lender eligibility

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					                              Predatory Lending

A.    New Jersey

      The New Jersey Home Owner’s Security Act became effective for all loans closed
      on or after November 27, 2003. The “Act” categorizes mortgage loans as either
      (1) home loans, (2) covered home loans or (3) high cost home loans.

      U.S. Bank Home Mortgage has revised restrictions on properties located in New
      Jersey. As a result, there are no longer any product restrictions for loans
      secured by New Jersey properties. The following transaction restrictions are
      effective immediately.

         We will not purchase any loans secured by manufactured homes.
         We will not purchase any cash-out refinances where the proceeds are
          intended for home improvement purposes, where any part of the loan
          proceeds is paid solely to the home improvement contractor.
         We will not purchase any “covered” loans.
         We will not originate any “high cost” loans.

      ***Please note:         We have removed one previous restriction regarding the
          inability to purchase refinances for non-agency and non-conforming loans.
          These products are NOW allowable.

      The following two documents must be completed as required below:

      Net Tangible Benefit Disclosure
         At application, the Net Tangible Benefit Disclosure must be completed and
          acknowledged on all refinance transactions in the state of New Jersey.


      Affidavit Regarding Loan Origination
       At application, the Affidavit Regarding Loan Origination must be completed
         and acknowledged on ALL cash out refinance transactions on properties
         located in the state of New Jersey.

      Definitions of each of the three mortgage loan categories are provided below for
      reference.
      Home Loans
       “Home Loans” are defined as an extension of credit primarily for personal,
          family or household purposes that is or will be occupied as the borrowers
          principal dwelling. This includes 1-6 family dwellings and manufactured
          homes. It also includes open-end credit.

Page 11 Index                                       Mortgage Programs (03/30/04)
         Home loans do not include reverse mortgage transactions, mortgage loans
          that are primarily for business purposes, investment properties, or loans
          secured by second homes.

      Covered Loans
       A covered home loan is defined as a home loan in which either:

          1. The total points and fees payable in connection with the loan excluding
             either a conventional prepayment penalty or not more than two bona
             fide discount points exceeds:
             a. 4% of the total loan amount;
             b. 4.5% of the total loan amount for loans of $40,000 or less;
             c. 4.5% of total loan amount for FHA or VA loans; or

          2. The loan is considered a high cost home loan under the Act.

      High Cost Home Loan
       A High cost Home loan is defined as a home loan which the principal
         amount of the loan does not exceed $350,000 (adjusted annually) in which
         the terms of the loan either meet or exceed the “Points and Fees” threshold
         or the “Rate” threshold defined under the Act.

      Points and Fees Threshold

         The points and fees threshold is the total points and fees payable by the
          borrower at or before the loan closing, excluding up to two bona fide
          discount points and any conventional prepayment penalty, which exceeds
          either:

          1. 5% of the total loan amount if the total loan amount is $40,000 or more;
             or

          2. The lesser of 6% of the total loan amount or $1,000, if the total loan
             amount is less than $20,000; and 6% if the total loan amount is $20,000
             or more but less than $40,000.

      APR Threshold

         The APR threshold is the same as the HOEPA threshold. For a first lien loan
          the APR threshold exceeds the yield on Treasury securities having
          comparable periods of maturity by more than 8 percentage points, or by
          more than 10 percentage points for a subordinate lien loan.



Mortgage Programs (03/30/04)                                      Page 12 Index
      Total Loan Amount
           For purposes of the “points and fees” test, the total loan amount is
            calculated by taking the amount financed, as determined in 226.18(b), and
            deducting any cost listed in section 226.32(b).

B.    Oakland Ordinance

      On October 2, 2001, the City of Oakland, CA passed an Ordinance prohibiting
      predatory lending practices. The Oakland Ordinance was intended to be
      effective November 1, 2001 but due to pending appeals, the law has not yet
      gone into effect. Expectations are that the Ordinance will become effective
      following an upcoming court case hearing. As a result of this ordinance, U.S.
      Bank Home Mortgage is implementing the following precautions for loans with
      properties located in the City of Oakland effective with loans disbursed on and
      after February 23, 2004:

      1)        Eligible Products for properties located in Oakland, California are:

       ALLOWABLE PRODUCT TYPES                               PRODUCT CODES
          FOR CITY OF OAKLAND
                                                    3501,3502,3503,3505,3506,3507,
          FNMA Fixed Rate
                                                    3508
          FNMA 7 Yr Balloon                         3504
          FNMA Community Homebuyers                 3550,3551,3552, and 3553
          FHLMC Fixed Rate                          3601,3602,3604,3610, 3611, 3619
          FHLMC 7 Yr Balloon                        3603
          FHLMC Affordable Gold                     3606, 3607, 3613
          FHLMC 5 Yr Balloon                        3609
          FHLMC 80/20 Program                       3639
       ALLOWABLE PRODUCT TYPES                               PRODUCT CODES
          FOR CITY OF OAKLAND
          FHLMC 97 Plus 30/15 Year                  3614 and 3616
          FHLMC Fixed A-Minus                       3642, 3643
          FHLMC 100% LTV                            3656, 3657 and 3850
          FHA                                       1001,1002,1003,1004, and 1006
          VA                                        2001 and 2002
          Rural Development                         3001
          Barrier Buster                            3672




