Docstoc

Communicating with Chase

Document Sample
Communicating with Chase Powered By Docstoc
					Doing Business with Chase                                                 Chase Correspondent Division



                                            Preface


Purpose            The purpose of the Correspondent Lending Guide is to provide Chase’s
                   approved Correspondents with procedural guidelines to follow when doing
                   business with Chase’s Correspondent Division. It should be used in
                   conjunction with the Chase Correspondent Division Credit Policy Guide and
                   the applicable Product and Program Guidelines,

                   Adherence to the guidance provided within the combined resources will help
                   to ensure a sound underwriting decision. As a reminder, when the specific
                   Product and Program Guidelines differ from a feature detailed within the
                   Correspondent Lending Guide or the Credit Policy Guide, the Product and
                   Program Guideline will dictate.


Intended Use       This document contains information that is confidential and is the property of
                   The Chase Correspondent Division. It may not be copied, published, or used,
                   in whole or in part, for any purpose other than as expressly authorized by The
                   Chase Correspondent Division.


Regulatory         As a loan originator, the Correspondent is responsible for ensuring that all
Compliance         mortgages sold to Chase are in compliance with all federal and state
                   regulations, including but not limited to:

                   ·   Federal Truth in Lending Act
                   ·   Federal Regulation Z
                   ·   Federal Fair Credit Reporting Act
                   ·   Federal Equal Credit Opportunity Act
                   ·   Federal Real Estate Settlement Procedures Act
                   ·   Flood Disaster Protection Act
                   ·   Fair Housing Act
                   ·   Home Mortgage Disclosure Act
                   ·   Federal Regulation X
                   ·   HOEPA - Home Ownership and Equity Protection Act of 1994
                   ·   All applicable state and local high-cost lending laws

                   Chase Correspondent Division cannot serve as an advisor to our
                   Correspondents in regards to Compliance issues. Information relative to
                   regulatory compliance should be obtained from the correspondent’s own
                   legal/compliance counsel.

                                                                                Continued on next page




July 2004                                                                                   Preface - i
Doing Business with Chase                                                Chase Correspondent Division



Preface, Continued


Correspondent      It is the responsibility of the Correspondent to maintain the guide in
Responsibilities   accordance with all Updates and Correspondent Bulletins published by Chase
                   prior to the next lending guide publication. In addition, it is imperative that
                   the contents of this guide be shared with all pertinent parties within the
                   Correspondent’s organization to ensure compliance with Chase guidelines
                   when registering, underwriting, and delivering credit and/or closed loan files
                   to Chase for purchase.


Correspondent      The Chase Correspondent Lending Guide is also available on the Chase’s
Lending Guide      Correspondent Web site for your review along with current policy or
on the Web         procedural updates. To obtain access to Chase’s Correspondent Web site,
                   contact Chase’s Technology Help Desk at 1-877-ASK CHASE (1-877-275-
                   2427).


Guide Updates      As new policies or procedures are introduced or existing policies and
                   procedures are revised, you will receive bulletins by fax or mail. These
                   bulletins should be filed with the guide. Periodically, we will update the
                   guide to incorporate these changes.


Questions or       Any questions and/or comments regarding the contents of the Correspondent
Comments           Lending Guide should be addressed to the appropriate Sales Manager.




July 2004                                                                                 Preface - ii
Doing Business with Chase                                                Chase Correspondent Division



                                    Welcome to Chase
Introduction


Mission            The mission of the Chase Correspondent Division is:
Statement
                   To establish an operations infrastructure and customer management strategy
                   incorporating the mechanisms necessary for us to meet our division’s
                   strategic objectives. We do this by:

                   ·   Understanding the needs and expectations of our customers.
                   ·   Exceeding those expectations through world class service.
                   ·   Establishing and monitoring work processes to ensure accuracy, efficiency.
                   ·   Influencing a relentless pursuit of excellence.
                   ·   Enhancing employee satisfaction and increasing shareholder value.
                   ·   Doing it right the first time.


In This            This chapter contains information on the following topics:
Chapter

                                              Topic                                    See Page
                    Chase Roles and Responsibilities                                       2
                    Chase Hours of Operation and Holidays Observed                         3
                    Communicating with Chase                                               4
                    Research Department Contacts                                          11
                    Written Correspondence                                                13
                    Chase Web site                                                        16




July 2004                                                                       Welcome to Chase – 1
Doing Business with Chase                                                      Chase Correspondent Division



Chase Roles and Responsibilities


Chase              Listed below are the roles and responsibilities for the Correspondent
Roles and          Division’s primary contacts.
Responsibilities

                        Roles/Location                           Responsibilities
                   Sales*                     The Correspondent’s primary point of contact when
                                              communicating with Chase.
                   By Location
                   Customer Management        Approves all Correspondents and ensures each
                   Group (CMG)                Correspondent is operating within Chase’s guidelines.

                   Jacksonville, FL
                   Registration*              Registers and locks loans in Chase’s Pipeline in
                                              accordance with Chase guidelines.
                   Jacksonville, FL
                   Underwriting*              Performs an underwriting review and/or validates
                                              automated underwritten loans.
                   Jacksonville, FL
                   Funding*                   Reviews and funds loans submitted to Chase for purchase.

                   Jacksonville, FL
                   Communications,            Publishes and distributes Chase’s policies and procedures
                   Policies, and Procedures   to all approved Correspondents via Correspondent
                   (CP&P)                     Bulletins and the Correspondent Lending Guide. Also
                                              provides Chase specific legal documents and forms.
                   Jacksonville, FL
                   Research                   Facilitates the resolution of discrepancies identified after
                                              purchase of the loan from the Correspondent.
                   Jacksonville, FL
                   Post Production Services   Receives final closing documents and prepares all closed
                                              loan files for Servicing. Assists in resolving identified
                   Monroe, LA                 closed loan delivery problems.
                   Servicing*                 Handles borrower inquires regarding payments, escrows,
                                              and other servicing issues.
                   Columbus, OH

                   *NOTE: Refer to the “Contact Information” section for specific names
                   and telephone numbers.




July 2004                                                                             Welcome to Chase – 2
Doing Business with Chase                                              Chase Correspondent Division



Chase Hours of Operation and Holidays Observed


Hours of           Standard hours of operation:
Operation
                   Monday through Friday
                   8:30 a.m. - 5:30 p.m. eastern time

                   Exception: The Pacific/West Regional Funding hours of operation are
                   9:00 a.m. - 6:00 p.m. eastern time.


Hours of           Loan Registration hours of operation:
Operations
                   Monday through Friday
                   8:30 a.m. - 6:30 p.m. eastern time


Holidays           Chase will observe the following Federal holidays in 2004:
Observed

                                  Holiday                                 Date
                    New Year’s Day                         January 1, 2004
                    Dr. Martin Luther King                 January 19, 2004
                    President’s Day                        February 16, 2004
                    Memorial Day                           May 31, 2004
                    Independence Day                       July 5, 2004
                    Labor Day                              September 6, 2004
                    Veterans’ Day                          November 11, 2004
                    Thanksgiving Day                       November 25, 2004
                    Day after Thanksgiving Day             November 26, 2004
                    Christmas                              December 25, 2004




July 2004                                                                       Welcome to Chase – 3
Doing Business with Chase                                               Chase Correspondent Division



Communicating with Chase


Introduction       The Chase Correspondent Division is committed to our customers and we
                   welcome your calls and questions. The following information is provided to
                   facilitate communications.

                   NOTE: Please do not give the numbers listed below to your borrowers.


Sales Team         The Sales Team is the primary contact with Chase.

                    Region                  Contact              Telephone               Fax
                   All         Kathryn Hellbach                (904) 620-6704      (904) 620-6551
                               Sales Support Manager
                               Kathryn.H.Hellbach@chase.com
                   Northeast   Richard Paddock                     TBD                   TBD
                               Division Manager
                               Richard.B.Paddock@chase.com
                               Thomas Coale                    (516) 771-5523      (516) 868-0574
                               Account Executive
                               Thomas.Coale@chase.com
                               (NY, Northern NJ, CT, RI, MA,
                               NH, VT, ME)
                               Nelson Ramos                    (609) 518-1421      (609) 518-1423
                               Account Executive
                               Nelson.Ramos@chase.com
                               (Southern NJ, Eastern PA)
                               Jennifer Albert                 (904) 620-6830      (904) 620-6837
                               Account Representative
                               Jennifer.L.Albert@chase.com
                               Dan Sheehy                      (410) 751-9451      (410) 751-9452
                               Account Executive
                               Daniel.Sheehy@chase.com
                               (VA, MD, WV, DE, DC Western
                               PA)
                               Nermina Gradisic                (904) 620-6584      (904) 620-6551
                               Sales Assistant
                               (Bilingual - Bosnian,
                               Croatian, German)
                               Nermina.Gradisic@chase.com
                               Meagan McIntosh                 (904) 620-6518      (904) 620-6551
                               Sales Assistant
                               Meagan.McIntosh@chase.com

                                                                                Continued on next page




July 2004                                                                       Welcome to Chase – 4
Doing Business with Chase                                            Chase Correspondent Division



Communicating with Chase, Continued

Sales Team (continued)

                    Region                Contact             Telephone               Fax
                   Central/  David McPherson                (360) 574-0327      (360) 574-0329
                   Northwest Division Manager
                             David.Mcpherson@chase.com
                             Rick Erickson                  (425) 836-1691      (425) 836-5397
                             Account Executive
                             Richard.C.Erickson@chase.com
                             (WA, OR, ID, AK)
                             Charlie Nager                  (636) 265-0082      (702) 441-8215
                             Account Executive
                             Charles.A.Nager@chase.com
                             (CO, KS, MO, IA, NE, MN)
                             Rachel Thomas                  (312) 794-5002      (312) 794-5003
                             Account Executive
                             Rachel.M.Thomas@chase.com
                             (WI, MI, IL, IN, OH)
                             Cathy Freeman                  (281) 920-9076      (832) 379-9326
                             Account Executive
                             Cathy.A.Freeman@chase.com
                             (OK, TX)
                             Michelle Martinez              (904) 565-5399      (904) 620-6551
                             Account Representative
                             Michelle.Martinez@chase.com
                             (SD, ND, WY, MT)
                             Seth Erickson                  (904) 620-6515      (904) 620-6551
                             Sales Assistant
                             Seth.Erickson@chase.com
                             Elisa Townsend                 (904) 620-6585      (904) 620-6551
                             Sales Assistant
                             Elisa.V.Townsend@chase.com

                                                                             Continued on next page




July 2004                                                                    Welcome to Chase – 5
Doing Business with Chase                                             Chase Correspondent Division



Communicating with Chase, Continued


Sales Team (continued)

                    Region               Contact               Telephone               Fax
                   Southeast   Bob Cabrera                   (813) 288-1676      (813) 286-9827
                               Division Manager
                               Bob.Cabrera@chase.com
                               Sam Garcia                    (904) 821-4464      (801) 659-6882
                               Account Executive
                               Sam.Garcia@chase.com
                               (FL, SC, NC)
                               Zollie Pavlina                (205) 871-9669      (205) 871-2771
                               Account Executive
                               Zollie.Pavlina@chase.com
                               (LA, AR, MS, GA, TN, KY, AL)
                               Michelle Quill                (904) 565-5380      (904) 620-6551
                               Account Representative
                               Michelle.Quill@chase.com
                               Gloria Lehrer                 (904) 620-6581      (904) 620-6551
                               Sales Assistant
                               (Bilingual - Spanish)
                               Gloria.A.Lehrer@chase.com
                               Bren Davis                   (904) 620-6526       (904) 620-6551
                               Sales Assistant
                               Brennadette.Davis@chase.com

                                                                              Continued on next page




July 2004                                                                     Welcome to Chase – 6
Doing Business with Chase                                                Chase Correspondent Division



Communicating with Chase, Continued


Sales Team (continued)

                    Region                Contact                 Telephone               Fax
                   Pacific/   Karen Herr                        (760) 635-3700      (760) 635-3701
                   West       Division Manager
                              Karen.L.Herr@chase.com
                              Barbara LaFond                    (619) 702-3800      (619) 702-3810
                              Account Executive
                              Barbara.Lafond@chase.com
                              (Southern CA)
                              David Liu                         (415) 921-9700      (415) 921-9701
                              Account Executive
                              David.T.Liu@chase.com
                              (Northern California, HI, UT,
                              NV, AZ, NM))
                              Wendy Johnson                     (904) 565-5398      (904) 620-6551
                              Account Representative
                              Wendy.F.Johnson@chase.com
                              Anita Green                       (904) 620-6549      (904) 620-6551
                              Sales Assistant
                              (Bilingual - Spanish)
                              Anita.M.Green@chase.com
                              Peili Yu                          (904) 620-6569      (904) 620-6551
                              Sales Assistant
                              (Bilingual - Mandarin Chinese,
                              Shanghaiese)
                              Peili.Yu@chase.com


Marketing          Chase proudly provides access to ChaseMarketingZone.com. It is a web-
Assistance         based facility that provides Correspondents the ability to:

                   · Generate flyers, ads, and e-mail promotions.
                   · Customize contact information and logo to reflect their business identify.
                   · Promote Chase products without the Chase brand.

                                                                                 Continued on next page




July 2004                                                                        Welcome to Chase – 7
Doing Business with Chase                                                 Chase Correspondent Division



Communicating with Chase, Continued


General            The following chart outlines some key telephone and fax numbers:
Contacts

                                 Function                        Telephone                Fax
                    Main Switchboard                          (888) 289-6114 or           N/A
                                                               (904) 620-6565
                    Mandatory Bulk Program                     (800) 250-5015        (904) 620-6852

                    NOTE: The Mandatory Desk can
                    also be reached by e-mailing
                    CHF.Mandatory@JPMChase.com
                    Registration                              (800) 305-LOCK or      (904) 620-6545
                                                                (904) 620-6560
                    Purchase Advice Copies/File Receipt         (904) 620- 6653           N/A
                    Confirmation
                    Note Control                              (904) 565-5366 or           N/A
                                                               (904) 620-6790


Underwriting       The following table outlines key underwriting telephone and fax numbers.

                                    Function                      Telephone               Fax
                    Eastern B2B Underwriting Manager            (281) 259-8354      (281) 259-8365
                    John Holland
                    Lisa Hillebrand                             (904) 620-6703      (866) 606-3597
                    Correspondent Underwriting Manager
                    Underwriting Support                        (904) 620-6705      (904) 620-6740
                    Underwriting Conditions/Status              (904) 620-6706      (904) 620-6742
                                                                                    (904) 620-6738
                    MI Coordinator                              (904) 620-6720      (904) 620-6739


Return Wires       Should you have any questions regarding a return wire, please refer to the
                   table below.

                          Contact              Telephone                       Fax
                    April D. Jackson         (904) 620-6030      (904) 620-6040 or (904) 620-6039
                    Nita R. Patel            (904) 620-6033      (904) 620-6040 or (904) 620-6039
                    Cotinna S. Wilson        (904) 620-6031      (904) 620-6040 or (904) 620-6039

                                                                                  Continued on next page




July 2004                                                                         Welcome to Chase – 8
Doing Business with Chase                                               Chase Correspondent Division



Communicating with Chase, Continued

Operations         The Operations Customer Service Group is the main customer contact
Customer           throughout the funding process. The contact information is included on all
Service Group      Suspense Notices. To reach the customer Service Group, dial 1-800-877-
                   3968. You will be prompted to identify your region.

