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					                    GENERAL CLOSING REQUIREMENTS



A.    INTRODUCTION

      General Information:

      The following instructions are applicable to closing FHA, VA, Conventional and
      Adjustable Rate Residential Mortgage loans to be sold to U.S. Bank Home
      Mortgage. All loans must close in the name of the Correspondent. The
      Mortgage loans must be readily marketable to prudent investors in the
      secondary mortgage market. In addition to these instructions, Sellers must
      comply with individual loan conditions as set forth by the Department of HUD,
      the Veterans
      Administration, Fannie Mae, Freddie Mac and/or U.S. Bank Home Mortgage.

      When situations arise where common sense or good business practices dictate
      deviation from these closing instructions, it is the Seller’s responsibility to
      postpone the closing until a waiver can be obtained from U.S. Bank Home
      Mortgage by contacting the Wholesale Lending Department.

      Sellers are responsible for full compliance with the Real Estate Settlement
      Procedures Act (RESPA), Federal Truth-in-Lending Law, and with supplying
      U.S. Bank Home Mortgage with the correct information to comply with the
      Home Mortgage Disclosure Act. See Compliance Section.

      Sellers will be responsible for the proper preparation and execution of all legal
      documents, closing statements, HUD-1 form, Truth-in-Lending form, and any
      other exhibits on the Closed Mortgage Loan Transmittal.

B.    FUNDING DOCUMENTATION REQUIREMENTS

      This section is to clarify the funding documentation
      requirements for most loans. The documentation mentioned
      herein may not necessarily fulfill all requirements for all loans
      submitted to U.S. Bank Home Mortgage for purchase. U.S. Bank Home
      Mortgage reserves the right to require additional documentation
      needed to enhance a loan file on a case by case basis. Please
      assure that each document is submitted and correct.


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      1. NOTE

         a. Original Note plus one copy must be in file.

         b. The date must agree with the date on the Deed of Trust/
            Mortgage and HUD I.

         c. The city and state where executed must be completed.

         d. The property address must agree with the Deed of Trust/
            Mortgage, Appraisal and HUD I.

         e. The loan amount must be correct, numerically and
            alphabetically, and must be rounded down to the nearest
            dollar.

         f. The lender’s name must be correct.

         g. The interest rate must be correct, numerically and alphabetically.

         h. The first payment date must be correct.

         i. The maturity date must be correct.

         j. The payment amount must be correct. A tolerance of .02 cents is allowed
            on all FHA, VA and Conventional fixed rate loans.

         k. The grace period may not exceed 15 days, late charge not to exceed 5%
            fpr conventional, 4% for government or the maximum allowable in your
            state.

         l. The borrower’s names must be typed under their signatures. All
            borrowers on the loan application approved by underwriting must
            execute the Note.

         m. The borrower(s) must sign exactly as their names appear in type
            (inconsistencies will require a Name Affidavit).

         n. The acceptable form must be utilized.


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            1. Conventional fixed rate or FMHA must use the most recent
               FNMA/FHLMC multistate form or required state specific form.

            2. Adjustable rate must use the most recent form applicable to the
               program.

            3. FHA must use most recent HUD form.

            4. VA must use most recent VA form and be notarized if form requires it.
               VA form must contain property address and late charge information.

         o. FHA Notes must include the case number in the upper right hand
            corner.

         p. Use of whiteout or correcting typewriter strikeovers will not be accepted.
            We suggest that you prepare the Note, take a clear photocopy and obtain
            original signatures on that copy.

         q. Lining out typographical errors in non-numerical areas with Borrower’s
            initial will be accepted. Typographical errors in numerical areas will
            require preparation of a new Note.

         r. Applicable Addendums and/or Riders must be attached.

         s. Endorsement on Note-
            Please follow the Example Provided:

                    Pay to the Order of

                    U.S. Bank N.A.

                    Without Recourse




            By:____________________________(signature)
            XYZ Mortgage Corporation (full legal name)
            John Doe, Vice President (typed name & title)




Closing & Funding   (10/20/04)                                      Page 3
            1. Be sure to type the name of your institution and the name and title of
               the officer endorsing the Note. Stamped signatures are not
               acceptable.

            2. All endorsements should be made on the back of the original Note
               only. An allonge is acceptable if there is not room on the Note for an
               endorsement. Endorsements on Riders or Addendums are not
               acceptable.

            3. Canceled endorsements should be lined through or stamped over
               “CANCELED” and initialed.

            4. Intervening endorsements must be correct (if applicable). The
               endorsements must follow the chain of title.

      2. ARM (Adjustable Rate Mortgage) Note

         The above requirements apply to ARM Notes with the following additional
         requirements:

         a. Conventional Government ARM Notes: Interest rate change dates,
            margin, cap adjustments and lifetime cap must coincide with the
            particular U.S. Bank Home Mortgage adjustable rate program.

         b. Conventional and Government ARM Notes: Refer to Exhibit Section for
            Change Date Charts.

      3. Name Affidavit

         1. Do Use

            Whenever there is a substantial discrepancy in the names or signatures
            of the Borrowers that is of record, a notarized and recorded Name
            Affidavit is required. An example of such a case is the use of "Jackie" on
            the Warranty Deed and "Jacqueline" on the Mortgage/deed of Trust.

            Discrepancies that are not of record can be resolved by the use of an
            Name Affidavit that is notarized. In such cases that Name Affidavit need
            not be recorded. An example of such a case is the appearance of "Jr." on
            the LGC/MIC but not on the Mortgage/Deed of Trust.



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         2. Do Not Use

            A Name Affidavit should not be used to correct discrepancies in
            Borrower's names which result from errors in final document
            preparation. Such errors should be corrected and the document
            recorded if necessary.

         3. Acceptable Witnesses

            The Name Affidavit cannot be signed by the person whose identity is in
            question. It must be signed by someone else who is in a position to
            swear to that person's identity.

         4. Use of Copies

            A copy of the Name Affidavit is permissible in the Final Package if the
            original is not available. In such cases where the Name Affidavit has
            been recorded, the copy must show all recording information.

      4. Power of Attorney

         a. Must meet applicable state requirements.

         b. Must be on acceptable recordable form.

         c. U.S. Bank Home Mortgage accepts only a Limited (Specific) Power of
            Attorney in those cases that require one.

         d. Depending upon how power of attorney document drafted, there may
            be an expiration date. If so, power of attorney invalid if already
            expired when loan closes.

         e. Title Company must insure a valid power of attorney, and that Seller
            has a valid first lien position before funds are disbursed.

         f. Final title policy must not contain any exceptions based on the use of
            a power of attorney.

         g. The property address and legal description must agree with the
            Mortgage/Deed of Trust.

         h. The Power of Attorney must be recorded concurrently with the Deed of

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            Trust/Mortgage.

         i. The person being appointed with the Power of Attorney is “Attorney in
            Fact” and must sign the closing documents as follows:

               ________________________________________
               Jane Doe by John Doe, Her Attorney-in Fact

          The signature could be: “Jane Doe by John Doe, Her Attorney-in Fact”,
          “John Doe, Attorney-in Fact for Jane Doe”, or John Doe, AIF”. The
          manner of signing must be legally acceptable according to state guidelines
          and must clearly show the signer to be the one authorized to sign for the
          other specifically named individual.

         j. The title company must insure a valid Power of Attorney and that seller
            has a valid first lien.

      5. Corporate Assignment—AKA Assignment of Mortgage, Transfer of
         Lien, Assignment of Security Deed.

         a. A certified copy (cc) of the Assignment of Mortgage is required.

         b. Assign to: U.S. Bank N.A. under the laws of the United States of America,
            4801 Frederica Street, Owensboro, KY 42301.

         c. It must contain the legal description of the property which is identical
            to that on the Deed of Trust/Mortgage.

         d. It must be signed by an officer of the assigning corporation with the
            officers name and title typed below the signature. The name of the
            assigning corporation must appear above the signature line.

         e. Intervening/Mesne Assignments must conform to the guidelines stated
            above.

