive one of the following
                    recommendations:

                    ◊     Approve / Eligible

                    ◊     Approve/Ineligible

                          *    Co-ops with subordinate financing are permitted with ineligibility
                               due to presence of subordinate financing.

                          *    Loan amount > Permanent High Cost Amount:
                               For DU 7.1 findings, if the loan amount exceeds the current loan
                               limit applied by DU (i.e., the permanent high-cost limit for the area
                               in which the property is located) an ineligible finding will result. If
                               this is the only ineligible reason, the loan is OK. The loan amount
                               cannot exceed the temporary high-cost limit applicable to the area
                               in which the property is located.
                         *    For DU 8.0, an ineligible finding due to loan amount is not
                              permitted.


                   Loans that receive any recommendation from DU other than those listed
                   above are not eligible for this program, and are not eligible for manual
                   underwriting under a different process type.



               •   Resubmission Requirements: Standard DU Resubmissions guidelines
                   apply per Section 406.

               •   Validation Requirements: All requirements in the final DU underwriting
                   findings report must be met.



SPECIAL U/W    •   There are no exceptions to the requirements in this program.
REQUIREMENTS
               •   In addition to the requirements in the DU findings, the underwriter must
                   confirm that all requirements in this fact sheet are met.

               •   DU is not able to identify or message the following items, therefore special
                   attention must be paid if any of the following are present on the loan:

                   ◊     Non-taxable income

                   ◊     Trailing secondary wage earner income (Not an eligible income type per
                         PacificBanc policy.)

                   ◊     Deed Restrictions – Refer to Section 808 of the Correspondent Manual

                   ◊     Up-front fees finanded with a credit card

                   ◊     Individual Development Accounts

               •   Bankruptcy & Foreclosures: 48 months must have elapsed from the date of
                   bankruptcy was discharged or dismissed (84 months for a foreclosure) or per
                   DU output whichever is more restrictive. Note: DU identifies prior foreclosures
                   as follows: Mortgage accounts, including first and second liens, home
                   improvement loans, HELOCs and mobile home loans are identified as a
                   foreclosure if there is a current status or manner or payment/MOP code of "8"
                   (foreclosure) or "9" (collection or charge-off), or if there is a foreclosure-
                   related Remarks Code in the credit report data that is associated with the
                   tradeline.

               •   Unpaid Charge-offs & Collections: Only accounts that impact PacificBanc’s
                   first lien position must be paid or as determined by DU.

               •
                   Lawsuits: The underwriter should consider whether a lawsuit the borrower is
                     involved in impacts PacificBanc’s first lien position.

                •    Borrower Identity Verification, Social Security Numbers, Validation of
                     Qualified Parties to Transaction and Unit Numbers - refer to the Borrower
                     Eligibility section of this Manual for requirements.



CREDIT REPORT   •    A new merged credit report with the borrower(s) representative credit score is
                     required.

                •    DU will determine if the Borrower meets mortgage payment delinquency,
                     bankruptcy and foreclosure policies applicable for DU underwritten loans,
                     based on information contained in the credit report. See Mortgage History
                     section of this fact sheet for additional requirements.

                •    Credit Inquiries: The underwriter must address inquiries per the Credit
                     section of the Correspondent Manual.



CREDIT SCORE    •    Minimum FICO score is 660, regardless of DU. (DU will not apply a minimum
                     score to DU Refi Plus loans.)

                •    DU Expanded Approval loans are not ineligible.



DEBT RATIO      •    Qualifying rate and debt ratios are as determined by DU, except the
                     maximum DTI for HPML loans is 45%.

                •    DU Refi Plus loans will continue to be subject to the maximum allowable total
                     expense ratios currently applied to all DU loan case files. Loans that exceed
                     the maximum will receive an Ineligible recommendation, which is not an
                     acceptable recommendation.



MORTGAGE        •    0x30 late pays in the past 12 months for all mortgages, regardless of DU.
HISTORY


RESERVES        Determined by DU.

SEASONING       There is no minimum seasoning requirement for the existing mortgage.
REQUIREMENT

DOCUMENTATION •      Loan Application: A new executed Uniform Residential Loan Application
REQUIREMENTS         (Form 1003 or 1003(S)) from the borrower(s) with all information completed
                     including borrower income, employment, and assets is required.
                    •    Closing Documents: A new mortgage note, security instrument, and
                         applicable riders and addenda are required.



WAGE EARNER         •    Determined by DU.
INCOME


SELF-EMPLOYED •          Determined by DU.
INCOME


VOE                 •    Wage Earner: Documented telephone verification of employment with the
                         employer no more than 10 business days prior to the loan closing is required.
                         Neither a pay stub nor a written VOE may replace the verbal VOE.

                    •    Self-Employed: Refer to “Verifying the Existence of the Business” in Section
                         805.2.



RENTAL INCOME •          Rental income is not permitted for second homes.

                    •    When verification of rental income is required, refer to Section 805.3



OTHER INCOME        •    Determined by DU.



ASSETS              •    Determined by DU.

                    •    Verification of assets is required if loan is an HPML loan.