                   The following table provides all key Regional numbers:

                             Region               Option #                Fax Number
                    Northeast                        1                   (904) 620-6616
                    Southeast                        2                   (904) 620-6667
                    Central Northwest                3                   (904) 620-6663
                    Pacific West                     4                   (904) 620-6589

                   NOTE: Please do not give the Customer Service Group’s contact
                   number to your borrower.


CP&P -              The Communications, Policies, and Procedures (CP&P) department handles
Communications,     all requests for Lending Guide CDs. To request copies, please complete a
Policies, and       Communication Request Order Form (see Exhibits) and fax the completed
Procedures          form to (904) 620-6841.

                    NOTE: Legal Documents and Chase specific forms are provided on the
                    CD and Correspondent Bulletins are available on the Chase
                    Correspondent Website at www.chasecorrespondent.com.


Technology          Chase Correspondent provides a technology HELP Desk to answer questions
HELP Desk           about our Correspondent Web-site. For information or assistance on the
                    Web site only, call 1-877-ASK-CHASE (1-877-275-2427) during the hours
                    of 8:00 a.m. - 8:00 p.m. eastern time Monday through Friday.

                                                                              Continued on next page




July 2004                                                                      Welcome to Chase – 9
Doing Business with Chase                                                Chase Correspondent Division



Communicating with Chase, Continued


Chase Servicing · Customer inquiries concerning payments, escrow issues, or other general
Department        servicing issues or problems, over 45 days subsequent to the Chase funding
                     date, should be directed to the Chase Customer Service Department.
                   · In addition to servicing inquires, Chase’s Customer Service Department
                     also provides a service for automatic drafting of monthly payments. This
                     service, also referred to as “Pre-Authorized Instant Deductions” or “PAID,”
                     affords an increased level of convenience demanded by today’s borrowers.
                     We encourage our Correspondents to use this service as a sales tool. More
                     information regarding this service is included in the borrower’s statement.
                   · Please forward all servicing inquiries, over 45 days subsequent to the Chase
                     funding date, or questions regarding automatic drafting of monthly
                     payments to:

                                       Chase Customer Service Department
                                                P. O. Box 24698
                                          Columbus, OH 43224-0696
                                           Telephone: 800-848-9136
                                              Fax: (614) 422-7575


Changing           To notify Chase regarding changes to the correspondent customer contact
Contact            information, please contact your Sales Assistant or Account Executive.
Information




July 2004                                                                     Welcome to Chase – 10
Doing Business with Chase                                                  Chase Correspondent Division



Research Department Contacts


Main Contact       The following chart outlines key telephone and fax numbers for resolving
Numbers            issues on funded loans.

                                                             Number of Days from
                                   Contact                       Funding Date           Telephone
                   Research Department-Toll Free Number     Within 45 days of         (888) 289-6114
                   (Jacksonville, FL)                       funding
                   Research Department-Main Fax Number      Within 45 days of         (904) 620-6664
                   (Jacksonville, FL)                       funding
                   Customer Service - Servicing Inquiries   Within 45 days of         (800) 631-5946
                                                            funding
                   Customer Service - Servicing Inquiries   Over 45 days of funding   (800) 848-9136


Funding            The following chart outlines Chase’s Research Department Contacts
Corrections        responsible for funding corrections, payment reversals, document corrections,
                   and reassignments within 45 days of Chase’s funding date.

                               Region                     Contact                  Telephone
                   Northeast                     Carolyn Williams                (904) 620-6784
                                                 (A-L)
                   Northeast                     Sharon Hunley                   (904) 620-6621
                                                 (M-Z)
                   Pacific/West                  Donata Savic                    (904) 620-6652
                   Southeast                     Brankica Stanojkovic            (904) 620-6626
                                                 (A-L)
                   Southeast                     Vanessa Scott                   (904) 620-6650
                                                 (M-Z)
                   Northwest/Central             Wanda Battles                   (904) 620-6655
                                                 (A-L)
                   Northwest/Central             Geneva Stephens                 (904) 620-6639
                                                 (M-Z)

                                                                                 Continued on next page




July 2004                                                                       Welcome to Chase – 11
Doing Business with Chase                                               Chase Correspondent Division



Research Department Contacts, Continued


Pay History        All pay history requests for the purpose of insuring FHA loans must be
Requests           written and delivered in the following manner:

                   · faxed to (904) 620-6664, or
                   · e-mailed to Research.Request@chase.com

                   NOTE: Requests for payment histories for any other purpose should be
                   directed to Chase Customer Service at 800-848-9136.


Missing            The chart below outlines the Research Department Contacts for missing
Documents and      documents and miscellaneous checks.
Miscellaneous
Checks

                                Contact                               Telephone
                   Winsome Facey                                    (904) 565-5393
                   Treneka Howard                           (904) 620-6565, extension 3407
                   Bobbi Nelson                             (904) 620-6565, extension 3367




Research           In order to provide timely resolution of issues, the Research Department
Department         maintains separate fax machines to receive documents. Utilizing the correct
Fax Numbers        fax number will help to ensure a timely resolution.

                                        Document                                Fax Number
                    New Research Request and supporting documentation          (904) 620-6664
                    All other documents                                        (904) 620-6676




July 2004                                                                    Welcome to Chase – 12
Doing Business with Chase                                                 Chase Correspondent Division



Written Correspondence


Mail Room          The Chase Correspondent Division Mail Room receives mail at 10:30 a.m.
Delivery           EST and 2:30 p.m. EST. This includes U.S. Postal Service, express, and
Schedule           courier mail. All Chase outgoing mail must be processed for mailing by 2:30
                   p.m. EST.


Mailing            To ensure your files and other mailings are directed to the appropriate
Information        departments, please use the correct address as noted in the chart below.


Mailing            To ensure that packages sent to Chase Correspondent are routed to the
Requirements       appropriate area in the most efficient manner, it is imperative to follow the
                   guidelines below:

                   · Clearly identify on the outside of the package the appropriate receiving
                     area, (Underwriting, Registration, Funding, etc.),
                   · Utilize Regional Labels when appropriate. Regional Labels may be ordered
                     via:
                     · Telephone - (904) 620-6794, or
                     · Fax - (904) 620-6662
                     · Packages that are intended for more than one area must be mailed to each
                       individual department in separate envelopes.

                   This additional information will ensure packages arrive in the appropriate
                   area as expeditiously as possible.

                          Type of Correspondence                              Address
                    Customer Management Group               Chase Correspondent Division
                    Correspondence                          ATTN: Customer Management Group
                                                            10151 Deerwood Park Boulevard
                                                            Building 300, 1st Floor
                                                            Jacksonville, FL 32256
                    · New loan files to be underwritten.    Chase Correspondent Division
                    · Documentation to clear suspended      ATTN: Correspondent Underwriting
                      underwriting conditions.              10151 Deerwood Park Boulevard
                    · Documentation to clear asterisked     Building 300, 3rd Floor
                      underwriting conditions.              Jacksonville, FL 32256
                    Mandatory Bulk Commitment Files         Chase Correspondent Division
                                                            ATTN: Correspondent Registration Dep.
                    NOTE: A Mandatory Bulk sticker          10151 Deerwood Park Boulevard
                    must be placed on the exterior of the   Building 300, 4th Floor
                    delivery box and on each individual     Jacksonville, FL 32256
                    file folder contained therein.
                                                                                Continued on next page


July 2004                                                                       Welcome to Chase – 13
Doing Business with Chase                                                 Chase Correspondent Division



Written Correspondence, Continued


Mailing Requirements (continued)

                         Type of Correspondence                              Address
                    Funding Correspondence:               Chase Correspondent Division
                    · Credit* or closed loan file.        ATTN: Correspondent Funding Department
                    · Funding Suspense conditions.        10151 Deerwood Park Boulevard
                    · Standard underwriting conditions.   Building 300, 4th Floor
                                                          Jacksonville, FL 32256
                    *NOTE: Any credit file that must
                    be reviewed by Chase                NOTE: Please affix the appropriate
                    Underwriting must be sent to        regional label on the mailing envelope.
                    Chase Underwriting prior to
                    submitting the closed loan file to
                    the Correspondent Funding
                    Department.
                    Research Documentation              Chase Correspondent Division
                                                        ATTN: Correspondent Research Department
                                                        10151 Deerwood Park Boulevard
                                                        Building 300, 4th Floor
                                                        Jacksonville, FL 32256
                    Registration Documentation           Chase Correspondent Division
                                                        ATTN: Correspondent Registration
                                                        Department
                                                        10151 Deerwood Park Boulevard
                                                        Building 300, 4th Floor
                                                        Jacksonville, FL 32256
                    Follow-Up Documentation             Overnight Delivery
                                                        JPMorgan Chase
                                                        NPC Distribution Services
                                                        Trailing Documents
                                                        780 Kansas Lane 1st Floor
                                                        Monroe, LA 71203
                    Final Documents (Recorded           Overnight Delivery
                    Assignment, Recorded Security       JPMorgan Chase
                    Instrument, Final Title Policy, and Custody Services
                    LGC)                                1040 Oliver Road
                                                        Monroe, LA 71203

                                                          Standard Delivery
                                                          JPMorgan Chase
                                                          Custody Services
                                                          P. O. Box 8000
                                                          Monroe, LA 71211

                                                                                Continued on next page




July 2004                                                                      Welcome to Chase – 14
Doing Business with Chase                                             Chase Correspondent Division



Written Correspondence, Continued


Mailing Requirements (continued)

                         Type of Correspondence                        Address
                    Borrower First Payment Address   Overnight Address
                                                     Chase Manhattan Mortgage Corporation
                                                     1820 E. Sky Harbor Circle South
                                                     Attention: P. O. Box 79046
                                                     Phoenix, AZ 85034-9700
                                                     Mailing Address
                                                     Chase Manhattan Mortgage Corporation
                                                     Attention: P. O. Box 79046
                                                     Phoenix, AZ 85062-9046
                    PMI Billings/Notifications       Chase Manhattan Mortgage Corporation
                                                     Post Office Box 11730
                                                     Monroe, LA 71211-1730
                    Homeowner’s Policy Renewals      Chase Manhattan Mortgage Corporation
                                                     Post Office Box 47020
                                                     Doraville, GA 30362




July 2004                                                                  Welcome to Chase – 15
Doing Business with Chase                                                  Chase Correspondent Division



Chase Web Site


Types of           Currently, the information available on the Chase Correspondent Web site
Information        includes:

                               Page                                Description
                    The Chase Advantage           Communicates the Advantages of working with
                                                  Chase Correspondent Lending and includes:

                                                  · the Site Tour,
                                                  · Correspondent Highlights,
                                                  · Archived Highlights,
                                                  · Contact Your Account Rep, and
                                                  · Correspondent Application.
                    Rate and Price Bulletin       Lists the Current Rate and Pricing and includes a
                                                  download bulletin.
                    ChaseLock                     Enables Correspondents to:

                                                · create a Pipeline for pre-registered loans,
                                                · register and lock best effort and Mandatory loans,
                                                  (including float to locks), and
                                                · extend and relock best effort loans.
                    Loan Status Reporting       Provides up-to-date pipeline reports and volume
                                                reports.
                    Correspondent Lending Guide Provides an on-line version of the Correspondent
                                                Lending Guide and the Products and Programs
                                                Guide.
                    Frequently Asked Questions  Lists frequently asked questions and includes access
                                                to Chase’s Help Desk.


Web site Access    To gain access to the Chase Correspondent Division Web site,
                   Correspondents must request an authorization number, complete the Web site
                   Administration Form located in the “Correspondent Applications” section of
                   the Correspondent home page at www.chasecorrespondent.com or obtain a
                   copy of the form from Chase’s Help Desk at 1-887-ASK-CHASE (1-877-
                   275-2427).

                   NOTE: The Web site Administration Form must be signed by an
                   authorized signer as defined in the Correspondent’s Corporate
                   Resolution.




July 2004                                                                        Welcome to Chase – 16
Doing Business with Chase                                                 Chase Correspondent Division



                                 Program Parameters
Overview


Introduction       The Correspondent Division of Chase is one of the top Correspondent lenders
                   in the mortgage industry. We purchase closed loans from our approved
                   Correspondents on a service release basis and provide an array of best efforts
                   and mandatory pricing structures to meet their needs.

                   At Chase, we firmly believe that establishing “The Right Relationship is
                   Everything.” Therefore, in this chapter we will outline the various types of
                   products and programs offered by Chase that are structured to meet your
                   specific needs, as well as identify those loans that are not saleable to Chase
                   due to industry guidelines and/or Chase specific guidelines.


In this Chapter    Included in this chapter are the following topics:

                                              Topic                                    See Page
                    Eligible Loan Products                                                 2
                    Texas Refinance Transactions                                           5
                    Ineligible Loan Products                                               8
                    Predatory/High Cost Loans                                             10




July 2004                                                                      Program Parameters – 1
Doing Business with Chase                                               Chase Correspondent Division



Eligible Loan Products

Introduction       In accordance with our mission, the products offered by Chase further
                   exemplify our commitment to meeting our customer’s specific needs and
                   expectations the first time. We offer a wide range of conventional,
                   government, and Chase specific products and programs in the 50 states,
                   except where geographic restrictions are noted in the product guidelines. The
                   products and programs offered are tailored to meet a variety of lending needs
                   in a competitive market.

                   NOTE: ALL loan amounts must be whole dollars. Therefore, all loans
                   closed with amounts ending in cents, must be rounded down to the
                   nearest dollar PRIOR to submitting the file to Chase for purchase.

Agency             Chase offers both generic and Chase negotiated alternatives on Fannie Mae
Products           and Freddie Mac products. Agency products available for sale to Chase
                   include:
                   · 15- to 30-Year Fixed Rate
                   · 5-Year Balloon
                   · 7-Year Balloon
                   · Affordable Loan/1st Time Homebuyer Programs (DreaMaker 95, 97, and
                     Plus)


Government         Delegated correspondents with government loan underwriting authority may
Products           deliver a full range of FHA and VA mortgages to Chase, including:

                   · FHA/VA 15- and 30-Year Fixed Rate
                   · FHA 1 Year ARM
                   · Zero Down Payment VA Loans
                   · Nehemiah FHA Loans Closed Under FHA Eligibility Specifications
                   · Loans secured by Manufactured Housing located in all states

Chase Specific     In addition to the Agency and Government loan products, Chase also offers a
Products           variety of Chase specific products designed to meet various lending needs.
                   Chase products available through the Correspondent Division include:

                   · Non-Agency 15- to 30-Year Fixed (Non-Conforming Loan Amounts)
                   · Non-Agency 1/1, 3/1, 5/1, 7/1, and 10/1 ARM
                   · ChaseFlex Line of Products
                   · 103% LTV Fixed and 7/1 ARM
                                                                              Continued on next page




July 2004                                                                    Program Parameters – 2
Doing Business with Chase                                                 Chase Correspondent Division



Eligible Loan Products, Continued


Chase’s            Many of Chase’s standard loan products also include highly competitive
Product            product features. The features available include:
Features
                   · Flexible Terms
                   · Temporary Buydowns
                   · Expanded Ratios
                   · Expanded LTVs


ChaseFlex          The ChaseFlex programs offer more options for borrowers with non-
Programs           traditional needs. These options include:

                   · Expanded occupancy eligibility, higher LTVs, and higher loan amounts.
                   · Purchase or refinance, including cash-out for primary residence, second
                     home, investment, and 1-4 unit condos/PUDs.
                   · Loans to foreign borrowers and foreign nationals.
                   · Loans for properties with excessive acreage.
                   · Loans for condominium hotel units.