      6. Deed of Trust/Mortgage (Security Instrument)

         a. Copies must be certified as true and exact copies of the original.
            Appropriate, complete Riders must be attached.


         b. The notarized section must be completely filled in and signed by a
            notary. The stamp/seal and expiration date is required.
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         c. The date of the notary must be the same date of the security
            instrument. In the case of “Mail-Aways”, it may be necessary for
            signatures to be notarized in advance of the date of the instrument.

         d. Borrowers names on Mortgage Deed/Deed of Trust should appear
            identical to how they appear on the Note and Assignment. Marital status
            of borrowers should appear on page 1 and in the notary section.

            Borrowers typed names and signatures should be identical on all
            documents. If there are inconsistencies, a Name Affidavit is required.

         e. Mortgage Deed must contain the signature of the spouse.

            Title Insurance is not considered an acceptable substitute for the
            spouse's signature. Lack of the spouse's signature poses an
            unacceptable risk during foreclosure proceedings.

         f. The acceptable forms should be utilized:

            1. Conventional/VA loans must use most recent FNMA/FHLMC
               Form.

            2. FHA must use most recent HUD form.

            3. Adjustable rate must use most recent form applicable to loan
               program.

         g. All corrections, additions and deletions must be initialed by all
            mortgagors. No whiteouts allowed.

         h. Once the Mortgage Deed has been recorded, corrections must be made as
            follows:

            1) Re-recording the Mortgage (Preferred resolution to be taken whenever
               possible. Only applicable to abstract property.)

               If you can obtain the original Mortgage back from the recording office
               promptly, make the necessary corrections or insertions, have all
               Borrowers initial all corrections or insertions, add the following
               statement under the legal:


Closing & Funding   (10/20/04)                                       Page 7
               THIS MORTGAGE is being re-recorded to correct
                     (problem)                           , which should read
                            (correction)                       .

               THIS MORTGAGE is being re-recorded to insert
                       (item being added)
               which was inadvertently omitted.

               If you have a Rider attached to the Mortgage which needs correction
               or insertion, the statement should read:

               THIS MORTGAGE is being re-recorded to       (correct or insert)
               the (reason or what you are adding on the Mortgage and/or
               Adjustable Rate Rider)

               If Rider/Attachment was omitted when you recorded the Mortgage,
               the statement should read:

               THIS MORTGAGE is being re-recorded to add
               which was inadvertently omitted.

               Take a copy of the document for U.S. Bank, then send for
               re-recording.

               When you re-record a Mortgage, you must also re-record the
               Assignment with the phrase, "This Assignment is being re-recorded to
               reflect the re-recording of the Mortgage". Please indicate the new
               recording information of the Mortgage on the Assignment.

            2) Corrective Mortgage Deed/Deed of Trust/Assignment

               If you cannot obtain the original Mortgage from the recording office
               promptly, a Corrective Mortgage must be correctly completed and
               signed by all Borrowers.

               On the very top of the first page, type CORRECTIVE MORTGAGE. The
               date must be the same as that of the original Mortgage. A statement
               located on the front of the document stating the correction may
               appear as follows:

               "The Corrective Mortgage Deed/Deed of Trust is being filed to correct
               (i.e.: the maturity date of the Mortgage) to correctly read (i.e.:

Closing & Funding   (10/20/04)                                      Page 8
               January 2024). This is correcting the original Mortgage Deed/Deed of
               Trust filed on (date of recording) as Document # (doc number of
               incorrect Mortgage Deed/Deed of Trust) which originally had a (i.e.: a
               maturity date of January 2023)."

               If the Assignment of Mortgage had an error, a Corrective Assignment
               would be required. If only the Mortgage Deed/Deed of Trust required
               a corrective both the original Mortgage Deed/Deed of Trust and the
               corrective Mortgage Deed/Deed of Trust would need to be assigned to
               U.S. Bank N.A. and can be done on the same Assignment
               or on separate Assignments. The Assignment must contain the
               following phrase: "This Assignment is being recorded to follow chain
               of title."

      7. Adjustable Rate Rider (Conventional Loans)

         a. The date must be the same as on the Note and Deed of Trust/Mortgage.

         b. The lender’s name must agree with the Deed of Trust/Mortgage.

         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The initial interest rate must be the same as on the Note.

         d. The interest rate change dates must coincide with the particular U.S.
            Bank Home Mortgage adjustable rate programs and agree with the
            information on the Note.

         f. The margin must be the same as on the Note.

         g. The limits on the interest rate changes must coincide with the particular
            U.S. Bank Home Mortgage adjustable rate program.

         h. The original must be recorded.

         i. The names must be typed the same as on the Deed of Trust/Mortgage
            and vesting name(s) on the Title Policy.

         j. The borrower’s signature must be the same as typed.

      8. FHA ARM (Adjustable Rate Mortgage) Rider

         a. Same as # 7 above.
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         b. The FHA case number must match all other documents in the loan file.

      9. Assignment of Rents 1-4 Family Rider

         a. The date must match the Note and Deed of Trust/Mortgage.

         b. The name of the lending institution must agree with the Deed of
            Trust/Mortgage.

         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The borrower’s typed names must be the same as on the Deed of
            Trust/Mortgage.

         e. The borrowers must have signed as their name is typed and must match
            Deed of Trust/Mortgage.

         f. The original must be recorded.

         g. This form is mandatory on all properties with rental income or more than
            one unit.

      10.   Balloon Rider

         a. The date must match the Note and Deed of Trust/Mortgage.

         b. The name of the lending institution must agree with the Deed of
            Trust/Mortgage.

         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The borrower’s names typed same as on Note, Deed of Trust/Mortgage
            and as vested on Title Policy.

         e. The borrower(s) must have signed the same as their typed names and
            must match Deed of Trust/Mortgage.

         f. The maturity date must be correct per product guidelines.

         g. The original must be recorded.

      11.   Second Home Rider
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         a. The date must match the Note and Deed of Trust/Mortgage.

         b. The name of the lending institution must agree with the Deed of
            Trust/Mortgage.

         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The borrower’s names typed must be the same as on the Note, Deed of
            Trust/Mortgage and as vested on the Title Policy.

         e. The borrower(s) have signed the same as typed and as on the Deed of
            Trust/Mortgage.

         f. The original must be recorded.

      12.   Rehabilitation Loan Rider

         a. The date must match the Note and Deed of Trust/Mortgage.

         b. The name of lending institution must agree with the Deed of
            Trust/Mortgage.

         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The borrower’s names typed must be same as on Note, Deed of
            Trust/Mortgage and as vested on the Title Policy.

         e. The borrower(s) must have signed as typed and must match the Deed of
            Trust/Mortgage.

         f. Rehabilitation Loan Agreement date must be inserted.

         g. The FHA case number must be complete and correct.

         h. The original must be recorded.


      13.   Condominium Rider

         a. The date must agree with the Deed of Trust/Mortgage.

         b. The lender’s name must be the same as on the Deed of Trust/Mortgage.
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         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The name of the Condominium Project must be the same as on the Title
            Policy.

         e. The borrower’s names typed same as on the Note, Deed of
            Trust/Mortgage and as vested on the Title Policy.

         f. The borrower(s) must have signed as typed and must match the Note and
            Deed of Trust/Mortgage.

         g. The original must be recorded.

         h. This Rider is required on all condominium transactions.

      14.   PUD Rider

         a. The date must be the same as on the Deed of Trust/Mortgage.

         b. The lender’s name must agree with the Deed of Trust/Mortgage.