Page 13 Index                                         Mortgage Programs (03/30/04)
          NOTE:    Any products other than those referenced in the above chart MAY
                   NOT be offered if the property is located in the City of Oakland or
                   within the city limits. Refer to the zip code attachment.
                   Acceptable transactions that may be originated in the City of
                   Oakland include: conforming and non-conforming loans for both
                   purchase and refinance transactions secured by a 1-4 family
                   owner-occupied property (including condos and PUDs), second
                   homes and non-owner-occupied properties provided the
                   transaction type is allowable under the guidelines of the products
                   shown above. Any transaction types that do not conform to the
                   product guidelines referenced in this memorandum are NOT
                   allowed.

     1)   U.S. Bank Home Mortgage will require the attached “Points and Fees”
          Worksheet to be completed and included in each loan file.
     2)   All borrowers must acknowledge receipt of the Net Tangible Asset Disclosure
          (attached) to document reasonable, tangible net benefit to the borrower
          considering all of the circumstances, including the terms, the purpose and
          cost of the loan. This form must be completed on all refinances of an existing
          home loan on properties located in the City of Oakland.

C.        New Mexico Home loan Protection Act
          On April 11, 2003, the New Mexico Home Loan Protection Act (“HLPA”) became
          law. The New Mexico Home Loan Protection Act applies to all “home loans”
          made or entered into on or after January 1, 2004. As with other predatory
          lending legislation, New Mexico has the following specific prohibitive
          requirements pertaining to high cost home loans which include but are not
          limited to: 1) loan flipping; 2) financing of points in excess of 2% of the
          principal loan amount; and 3) lender and assignee liability which includes
          borrowers harmed by violations to be awarded punitive damages. In addition,
          rating agencies will require representations and warranties on any RMBS
          transactions that include New Mexico loans.

          Effective with all applicable loans closing and disbursing on and after Friday
          February 20, 2004. Applicable loans are defined as New Mexico transactions
          which include all conforming purchase and refinance loans that are owner-
          occupied 1-4 family primary residences (including condos, PUD’s, second
          homes and manufactured homes). U.S. Bank Home Mortgage will require the
          attached New Mexico High Risk Home Loan Act Points and Fees Worksheet to
          be completed and included in each applicable purchase and refinance loan file
          delivered for purchase. In addition, all applicable refinance loans will require
          all borrowers to acknowledge receipt of the Net Tangible Benefit Disclosure
          (attached) to document reasonable tangible benefits to the borrower including
          the terms, purpose and cost of the loan. The act does not include non-
          conforming/jumbo loan limits or investment properties

Mortgage Programs (03/30/04)                                           Page 14 Index
      U.S. Bank Home Mortgage does not purchase any loans determined to be “high
      cost” loans. U.S. Bank Home Mortgage will not purchase loans for which the
      Net Tangible Benefit Disclosure has not been received, completed and executed
      by the borrower(s) or if the points and fees test fails.

D.    Illinois High Risk Home Loan Act

      On August 20, 2003, the Illinois High Risk Home Loan Act became law and on
      January 1, 2004, the Act went into effect. As with other predatory lending
      legislation, Illinois has some specific prohibitive requirements pertaining to
      high cost home loans which include but are not limited to 1) loan flipping; 2)
      equity stripping; and 3) lender and assignee liability. The Act does not include
      purchase transactions, investment properties or open-end loans.

      Effective with all applicable loans closing and disbursing on and after Friday
      February 20, 2004. Applicable loans are defined as Illinois refinance
      transactions that are owner-occupied, 1-4 family primary residence
      transactions (including condos, PUDs and second homes that are both
      conforming and non-conforming loan limits). U.S. Bank Home
      Mortgage will require the Illinois High Risk Home Loan Act Points and
      Fees Worksheet to be completed and included in each applicable refinance loan
      file delivered for purchase. In addition, all applicable refinance loans will
      require all borrowers to acknowledge receipt of the Net Tangible Benefit
      Disclosure to document reasonable tangible net benefit to the borrower
      considering all of the circumstances, including the terms, the purpose and cost
      of the loan.

      U.S. Bank Home Mortgage does not purchase any loans determined to be “high
      cost” loans. U.S. Bank Home Mortgage will not purchase loans for which the
      Net Tangible Benefit Disclosure has not been received, completed and executed
      by the borrower(s) or if the points and fees test fail.

E.    Cleveland Predatory Lending Ordinance

      U.S. Bank Home Mortgage has eased restrictions on purchasing loans secured
      by properties located within the city of Cleveland, Ohio. This is a result of
      Predatory Lending Ordinance No. 737-02. U.S. Bank will purchase conforming
      conventional loans provided a completed Certificate of Compliance is recorded
      at the same time as the mortgage.

      As a reminder, U.S. Bank will not purchase Balloons, ARMs, government loans
      and second mortgages secured by properties located within the city of
      Cleveland.


Page 15 Index                                        Mortgage Programs (03/30/04)

				
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