Subordinate        Refer to the Product and Program Guidelines for applicable requirements.
Loan Payoffs


Gift Funds -       · Chase maintains a list of all Non-profit Organizations eligible to provide
Non-Profit           gift funds for applicable Conventional and FHA loans.
Organizations      · The Correspondent must contact Chase to verify the Non-profit
                     Organization’s eligibility prior to submitting the loan.

                                                                                Continued on next page




July 2004                                                                      Program Parameters – 3
Doing Business with Chase                                               Chase Correspondent Division



Eligible Loan Products, Continued


Seasoned Loans     Chase also purchases seasoned loans meeting the following criteria:

                   · All loans received by Chase for purchase in which payments have already
                     been made, must have either a current payment history showing the current
                     principal balance and escrow balance or the current payment(s) due.
                   · If the insurance, taxes, or monthly MIP/PMI have become due and have
                     been paid, it must be clearly shown on the pay history or copies of checks
                     used to pay the monthly amount must be provided.
                   · The maximum seasoning period is:
                     · 10 months from Note date to Chase funding date for conforming and non-
                       conforming conventional loans, and
                     · 18 months from Note date to Chase funding date for government loans.
                   · The recorded mortgage/deed of trust, recorded assignments(s) and final title
                     policy are required to be in the closed loan package if the Chase funding
                     date is 210 days later than the Note date.
                   · The Loan Guaranty Certificate (LGC) is required to be in the closed VA
                     loan package if the Chase funding date is 90 days later than the Note date.

                   NOTE: Chase will not purchase a loan if it contains a delinquent
                   payment history. (History of making payments > 15 days after the
                   scheduled due date.)




July 2004                                                                    Program Parameters – 4
Doing Business with Chase                                              Chase Correspondent Division



Texas Refinance Transactions


Texas Agency       Chase will purchase loans secured by owner-occupied, homestead properties,
Cash-Out and       in the state of Texas defined as Fannie Mae Limited Cash-out and Freddie
NCO                Mac No Cash-out transactions and loans defined as Agency Cash-out
Refinances         transactions providing that these transactions meet the requirements below
                   and are not Home Equity Loans under Section 50 (a)(6) of the Texas
                   Constitution.


Impacted           The policies outlined in this section apply to Agency 1 and Agency 2 market
Products           types, including DreaMaker 95 and DreaMaker 97 (Agency 1 only), secured
                   by an owner-occupied, homestead property in the state of Texas.

                   NOTE: All other loan transactions should be underwritten in
                   accordance with the refinance terms as outlined in the applicable product
                   guide.

                                                                             Continued on next page




July 2004                                                                   Program Parameters – 5
Doing Business with Chase                                                    Chase Correspondent Division



Texas Refinance Transactions, Continued


Acceptable         The table below identifies transactions eligible for purchase on owner-
Agency             occupied homestead properties in the state of Texas.
Transactions

                      Fannie Mae Limited Cash-out and
                    Freddie Mac No Cash-out Refinances             Agency Cash-out Transactions
                   · The payoff of the outstanding principal   · The payoff of the outstanding
                     balance of an existing first mortgage       principal balance of an existing first
                     NOT originated as a true cash out or        mortgage NOT originated as a true
                     home equity loan as defined in Section      cash out or home equity loan as
                     50(a)(6) of Texas Constitution.             defined in Section 50(a)(6) of the
                   · The purchase of a spouse’s interest in      Texas Constitution.
                     connection with a divorce or the          · The payoff of the outstanding
                     purchase of a heir’s interest in the        principal balance of an existing
                     property (Owelty loan transactions).        subordinate lien originally used
                   · The payoff of the outstanding principal     entirely as a bona fide home
                     balance of an existing subordinate lien     improvement loan, to pay taxes due
                     originally used entirely for home           on the mortgaged property or to pay
                     purchase purposes.                          the tax debt of the owner including a
                     NOTE: If the borrower received cash         federal tax lien.
                     back at the time the subordinate lien       NOTE: Delinquent property taxes,
                     was originated, the loan is considered      delinquent federal income taxes,
                     a cash-out transaction under Texas          property tax liens, and federal tax
                     Law and is no longer eligible for           liens are considered derogatory
                     purchase by Chase.                          credit and may impact the loan
                   · The refinance includes reasonable           decision.
                     closing costs                             · The refinance includes reasonable
                   · The refinance includes pre-paids up to      closing costs
                     5% subject to the limits outlined under   · The refinance includes pre-paids up
                     the section titled “Pre-paid Limits”).      to 5% subject to the limits outlined
                   · The borrower receives ZERO cash back        under the section titled “Pre-paid
                     in hand at closing. (Refer to the “Cash     Limits”).
                     Back Restrictions” topic for details).    · The borrower receives ZERO cash
                                                                 back in hand at closing. (Refer to the
                                                                 “Cash Back Restrictions” topic for
                                                                 details).

                                                                                   Continued on next page




July 2004                                                                          Program Parameters – 6
Doing Business with Chase                                                Chase Correspondent Division



Texas Refinance Transactions, Continued


Pre-paid Limits    Pre-paids up to 5% of the loan amount may be included in an Agency Limited
                   NCO or Agency Cash-out transaction on an owner-occupied homestead
                   property in the state of Texas providing the following conditions are met:

                   · Chase-to-Chase refinances in which the application of the escrow credit
                     does not cover what is required for the new loan.
                   · Chase-to-Chase refinances where no previous escrow account existed.
                   · Non Chase-to-Chase refinances with a credit score >680.
                   · Non Chase-to-Chase refinances that receive a standard Approve/Eligible
                     through DU or Eligible/Accept recommendation from LP.
                   NOTE: Pre-paids may not be included on manually underwritten loans
                   with a credit score <680 or on loans that receive a recommendation other
                   than Approve/Eligible or Eligible/Accept. (Refer to the applicable
                   product guide in the Correspondent Lending Guide for acceptable
                   underwriting methods).


Cash Back          Borrowers will receive ZERO cash back in an Agency Limited/NCO or
Restrictions       Agency Cash-out transaction on an owner-occupied homestead property in
                   the state of Texas. Therefore, incidental surpluses must be processed as
                   outlined below:
                    IF the surplus…        THEN the…
                    exceeds $200,          loan amount must be decreased and the documents must
                                           be redrafted.
                    is less than $200,     excess must be credited towards the principal balance.


Underwriting       Loans meeting the definition of an Agency Cash-out transaction must be
and                locked and submitted to DU/LP as a cash-out transaction. In addition, the
Registration       closed loan file must evidence that the loan is not a Texas Home Equity Loan
Requirements       as defined in Section 50(a)(6), Article XVI of the Texas Constitution.


Ineligible         True “cash-out” transactions on owner occupied, homestead properties in
Transactions       Texas as defined under Section 50(a)(6), Article XVI of the Texas
                   Constitution are NOT eligible for funding by Chase.

                   NOTE: True “cash-out” transactions on second home and investment
                   properties in the state of Texas continue to be eligible for purchase,
                   unless otherwise restricted in the applicable product guide.




July 2004                                                                     Program Parameters – 7
Doing Business with Chase                                                  Chase Correspondent Division



Ineligible Loan Products


Introduction       Chase works diligently to ensure that all products and programs provided are
                   in compliance with federal guidelines and lender guidelines as established by
                   Fannie Mae, Freddie Mac, GNMA, HUD/FHA, VA, and Chase. Therefore, it
                   is imperative that you review this section in its entirety to identify loans that
                   Chase is prohibited from purchasing.


High Rate          In the past, a small number of lenders have sought to make high rate
Refinances         HUD/VA loans (often prices in excess of 103%), with the expressed intent of
                   doing a streamline refinance of the loan immediately, or soon after the closing
                   of the initial loan, thereby securing an additional service release premium.
                   This practice defrauds a GNMA Security Investor of the anticipated return on
                   investment through earlier than normally expected prepayments. In addition,
                   this practice is highly unethical in that it intentionally defrauds the acquiring
                   lender when the originating lender conspires with the borrower to deprive the
                   acquiring lender of income streams by providing insufficient time to recoup
                   the service release premium paid for the loan.

                   As a result of these practices, GNMA and Chase require that the notice
                   entitled “Borrower Acknowledgment of High Rate Refinancing” be executed
                   in connection with the closing of any government loan.


Live Free          GNMA, Fannie Mae, and Freddie Mac prohibit the selling of so called “live
Mortgages          free” mortgages. These loans are originated by lenders at relatively “high
                   rates” and sold with the intent of specifically targeting these same loans for a
                   low/no cost refinance in the near future. Thus the originating lender would
                   quickly generate an additional service release premium. This unethical
                   practice, often times, includes an arrangement whereby the originating lender
                   agrees to pay a number of installments on the loan (“live free”). Chase will
                   not purchase any loan made under these circumstances or any seasoned loan
                   that the lender has agreed to refinance (other than a balloon) or that is in the
                   process of refinancing.


Manufactured       Agency and Preferred Non-Agency Conventional loans secured by
Housing Loans      Manufactured Housing are ineligible for purchase by Chase, regardless of
                   property location.

                   NOTE: FHA and VA loans secured by Manufactured Housing are
                   eligible for purchase by Chase in all states.

                                                                                 Continued on next page



July 2004                                                                       Program Parameters – 8
Doing Business with Chase                                                Chase Correspondent Division



Ineligible Loan Products, Continued


HUD-Owned          The following FHA-insured mortgages involving HUD-owned properties are
Property           not available for sale to Chase:
Programs
                   · 203(h) - A FHA program that provides mortgage insurance for disaster
                     victims.
                   · 203(k) - A FHA program used for the purchase or refinance of a HUD-
                     owned property in conjunction with rehabilitation.

                   NOTE: HUD’s 203(k) program loans are eligible for purchase by Chase,
                   once the repairs are complete and a final inspection has been obtained
                   and placed in the closed loan file submitted to Chase for funding.


Texas Home         Under no circumstance will Chase purchase a home equity/true cash-out
Equity “Cash-      refinance on homestead property in the state of Texas. Second home and
Out”               investment transactions in the state of Texas are permitted and must clearly
Refinances         evidence in the file that the transaction is being made on a second home or
                   investment property.

                   NOTES:
                   · Once a borrower has executed a home equity/cash-out refinance on an
                     owner-occupied, homestead property under section 50(a)(6), the loan is
                     considered home equity/cash-out until title is transferred. In other
                     words, once a cash-out, always a cash-out.
                   · Refer to section 50(a)(6) of the Texas Constitution Article XVI for a
                     complete definition of a home equity/cash-out refinance in the state of
                     Texas.


“Predatory” or     Chase does not purchase loans defined under federal, state, city, and county
“High Cost”        regulations as a “Predatory” or “High Cost” loan.
Mortgage
Loans              REFERENCE: Refer to the “Predatory/High Cost Loans” section of this
                   chapter for additional information.


For More           For additional information regarding Chase’s products and programs, please
Information        refer to the Product and Program Guidelines of the Correspondent Lending
                   Guide.




July 2004                                                                     Program Parameters – 9
Doing Business with Chase                                                Chase Correspondent Division



Predatory/High Cost Loans


Introduction       In accordance with Chase’s policy of not originating or purchasing predatory/
                   high cost loans, the Correspondent division will not purchase loans defined as
                   predatory or high cost.


High Cost/         Chase will conduct high cost/predatory testing on loans that meet criteria
Predatory          established by:
Testing
                   · Federal (as defined by Federal Regulation Z - Section 32)
                   · Investor/Agency (as defined by the Agencies)
                   · State
                   · City/Village/Municipality
                   · County
                   · Where Chase has elected to test due to a business decision


Receiving High     Any loans received by Chase Correspondent for funding that meet the
Cost/Predatory     definition of a federal, state, city, county, or agency high cost/predatory
Loans              mortgage loan, will not be purchased and the file will be returned to the
                   Correspondent. Once a file is returned, Chase will not allow a Correspondent
                   to refund excessive fees and then resubmit the loan for purchase. Loans that
                   Chase inadvertently purchases that meet the definition of a high cost
                   mortgage loan are subject to repurchase.


Correspondent      Correspondents are responsible for ensuring that all loans sold to Chase are
Responsibility     originated and closed in accordance with all federal, state, city, county, and
                   agency high-cost/predatory lending regulations. Correspondents should
                   refer to their legal counsel for additional information on complying with
                   high cost/predatory lending regulations.




July 2004                                                                    Program Parameters – 10
Doing Business with Chase                                               Chase Correspondent Division



                             Correspondent Eligibility
Overview


Overview           This chapter of the Correspondent Lending Guide contains the policies and
                   procedures relating to Correspondent eligibility.


In this Chapter    This chapter contains information on the following topics

                                               Topic                                   See Page
                    Standard Approvals                                                     2
                    Extended Approvals                                                     4
                    Approval Procedures                                                    9
                    d-Lite Funding                                                        12
                    Fictitious Name Requirements                                          13
                    Correspondent Notifications                                           16
                    Corrective Actions                                                    18
                    Recourse and Compliance                                               19




July 2004                                                                Correspondent Eligibility – 1
Doing Business with Chase                                                Chase Correspondent Division



Standard Approvals


Introduction       To participate in Chase’s Correspondent Purchase Program, the
                   Correspondent must initially meet, then maintain, compliance with Chase’s
                   eligibility standards. Chase may waive or modify the eligibility standards
                   without affecting the subsequent ability to enforce them.


Approval           The following policy standards must be met, for an organization to be eligible
Standards          for acceptance into the Correspondent Lending Program:

                   · The organization must be financially and operationally sound;
                   · A Correspondent Origination and Sales Agreement must be executed;
                   · The company must be duly organized and in compliance with all applicable
                     Federal, State, and local regulations;
                   · The company must exhibit an acceptable level of mortgage lending
                     experience; and
                   · Resumes of all key personnel must be submitted and acceptable to Chase.

                   NOTE: Controlled Business Arrangements (CBA) are ineligible for
                   acceptance into the Correspondent Lending Program unless the
                   applicant provides specific warranties (i.e., title or escrow companies
                   owned by mortgage lenders).


Failure to         Failure to adequately satisfy the approval standards will jeopardize the
Satisfy            applicant’s acceptability into Chase’s Correspondent Lending Program.
Approval
Standards

                                                                               Continued on next page




July 2004                                                                 Correspondent Eligibility – 2
Doing Business with Chase                                                     Chase Correspondent Division



Standard Approvals, Continued


Guidelines for     In addition to meeting the Approval Standards outlined above, the following
New                guidelines will be observed in determining standard approval levels for new
Correspondent      Correspondents.
Approval

                                            Loans
                    Approval Type     Underwritten By                        Requirements
                   Conventional      Chase and/or            · Must have a minimum HUD adjusted audited
                   Retail Approval   Contract MI               net worth of $250,000
                                     Underwriting            · Must exhibit a minimum 20% of HUD
                                                               adjusted net worth in liquid assets (to a
                                                               maximum of $500,000).
                                                               NOTE: Acceptable liquid assets are
                                                               defined as cash, marketable securities, and
                                                               any instrument held for investment that
                                                               can be liquidated in less than 90 days.
                                                             · Must have been actively engaged in
                                                               residential mortgage lending for a minimum
                                                               of two years immediately preceding
                                                               submitting an application to Chase.
                                                             · Must provide a copy of an acceptable
                                                               Quality Control Plan.
                                                               NOTE: At Customer Management Group
                                                               (CMG’s) discretion, a copy of the latest
                                                               audited results may also be required.
                   Government        FHA and/or VA           Must meet the Conventional Retail Approval
                   Retail Approval   loans underwritten by   requirements, plus:
                                     the Correspondent’s
                                     FHA DE or VA            · Must be in compliance with all requirements
                                     Automatic                 issued by HUD/FHA and VA (including
                                     underwriter               HUD adjusted net worth).
                                                             · Must evidence their Direct Endorsement
                                                               authority with HUD to be granted FHA
                                                               approval by Chase
                                                             · Must evidence their VA Automatic authority
                                                               to be granted VA approval by Chase
                                                             · Must provide current resumes of all DE and
                                                               VA Automatic underwriters.