         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The name of the PUD Project must be the same as listed on the Title
            Policy.

         e. The borrowers’ names typed same as on the Note, Deed of
            Trust/Mortgage and as vested on the Title Policy.

         f. The borrower’s must sign the same as typed and must be the same as on
            the Deed of Trust/Mortgage.

         g. The original must be recorded.

         h. This Rider is required on all PUD transactions and/or when homeowners
            assoc. dues are required per the appraisal or the title insurance
            commitment.

      15.   VA Rider

         The following must be correct.

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         a. The closing date must match the Note and Deed of Trust/Mortgage.

         b. The name of the lending institution must agree with the Deed of
            Trust/Mortgage.

         c. The property address must match that on the Deed of Trust/Mortgage.

         d. The borrower’s names typed must be the same as on the Note, Deed of
            Trust/Mortgage and as vested on the Title Policy.

         e. The borrower(s) must have signed their name exactly as typed and as on
            the Deed of Trust/Mortgage.

         f. The original must be recorded.

      16.   HUD-I Settlement Statement

         Check from top of HUD-1:

         a. Type of loan – proper box is marked.

         b. Name of borrower agrees with the name on all legal documents.

         c. The name of seller is identified and completed.

         d. The name of lender is identified and completed.

         e. The property location agrees with Note Deed of Trust/Mortgage and
            appraisal and loan application.

         f. The settlement date is reflected. This date may or may not be the same
            as on the Note and Deed of Trust/Mortgage.

         g. The summary of borrower’s transaction:

            1. The contract sales price must agree with the sales contract.

            2. The principal amount of new loan must agree with the loan amount
               stated on the Note and Deed of Trust/Mortgage.

            3. If the loan contains a buydown agreement, the total buydown funds
               will be shown in either borrower’s column or seller’s column. In

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               addition to buydown funds reflected here, escrow holdbacks may be
               shown under this heading.

            4. FHA/VA loans must reflect the MIP/FF paid. FmHA loans must have
               the guarantee fee paid.

            5. The Hazard Insurance premium prepaid for 12 months is acceptable
               in lieu of a paid receipt.

            6. The Flood Insurance premium prepaid for 12 months is acceptable
               in lieu of a paid receipt.

            7. All loans must have adequate reserves deposited with the lender.
               Conventional loans with loan-to-value below 80.00% may or may not
               reflect reserves. An escrow waiver will be required for all non-escrow
               loans. Adequate reserves for taxes/insurance, etc. must be shown to
               have been collected to insure there are sufficient funds available to
               pay the next installment when due.

            8. Both the borrower and seller must sign the HUD-1 Settlement
               Statement (if the loan transaction is a purchase). Only the borrower’s
               signature is required if the loan transaction is a refinance. The
               settlement agent must sign and date this document in either case.

            9. On FHA loans, the addendum must be executed by all parties.

      17.   Temporary Buydowns

         a. A buydown is a financial incentive offered by the seller (frequently also
            the builder) to a buyer which enables the buyer to reduce the mortgage
            payment in the early stages of the loan. This may also allow the
            borrower to more easily qualify for the loan. The buydown funds are
            held by U.S. Bank Home Mortgage and are used to supplement the
            borrower’s payments.


         b. When U.S. Bank Home Mortgage buys the loan, the buydown
            contribution will be deducted from the wire amount in the same way as
            other collected escrows for insurance taxes.

         c. To document the buydown, there must be an original, signed buydown
            agreement in the closed loan package.

Closing & Funding   (10/20/04)                                     Page 14
      18.   Acknowledged Right of Rescission

         Rescission applies to refinance transactions unless, the refinance is not the
         borrower’s principal residence.

         The following areas must be completed correctly on the Right to Cancel
         Form:

         a. The date of the transaction. This is the date the documents are signed.
            It can be documented by comparing it to the date the security
            instrument was notarized.

         b. The name and complete address of the originating lender must be
            present.

         c. Each borrower must be provided with a “Notice of Right to Cancel” form.

         d. The borrower(s) must acknowledge receipt of the “Notice of Right to
            Cancel” form on the Closing Date.

         e. Funds can not be disbursed until three (3) business days have elapsed
            (count Saturdays, do not count funding date, Sundays and holidays on
            which mail is not delivered) after the Closing Date.

         f. Completed, signed originals must be included in your Closed Loan
            Package. The signatures of all borrowers must be present acknowledging
            that they have received a copy of the Notice of Right to Cancel Form.

         g. Dated signatures of all borrowers on the transaction confirming they
            wish to complete the transaction. The date must be after the date shown
            in “e” above.

         h. Interim interest must be collected from the Funding Date. First
            payments must be set accordingly.

         Each borrower must sign and be furnished with two (2) copies of the Notice
         of Right to Cancel at the time the documents are signed. Each borrower
         must also be provided with a copy of the Final Truth-in Lending Disclosure
         at that time. Any one borrower may exercise the right to cancel the
         transaction on behalf of the other borrowers.


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         The rescission period is three (3) days after the date documents are signed.
         It begins the day after documents are signed and funds may not be
         disbursed by the closing agent until after midnight of the third business day
         after the date rescission begins. Monday through Saturday are considered
         business days and are counted as part of the three day rescission period.
         Sundays and national holidays are not counted as part of the rescission
         period. If there is a change in the transaction after the documents are
         signed, a new Notice of Right to Cancel and a new 3-day rescission period
         must be provided.

         U.S. Bank Home Mortgage will not purchase any loan if there is a question
         that the rescission has not been completed in a correct manner.

      19.   Title Commitment—AKA Title Binder or Prelim.
            (Please refer to Title Insurance Requirements)

         Check for these items on the title commitment:

         a. If the loan transaction is a refinance, title will show the vesting of the
            borrower(s). If the loan transaction is a purchase, it will show the
            borrower(s) as the “proposed insured”, which may or may not be
            accompanied by a vesting.

         b. The proposed dollar amount of the Deed of Trust/Mortgage.

         c. The legal description agrees with the Deed of Trust/Mortgage and the
            appraisal.

         d. The date must be the same or prior to the Deed of Trust/Mortgage.

         e. Schedule B items, such as delinquent taxes, judgments and liens must
            be paid on HUD-1.

         f. A copy of the survey or plat map is needed unless a location
            endorsement has been ordered. The commitment must contain wording
            such as “a comprehensive endorsement and location note have been
            approved for loan policy”. The address of the property will also be noted.

         g. Attorney’s opinion letter (if applicable to your state) must be included.
            Do not include the Abstract of Title.

         h. All title insurance must include an Environmental Protection Lien
            Endorsement.
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         i. The latest ALTA form of title insurance policy is required. In states
            where ALTA forms are not used, similar coverage will be required.

         j. ALTA policies must be audited for proper endorsements (i.e., ARM
            endorsements ALTA 6.0, EPA endorsement 8.1, PUD endorsement ALTA
            5, Condo endorsement ALTA 4, Manufactured Housing endorsement
            ALTA 7, etc.)

      20.    Survey or Plat Survey

         Check the following items:

         a. A survey will be required if evidenced on the HUD-1 that there has been
            a charge for a survey.

         b. The survey identifies the property by the street address or the legal
            description, (preferably both).

         c. It must be signed and sealed by surveyor.

         d. A photocopy of the survey is acceptable.

      21.    Flood Certification

         All files must contain a flood certification from an outside third party. Refer
         to Underwriting Guidelines – Conventional Section for details.

      22.    Hazard Insurance

         U.S. Bank Home Mortgage requires an insurance policy or binder (if a
         binder state) with a paid receipt for one year’s coverage.