IRS FORM 4506-T A signed IRS Form 4506-T is required on all loans, regardless of income type
                (salary, self-employed, social security, etc.). All borrowers must sign the IRS Form
                4506-T at application and closing. If tax returns are used to calculate borrower
                income, the Form 4506T must be processed prior to loan approval. All forms and
                transcripts must be included in the closed loan package. The 4506-T does not need
                to be processed prior to closing. For complete signature and processing
                requirements, refer to Section 805 of the Correspondent Manual.

PROPERTY            The gross monthly rent for each unit must be documented in each loan, even when
MARKET RENTS        the borrower is not utilizing rental income to qualify.

                    For all investment properties AND all 2-4 unit primary residences, when rental
                    income is not used to qualify, the gross monthly rental income for each unit must be
            documented with one of the following:

            •    Current Lease Agreement(s), or

            •    Form 216: Operating Income Statement for investment and 2-4 unit owner
                 occupied properties (including those in which the borrower occupies one of
                 the units as a principal residence), or

            •    Form 1007: A Single Family Comparable Rent Schedule for one-unit
                 investment properties, or

            •    Small Residential Income Property Appraisal Report (Form 1025)



APPRAISAL   •    Lender must comply with the property fieldwork recommendation issued by
                 DU except as indicated below*, or a different appraisal format is required to
                 met PacificBanc’s standard project approval requirements

                       * Note: DU will indicate the type of fieldwork recommendation that is
                       required, and if applicable, that a fieldwork waiver is permitted. If the
                       property is located within an area subject to a natural disaster, or if the
                       DU findings reflect red flags in connection with the value submitted, the
                       minimum fieldwork recommendation should be followed; a PIW would
                       not be permitted.

            Note: Refer to the Appraisal Documentation section for additional requirements
            for reduced property fieldwork recommendations.

            Property Fieldwork Waivers

            •    For certain eligible loan casefiles, DU will waive the requirements of an
                 appraisal or exterior-only property inspection for a fee of $75 at delivery.
                 (Fees for PIWs (property inspection waivers) are net funded at the time of
                 loan purchase.)

                 ◊     Listed for Sale: PacificBanc policy related to properties listed for sale
                       does not apply.

            •    A DU Refi Plus Property Inspection Waiver (PIW) may only be exercised if:

                 ◊     The final submission of the loan casefile to DU resulted in a property
                       fieldwork waiver offer; and

                 ◊     The property fieldwork waiver offer is not more than four months old on
                       the date of the note and the mortgage.

            •    When a DU Refi Plus DU Refi Plus PIW is exercised, Fannie Mae accepts the
                 property value estimate submitted to DU as the market value for the subject
                 property, and the lender is not required to make any representation or
                 warranty as to value, marketability, or condition of the subject property.
                     However, the lender continues to be required to represent and warrant that all
                     of the information and data submitted to DU is complete and accurate.

                •    A DU Refi Plus property fieldwork waiver may not be exercised if there is
                     reason to believe that fieldwork is warranted based on additional information
                     obtained about the property or subsequent events such as a hurricane or
                     other natural disaster, or based on additional information provided by DU
                     regarding the subject property for these loans. In these situations the
                     minimum level of property fieldwork as specified by DU must be ordered.

                •    For those eligible, DU will issue two DU Refi Plus property fieldwork
                     recommendation messages:

                     ◊     The first message will indicate that the loan casefile is eligible for the
                           property fieldwork waiver.

                     ◊     The second message will indicate the minimum level of fieldwork
                           required if the lender does not elect to exercise the property fieldwork
                           waiver when delivering the loan to Fannie Mae.

                •    Appraisal update and aging requirements apply to these loans. Refer to the
                     Appraisal Requirements section 501 of the Correspondent Manual.

                •    PacificBanc Declining Markets Policy does not apply to these loans.



CONDO/PUD/CO-   •    Must meet PacificBanc Project Approval guidelines.
OP PROJECT
APPROVAL        •    Condo Type V is not eligible. Standard project coding must be used.

                •    PUD Type E only; PUDs must be an established project in which control of
                     the homeowners association has been turned over to the unit purchasers.

                •    Coops Type 2 (Building Style for co-ops must be 38-FNMA Coop)

                •    Insurance Coverage: Although project approval is not required, evidence of
                     hazard/ liability/fidelity/flood insurance, must be obtained to ensure the
                     policies have not expired, or will not expire within 30 days from the date of the
                     new loan.

                •    Property Address: The subject property address and unit number must be
                     included on the proof of master insurance.




                Refer to the Condo chapter for appraisal requirements for project approvals.

                Refer to the PUD Section 607 for appraisal requirements on project approvals.
NOTE / DELIVERY New Mortgage loans must close and have an original note date on or before June
DATES           30, 2012.

REGISTRATION       Process Type: DU
INSTRUCTIONS       Program Code:

                   •    DU Refi Plus

                   •    DU Refi Plus Agency Jumbo

                   •    DU Refi Plus >80% LTV w/o MI

                   •    DU Refi Plus Jumbo >80% LTV w/o MI



                   Sub-Program Codes

                   •    Agency Jumbo Temp Loan Limit (to be used with loans exceeding the county
                        Permanent loan limits)

                   •    Deed Restrictions Age Survive Foreclosure

                   •    Deed Restriction Age Do Not Survive Foreclosure

				
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