July 2004                                                                      Correspondent Eligibility – 3
Doing Business with Chase                                                Chase Correspondent Division



Extended Approvals


Introduction       In addition to applying for standard approval authority, Correspondents may
                   also apply for extended authorities. Extended authorities enable qualifying
                   correspondents to underwrite loans sold to Chase, sell third party originated
                   loans, and/or deliver loans through our negotiated transactions program.


Delegated          Description
Underwriting       This program provides an opportunity for experienced, financially sound
                   customers to have conventional loans purchased without prior review by
                   Chase Underwriting. Correspondents receiving delegated underwriting
                   approval will be held accountable for the quality of the delegated loans sold
                   to Chase.

                   Limitations
                   · Chase does not issue government delegated authority. To submit
                     government loans to Chase, the Correspondent must be issued DE or VA
                     Automatic underwriting authority through HUD and VA.
                   · Some conventional programs offered by Chase are not eligible for delegated
                     underwriting. Refer to the “Underwriting” and “Product and Programs”
                     sections of this guide for specific information regarding products that may
                     be underwritten by delegated correspondents.

                   Underwriter Qualifications
                   Individual underwriters designated by the correspondent to underwrite
                   conventional loans for sale to Chase should exhibit an acceptable level of
                   underwriting experience to support the additional warranties associated with
                   the authority being granted. To be considered as qualified, we recommend
                   that each underwriter exhibit a minimum of five years recent underwriting
                   experience, evidenced by a current resume.

                   Approval Guidelines
                   The following guidelines must be satisfied prior to being granted delegated
                   underwriting authority:

                                                                               Continued on next page




July 2004                                                                 Correspondent Eligibility – 4
Doing Business with Chase                                                Chase Correspondent Division



Extended Approvals, Continued


Delegated Underwriting (continued)

                             Type of Delegated
                          Underwriting Approval                      Requirements
                    Conforming Conventional Authority Must meet all standard Conventional Retail
                    (Retail Originations Only)        approval requirements and must have a
                                                      minimum HUD adjusted net worth of
                                                      $500,000.
                    Non-conforming to $650,000 loan   Must meet all standard Conventional Retail
                    amount Conventional Authority     approval requirements and must have a
                    (Retail Originations Only)        minimum HUD adjusted net worth of
                                                      $1,000,000.
                    Non-conforming to $750,000 loan   Must meet all standard Conventional Retail
                    amount Conventional Authority     approval requirements and must have a
                    (Retail Originations Only)        minimum HUD adjusted net worth of
                                                      $5,000,000.
                    Non-conforming to $1,000,000 loan Must meet all standard Conventional Retail
                    amount Conventional Authority     approval requirements and must have a
                    (Retail Originations Only)        minimum HUD adjusted net worth of
                                                      $10,000,000.
                    Delegated Third Party Origination Must meet all standard Conventional Retail
                    (TPO) Authority                   approval requirements and must:

                                                       · Have a minimum HUD adjusted net worth
                                                         of $1,000,000, and
                                                       · Be approved for and meet all criteria for
                                                         TPO extended authority.


Super Jumbo        In addition to meeting the Conventional Retail Authority requirements and
Approval           minimum HUD adjusted net worth requirements, Correspondents requesting
Authority          Super Jumbo ($750,000 or $1,000,000) conventional authority must also meet
Requirements       the following criteria:

                   · Financial Institutions must have LACE rating of C or better for the previous
                     four quarters and IDC rating of 125 or more. (Applies to Banks only.)
                   · Must be in residential mortgage banking business for at least seven years.

                                                                               Continued on next page




July 2004                                                                 Correspondent Eligibility – 5
Doing Business with Chase                                                Chase Correspondent Division



Extended Approvals, Continued


Super Jumbo        · Must meet or exceed Chase performance standards.
Approval           · Must have written internal procedures for super jumbo delegated
Authority            underwriting authority approval that are acceptable to Chase,
Requirements
(continued)
                   · Must designate specific underwriters authorized to underwrite super jumbo
                     loans.
                   · Underwriters must have a minimum of five years acceptable underwriting
                     experience.
                   · All loans over $650,000 require a post-purchase review by the Delegated
                     Underwriting Review Group (DURG).


Third Party        Description
Origination        This program allows Correspondents to deliver loans in which a Third Party
                   Originator performs a significant portion of the origination process for a fee.
                   A Third Party Originator is any person or entity, not employed by the
                   correspondent, who is duly authorized to perform all or part of the origination
                   processing, including but not limited to processing a loan application,
                   ordering appraisals and/or credit reports, verifying income and/or
                   employment.

                                                                               Continued on next page




July 2004                                                                 Correspondent Eligibility – 6
Doing Business with Chase                                                   Chase Correspondent Division



Extended Approvals, Continued


Third Party        Approval Guidelines
Origination        It is critical that customers participating in this program exhibit a high degree
(continued)        of experience and financial strength. Because the risk associated with these
                   types of loans, Chase requires that the correspondent satisfy the following
                   guidelines prior to being granted TPO Authority.

                     Type of TPO Authority                         Requirements
                    Conventional TPO           Correspondent must meet all standard Conventional
                    Authority                  Retail approval requirements and must:
                    (Non-delegated)
                                               · Have a minimum HUD adjusted net worth of
                                                 $500,000.
                                               · Satisfactorily complete the TPO Questionnaire or
                                                 provide a copy of their TPO Policy and Procedure
                                                 Manual evidencing their process for ensuring the
                                                 quality of loans submitted.
                                               · Evidence a minimum of three years experience in
                                                 third party origination by the company or key staff.
                    Government TPO             Correspondent must meet all standard Conventional
                    Authority                  Retail approval requirements and must:

                                               · Have a minimum HUD adjusted net worth of
                                                 $1,000,000.
                                               · Satisfactorily complete the TPO Questionnaire or
                                                 provide a copy of their TPO Policy and Procedure
                                                 Manual evidencing their process for ensuring the
                                                 quality of loans submitted.
                                               · Evidence a minimum of three years experience in
                                                 third party origination by the company or key staff.

                                                                                   Continued on next page




July 2004                                                                    Correspondent Eligibility – 7
Doing Business with Chase                                                 Chase Correspondent Division



Extended Approvals, Continued


Correspondent      Description
Negotiated         This program enables qualified correspondents to conduct the following
Transactions       transactions with Chase:

                   · Assignments of Trade,
                   · Co-issues, and
                   · Bulk Servicing Sales.

                   Approval Guidelines
                   Correspondents that are active and in good standing are eligible to participate
                   in the CNT program providing that they meet all requirements for
                   Conventional and/or Government Retail approval, plus:

                   · Have a minimum HUD adjusted net worth of $5,000,000,
                   · Satisfactorily complete a due diligence review by Chase Correspondent
                     Negotiated Transactions, and
                   · Have obtained the required agency approvals.

                   NOTE: These transactions are processed by the CNT Division of Chase
                   and are separate from traditional best effort/mandatory correspondent
                   transactions.




July 2004                                                                  Correspondent Eligibility – 8
Doing Business with Chase                                               Chase Correspondent Division



Approval Procedures


Standard           Correspondents requesting to participate in Chase’s Correspondent Lending
Approval           program must provide the following standard approval documentation to the
Required           Sales Manager:
Documentation
                   · Fully completed and executed Correspondent Application.
                   · Fiscal year-end audited financial statements for the past two years
                     NOTE: If audited statements are only prepared in a parent company’s
                     name, submit parent company’s financial statements along with a
                     Resolution of Board of Directors which authorizes guarantying the
                     contract.
                   · Management prepared interim financial statements if fiscal year-end
                     statements are more than six months old.
                   · Current resumes of officers and/or principal shareholders, key management
                     personnel, and underwriters.
                   · List of all branch locations originating mortgage loans. Include branch
                     manager’s name, business address, and telephone number.
                   · Copy of Fannie Mae/Freddie Mac/GNMA approvals (CNT customers
                     only).
                   · Copy of FHA and VA approvals (if requesting government loan sale
                     authority).
                   · Certificate of Secretary including a Resolution of Board of Directors, which
                     authorizes selling serviced released loans to Chase.
                   · Executed copy of the Chase Origination and Sales Agreement (executed by
                     an individual authorized by the Corporate Resolution).
                   · Copy of acceptable quality control plan.
                   · Completed Chase Wire Instructions Set-up Form.
                   · Completed W-9 Form.
                   · Copy of current E&O Insurance Certificate and Fidelity Bond Coverage
                   · Copy of Mortgage Banker’s License(s), if required by law in the states in
                     which company is doing business.
                   · Minimum of three references from investors with which the company is
                     currently doing business.

                                                                              Continued on next page




July 2004                                                                Correspondent Eligibility – 9
Doing Business with Chase                                                   Chase Correspondent Division



Approval Procedures, Continued


Extended           The following table identifies the extended approval authority documentation
Approval           that must be submitted in addition to the standard approval documentation.
Authority
Documentation

                        Type of Extended
                            Approval                          Required Documentation
                    Delegated Underwriting      · Current resumes of all underwriters on staff
                    Authority                     responsible for underwriting loans that will be sold
                                                  to Chase.
                                                · Completed Delegated Underwriting Application
                                                  form.
                                                · Executed Delegated Underwriting Addendum to the
                                                  Chase Originations and Sales Agreement.
                    Third Party Origination     · Documentation to satisfy the requirements of the
                    (TPO) Authority               requested approval authority level.
                                                · Completed Third Party Origination (TPO)
                                                  Questionnaire.
                                                · Executed TPO Rider to the Chase Originations and
                                                  Sales Agreement.
                    Correspondent Negotiated    · Satisfactorily completed due-diligence review
                    Transaction (CNT)             package from CNT.
                    Approval


Standard           To request approval to participate in Chase’s Correspondent Lending
Approval           Program, the Correspondent must complete the following steps:
Procedures

                      Step                                    Action
                       1      Sign Chase’s Correspondent Origination and Sales Agreement.
                       2      Obtain documentation required to satisfy the requirements for the
                              requested authority level.
                        3     Provide signed Correspondent Origination and Sales Agreement along
                              with all other required documentation to the Correspondent’s assigned
                              Sales Manager.

                                                                                  Continued on next page




July 2004                                                                   Correspondent Eligibility – 10
Doing Business with Chase                                                 Chase Correspondent Division



Approval Procedures, Continued


Issues             All application issues should be brought to the Sales Manager’s attention.
                   The Sales Manager will then work directly with the Correspondent to resolve
                   outstanding issues and concerns.


Approved           Approved Correspondents will receive:
Correspondents
                   ·   An approval letter which confirms the correspondent’s approval authority,
                   ·   Daily Rate Sheets,
                   ·   A copy of the Chase’s Correspondent Lending Guide,
                   ·   Lending Guide Update Publications, and
                   ·   Regional labels for loan submissions.




July 2004                                                                Correspondent Eligibility – 11
Doing Business with Chase                                                 Chase Correspondent Division



d-Lite Funding


Introduction       d-Lite Funding is a loan purchase process providing Correspondent lenders
                   the ability to deliver certain loans for funding with an expedited review.
                   Once Correspondents participate in the orientation phase they can submit files
                   for d-Lite funding through either a full file delivery or a staged file delivery.

                   IMPORTANT: Correspondents are recommended by the
                   Correspondent Sales Team to participate in d-Lite Funding.


Correspondent      · To be eligible for the d-Lite funding process, Correspondents must have
Eligibility          satisfactory performance with Chase, and
Requirements       · be approved for the appropriate delegated authority for the loan submitted
for d-Lite
                     [e.g., Conventional delegated authority , FHA/VA authority or TPO
Funding
                     authority (government and/or conventional)].




July 2004                                                                 Correspondent Eligibility – 12
Doing Business with Chase                                                  Chase Correspondent Division



Fictitious Name Requirements


Introduction       Strict adherence to the requirements outlined in this section is required for all
                   loans made by Correspondents using its fictitious name and sold, or assigned,
                   to Chase.


Fictitious         A fictitious name is defined as a:
Name-Defined
                   · trade name,
                   · “doing-business-as” name, or
                   · name other than the name of the Correspondent, as used in the
                     Correspondent’s Articles of Incorporation or character.


Document           In the event a Correspondent makes a loan or generates a loan document
Requirements       using a fictitious name, the Correspondent must provide Chase with the
                   following documentation for each state where the Correspondent transacts
                   business using a fictitious name:

                   · a copy of the Fictitious Name Certificate or Registration Statement
                     issued by the applicable state or local regulatory agency authorizing the
                     Correspondent to transact business under the fictitious name, and
                   · if appropriate, a copy of the Correspondent’s current state lending
                     license bearing the Correspondent’s fictitious name, if such state
                     requires a license to bear the licensee’s fictitious name in order for the
                     licensee to lend in such fictitious name.


Document           All required fictitious name documents must be forwarded to:
Submission
                   Chase Correspondent Division
                   Attention: Customer Management Group/Cynthia Dotzler
                   10151 Deerwood Park Boulevard, Building 300
                   Jacksonville, FL 32256

                                                                                 Continued on next page




July 2004                                                                  Correspondent Eligibility – 13
Doing Business with Chase                                                 Chase Correspondent Division



Fictitious Name Requirements, Continued


Reps and           · The Correspondent must represent and warrant to Chase:
Warrants             · that any loan document bearing the Correspondent’s fictitious name is a
                       legal, valid and binding obligation of the obligor(s) there under,
                     · the loan is not subject to any defense, claim, or right of rescission of the
                       obligor(s), due to the use of such fictitious name,
                     · the validity, enforceability, effectiveness of recording or priority of any
                       Mortgage is in no way affected by the use of the Correspondent’s
                       fictitious name, and
                     · the transfer or assignment of any loan or loan documents to Chase
                       confers upon Chase the legal right of ownership and enforceability of any
                       such loan or any such loan documents.
                   · The Correspondent’s obligations and liabilities, regarding its use of a
                     fictitious name, should in no way imply the Correspondent is subject to any
                     lesser degree of liability or obligations under the agreement, including
                     loans previously acquired by Chase, for which a fictitious name was used.
                   · Correspondents must indemnify, defend, and hold harmless Chase, it’s
                     officers, directors, agents, employee’s, successors, and assigns, from and
                     against:
                     · any and all losses,
                     · damages,
                     · fines, and/or
                     · costs or expenses, including attorney’s fees, incurred by Chase as a result
                       of any allegation, claim, action, or complaint alleging the improper or
                       unlawful use of a fictitious name.
                   · Capitalized terms not defined herein shall have the meaning provided in
                     the Origination and Sales Agreement, by and between Chase and the
                     Correspondent (the “Agreement”).