         The Binder/Policy should include the following:

             The borrowers names
             Insured property address
             Effective dates of policy
             Premium amount
             Dwelling coverage



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         Coverage must be for not less than 80% of the value of the improvements.
         Full replacement cost coverage or coverage at least equal to the full
         mortgage amount are also acceptable. Deductibles are in the amount of 1%
         of the coverage amount or $1000, whichever is higher. The policy must
         include the name of the insurance company and insurance agency, policy
         number, inception date, agent's address and telephone number and the
         signature of the licensed agent for the company.

         All insurance companies are to be rated by BESTS Key Rating Guide no less
         than "B3" with a financial performance of a "6" or better to be acceptable to
         U.S. Bank Home Mortgage.

         On refinance loans, if the premium is due within 60 days of purchase, the
         seller will be responsible for paying the premium and providing U.S. Bank
         Home Mortgage with proof of payment.

         U.S. Bank Home Mortgage will deduct the required amount of hazard
         insurance escrow from the total wire amount to insure sufficient funds to
         pay the premium when due. The seller is responsible for collecting any
         shortage from the borrowers.

         Please Note: On refinance loans, borrowers generally will already have a
         hazard policy in force. U.S. Bank Home Mortgage will require a total of 12
         months escrow plus allowable cushion with the payment preceding the
         month the premium is due. (Example: 1st payment date is 04/01/__ ---
         premium is due 10/05/__. Seller will need to collect enough months at
         closing so U.S. Bank Home Mortgage has 12 months plus the allowable
         cushion with the 09/01/__ payment. Collect 8 months at closing.)


         For Conventional Loans on a 2-4 unit dwelling you must provide us with a
         policy which includes "rental loss" insurance if you use the rental income to
         qualify for your loan.




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         Loss payable clause must read as follows:

      The Loss Payee should read:

                    U.S. Bank N.A.
                    Its Successors and Assigns as Their Interest May Appear
                    c/o U.S. Bank Home Mortgage
                    P.O. Box 7298
                    Springfield, OH 45501-7298

            (See Exhibit E6)

         For properties in an association such as a townhouse or condominium there
         is customarily a Master Policy with Certificates issued to each Borrower.
         This will be acceptable as evidence of insurance.

      23.    Flood Insurance

         a. Flood Zones A and V require flood insurance.

         b. Refer to Hazard Insurance requirements, Section #23, for additional
            information.

      24.    Acceptable Evidence of Payment of Hazard Insurance and/or Flood
             Insurance.

         a. Policy stating premium amount is paid in full.

         b. A canceled check, copy of front and back.

         c. A paid receipt from the insurance agent or insurance company.

         d. Payment deducted on the HUD-1.

      25.    Private Mortgage Insurance

         U.S. Bank Home Mortgage requires private mortgage insurance on all
         Conventional and ARM loans with loan-to-value ratios in excess of
         80.00% LTV. Please review the following:


         a. Original commitment must be in the file with the lender’s information
            completed on the bottom and signed by the lender
Closing & Funding    (10/20/04)                                   Page 19
         b. Coverage must equal or exceed the loan amount. Private Mortgage
            Insurance is required on all mortgages where the loan-to-value exceeds
            80.00%. Please refer to the program guidelines for Private Mortgage
            Insurance requirements.

         c. Evidence that premium has been paid must be reflected on the HUD-1.

         d. Amount of coverage must be correct per product guidelines.

         e. All information must be complete, correct and agree with loan file.

      26.   Acceptable Private Mortgage Insurance Companies

                   GE                Radian            UGI
                   RMIC              MGIC              PMI
         One time MI premiums offered by some mortgage insurance companies are
         acceptable provided the total LTV doesn’t exceed 90% including MI
         premiums. Any program LTV limitation would take precedence on Fixed
         Rate Purchases, Fixed Rate Refis, Adjustable Rate and Balloon Mortgages.

         The monthly MI premium plan is acceptable for all loan programs requiring
         mortgage insurance. The monthly premium plan is currently available
         through all the approved primary MI companies (see above). Check with
         your local MI company representative to make sure the program is available
         in your area.

         U.S. Bank Home Mortgage requires full MI coverage per FNMA/FHLMC
         requirements and will not accept reduced or custom MI coverage on
         any loan.

      27.   Typed Loan Application

         a. Freddie Mac 65/ Fannie Mae 1003 must be utilized for all Conventional,
            Government and FmHA mortgage loans.

         b. The typed Loan Application must contain the verified information from
            the credit report, exhibits and appraisal. Any discrepancy requires a
            written explanation.

         c. All borrowers must sign and date the Loan Application.

         d. The Loan Application must be signed by the lender.
Closing & Funding   (10/20/04)                                    Page 20
      28.   Appraisal

         Check the following items:

         a. The appraisal report form is correct for the type of property being
            appraised and all applicable exhibits are included.

         b. The appraisal was signed by the appraiser prior to approval of the loan.

         c. The appraiser is qualified and disinterested in the subject transaction.

         d. The appraiser has made both exterior and interior inspections of the
            property.

         e. The property address agrees with the Note.

         f. If the lender/client is not the lender referenced on the Note, one of the
            following will be required:

            1. Credit Transfer Letter
            2. Copy of HUD Case Assignment Results
            3. Sponsor relationship reflected on page 1 of HUD form 92900-A.

         g. The appraisal must be dated within the twelve (12) months that precede
            the date of the Note and Mortgage. A recertification of value (including
            exterior inspection of property) will be required if the appraisal is over
            four (4) months old.

         h. Original photos of the subject and comparables are required.

         i. U.S. Bank Home Mortgage reserves the right to request a review
            appraisal if not satisfied with the one delivered. This cost will be paid by
            the originating lender.

      29.   W-9 Form

         Federal regulations require us to have in each loan transaction a completed
         W-9 form signed by all mortgagors. The form is to be completed with the
         name, mailing address and social security number of the mortgagor. Each
         W-9 must be signed and dated. (See Exhibit 5a.)


Closing & Funding   (10/20/04)                                      Page 21
      30.    IRS Form 4506T

            IRS form 4506T will be required on all loans purchased unless specifically
            indicated in program guidelines not required.

      31.    Notice to Mortgagor Regarding Actual Transfer of Servicing.

         The notice to the mortgagor advising them of the actual transfer of servicing
         must contain the required RESPA information. The Cranston Gonzales Act
         requires the borrower(s) to receive notification at least fifteen (15) days prior
         to the effective date of the transfer. U.S. Bank Home Mortgage suggests
         using the Notice of Assignment, Sale or Transfer of Servicing Rights form
         (see Exhibit E3) when notifying the borrower(s) that the loan has been sold
         to U.S. Bank Home Mortgage. Any equivalent type of "Good-bye” letter is
         acceptable as long as it has all the required information.

C.    TAX INFORMATION

      Property taxes must be paid through the current tax payment period at time of
      loan closing. If bills are available, taxes for the subsequent period should also
      be paid, particularly if they become due within 59 days of loan closing. The
      date through which taxes are paid should always agree with exceptions for
      taxes in the title policy. Under no circumstances should the title policy take
      exception to taxes other than those, which are not yet due and payable.
      Postponed or deferred taxes are not acceptable.

      Tax ID Number: If the Tax ID number is subject to change because the
      property has been subdivided or is a new construction and an individual
      number has not yet been assigned, Seller must send a letter of explanation
      along with the Closed Mortgage Loan Package. If taxes are due within 59 days
      of closing, taxes must be paid to the tax authority and furnish U.S. Bank Home
      Mortgage with a tax receipt.

      If escrow for taxes and insurance are waived, Exhibit E7 must be completed
      and executed by borrowers and Correspondent Lender at closing.
          a. U.S. Bank Home Mortgage will hold any non-homestead portion of taxes
             contributed by property seller.

         b. All levied special assessments must be paid in full, unless specifically
            waived by U.S. Bank Home Mortgage.

         c. The title company closer must collect and hold escrow for all pending
            assessments.
Closing & Funding   (10/20/04)                                        Page 22
         d. Please provide a photocopy of the most recent tax bill if available.

D.    AGGREGATE ESCROWS

      Sellers will be responsible for collection of the appropriate amount of taxes and
      insurance.

      The “Aggregate Method” of calculation must be used for establishing escrow
      accounts. It can be defined as the accounting method a lender of bank used in
      computing the sufficiency of the escrow account funds by analyzing the
      account as a whole. Sellers are responsible for collecting the correct amount of
      escrows at closing. If insufficient funds are collected at closing, U.S. Bank
      Home Mortgage will require the seller to correct the shortage in addition to
      providing the borrower with a re-disclosed initial escrow account statement.
      The shortage must be corrected prior to purchase by U.S. Bank Home
      Mortgage.

      The Aggregate Accounting Adjustment reflected on lines 1006-1008 of the
      HUD-1 must always be a negative number (credit) or zero. If your calculations
      result in a positive number (greater than zero), you should re-check your
      calculations. However, if your calculations are correct, you can only reflect a
      zero for the Aggregate Accounting Adjustment on the HUD-1. The regulation
      does not permit a positive charge on the HUD-1. Keep in mind that you can not
      collect the positive charge Aggregate Accounting Adjustment shown in your
      calculation.

      Please refer to Exhibit E24-a, b, c, d, e for an illustration on how to
      calculate Aggregate.

E.    FIRST PAYMENT DATE

      All loans must be closed with the monthly payments coming due on the first
      day of each month. Therefore, the first payment should be set so the borrower,
      when making the first payment, will pay an entire month’s interest. First
      payment dates cannot exceed 61 days from the date of disbursement. Cut off
      for collecting interest is the first of the month.
      Example: Closing date is May 1st – First payment is June 1st
                    The borrower would pay May’s interest with the June payment.

                    Closing date is May 2nd – First payment is July 1st
                    The borrower would pay interest from May 2nd to May 31st at
                    closing. June’s interest would be paid with the first payment.
Closing & Funding    (10/20/04)                                     Page 23
      First payment notices should read:

                     U.S. Bank N.A.
                     Attn: Payment Processing
                     P.O. Box 20005
                     Owensboro, KY 42304

F.    COMMON CLOSING CONDITIONS

      1. Evidence of Sale of Previous Home
         a. Copy of HUD-1 on previous property – SIGNED BY BOTH BUYERS AND
            SELLERS. The HUD-1 must show the amount of cash netted to our
            Borrower(s); payoffs and,

           b. Copy of Warranty Deed showing transfer of Title from seller to buyer.

      2. Proof of Payoff Accounts (also known as charge accounts)
         a. Letter from appropriate institution showing Borrower(s) name, present
            address, account number and stating a zero balance; or

           b. Copy of most current statement (no more than one month old) with a
              copy of a canceled check covering the total amount owing on the
              account; or

           c. Our HUD-1 showing payoff of the revolving accounts.

              **COPIES OF THE FACE OF PERSONAL CHECKS ARE NOT
                ACCEPTABLE**

      3. Proof of Payoff of Installment Loan(s)
         a. Copy of the Note showing paid in full and the date and signature of the
            bank official; or

           b. Letter on institution letterhead reflecting account number, Borrower’s
              name, present address, and account paid in full. Letter must be dated
              and show signature of institution official.

      4.    Proof of Payoff of Mobile Home
            a. Transfer of Title, signed by all parties; and

            b.   Copy of closing statement or settlement statement, signed by all
                 parties; and
Closing & Funding    (10/20/04)                                     Page 24
           c.   Copy of certified funds received (if applicable).

      5.   Verify Receipt of Gift Funds

           Refer to the Underwriting section for appropriate documentation of gift
           funds.

      6.   Certifications (Electrical, Plumbing, Heating, Roofing)
           a. Must be signed by a licensed contractor.

           b.   Cannot be more than six months old.

      7.   Private Well, Cistern
           a. If water test is required refer to guidelines listed below:

                   Nitrate Nitrogen must be less than 10 ppm (parts per million).
                   Coliform level must be less than 1 per 100 ml (milliliter).
                   Cannot be more than six months old.
                   Sample must be drawn by licensed laboratory.

           b.   Cisterns only: Have local municipality writer a letter stating that
                delivery of city water will continue to be available at anytime if
                insufficient amount of rainwater is collected.

      8.   Health Authority Approval of Private Septic System
           a. Have local municipality write a letter indicating septic system meets
               their approval. If municipality will not approve the system, get letter
               from them indicating so, or have licensed plumber inspect system and
               document results.

           b.   Cannot be more than six months old.

      9.   Certificate of Code Compliance or Certificate of Occupancy
           a. Must come from governing municipality.
           b. Cannot be more than six months old.

G.    PURCHASE FUNDING

      Loan must be disbursed no later than the expiration date (if the expiration date
      falls on a Saturday, Sunday or legal holiday, the loan is extended to the very
      next day which is not a Saturday, Sunday or legal holiday. The timeframe for

Closing & Funding    (10/20/04)                                      Page 25
      the loan delivery due date begins when the loan is disbursed, regardless of the
      expiration date of the lock-in.

      A complete closed loan package must be received in fundable condition within
      ten (10) calendar days following the disbursement date. If the expiration date
      falls on a weekend or holiday , the loan file will be due the next business day.

      Refer to the “Pricing Policy” Section of the manual for re-price procedures due
      to late loan delivery.

      1. Delivery Instructions

      Closed loan packages must be submitted in a legal sized file folder with all
      documentation “acco” fastened according to the U.S. Bank Home
      Mortgage Closed Mortgage Loan Transmittal (Exhibit E1). The closed loan
      packages must be sent to the following address:

                    U.S. Bank Home Mortgage
                    Wholesale Funding Dept
                    1550 E. American Blvd. #300
                    Bloomington, MN 55425

      2. Notes Delivered by Warehouse

         If your notes are delivered direct to us from your Warehouse bank, they
         must be delivered in identifiable form. Please instruct your Warehouse
         Bank to attach the Note to a cover sheet, which reflects the identifying
         U.S. Bank N.A. number, borrower’s name and the property
         address. This will enable us to quickly match the Note with the
         correspondent closed loan package.



      3. Suspended Loans

         Loans, which are not in fundable condition, must be perfected by the date
         indicated on the Deficiency Notice.

         A copy of the Deficiency Notice must be attached to all documentation sent
         to U.S. Bank Home Mortgage to clear a suspended loan. If more than one
         condition is required, please wait and submit all conditions at the same
         time.

Closing & Funding    (10/20/04)                                    Page 26
         If the loan can not be perfected by the deficiency due date provided on the
         Deficiency Notice, the loan may be subject to repricing. Please refer to the
         “Pricing Policy” Section for re-pricing procedures.

      4. Funding

         Following receipt and review of a complete closed loan package or the
         suspense items needed for purchase, U.S. Bank Home Mortgage will wire
         funds according to the provided wire instructions. You will receive a faxed
         confirmation detailing the purchase transaction on the day the funds are
         wired.

         To ensure that the proceeds from the purchase are wired to the correct
         warehouse bank, wiring instructions must be enclosed in each closed loan
         package. The instructions must include the borrower’s first and last name
         along with the correct wire instructions.

         Interest paid-to-date will be calculated by U.S. Bank Home Mortgage on a
         365 day calendar year for all loan types.

         On any loan purchased by U.S. Bank Home Mortgage between the 26th and
         the last day of the month, where the first payment is due the following
         month, U.S. Bank Home Mortgage will fund the loan at an amortized
         balance. It will be the lender’s responsibility to advise the mortgagor and
         collect that payment from the mortgagor.