                   NOTE: These provisions include clarifications to, and are not to
                   replace, any acknowledgements, covenants, representations, or
                   warranties contained in the Agreement.


Fictitious Name    Correspondents must promptly advise Chase, in writing, of any changes in
Change             its use of a fictitious name, including:
Requirements
                   · the use of a new or different fictitious name, and
                   · changes regarding registration or licensure of a fictitious name.

                                                                                Continued on next page




July 2004                                                                 Correspondent Eligibility – 14
Doing Business with Chase                                               Chase Correspondent Division



Fictitious Name Requirements, Continued


Additional         In addition to the documentation requirements outlined above, Chase
Requirements       requires the documentation otherwise required by the agreement, prior to the
                   funding date of any such loan sale.




July 2004                                                               Correspondent Eligibility – 15
Doing Business with Chase                                               Chase Correspondent Division



Correspondent Notifications


Introduction       For quality assurance purposes, Chase requires that Correspondents notify the
                   Customer Management Group when changes occur and/or quality issues are
                   identified.


Change of          Correspondents must notify Chase of all Senior Management changes and
Ownership/         Changes in Ownership, unless prohibited by law. Notices must be provided
Management         prior to the effective date of the change and may be given to the Sales
                   Manager or the Customer Management Group in Jacksonville. All notices
                   must be provided in writing and should include copies of current resumes for
                   all new key officers and owners. Upon receipt of the change notification,
                   Chase will review the information provided to determine if there are any
                   impacts on the Correspondent’s relationship with Chase.


Sanctions/         In the event that a Correspondent receives an action notification from a
Actions by         Warehouse Lending Investor, FHA, VA, Freddie Mac, Fannie Mae, or any
Agencies           other regulatory agency, the Correspondent must provide a copy of the notice
                   to Chase immediately upon receipt.


Quality Control    When internal audits and/or quality control reviews identify loan quality
and/or Internal    issues, Chase requires the Correspondent to provide a copy of the findings
Audit Results      report to Chase within 60 days of receipt.


Annual             In addition to the notifications outlined above, Chase also requires that all
Reviews            Correspondents forward updated audited financial statements within 120 days
                   of their fiscal year end.

                   NOTES:
                   · Banks, Savings & Loans, and Credit Unions not required to produce
                     audited statements may substitute their regulatory call reports.
                   · Failure to provide the required annual review documentation within
                     the time allotted will result in suspension from the program.

                                                                              Continued on next page




July 2004                                                               Correspondent Eligibility – 16
Doing Business with Chase                                                Chase Correspondent Division



Correspondent Notifications, Continued


Notification       All notifications and annual review documents are to be sent to the following
Address            address:

                   Chase Correspondent Division
                   Attention: Correspondent Customer Management Group
                   10151 Deerwood Park Boulevard
                   Building 300, 1st Floor
                   Jacksonville, FL 32256


Loan               Description
Performance        From time to time, we will be providing information to you, as a
Communications     Correspondent Lender of Chase, about loan performance.

                   Purpose
                   This information is provided for the sole purpose of assisting you with your
                   internal Quality Control review of your processes, procedures and loan
                   quality, as it relates to the loans purchased by Chase from you.

                   Use
                   This information is confidential and should be maintained as such and used
                   only in compliance with law. In accepting this data, you agree that there shall
                   be no contact made with the borrower(s) by your company or agents of your
                   company in regard to the delinquency information. To the extent that you or
                   your agents (i) contact the borrower(s) notwithstanding your agreement not to
                   do so, or (ii) use this information other than in compliance with law, and in
                   either event Chase suffers a loss there from, you agree to be fully liable for,
                   and indemnify Chase for, any losses which Chase suffers.




July 2004                                                                Correspondent Eligibility – 17
Doing Business with Chase                                                  Chase Correspondent Division



Corrective Actions


Introduction       When performance issues are identified, Chase may elect to take appropriate
                   corrective action. The type of action taken varies based on the circumstances
                   and severity of the issue.


Actions Taken      Depending on the seriousness of the performance issue, Chase may elect to
for Poor           take one or more of the following actions:
Performance
                   ·   Request Quality Control Reports,
                   ·   Hold SRP,
                   ·   Suspend the Relationship,
                   ·   Rescind Authorities,
                   ·   Terminate the Relationship, and
                   ·   Any other actions as deemed appropriate by Chase.


Recourse           When recourse related issues are identified, Chase may require that the
Provisions         Correspondent complete one or more of the following actions:

                   ·   Repurchase the loan,
                   ·   Pay a monetary penalty,
                   ·   Return the SRP,
                   ·   Return the SRP plus pay a portion of Chase’s expected foreclosure costs,
                   ·   Reimburse for any losses, and/or
                   ·   Comply with any other request as deemed appropriate by Chase.

                   NOTE: Refer to the Origination and Sales Agreement for specific
                   information regarding causes for redress.


Performance        The Sales Manager will discuss all performance issues directly with the
Issue              Correspondent and will work with the Correspondent to resolve outstanding
Notification       issues.


Who to Contact     Questions regarding performance issues and/or any actions taken should be
                   addressed directly with the Correspondent’s Sales Manager.




July 2004                                                                  Correspondent Eligibility – 18
Doing Business with Chase                                                Chase Correspondent Division



Recourse and Compliance


Early Loan         If a loan purchased by Chase is paid in full within 90 days of Chase
Payoff Penalty     purchasing the loan, the Correspondent will be responsible for repayment to
                   Chase as outlined in the chart below.

                      If the loan pays off within…   Then the potential penalty amount will be…
                    1-60 days of funding,            SRP plus any over par amount.
                    61-90 days of funding,           SRP only.


Early Loan         The number of Early Repayments recorded in a specific month will be
Payoff Policy      compared to the number of units purchased from the Correspondent during
                   the previous three months to determine the percent of Early Repayment to
                   volume.

                   Early Repayments in excess of .75% will be subject to a repayment penalty.

                   EXAMPLE: The table outlines how the Early Repayment Penalty is
                   applied.

                    If the number of early And the “Percent       Then the applicable penalty
                        repayments is…      to Volume” is …           will be charged on…
                    one,                   greater than .75%, the single Early Repayment for that
                                                              month.
                    one,                   less than .75%,    N/A
                    more than one,         greater than .75%, · Early repayments in excess of the
                                                                tolerance, and
                                                              · Early repayment(s) that occurred
                                                                on the latest date of the month.
                    more than one,         less than .75%,    N/A


Additional         · This policy applies to all loans including government, conforming
Early Loan           conventional, and jumbo conventional products.
Payoff             · The policy applies regardless of the reason for early repayment.
Requirements
                   · The period of time covered by this policy is from the date of the loan
                     purchase by Chase (not the date of loan closing) to the date of repayment.

                                                                               Continued on next page




July 2004                                                                Correspondent Eligibility – 19
Doing Business with Chase                                               Chase Correspondent Division



Recourse and Compliance, Continued


Correspondent      Within five days of receipt of Chase’s written request, the Correspondent
Remittance of      must remit repayment to the Recourse and Compliance Management
Early Loan         Department at the following address.
Payoff
                   Chase Manhattan Mortgage Corporation
                   Attention: Recourse and Compliance Management Department
                   10151 Deerwood Park Boulevard
                   Building 300, 2nd Floor
                   Jacksonville, FL 32256


Early Payment      For conventional loans, Section 5.2 of the Delegated Underwriting Addendum
Default Policy     to the Correspondent Origination and Sales Agreement states, “The failure by
                   the related Mortgagor to make any of the first three monthly payments due
                   Chase which remain unpaid for 120 days; Correspondent shall:

                   · pay Chase $1,000 as reimbursement for administrative expenses, and
                   · return any servicing release premium paid to the Correspondent in reference
                     to such Loan.”


Early Payment      · Currently, Chase Correspondent enforces the EPD penalty as soon as the
Default Policy       default occurs as defined by the addendum.
Enforcement        · Chase will continue to immediately enforce the EPD penalty on all
                     government loans.
                   · Chase will continue to immediately enforce the EPD penalty on all
                     conventional loans that are manually underwritten.
                   · On loans purchased on/after February 1, 2000, Chase will defer any
                     EPD penalties on conventional loans underwritten through Fannie Mae’s
                     Desktop Underwriter or Freddie Mac’s Loan Prospector and validated by
                     the Correspondent with delegated underwriting authority.

                   If a loan on which the EPD penalty has been deferred becomes subject to
                   repurchase, the Correspondent will be billed for the loan amount, SRP, and
                   other charges in accordance with section 5.2 and 5.3 of the Origination and
                   Sales Agreement.

                                                                              Continued on next page




July 2004                                                               Correspondent Eligibility – 20
Doing Business with Chase                                                Chase Correspondent Division



Recourse and Compliance, Continued


Additional         For a conventional loan with an early payment default to be eligible for
Early Payment      penalty deferment, all of the following requirements must be met:
Default Penalty
Deferment          · Underwritten through DU and received an APPROVE recommendation or
Requirements
                     underwritten through LP and received an ACCEPT recommendation.
                   · Validated by an employee or agent of the Correspondent under the terms of
                     the Delegated Underwriting Addendum.
                   · Loan product meets DU or LP product eligibility requirements.


Loans Ineligible The loan products not eligible for the EPD penalty deferment are:
for Early
Payment          · FHA or VA loans.
Default Penalty
                 · Conventional Chase products on which DU or LP underwriting is not
Deferment
                     allowed.
                   · Eligible conventional loan products receiving a REFER or REFER with
                     CAUTION recommendation from DU or CAUTION from LP.


Early Payment      The Chase Correspondent Division may terminate this policy within 15 days
Default Penalty    of written notice to the Correspondent.
Deferment
Policy
Termination




July 2004                                                                Correspondent Eligibility – 21
Doing Business with Chase                                                 Chase Correspondent Division



                                            Pricing
Overview


Overview           This chapter of the Correspondent Lending Guide contains the policies and
                   procedures relating to pricing of loans.


In this Chapter    Use the following chart to locate the main topics in this chapter:

                                                 Topic                                  See Page
                    General Information                                                     2
                    Pricing Adjustments                                                     3
                    Price Changes                                                           5
                    Low to Moderate Income Subsidy Program                                  6




July 2004                                                                                  Pricing – 1
Doing Business with Chase                                                 Chase Correspondent Division



General Information


Delivery           Rate sheets are distributed via fax from the Registration Department at
                   approximately 10:30 a.m. eastern time each day. In addition to the fax
                   distribution, Chase also publishes pricing at approximately 10:30 a.m. on our
                   Web site www.chasecorrespondent.com.

                   NOTE: To view pricing on the Web site, the correspondent must first be
                   assigned an approval pin number. Refer to the “Welcome to Chase”
                   section for detailed procedures regarding obtaining Web site access.


Delivery           Fax
Contact            To ensure that rate sheets are delivered to the appropriate parties, it is
Changes            important that all contact information is accurate. Therefore, should rate
                   sheet distribution contact data change, please contact the Registration Desk at
                   (800) 305-LOCK (5625) or (904) 620-6560.

                   NOTE: All change requests will be implemented within two business
                   days of receipt.

                   Web site
                   Should the correspondent choose to make any Web site administration
                   changes, a Web site Administration Form must be completed. This form can
                   be found in the Correspondent Application section of the Correspondent
                   home page www.chasecorrespondent.com or it may be obtained from Chase
                   Help Desk by calling 1-877-ASK-CHASE (1-877-275-2427).

                   NOTE: The Web site Administration Form must be signed by someone
                   who has the authority as defined in the Correspondent’s Corporate
                   Resolution.


Off Rate Sheet     Chase offers a wide variety of rates and products, therefore, not all available
Products           products are included on the Rate sheet. Contact the Registration Desk to
                   obtain pricing for products not listed on the Rate Sheet.




July 2004                                                                                  Pricing – 2
Doing Business with Chase                                                 Chase Correspondent Division



Pricing Adjustments


Introduction       All products published on our rate sheets will reflect base pricing. Special
                   program and loan feature adjustments are not included in the base price,
                   however, they are listed separately on each rate sheet.


Special            Since we are unable to publish all programs on our rate sheets, adjustments to
Program            the basic program pricing may be required for special programs. Prior to
Adjustments        quoting a rate, be sure to review each page to identify the special program
                   pricing requirements.


Lender Paid        When mortgage insurance is paid up-front by the lender, an adjustment to the
MI                 rate, based on the LTV, will apply to the following Conventional products:

                   ·   Conforming Conventional 30-year Fixed
                   ·   Agency 1 Conforming Conventional 30-year Fixed
                   ·   Agency 2 Conforming Conventional 30-year Fixed
                   ·   Non-Conforming Conventional Fixed

                   TIPS:
                   · All lender-paid MI adjustments will be posted on the Government page
                     of the rate sheet.
                   · Refer to the LPMI Disclosure for an example of how LPMI is
                     calculated.

                                                                                Continued on next page




July 2004                                                                                  Pricing – 3
Doing Business with Chase                                                Chase Correspondent Division



Pricing Adjustments, Continued


Government         Government Fixed Rate buydowns are eligible on loans with interest rates in
Fixed Rate         ½ and whole increments. Government Fixed Rate buydown adjustment is
Buydowns           0.500%.


Escrow             Adjustments for escrow waivers are located on the rate sheet and SRP
Waivers            Schedule.


Pricing Feature    Pricing Adjustments for different loan features (i.e., occupancy, dwelling
Adjustments        type, LTV, number of units, etc.) are located at the bottom of each page of the
                   rate sheet.




July 2004                                                                                 Pricing – 4
Doing Business with Chase                                                Chase Correspondent Division



Price Changes


Definition         When the market moves a substantial amount, new pricing will come into
                   effect. When pricing improves the correspondent will be notified of a “price
                   improvement.” However, when pricing drops, the correspondent will be
                   notified of a “price change.”

                   Both pricing improvements and pricing changes are effective immediately.


Notification       When a pricing improvement or change occurs, Chase will fax a new rate
Method             sheet to all Correspondents. In addition, Chase will also add a price change
                   announcement to the Registration Telephone System.


ChaseLock          New pricing will be uploaded on the Web site without notification. All
Web site           loans not locked prior to the price change will automatically reflect the new
Pricing            price. Should questions concerning pricing arise, please contact the
Changes            Registration Desk.


Fax                Pricing in effect at the time a faxed request is received by the Registration
Registration       Department is the pricing honored. Time of receipt will be determined by the
Request            date and time stamp indicated by the Correspondent Registration Department
                   fax machines.




July 2004                                                                                 Pricing – 5
Doing Business with Chase                                                 Chase Correspondent Division



Low to Moderate Income Subsidy Program


Introduction       Chase’s Low to Moderate Income (LMI) Subsidy program is offered to
                   promote home ownership in Chase certified low to moderate-income census
                   tract areas. Chase awards a subsidy to qualifying purchase and refinance
                   loans within these tracts. Currently, all Chase certified census tracts lie
                   within portions of New York, New Jersey, Connecticut, Delaware, and Texas.

                   NOTE: LMI approved areas are subject to change.