         Taxes/insurance/MIP due prior to the first payment due to U.S. Bank N.A.
         will be the responsibility of the correspondent to pay.

         A loan history is required on loans where payment(s) were due on the first of
         the previous month (i.e., first payment due per Note is May 1, loan to be
         purchased on June 15). It is the lender'’ responsibility to forward an
         updated history if the history previously provided is outdated.

      5. Payment of Premiums

         The correspondent lender (seller) will be responsible for all mutual premium
         payments of UFMIP, VAFF or conventional private
         mortgage insurance premium and provide proof of payment in the closed
         loan file.


Closing & Funding   (10/20/04)                                     Page 27
         U.S. Bank Home Mortgage will submit for insurance guaranty only those
         loans underwritten by U.S. Bank Home Mortgage. The seller will be
         responsible for submitting all insurance or guaranty packages for these
         loans sent to the agency for prior approval or when direct endorsement is
         utilized.

      6. Post-Funding Follow-up Documentation

         Any required post-funding follow-up documentation will be notated on the
         Deficiency Notice. The required follow-up documentation must be delivered
         to U.S. Bank Home Mortgage by the deficiency due date. If not, you may be
         required to repurchase said loan(s) within 10 business days of a written
         demand by U.S. Bank Home Mortgage.

         A copy of the Deficiency Notice must be attached to all documentation that
         is sent to U.S. Bank Home Mortgage to clear a post-funding deficiency.

H.    TABLE FUNDING

      1. Funding Requests

         a. Fax all table funding requests (refer to exhibit D3, D3a and D3b) to
            the U.S. Bank Home Mortgage Funding Dept. no later than 12:00 noon
            CST two (2) business days prior to closing for refinances and two (2)
            business days prior to closing for purchase transactions unless
            otherwise specified by U.S. Bank Home Mortgage.

            Attn:    Wholesale Funding Dept
            Fax      (952) 854-6866 or (952) 854-6870
                     (952) 876-4441 or (952) 876-4442

      All requests    must have “U” conditions cleared or additional fees may be
      imposed.

            1) Seller has requested funds sufficiently in advance of closing to
               allow U.S. Bank Home Mortgage to provide available funds to the
               closing agent;

            2) All "U" conditions of the Underwriting Approval are satisfied and
               the Buy Price has been confirmed in the final Registration
               Confirmation for the loan;


Closing & Funding    (10/20/04)                                   Page 28
            3) All "C" or at closing conditions will be required to be faxed to U.S.
               Bank Home Mortgage and approved prior to disbursement of the
               loan. U.S. Bank Home Mortgage must issue a FUNDING NUMBER
               prior to disbursement by closing agent. Any closed loan file received
               without an issued FUNDING NUMBER both Seller and the Closing
               Agent will be held liable for disbursing the loan without obtaining
               approval from U.S. Bank Home Mortgage which could lead to
               termination.

               All "C" or at closing conditions should be faxed to: 952-876-4422 or
               952-876-4423 with the U.S. Bank Home Mortgage loan number
               clearly identified on the fax cover sheet.

               Call 952-814-3345 and ask for a Funding Number.

               Table funding wires will be calculated as follows:

               Mortgage amount less the following (if applicable) loan buy price,
               interest per diem, commitment fees, escrow waiver fee, VA Funding
               Fee/UFMIP/MI Premium, tax and insurance escrows plus applicable
               Service Released Premium.

               The funds will be wired directly to the title company or closing agent.

               Seller can request one wire funding revision free of charge. All
               subsequent wire funding revision requests will be accepted by U.S.
               Bank Home Mortgage for a fee of $75.00 per additional revision
               request.

               If a closing is canceled or delayed for any reason, it will be the
               responsibility of the Seller to notify U.S. Bank Home Mortgage by
               telephone immediately - contact the Table Funding Specialist or the
               Funding Supervisor at 952-814-3345. All funds must be returned by
               wire no later than the day after the original disbursement date or the
               Seller will be responsible for reimbursing U.S. Bank Home
               Mortgage for lost interest and/or penalties.

               Seller will be charged a $200.00 fee if notification to U.S. Bank Home
               Mortgage is not within 24 hours of loan cancellation or delay.




Closing & Funding   (10/20/04)                                      Page 29
               U.S. Bank Home Mortgage will fax the following documents to the
               Seller and title company:
                      Wire Breakdown
                      Closing Letter
                      Addendum to the HUD-1 (includes buy price and SRP)

      2. Delivery Instructions

         Within 7 calendar days after the loan disbursement date, the complete
         Closed Mortgage Loan file and original Collateral Pkg. must be delivered by
         the Seller to:
            U.S. Bank Home Mortgage
            Attn: Wholesale Funding
            1550 E. American Blvd. #300
            Bloomington, MN 55425

      3. Collateral Package

         a) The collateral package, if sent separately, must include the following
            documents and must be delivered to U.S. Bank Home Mortgage within 7
            calendar days from Funding.
            1) Original Note endorsed to U.S. Bank N.A.
            2) Certified copy of the Security Instrument
            3) Certified copy of the Assignment
            4) Copy of HUD-1 Settlement Statement
            5) Power of Attorney (POA) (if applicable)

      4. Payment of Premiums and Insurance or Guaranty

         a) U.S. Bank Home Mortgage will deduct from the wire any amounts due for
            initial payment of FHA UFMIP, VA Funding Fee, or Conventional
            Private Mortgage Insurance.

         b) U.S. Bank Home Mortgage will prepare and submit all insurance or
            guaranty packages to HUD/VA on all table funded loans underwritten by
            U.S. Bank Home Mortgage Underwriting.

I.    ALT FUNDING

      1. Funding Requests
         Fax all Alt funding requests (refer to exhibit D4 on the date of closing).
         Attn: Wholesale Funding Dept
         Fax 952-854-6866 or 952-854-6870
Closing & Funding   (10/20/04)                                       Page 30
         a. All “U” conditions of the Underwriting Approval are satisfied and the Buy
            Price has been confirmed in the final Registration Confirmation for the
            loan;

         b. All “C” or at closing conditions will be required to be received and
            approved by U.S. Bank Home Mortgage prior to purchase of the loan. All
            “C” or at closing conditions should be included in the collateral package
            if submitted separate from the closed loan file.

         c. All wires will be completed within 24 hours of receipt of both the faxed
            request and the original collateral package and/or closed loan file.

      2. Delivery Instructions

         Within 7 calendar days after the loan disbursement date, the complete
         Closed Mortgage Loan file and original Collateral Pkg. must be delivered by
         the Seller to:

            U.S. Bank Home Mortgage
            Attn: Wholesale Funding
            1550 E. American Blvd. #300
            Bloomington, MN 55425

      3. Collateral Package

         a. U.S. Bank Home Mortgage will purchase the loan within 24 hours of
            receipt of both the funding request form and the collateral package. The
            collateral package must include the following documents and be
            delivered to U.S. Bank Home Mortgage within 7 calendar days from
            Disbursement:
              1) Original Note endorsed to U.S. Bank N.A.
              2) Certified copy of the Security Instrument
              3) Certified copy of the Assignment
              4) Copy of HUD-1 Settlement Statement
              5) All “C” closing conditions
              6) UFMIP/VAFF Transmittal for remittance of the initial
                 premium




Closing & Funding   (10/20/04)                                     Page 31
      4. Funding and Wire Breakdown

         a. Alt Funded wires will be calculated as follows:
            Original Loan amount less the following (if applicable), loan buy price,
            interest per diem (from the purchase date), commitment fee, escrow
            waiver fee, VAFF/UFMIP/MI Premium, tax and insurance
            escrows plus applicable Service Released Premium.