LMI Eligibility    LMI subsidy is available to Correspondents doing business in LMI approved
Requirements       states provided the loan and property, in those states, meet the following
                   program requirements:

                             Topic                                Requirement
                    Property Location         Lie within a Federally designated LMI census tract,
                                              in an LMI Discount program area as certified by
                                              Chase.
                    LMI Request Form          The Form is used to establish the location eligibility
                                              of the property. A completed form must be
                                              submitted by Correspondent, and approved by Chase
                                              prior to Chase receiving the closed loan package.
                    Chase Loan Number         The Chase loan number is assigned to the
                                              loan/property at registration. The loan number and
                                              property address on the LMI Request Form must
                                              correspond with the loan number and property
                                              address registered. Use of a different loan number
                                              will disqualify LMI eligibility.
                    Maximum Loan Amount       $200,000
                    Occupancy                 Owner-occupied only
                    Property Type             · 1-4 unit
                                              · Condo
                                              · PUD
                                              · Co-op (eligible for co-op approved Correspondents
                                                only)
                    Transaction Type          Purchase or Refinance (Home Improvement Loans
                                              are not permitted.)
                    Products                  All market types are eligible.

                   NOTE: Chase will not be able to award LMI subsidy after the loan has
                   been purchased by Chase. Therefore, it is imperative that the loan be
                   properly pre-approved and registered as an LMI loan PRIOR to loan
                   submission.
                                                                                Continued on next page



July 2004                                                                                   Pricing – 6
Doing Business with Chase                                                Chase Correspondent Division



Low to Moderate Income Subsidy Program, Continued


Pricing            Refer to the table below to determine the applicable subsidy rates.

                   NOTE: These rates are subject to change.

                                           State                                   Rate
                    New York                                                       1.5%
                    New Jersey                                                     1.5%
                    Delaware                                                       1.5%
                    Connecticut                                                    2.0%
                    Texas (other than Bexar and Comal Counties)                    1.5%
                    Texas (Bexar and Comal Counties only)                          2.0%


Approval           All LMI approvals will be valid for six months from approval date, after
Expiration         which the approval will be expired. If the loan is not received in fundable
                   condition prior to the LMI approval expiration, a new request for LMI
                   approval will be required for the LMI subsidy to be provided.




July 2004                                                                                 Pricing – 7
Doing Business with Chase                                                 Chase Correspondent Division



                                    Loan Registration
Overview


Overview           This chapter of the Correspondent Lending Guide contains the policies and
                   procedures relating to loan registration.


In this Chapter    Use the following chart to locate the main topics in this chapter:

                                                Topic                                   See Page
                    Registration and Pricing Maintenance Methods                            2
                    Registration and Pricing Maintenance Requirements                       3
                    General Registration Procedures                                         4
                    Specific Registration Procedures                                        5
                    Product Changes                                                         8
                    Product Exceptions                                                     10
                    Escrow Waivers                                                         11




July 2004                                                                         Loan Registration – 1
Doing Business with Chase                                                   Chase Correspondent Division



Registration and Pricing Maintenance Methods


Telephone          To extend or re-lock loans directly through Chase’s Registration Desk call
                   (800) 305-LOCK (5625) or (904) 620-6560.


FAX                All new applications, float to lock conversions, re-locks, extensions, and
                   modifications can be requested via fax by completing the Loan Registration
                   Fax Form and faxing the completed form to (904) 620-6545.

                   NOTE: See the bottom section of the Loan Registration Fax Form to
                   reference the key information to complete the form as required. All new
                   applications must be submitted on the Loan Registration Fax Form.


Web site           In addition to registering loans by fax and telephone, authorized
                   Correspondents may also register new applications on Chase’s Web site.

                   To request authorization, Correspondents must complete the Web site
                   Administration Form. This form can be found in the “Correspondent
                   Applications” section of the Correspondent home page
                   www.chasecorrespondent.com or it may be obtained from the Chase Help
                   Desk at 1-877-ASK-CHASE (1-877-275-2427).

                   NOTE: The Web-site Administration Form must be signed by someone
                   who has the authority as defined in the Correspondent’s Corporate
                   Resolution.

Registering        In addition to registering by fax, authorized Correspondents may also register
Loan by Web        loans via Chase’s Web site by using the steps below:
site

                      Step                                     Action
                       1     Select “ChaseLock” on the Correspondent home page
                             www.chasecorrespondent.com.
                       2     Enter ID and password and click “OK” to view the Pipeline Details
                             screen.
                       3     Click on “Add a Loan” to view the Add/Edit screen.
                       4     Enter information in the appropriate fields.
                       5     Click on “Price” for the Price and Shop Loans page to verify loan
                             information.
                       6     Select “Pricing Details” to review adjustment details.
                       7     Click on “Accept” to obtain a loan number and pricing.
                       8     Click on “Pipeline Details” to identify accepted loans with a padlock
                             icon and loans that were not accepted with a square box icon.



July 2004                                                                           Loan Registration – 2
Doing Business with Chase                                                 Chase Correspondent Division



Registration and Pricing Maintenance Requirements


Information        With each method used, the information necessary to register a loan is
Required to        consistent. The basic information needed to register a loan is:
Register a Loan
                   ·   assigned correspondent identification code,
                   ·   loan term and program (market type code),
                   ·   borrower’s first and last name,
                   ·   property address,
                   ·   loan amount,
                   ·   purchase price or appraised value,
                   ·   interest rate,
                   ·   purchase class,
                   ·   occupancy,
                   ·   property type,
                   ·   documentation type, and
                   ·   contact name and fax number.


Information        When locking a loan, the correspondent must inform Chase as to the type of
Required to        lock option in addition to the basic registration information, as outlined
Lock a Loan        above. If the loan was previously registered, as a float, the Correspondent
                   may lock the loan on the Web site or via fax to the Correspondent
                   Registration Department, by providing the existing loan number.


Market Type        When registering and locking a loan, a three-digit market type code is
Codes              required to identify the specific term, product, and program features. The
                   generic and Fannie Mae/Freddie Mac market type codes are located on the
                   rate sheet beside each program name. However, certain program features are
                   tied to specific market type codes that are not listed on the rate sheet. For a
                   complete list of available codes, refer to the Market Type Schedule located in
                   the “Products and Programs” section of this guide.




July 2004                                                                        Loan Registration – 3
Doing Business with Chase                                              Chase Correspondent Division



General Registration Procedures


Registering        To register a loan via fax, the Loan Registration Fax Form must be completed
Loan by FAX        in its entirety and faxed to (904) 620-6545. Once the Fax Registration is
                   received, the data from the form will be entered into Chase’s database and a
                   confirmation, including the assigned loan number, will be faxed to the
                   Correspondent. Chase will fax all confirmations within 24 hours, unless
                   otherwise noted. Should the Correspondent have any questions regarding the
                   receipt of a confirmation, the Correspondent must contact the Registration
                   Desk by 11:00 a.m. eastern time the next business day.

                   NOTE: Refer to the “Lock-In” section of this guide for time and dollar
                   limitations and restrictions.




July 2004                                                                     Loan Registration – 4
Doing Business with Chase                                                  Chase Correspondent Division



Specific Registration Procedures


Registering        Credit only loans may be float registered by fax or Web site. When
Credit Only        registering a credit only loan as a float, Chase will not require property
Loans              address information; however, the remaining basic information is required.

                   NOTE: Prior to locking in a credit only loan, a PROPERTY ADDRESS
                   must be provided to Chase.


Determining        Loans must be registered prior to determining eligibility for LMI subsidy.
LMI Subsidy        Once a LMI Potential loan is registered, the following steps are completed to
Eligibility        determine LMI subsidy eligibility.

                      Step    Responsibility                          Action
                       1     Correspondent     Determines that an applicant’s loan potentially
                                               qualifies as a Chase Low to Moderate Income loan
                                               based on the loan meeting Chase LMI eligibility
                                               requirements.
                       2     Correspondent     Resisters and/or locks the loan with Chase obtaining an
                                               assigned loan number.
                       3     Correspondent     Completes a Chase Low to Moderate Request Form
                                               including the following data and faxes the form to
                                               Chase at (904) 620-6552:

                                               ·   Loan number
                                               ·   Current date
                                               ·   Correspondent code and company name
                                               ·   Correspondent contact name
                                               ·   Contact telephone and fax number
                                               ·   Borrower’s first and last name
                                               ·   Borrower’s property address
                                               ·   loan amount
                                               ·   market type
                                               ·   number of units
                                               ·   purchase class

                                               NOTE: All information listed above is required.
                                               Incomplete forms will be returned immediately
                                               upon receipt.

                                                                                 Continued on next page




July 2004                                                                          Loan Registration – 5
Doing Business with Chase                                                       Chase Correspondent Division



Specific Registration Procedures, Continued


Determining LMI Subsidy Eligibility (continued)

                      Step    Responsibility                        Action
                       4     Chase             Receives the LMI Request form and reviews for
                             Registration      completeness and LMI potential.

                                                      If the LMI Request                Then Chase
                                                             form…                     Registration…
                                                  is incomplete,                faxes the form to the
                                                                                Correspondent contact
                                                                                requesting the form be
                                                                                completed and resubmitted
                                                                                to Chase.
                                                  reflects that the loan does   marks the request as
                                                  not meet the initial          “Denied Ineligible”
                                                  eligibility requirements,     indicates reason for
                                                                                ineligibility, signs, and
                                                                                faxes the form to the
                                                                                Correspondent contact.
                                                  is complete and loan          proceeds to step 5.
                                                  meets initial eligibility
                                                  requirements,

                       5     Chase             Faxes the completed, verified form to GEO Hotline for
                             Registration      approval.
                       6     Chase             Within two business days, receives and reviews the
                             Registration      completed “Report” section of the request form.

                                                    If the “Report”
                                                   section indicates
                                                        property
                                                     eligibility is…         Then Chase Registration…
                                                  denied,                 faxes the form to the
                                                                          Correspondent contact listed on
                                                                          the form.
                                                  approved,               proceeds to step 7.

                       7     Chase             Faxes a confirmation and the completed LMI Request
                             Registration      Form back to the Correspondent.

                                                                                       Continued on next page




July 2004                                                                               Loan Registration – 6
Doing Business with Chase                                                  Chase Correspondent Division



Specific Registration Procedures, Continued


Determining LMI Subsidy Eligibility (continued)

                      Step     Responsibility                            Action
                       8     Correspondent        Locks the loan with Chase’s Registration Desk, if
                                                  not previously locked, and submits the closed loan
                                                  file to Chase.

                                                  NOTE: Loans must be locked using the loan
                                                  number assigned when registered to qualify for
                                                  LMI subsidy.
                       9     Chase Funding        Receives the closed loan file, verifies file
                                                  information with Registration system and notifies
                                                  Chase Registration of receipt.
                       10    Chase Registration   Verifies that the loan is approved for LMI, awards
                                                  LMI subsidy, based on state and purchase class, and
                                                  notifies Chase Funding.
                       11    Chase Funding        Proceeds with Chase loan purchase.




July 2004                                                                         Loan Registration – 7
Doing Business with Chase                                                       Chase Correspondent Division



Product Changes


Policy             Although it is discouraged, it is not uncommon for a Correspondent to switch
                   from one product to another after registration. Program switching is allowed
                   on all loans under the standard lock option; however, loans locked under the
                   8-Day Mandatory, Extended Rate Lock, and Rate Cap programs may NOT be
                   switched to another product.

                   All change requests must be in writing. The Correspondent Registration
                   Change Request Form or a marked copy of the Chase Loan Confirmation
                   may be used to request changes.

                   NOTE: If a loan is not currently locked, it can be switched from one
                   program to another.


Major Product      For the purpose of product switches, the major product groups are:
Groups
                   · Agency - Conforming Conventional Fixed, Balloons, Government Fixed,
                     Government ARMs
                   · Non-Conforming Fixed - Jumbo Conventional Fixed, 103% Fixed Rate
                   · Non-Conforming ARMs - Jumbo Conforming ARMs, 103% 7/1 ARM
                   · ChaseFlex - ChaseFlex

                   Use the following chart to determine the pricing and lock expiration for
                   switching products on locked loans:

      Switch From                  Switch To                 Pricing                   Lock Expirations
AGENCY                      Non-Conforming          Worst Case Pricing            If Worst Case is current
· ALL Conforming            · Any Jumbo Program                                   market - use current
  Conventional Fixed        Chase Portfolio                                       expiration date.
· ALL Balloons              · Any Conventional ARM                                If Worst Case is from last
· ALL Government Fixed        (Jumbo or Conforming)                               lock date - expiration of
· ALL Government ARMs         ChaseFlex                                           last lock date is held.
AGENCY                      AGENCY                  The pricing from the last     Expiration of last lock date
· ALL Conforming            · ALL Conforming        lock date is used.            is held.
  Conventional Fixed          Conventional Fixed
· ALL Balloons              · ALL Balloons
· ALL Government Fixed      · ALL Government Fixed
· ALL Government ARMs       · ALL Government
                              ARMs

                                                                                      Continued on next page




July 2004                                                                               Loan Registration – 8
Doing Business with Chase                                                         Chase Correspondent Division



Product Changes, Continued


Major Product Groups (continued)

       Switch From                 Switch To                  Pricing                    Lock Expirations
Non-Conforming              AGENCY                    Worst Case Pricing            If Worst Case is current
· Any Jumbo Program         · ALL Conforming                                        market - use current
                              Conventional Fixed                                    expiration date.
                            · ALL Balloons                                          If Worst Case is from last
                            · ALL Government Fixed                                  lock date - expiration of
                            · ALL Government                                        last lock date is held.
                              ARMs
                            Chase Portfolio
                            · Any Conventional ARM
                              (Jumbo or Conforming)
                            ChaseFlex
Non-Conforming              Non-Conforming            The pricing from the last     Expiration of last lock date
· Any Jumbo Program         · Any Jumbo Program       lock date is used.            is held.
Chase Portfolio             AGENCY                    Worst Case Pricing            If Worst Case is current
· Any Conventional ARM      · ALL Conforming                                        market - use current
  (Jumbo or Conforming)       Conventional Fixed                                    expiration date.
                            · ALL Balloons                                          If Worst Case is from last
                            · ALL Government Fixed                                  lock date - expiration of
                            · ALL Government                                        last lock date is held.
                              ARMs
                            Non-Conforming
                            · Any Jumbo Program
                            ChaseFlex
Chase Portfolio             Chase Portfolio           The pricing from the last     Expiration of last lock date
· Any Conventional ARM      · Any Conventional ARM    lock date is used.            is held.
  (Jumbo or Conforming)       (Jumbo or Conforming)
ChaseFlex                   AGENCY                    Worst Case Pricing            If Worst Case is current
                            · ALL Conforming                                        market - use current
                              Conventional Fixed                                    expiration date.
                            · ALL Balloons                                          If Worst Case is from last
                            · ALL Government Fixed                                  lock date - expiration of
                            · ALL Government                                        last lock date is held.
                              ARMs
                            Chase Portfolio
                            · Any Conventional ARM
                              (Jumbo or Conforming)
                            Non-Conforming
                            · Any Jumbo Program
                            ChaseFlex




July 2004                                                                                 Loan Registration – 9
Doing Business with Chase                                               Chase Correspondent Division



Product Exceptions


Requesting         Correspondents may request specific product and Credit Policy exceptions by
Exceptions         completing a Correspondent Product Exception Form and faxing the form to
                   the Registration Department. Product exception requests would include LTV,
                   CLTV, property types, and investor requirements.

                   All exceptions must include copies of the 1003, 1008, credit report, and LP or
                   DU approval, if applicable.

                   NOTES:
                   · The Correspondent will receive a faxed response within approximately
                     three business days.
                   · Correspondents may contact Sales for general clarification on related
                     polices and procedures.


File               The Registration Department will document product exception information in
Documentation      the origination system for pricing purposes; in addition, the Correspondent
                   must include a copy of the Product Exception in the file.




July 2004                                                                      Loan Registration – 10
Doing Business with Chase                                                  Chase Correspondent Division



Escrow Waivers


Escrow Waiver      Refer to the table below to review the escrow waiver policy based on the loan
Policy             product type.

                     Product Type                                 Policy
                    Government        Waiver of tax and/or hazard insurance escrows is not permitted
                                      on Government loans.
                    Conventional -    Escrow waivers may be waived as outlined below:
                    Agency
                                      · Eligible up to 90% LTV for tax and hazard insurance.
                                      · PMI must always be escrowed unless lump sum.
                                      · If LTV >80%, a Delegated, Contract, or Chase Underwriter
                                        must approve and document their approval on the approval
                                        document.
                                      · If any escrow account is established and flood insurance is
                                        required, flood must be escrowed.
                                      · Applicable escrow waiver adjustments must be applied.

                                      NOTE: A Product Exception is not required to request
                                               Underwriting approval for waiving escrows on an
                                               Agency loan with a LTV over 80%.
                    Preferred/Non-    Certain Preferred/ Non-Agency products permit escrow
                    Agency (Non-      waivers on loans with a LTV up to 90%. Refer to the
                    Conforming)       applicable product guide for escrow waiver criteria.

                    ChaseFlex

                   REFERENCE: For applicable premiums and restrictions, refer to the
                   Pricing Policy.


Flood              Under the National Flood Insurance Reform Act of 1994, flood insurance
Insurance          escrows may not be waived when an escrow account is established for the
                   payment of taxes, hazard insurance, mortgage insurance, assessments, or
                   other similar items. Exceptions to this policy are not permitted.


Correspondent’s    It is the Correspondent’s responsibility to advise Chase if the account will be
Responsibility     escrowed, either through the Registration Desk or ChaseLock. Should a
                   correspondent register the loan as an escrowed account and subsequently
                   submit a non-escrowed loan to funding, Chase’s funding department will
                   adjust the service release premium accordingly.

                                                                                 Continued on next page




July 2004                                                                        Loan Registration – 11
Doing Business with Chase                                              Chase Correspondent Division



Escrow Waivers, Continued


Non-Escrow         Chase co-ops are not subject to an escrow waiver adjustment. However,
Pricing            condos are subject to the applicable escrow waiver adjustments.
Adjustment
Exceptions


Escrow Waiver      Escrow Waiver adjustments vary based on the loan amount and the type(s) of
Adjustments        escrow account components waived (i.e., hazard only, taxes only, hazard and
                   taxes). Adjustments for escrow waivers are located on the rate sheet and SRP
                   schedule.


Funding            In addition to meeting standard funding requirements, all non-escrowed
Requirements       conventional loans must meet the following funding requirements:

                   · LTV must be lower than 90% for Agency or within the appropriate LTV
                     limitations as outlined in the appropriate Preferred Non-Agency product
                     rules.
                   · Escrow waiver letter must be included in closed package.
                   · Registration system must indicate escrows waived.
                   · SRP must be adjusted on Registration system, if applicable.
                   · HUD-1 (settlement statement) must not reflect reserves.

                   NOTE: Should any of the above requirements be incorrect or missing,
                   the loan will be suspended and may be subject to repricing.




July 2004                                                                    Loan Registration – 12
Doing Business with Chase                                                 Chase Correspondent Division



                                           Lock-Ins
Overview


Overview           This chapter of the Correspondent Lending Guide contains the policies and
                   procedures relating to the locking of loans.


In this Chapter    Use the following chart to locate the main topics in this chapter:

                                                 Topic                                  See Page
                    Lock Parameters                                                         2
                    Standard Lock Options                                                   3
                    Alternative Lock Option - Short Term                                    4
                    Alternative Lock Option - Extended Rate Lock Program                    5
                    Alternative Lock Option - Rate Cap Program                              8
                    Lock Extension Policy                                                  12
                    Re-Lock Policies                                                       13
                    Duplicate Loans                                                        15




July 2004                                                                                 Lock-Ins – 1
Doing Business with Chase                                               Chase Correspondent Division



Lock Parameters


Registration       The Registration Desk will accept calls between the hours of 8:30 a.m. and
Desk               6:30 p.m. eastern time.
Availability


Maximum            The maximum dollar volume of locked loans per day allowable per
Dollar Volume/     Correspondent is limited to $10,000,000 from approximately 10:30 a.m. until
Standard Locks     5:00 p.m. per applicable time zone. (Mandatory Bulk commitments are not
                   included in this total.)


Overnight          After 5:00 p.m. per applicable time zone, Chase will offer overnight price
Protection         protection for all New Applications, Float to Lock conversions, Re-locks, and
                   Modifications until 7:59 a.m. eastern time the next business day. All new
                   applications received after 7:59 a.m. eastern time will be subject to new
                   pricing.


Maximum            The Correspondent is limited to $2,000,000 in overnight lock protection.
Dollar Volume/
Overnight
Protection




July 2004                                                                               Lock-Ins – 2
Doing Business with Chase                                                   Chase Correspondent Division



Standard Lock Options


Lock Periods       Chase offers several standard lock options to the Correspondent. The
                   standard lock options are referred to as Best Effort pricing and include 15-,
                   30-, 45-, 60-, and 75-day lock periods.


Lock            Chase calculates the lock expiration by using the day of the lock as “Day
Expiration Date One.” When the initial lock expiration date falls on a weekend or holiday, the
                   registration system automatically advances the expiration date to the next
                   business day.

                   NOTE: Chase’s lock expiration is all-inclusive. The loan must be
                   delivered in fundable condition by the lock expiration date.


Web-Site           The following table identifies when loans may be registered and locked
Availability       through the Web site.

                       Type of Lock                              Time Available
                    New Applications       When new pricing becomes available, at approximately
                    and Float to Locks     10:30 a.m. eastern time, until 10:59 p.m. eastern time and
                                           1:01 a.m. eastern time until 7:59 a.m. eastern time the next
                                           business day, unless a Midday Pricing Change is issued.

                                           NOTES:
                                           · Correspondents will be unable to access the Web site
                                             between the hours of 11:00 p.m. eastern time and 1:01
                                             a.m. eastern time due to daily system updating.
                                           · If a Pricing Change is issued the new price is effective
                                             immediately.

                   NOTE: From 8:00 a.m. eastern time until the new pricing is posted,
                   Correspondents will be unable to access the Web site.




July 2004                                                                                   Lock-Ins – 3
Doing Business with Chase                                                   Chase Correspondent Division



Alternative Lock Option - Short Term


Description        The Short Term Lock option, or 8-Day Mandatory, is available for all
                   products.


Terms and          The 8-Day Mandatory Lock is priced daily as a differential in points above
Pricing            the 15-day lock stated on the rate sheet, however, the net price must not
                   exceed the caps for the program.

                   Example:

                                            If…                                      Then…
                    15-day price is 102.625 with a price cap of 103.000,   8-day price is 102.750.
                    15-day price is 103.000 with a price cap of 103.000,   8-day price is 103.000.


Delivery           Loans locked under the 8-Day Mandatory Lock program must be delivered to
                   Chase in fundable condition by the lock expiration date. If the loan is not
                   delivered within the 8-day lock period, it is only eligible to be re-locked for
                   15 days at the worst-case price.

                   NOTE: For additional information regarding relocks on the 8-Day
                   Mandatory, refer to the “Re-lock” section of this guide.




July 2004                                                                                   Lock-Ins – 4
Doing Business with Chase                                                 Chase Correspondent Division



Alternative Lock Option - Extended Rate Lock Program


Description        If extra time is needed to deliver a loan and to minimize the risk of rising
                   interest rates, Chase offers Extended Rate Lock options of 90, 120, 150, and
                   180 days for Conventional Conforming ARMs and Fixed Rate products. To
                   be eligible for an Extended Lock, the loan must meet the following criteria:

                        Feature                               Requirement
                    Products            Government and Conventional Fixed, Non-conforming Fixed,
                                        and Conventional Conforming ARMs.

                                        NOTE: Not all products are eligible. See the Rate Sheet or
                                        Product and Program Guide for restrictions.
                    Loan Amount         · Conforming and Non-conforming.
                                        · The closed loan amount may not increase or decrease by
                                          more than 5% of the loan amount at the time of lock in.
                    Purpose             Purchase (existing homes and new construction)
                    Occupancy           Owner-occupied
                    Property Types      Primary residence and secondary home

                   NOTE: The availability of the Extended Rate Lock program may be
                   restricted by Chase at anytime. Product switching is not allowed.


Terms and          As indicated in the table below, the Extended Rate Lock Program on
Pricing            Conventional Conforming ARMs and Fixed Rate products require a fixed
                   adjustment to the applicable product’s current 75-day lock option price and an
                   up-front fee equal to 1% of the loan amount.

                             Extended Rate Lock for Portfolio ARM and Fixed Rate Products
                                                  Price Adjustment to
                            Lock Option            the 75-Day Price           Up-front Fee
                              90-day                      .250                     1%
                              120-day                     .500                     1%
                              150-day                     .750                     1%
                              180-day                     1.00                     1%

                   NOTE: All fees are subject to change.

                                                                                Continued on next page




July 2004                                                                                 Lock-Ins – 5
Doing Business with Chase                                                    Chase Correspondent Division



Alternative Lock Option - Extended Rate Lock Program,
Continued



Pricing            Use the example below to identify how a price adjustment is applied for a
Example            loan locked in under the Extended Rate Lock Program.

                                         If…                                      Then…
                    5-year Conventional Conforming ARM            the price will be 100.500 with an
                    price is currently 101.00 for the 75-day lock additional 1% of the loan amount
                    option, and correspondent chooses to lock in due up-front.
                    under Extended Rate Lock Program for 120
                    days,


Up-Front Fee       · The Correspondent must deliver the up-front fee to Chase within 20
Payment              calendar days of the lock-in.
                   · Checks from borrowers are not acceptable. Funds must be remitted from
                     the Correspondent to Chase.
                   · The up-front fee check should be made payable to Chase Correspondent
                     Division and should be mailed via overnight mail to the following address:

                                   Chase Correspondent Division
                                   ATTN: Correspondent Registration Department
                                   10151 Deerwood Park Boulevard
                                   Building 300, 4th Floor
                                   Jacksonville, FL 32256

                   NOTE: If Chase does not receive the up-front fee, as outlined above,
                   Chase will cancel the loan on the 21st calendar day of the lock.


Up-Front Fee       Use the following chart to determine the factors that impact the application of
Application        the up-front fee.

                                          If…                        Then the entire up-front fee is…
                   the loan closes and is delivered to Chase in      credited at the time of funding.
                   fundable condition by the lock expiration,
                   credit is denied by Chase,                        refunded.
                   the loan does not close on or before the          forfeited.
                   extended rate lock expiration,
                   loan is not delivered in fundable condition by    forfeited.
                   the lock expiration,

                                                                                   Continued on next page




July 2004                                                                                    Lock-Ins – 6
Doing Business with Chase                                               Chase Correspondent Division



Alternative Lock Option - Extended Rate Lock Program,
Continued



Relocks and        Chase’s standard relocks and extensions policies that apply to the Extended
Extensions         Rate Lock Program, plus:

                   · Chase’s standard extension policies apply, and the up-front fee remains
                     refundable, when the loan is extended, provided the loan is received by
                     Chase in fundable condition by the lock expiration date.
                   · The up-front fee is forfeited when the loan is relocked.




July 2004                                                                               Lock-Ins – 7
Doing Business with Chase                                               Chase Correspondent Division



Alternative Lock Option - Rate Cap Program


Description        In addition to an extended lock period, Correspondents can also take
                   advantage of current market conditions when they are ready to close by using
                   the Rate Cap Program. This is the only program that offers a price protection
                   feature referred to as the Float Down Option. The available lock options for
                   this program are 90, 120, 180, 270, and 360 days. To be eligible for the Rate
                   Cap program, the loan must meet the following criteria:

                        Features                            Requirements
                    Products          Government and Conventional Fixed, Non-conforming Fixed,
                                      and Conventional Conforming ARMs.

                                      NOTE: Not all products are eligible. See the Rate Sheet or
                                      Product and Program Guide for restrictions.
                    Loan Amount       · Conforming and Non-conforming
                                      · The closed loan amount may not increase or decrease by
                                        more than 5% of the loan amount at the time of lock-in.
                    Purpose           Purchase (existing and new construction)
                    Occupancy         Primary Residence and Second Home
                    Property Type     All

                   NOTE: Chase has established limits with regard to the amount
                   outstanding under this program, therefore, the correspondent must
                   contact the registration desk to obtain information regarding availability.
                   Changes in rate and point are subject to current market pricing.

                                                                              Continued on next page




July 2004                                                                               Lock-Ins – 8
Doing Business with Chase                                                      Chase Correspondent Division



Alternative Lock Option - Rate Cap Program, Continued


Terms and          The Rate Cap program on Fixed Rate and Conventional Conforming ARM
Pricing            products provides four non-refundable up-front fee options and the fee
                   correlates to the rate adjustment to our 60-day price as detailed in the chart
                   below.

                              Rate Cap Program-for Portfolio ARM and Fixed Rate Products
                               Non-         Rate         Rate           Rate           Rate           Rate
                            refundable   Adjustmen   Adjustment     Adjustment     Adjustment     Adjustment
                   Option    Up-front     t for 90   for 120 days   for 180 days   for 270 days   for 360 days
                                Fee         days
                      A        .25%        .625%        .750%         1.250%         2.000%         2.625%
                      B        .50%        .375%        .625%         1.000%         1.500%         2.000%
                      C        .75%        .250%        .500%          .875%         1.375%         1.875%
                      D       1.00%        .125%        .375%          .750%         1.125%         1.750%


                   NOTE: All fees are subject to change.

                   EXAMPLE: Should a correspondent decide to pay a non-refundable up-
                   front fee of .25%, of the loan amount, on the 120-day Rate Cap option for
                   a 30-year fixed product, with the rate of 7.875, the cap price will derive
                   from the 60-day 7.125 rate.


Float Down         The Float Down option may be exercised during the 45 calendar-day period
Option -           immediately preceding the receipt of the closed loan package for funding,
Definition         using the current market 75-day price.

                                                                                       Continued on next page




July 2004                                                                                         Lock-Ins – 9
Doing Business with Chase                                                  Chase Correspondent Division



Alternative Lock Option - Rate Cap Program, Continued


Float Down         In the example below, the following information is used to exercise the float
Option -           down option when the loan was previously capped at a rate of 7.5.
Example

                   Cap Rate            7.500
                   Float Down          45 calendar-day period immediately preceding the receipt of
                   Availability        the closed loan package for funding.
                   Float Down Rate     7.500 or less (7.375,7.25,7.125…) depending on availability.
                   Float Down Lock     75 days or less.
                   Period
                   Float Down Price    current market 75-day price.
                   Float Down          45 days from date of float down or original capped rate
                   Expiration Date     expiration, whichever is shorter.