      5. Payment of Premiums and Insurance or Guaranty

         a. U.S. Bank Home Mortgage will deduct from the wire any amounts due for
            initial payment of *FHA UFMIP, VA Funding Fee, or Conventional
            Private Mortgage Insurance.

         b. U.S. Bank Home Mortgage will prepare and submit all insurance or
            guaranty packages to HUD/VA on all loans underwritten by U.S. Bank
            Home Mortgage Underwriting.

      *Seller will be responsible for any late fees to premiums paid if the loans are
      not purchased within 10 days of disbursement or by agency late due dates.

J.    FINAL DOCUMENTATION

      Original loan documents relating to each loan purchased, which U.S. Bank
      Home Mortgage must receive within said 90 day period include:

      1. Title Policy

      2. Recorded Deed of Trust/Mortgage or applicable security instrument.

      3. Recorded Corporate Assignment, or its equivalent

      4. Mortgage Insurance Certificate/Loan Guaranty Certificate/Loan Note
         Guarantee.

      All follow-up documentation should be forwarded to the following address with
      the Final Closed Loan Package Transmittal (See Exhibit A5).

                         U.S. Bank Home Mortgage
                         Attn: Wholesale Final Doc Department
                         221 W. Cherry Street
                         Nevada, MO 64772

Closing & Funding   (10/20/04)                                      Page 32
      U.S. Bank Home Mortgage will provide monthly reports identifying outstanding
      Final Documents to assist correspondents in complying with our policies.

      Final Package Penalties:
      U.S. Bank Home Mortgage requires all final documents to be received no later
      than 90 days after closing. If a correspondent fails to deliver the final
      documents within 90 days after loan disbursement, the following steps may be
      taken at U.S.Bank’s discretion.

            90 – 180 days after loan disbursement:
            Issue a warning letter to the correspondent advising them of delinquent
            documents

            181 – 239 days after loan disbursement
            U.S. Bank reserves the right to charge a $25.00 monthly penalty per loan
            for outstanding Final Documents.


            240 + days after loan disbursement
            U.S. Bank will charge a $25.00 monthly penalty fee for final documents
            still outstanding. Billing notification will be mailed once a month for
            outstanding final documents from the previous month and will be due
            within thirty (30) days from billing date.

            360+ days subject to repurchase

K.    TITLE INSURANCE REQUIREMENTS

      U.S. Bank Home Mortgage will accept a title insurance policy issued by an
      American Land Title Association Title Company (ALTA) specially authorized by
      law or license to do business within the state where the property is located.
      Title Insurance Companies must be acceptable to Fannie Mae, Freddie Mac and
      Ginnie Mae in order to be eligible to title insurers for loans purchased by U.S.
      Bank Home Mortgage

      If the final title policy has not been issued at the time you deliver your closed
      loan file to U.S. Bank Home Mortgage we will accept a title binder. Your final
      title insurance policy must contain the following:

      1. Insured Party in Schedule A – The original mortgagee or assignee should be
         reflected with “Its Successors and/or Assigns” added.

Closing & Funding   (10/20/04)                                       Page 33
      2. U.S. Bank Home Mortgage must hold a valid first lien position.

      3. The effective date of the policy must be the same as or later than the
         recording date of the security instrument unless the policy is a master
         policy or a short form policy.

      4. The complete legal description must be shown including lot, block, addition,
         city, county and state and be exact to the mortgage.

      5. The complete tax identification number and amount of taxes must be shown
         unless the policy is a master policy or a short form. (Some states may not
         show the amount of taxes).

      6. Title insurance coverage must be for at least the loan amount. On
         graduated payment mortgages, coverage must be for the highest loan
         amount after all deferred interest is added to the principal.

      7. Name(s) of the mortgagor(s) must be consistent with those on the security
         instrument.

      8. All titles must be held as Fee Simple.

      9. The mortgagor(s) and mortgagee/beneficiary names, loan amount and date,
         recording information and recording state entered in Schedule A should be
         checked against the security instrument. The following is sample entry
         containing all required information.

         Mortgage from Robert T. Jones and Cynthia R. Jones, husband and wife, to
         U.S. Bank N.A. dated January 20, 2004, and recorded January
         25, 2004 in Book No. 451, Page 3544, as Document No. 1242534 in
         Jefferson County, Kentucky, in the amount of $50,000.00.

      NOTE: If the security instrument has been re-recorded, the security
            instrument description must show the re-recording information also.

    10. If a borrower’s spouse has not signed the security agreement, the title
        insurance policy must affirmatively state that the lien of the Mortgage
        described on Schedule of the policy is not affected by the absence of the
        spouse’s signature.



Closing & Funding   (10/20/04)                                    Page 34
    11. A plat drawing/survey/”Mortgage Inspection Report” must be included in
        the closed loan package. The correct dimensions of the lot, the locations of
        any improvements, the measurement from the improvements to the various
        lot lines, the location and identity of all easements and encroachments must
        be identified and illustrated on the drawing. All permanent structures must
        be identified (i.e., house, garage, storage, etc.). The location of easements
        (eastside, west side, etc.) must be described in the title policy.

         Surveys are acceptable up to six months old.

         If a Location Endorsement, ALTA 116 is not customary to the state and no
         plat/survey is available, then survey exceptions can not be noted on the title
         commitment/final policy.

    12. Required Endorsements:

         U.S. Bank Home Mortgage requires the following endorsements to the final
         title policy:

         a. All loans require the Comprehensive Endorsement 100 or ALTA 9.

         b. All loans require the Environmental Protection Lien Endorsement (ALTA
            8.1).

         c. All adjustable rate mortgages require the ARM/Variable Rate
            Endorsement (ALTA 6).

         d. All condominium mortgages require the Condominium Endorsement
            (ALTA 4)

         e. All properties located in a planned unit development require the PUD
            Endorsement (ALTA 5).

         f. All manufactured homes required an ALTA 7.

    13. General Title Waivers

         Title to the mortgaged property must be free and clear of all exceptions that
         would affect the first lien position of U.S. Bank Home Mortgage in any way.
         Schedule B, Part 1, of the title binder and final title policy lists title
         exceptions for which the title company is not providing coverage. Before
         closing, Sellers must determine what action, if any, should be taken to

Closing & Funding   (10/20/04)                                     Page 35
         protect the interest of U.S. Bank Home Mortgage in the case of each such
         exception appearing on Schedule B, Part 1.

         The title insurance industry is in the business of insuring over the title to
         property, not over its value. If the defect in question has potential effect on
         the chain of title, the title company should insure over it on the final title
         policy, either by specific wording on Schedule B or by endorsement.

         Examples of such defects are those referred to as “Covenants”, “Conditions”,
         “Restrictions”, “Declarations”, “Agreements”, “By-laws”, etc., which might
         cause the forfeiture or reversion of title if they were violated.

         a. Real Estate Taxes: FHA/VA/Conventional – Real Estate Taxes
            must be followed by the statement, “Taxes that are not yet due and
            payable”. Outstanding special assessments cited must be followed by
            the statement, “Special assessments hereafter levied”.

            Note: There are no pending assessments now a lien.

         b. Restrictions, Covenants and Conditions: FHA/VA/FmHA/Conventional
            restrictions, covenants and conditions cited must be followed by the
            statement, “which have not been violated to date. Any future violations
            will not result in forfeiture or reversion of title”. Restrictions, covenants
            and conditions cited that have been violated must be followed by the
            statements, “This policy insures against all losses or damage by reason of
            this violation. This policy insures that neither said violation nor any
            future violation will result in forfeiture or reversion or title.”

    14. The following exceptions are NOT acceptable on final title policies:
          Rights of Tenants in Possession
          Easements or claims of easements not shown of public record
          Right of first refusal
          Exceptions for dower or courtesy rights
          Fraudulent Conveyances
          Liens (except taxes not yet due and payable)
          Exceptions which state anything as to matters of survey:
                 (Examples: discrepancies, conflicts, shortages in area or boundary
                 lines, encroachments or any overlapping of improvements which
                 an accurate survey of the premises would disclose)
          Exceptions, which state “possible” or “if any”, must be specified or
           deleted.
          Rights of others in and to the use of the secured property.

Closing & Funding   (10/20/04)                                       Page 36
L.    LATE DELIVERY

      1.    Purchase Funded
             U.S. Bank Home Mortgage provides correspondents with a loan by loan
             deficiency report which includes the date deficiencies are due. U.S. Bank
             provides correspondents 7 calendar days to correct deficiencies.

              If Seller fails to deliver a complete Closed Mortgage Loan Package within
              the relevant period specified above, U.S. Bank Home Mortgage may
              impose a penalty, reprice or require Seller to repurchase loan. US Bank
              Home Mortgage provides deficiency reports on a loan by loan basis.

              Please contact the Wholesale Funding Manager at 952-814-3345 as soon
              as possible if you are not able to meet the loan delivery due date. Refer
              to Pricing Policy Section of Manual for details.

              Under no circumstances will U.S. Bank Home Mortgage accept packages
              delivered more than thirty (30) days after the loan delivery due date.

      2. Table Funded
         If Seller fails to deliver a complete Closed Mortgage Loan Package and
         original Collateral Package within the relevant period specified in Section H
         above, U.S. Bank Home Mortgage will impose a $15.00 per diem penalty per
         loan file. Penalties will be due and payable within 30 days of billing notice.
         U.S. Bank will exercise a right of offset on future fundings if penalty funds
         not received by U.S. Bank within ten (10) calendar days after final due date.

           Closed Loan Packages and Collateral packages received by U.S. Bank in
           excess of 30 calendar days after loan disbursement will be subject to
           repurchase by Seller. U.S. Bank will exercise a right of offset on future
           fundings if loans delivered in excess of thirty days beyond due date are not
           repurchased within ten (10) calendar days after notification of repurchase
           has been sent to broker.

      3. Alt Purchase Funded
            If Seller fails to deliver a complete Closed Mortgage Loan Package within
            the relevant period specified above, U.S. Bank Home Mortgage may
            impose a penalty, reprice or require Seller to repurchase loan. US Bank
            Home Mortgage provides deficiency reports on a loan by loan basis.



Closing & Funding    (10/20/04)                                      Page 37
            Please contact the Wholesale Funding Manager at 1-952-814-3345 as
            soon as possible if you are not able to meet the loan delivery due date.
            Refer to Pricing Policy Section of Manual for details.

            Under no circumstances will U.S. Bank Home Mortgage accept packages
            delivered more than thirty (30) days after the loan delivery due date.

M.    DEFECTIVE DELIVERY
      1. Purchase Funded
         U.S. Bank Home Mortgage will fax and/or mail a written notice of
         deficiencies in the Closed Mortgage Loan file. Correspondents will be
         provided seven (7) calendar days to correct deficiencies. If not,
         Correspondents may be required to repurchase loans(s) within ten (10)
         business days of written demand by U.S. Bank Home Mortgage.

           Late correction fees may be assessed starting the first calendar day
           following the fax and/or mailed written receipt. The penalty fee guidelines
           are as follows:

                    1-7 Calendar Days      No Penalty
                    8-42 Calendar Days     .50% of the unpaid principle balance
                    43 + Calendar Days     Subject to Repurchase

           Late correction fees for purchase funded loans will be withheld from the
           deducted from the wire when the loan is purchased.

      2.   Table Funded
           Critical Documents
           Collateral packages delivered with deficient critical documents are subject
           to a $15.00 per diem penalty per loan file if deficiencies are not cleared
           within seven (7) calendar days from notification of deficiency.

           Critical documents include any critical document and documentation to
           make succsesful delivery to the Investor and or Insuring Agency, to
           include but not limited to the following:
            Original Note endorsed to “U.S. Bank N.A.” / Allonge
            Certified copy of Mortgage / Deed of Trust
            Certified copy of Assignment
            Power of Attorney (POA) (if applicable)
            MI required for all conventional loans delivered with a LTV of 80.01% or
              greater
            Any other document that would prevent insuring of Government loans

Closing & Funding   (10/20/04)                                     Page 38
           Credit Package Documents
           Closed Loans delivered with deficient credit package documents are
           subject to a $25.00 monthly penalty fee if all credit deficiencies
           are not received and cleared by U.S. Bank within thirty (30) days from
           deficiency notice. Billing notification will be mailed once a month for
           outstanding deficiencies from the previous month and will be due within
           thirty (30) days from billing date.

           U.S. Bank will exercise a right of offset on future fundings if penalty funds
           are outstanding beyond the due date indicated on billing notice.

      3.   Alt Purchase Funded
           Critical Documents
           Collateral packages delivered with deficient critical documents are subject
           to a $15.00 per diem penalty per loan file if deficiencies are not cleared
           within seven (7) calendar days from notification of deficiency.

           Critical documents include any critical document and documentation to
           make succesful delivery to the Investor and or Insuring Agency, to
           include but not limited to the following:
            Original Note endorsed to “U.S. Bank N.A.” / Allonge
            Certified copy of Mortgage / Deed of Trust
            Certified copy of Assignment
            All “C” closing conditions
            UFMIP/VAFF Transmittal for remittance of the initial premium
            Any other document that would prevent insuring of Government loans

           Credit Package Documents
           Closed Loans delivered with deficient credit package documents are
           subject to a $25.00 monthly penalty fee if all credit deficiencies are not
           received and cleared by U.S. Bank within thirty (30) days from deficiency
           notice. Billing notification will be mailed once a month for outstanding
           deficiencies from the previous month and will be due within thirty (30)
           days from billing date.

           U.S. Bank will exercise a right of offset on future fundings if penalty funds
           are outstanding beyond the due date indicated on billing notice.




Closing & Funding   (10/20/04)                                      Page 39
N.     REPURCHASE PRICE
       The repurchase price will be the greater of par or Buy Price plus Service
       Released Premium.

       Right of Offset
       Bank shall have the right to deduct any penalties, fees, taxes, or other charges
       or obligations of any kind owed by Seller to Bank from the amount to be paid
       for any Mortgage Loan purchased by Bank from Seller to directly charge, or
       charge through the automated clearing house (ACH) the Settlement Account for
       such amounts.


O.     NATURAL DISASTER PROCEDURES
       In the event of a natural disaster, such as, a hurricane, tornado, flood, etc. the
       following procedures must be followed:


      Purchase Funding
      An exterior re-inspection of the subject property, with photograph, prior to
      funding of any loan located in the cities or counties affected by the disaster.
      The re-inspection must state the property is habitable and contains no evidence
      of damage based on the exterior inspection. The re-inspection may be
      performed by any of the following:

         The original Appraiser
         Staff Appraiser employed by the Correspondent
         A company that specializes in property inspections

      In lieu of the above, U.S. Bank Home Mortgage will accept a certification/
      endorsement from the Homeowner’s Insurance Company stating that the
      property is unaffected and remains insurable under their policy. The Agent
      must also include a photograph of the subject property.

      Table Funding
      The following additional documents must be included with the Table Funding
      Wire request for any loan located in the cities or counties affected by the
      disaster. An exterior re-inspection of the subject property (with photograph) as
      described above, and a copy of the hazard insurance binder. U.S. Bank Home
      Mortgage will validate that the hazard insurance is in force prior to releasing
      the funds.

You may check with the FEMA website for additional information on any Natural Disaster:
                          http://www.fema.gov/news/disasters.fema

Closing & Funding     (10/20/04)                                            Page 40

				
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