Up-Front Fee       · The Correspondent must deliver the up-front fee to Chase within 20
Payment              calendar days of the lock-in.
                   · Checks from borrowers are not acceptable. Funds must be remitted from
                     the Correspondent to Chase.
                   · The up-front fee check should be made payable to Chase Correspondent
                     Division and should be mailed via overnight mail to the following address:

                                         Chase Correspondent Division
                                         ATTN: Correspondent Registration Department
                                         10151 Deerwood Park Boulevard
                                         Building 300, 4th Floor
                                         Jacksonville, FL 32256

                   NOTE: If Chase does not receive the up-front fee, as outlined above,
                   Chase will cancel the loan on the 21st calendar day of the lock.

                                                                                 Continued on next page




July 2004                                                                                Lock-Ins – 10
Doing Business with Chase                                                    Chase Correspondent Division



Alternative Lock Option - Rate Cap Program, Continued


Up-Front Fee       Use the following chart to determine the factors that impact the application of
Application        the up-front fee.

                                          If…                        Then the entire up-front fee…
                   the loan is a Conventional Conforming ARM       will not be credited at the time of
                   product and is delivered to Chase in fundable   funding.
                   condition by the lock expiration,
                   the loan is a fixed rate product and is         will not be credited at the time of
                   delivered to Chase in fundable condition by     funding.
                   the lock expiration,
                   credit is denied by Chase or delegated          is refunded.
                   Correspondent,
                   Chase does receive the loan in fundable         is forfeited.
                   condition on or before the Rate Cap lock
                   expiration,


Relocks and        Chase’s relock and extension polices that apply to the Rate cap program are:
Extensions
                   · Chase’s standard extension policies apply.
                   · The loan can be relocked only after expiration, following Chase’s standard
                     relock policy.




July 2004                                                                                   Lock-Ins – 11
Doing Business with Chase                                                  Chase Correspondent Division



Lock Extension Policy


Extension          · A one-time lock extension may be granted on or before the lock expiration
Policy               date.
                   · To be eligible for the extension, the extension request must be faxed to
                     Chase no later than 5:00 p.m. eastern time on the day of lock expiration.
                   · The extension fees apply if the current market price is worse than the
                     original locked price. If the current market price is better than the original
                     locked price, there is no cost to extend.


Policy             · This policy applies to loans locked through the Registration Desk and
Application          ChaseLock.
                   · This policy applies to Best Effort locks only.
                   · This policy does not apply to loans delivered through our Mandatory Bulk
                     program in which pricing is negotiated through the Mandatory Trading
                     Desk.


Extension          The extension fees below apply if the current market price is worse than the
Pricing            original locked price. If the current market price is better than the original
                   locked price, there is no cost to extend.

                         Number of Days Extended                       Extension Fee
                    1-7 days                            1/8 point (.125%)
                    8-15 days                           1/4 point (.25%)
                    16-30 days                          1/2 point (.500%)
                    31+ days                            Not available. Treated as a re-lock.
                    NOTE: All fees are subject to change.


Exceptions         A loan initially locked through the Registration Department under the 8-day
                   mandatory lock does not qualify for an extension. If a fundable loan is not
                   delivered by the lock expiration date, the rate must be re-locked for 15 days
                   at the worst-case price..




July 2004                                                                                Lock-Ins – 12
Doing Business with Chase                                                  Chase Correspondent Division



Re-Lock Policies


Re-Locks -         · Any loan originally locked under the standard lock option can be re-locked
Prior to Lock        prior to expiration for an additional 15, 30, 45, 60, or 75 days at worst case
Expiration           pricing.
                   · The new expiration date is calculated from the date the loan is re-locked.

                   NOTE: Once a loan number is assigned, you must always keep the same
                   number unless the loan was canceled. If a loan is canceled, the loan
                   number cannot be reinstated.


Re-Locks -         · Any loan originally locked under the standard lock option that has been
After Lock           expired for less than 30 days can be re-locked for 15, 30, 45, 60, or 75 days
Expiration           at the worst-case price.
                   · The new expiration date is calculated from the date the loan is re-locked.


Re-Locks -         Loans expired for 30 days or more will be brought to current market and will
Loans Expired      retain the same loan number. The new expiration date is dependent upon the
More than 30       standard lock period selected at the time the loan is re-locked.
Days


Re-Locks -         If the loan does not close and/or cannot be delivered in fundable condition by
Short Term/8-      the expiration date, the loan must be re-locked for 15 days at the worst-case
Day Mandatory      price.


Maximum            A maximum of one re-lock is permitted per loan. Any additional re-locks
Number of          will be considered on an exception basis only.
Re-Locks

                                                                                 Continued on next page




July 2004                                                                                Lock-Ins – 13
Doing Business with Chase                                                Chase Correspondent Division



Re-Lock Policies, Continued


Re-pricing         Loans received with an expired lock are considered a request for re-lock.
Requirements       Therefore, upon identifying that the lock has expired, the Chase
                   Correspondent Division will automatically relock the loan for 15 days in
                   accordance with the existing re-lock policies.

                   NOTE: If Chase has received a loan in fundable condition by the lock
                   expiration and the lock expires before funding, Chase will re-lock the
                   loan without cost to the Correspondent.




July 2004                                                                              Lock-Ins – 14
Doing Business with Chase                                                   Chase Correspondent Division



Duplicate Loans


Description        It is important for Correspondents to maintain their pipeline to prevent
                   duplicate loans, or loans with more than one loan number. These loans may
                   be any combination of locks or loans cancelled less than 30 days.

                   Per Chase Home Finance policy a lock commitment is associated with one
                   specific physical address. If the subject property should change, the required
                   new loan will not be considered a duplicate lock.


Chase Policy       If it is determined that the loan has been registered twice, Chase will use the
                   following guidelines to determine which loan to cancel:

                              If…                                     Then the price…
                    two New Application Locks,      of the first lock will be honored and the second
                                                    will be removed from the origination system.
                    Lock and Loan cancelled less    And expiration of the first lock will be honored,
                    than 30 days,                   even if it is the one that was previously
                                                    cancelled.

                   NOTE: Loans that are registered then canceled on the same day will
                   automatically be removed from the origination system. However, if a
                   loan is registered and not canceled the same day, then issued another
                   loan number when resubmitted, the new number will be identified as a
                   duplicate.

                                                                                  Continued on next page




July 2004                                                                                  Lock-Ins – 15
Doing Business with Chase                                                Chase Correspondent Division



Duplicate Loans, Continued


Chase Loan         One loan number is assigned per registration. Should a loan be assigned a
Number             duplicate loan number, Chase will honor the first lock and any duplicates
                   will be canceled.

                   The loan number will remain the same when:

                   ·   A loan converts from a Float to Lock status.
                   ·   Relocks (includes relocks on loans expired over 30 days)
                   ·   Property Address Correction
                   ·   Loan Feature Changes
                   ·   Program Changes (if not denied by underwriting)

                   A new loan number will be assigned when:

                   · Property Address Change
                   · Original Program is Denied by Underwriting
                   · Original Loan is Canceled


Canceled Loans     Once canceled, a loan number cannot be reinstated. It is the Correspondent’s
                   responsibility to maintain their pipeline and cancel any loan that will not be
                   delivered to Chase. However, should an original loan be canceled in error by
                   Chase, the original pricing will be honored and will be assigned a new loan
                   number by Chase.




July 2004                                                                              Lock-Ins – 16
Doing Business with Chase                                                 Chase Correspondent Division



                                Processing Guidelines
Overview


Introduction       This section of the guide provides Chase specific requirements for processing
                   loans delivered to Chase for purchase. In addition to complying with the
                   policies listed herein, Correspondents must also process loans in accordance
                   with State/Federal and Agency guidelines.


In this Chapter    Use the following chart to locate the main topics in this chapter:

                                                 Topic                                  See Page
                    Processing                                                              1
                    Disclosures                                                             2
                    Credit Reports                                                          3
                    Credit Scores                                                           6
                    Appraiser Requirements                                                  8
                    General Appraisal Requirements                                         11
                    Specific Appraisal Requirements                                        16
                    Additional Processing Documentation Requirements                       18
                    Credit Insurance Policies                                              20
                    Property Damage - Prior to Submitting to Underwriting                  21




July 2004                                                                     Processing Guidelines – 1
Doing Business with Chase                                                 Chase Correspondent Division



Disclosures


Correspondent’s    It is the responsibility of the Correspondent to accurately prepare all
Responsibility     applicable disclosures and provide them to the borrower(s)/consumer(s), in
                   the manner prescribed and within the time frames prescribed by federal and
                   state laws and regulations.

                   Lenders who fail to meet these responsibilities are subjecting themselves to
                   possible fines and sanctions by federal and state regulatory agencies in
                   addition to possible civil and criminal liability through individual and class
                   action suits. In addition, a pattern of non-compliance will result in a
                   severance of our relationship.

                   NOTE: Chase does not provide legal advice regarding the acceptability
                   of specific disclosures. Correspondents should refer to their own legal
                   council/compliance department for regulatory advice.


ARM/               Every Adjustable or Balloon loan purchased by Chase must have a copy of
Balloon/LPMI       the appropriate program disclosure in the package. This disclosure must be
Loan               provided to the borrower(s) at the time of application. Additionally, any loan
Disclosures        delivered to Chase for purchase under the LPMI Program must contain a
                   signed disclosure describing LPMI terms and conditions.

                   NOTE: To order Chase specific Disclosures, Notes and Riders, fax the
                   completed Communication Request Form to (904) 620-6673.


Closed Loan        Chase requires that Correspondents provide copies of all applicable
Submission         disclosures in the closed loan package submitted to Chase for purchase.
Requirements       Failure to provide all disclosures, properly prepared, may result in our
                   inability to purchase a loan. Chase may withhold funding and/or the Service
                   Release Premium until corrected or missing documents have been received.




July 2004                                                                     Processing Guidelines – 2
Doing Business with Chase                                                  Chase Correspondent Division



Credit Reports


Chase              Chase requires that borrower’s current and past credit history be analyzed
Requirements       through the review of a credit bureau report prepared by an independent credit
                   reporting agency or credit reporting repository.


Types of Credit    Chase accepts three types of credit reports depending on the circumstances of
Reports            the mortgage request. The credit reports accepted by Chase are:

                   · Residential Mortgage Credit Reports (RMCR),
                   · In-file Reports/Merged In-File Reports, and
                   · Electronically obtained Credit Reports.


Electronic         Correspondents may obtain electronic credit bureau reports under the
Credit Reports     following conditions:

                            Type                               Requirements
                    Credit Bureau        Report must be obtained from one of the following Chase
                                         approved bureaus:

                                         · CBC,
                                         · Credco,
                                         · Equifax, and
                                         · TCN (the credit network).
                    Type of Report       Report must be a 3 bureau merged in-file report.


Non-               A Non-Traditional Mortgage Credit Report, prepared by the credit bureau, is
Traditional        required on all programs when the credit reporting agencies are unable to
Mortgage           develop a RMCR on a borrower. If the borrower indicates at time of
Credit Report      application that he/she has no credit or limited credit, information on non-
(NMCR)             traditional sources of credit must be obtained. Only credit arrangements that
                   require the borrower to make periodic payments on a regular basis should be
                   considered. The lender must order a RMCR; concurrently, the lender must
                   notify the bureau there may be insufficient repository information to develop
                   a RMCR (in-files or merged report, if allowed), and non-traditional credit
                   information is being provided. The credit bureau will develop a NMCR
                   based on these credit sources.

                   NOTE: Direct verifications obtained by the lender are not acceptable.

                                                                                 Continued on next page




July 2004                                                                      Processing Guidelines – 3
Doing Business with Chase                                                Chase Correspondent Division



Credit Reports, Continued


Automated          The credit report requirements for automated underwritten loans vary based
Underwritten       on agency/AU system. The following chart identifies Chase’s credit report
Loans              requirements on automated underwritten loans.

                        Agency        Type of Report Required           Chase Requirements
                    Fannie Mae/DU    3-File Merged Report        A copy of the credit report used
                                                                 by DU to make the
                                                                 recommendation must be
                                                                 included in the closed loan
                                                                 package.
                    Freddie Mac/LP   3-File Merged Report        A copy of the credit report used
                                                                 to reconcile the feedback
                                                                 certification data must be
                                                                 included in the closed loan
                                                                 package. However, if the
                                                                 Feedback Certificate indicates a
                                                                 “Caution” credit risk class due to
                                                                 a credit issue, the LP generated
                                                                 report must be included in the
                                                                 file.

                   NOTE: If a RMCR or any other traditional credit report was obtained
                   to overturn derogatory credit findings, the report must also be included
                   in the closed loan package.


Manually           Refer to the “Credit Policy” section of this guide for detailed information
Underwritten       regarding the types of credit reports required on manually underwritten loans.
Loans

                                                                               Continued on next page




July 2004                                                                    Processing Guidelines – 4
Doing Business with Chase                                                 Chase Correspondent Division



Credit Reports, Continued


In-file Credit     The previous requirement for an in-file credit report for all products is waived
Reports            for delegated and non-delegated loans, when the following conditions are
                   met:

                   Manually Underwritten Loans
                   The submitted Credit Report contains a Fraud Alert.

                   Automated Underwritten (AU) Loans
                   The Correspondent delivers an AU approved loan from ZiPPY, DU, or LP
                   and Chase is assured that Fannie Mae or Freddie Mac accepts the Credit
                   Reports that was used for the AU approval, and the Credit Report utilized a
                   Fraud Alert.

                   NOTE: Any file that doesn’t meet the above criteria will continue to
                   require an In-file Credit Report that contains a Fraud Alert.




July 2004                                                                     Processing Guidelines – 5
Doing Business with Chase                                                Chase Correspondent Division



Credit Scores


Chase              Credit risk scores must be requested for each borrower, whether the borrower
Requirements       is employed or not. A credit risk score must be obtained from each
                   repository used in the compilation of the credit report data, regardless of
                   the type of credit report obtained.


Selecting the      · A single “representative” score for each borrower must be selected from the
Appropriate          scores reported on the submitted report(s), based on the following
Score for Each       guidelines. The selected score then determines the level of review required.
Borrower             Refer to the “Underwriting” chapter located within the “Credit Policy”
                     section of this guide.
                   · The above procedure should be supplemented with a Chase-generated in-
                     file report obtained in accordance with approved procedures. Develop the
                     score from the submitted report based on the foregoing guidelines. The
                     reviewer must compare the submitted report and the in-file for any notable
                     discrepancies and resolve issues associated with those discrepancies. In the
                     event a discrepancy cannot be resolved, the lesser of the credit scores will
                     be used from the Chase in-file and the submitted report. If the in-file
                     (Chase generated) credit risk score is used under these circumstances, the
                     reviewer must make a comment on the approval document as to why that
                     credit score was used in place of submitted credit report.

                    If the number of credit risk scores reported is…          Then use…
                                         three,                      the middle score.
                                          two,                       the lower score.
                                          one,                       that score.


Selecting the      If there are multiple borrowers, the borrower who has the lowest score will be
Appropriate        used to determine the level of review.
Score for
Multi-             EXAMPLE: In the example below, Borrower B’s score of 710 would be
Borrower           used as it is the lowest of all scores.

                                       Borrower A               Borrower B
                                          720                      710
                                          740                      730

                                                                               Continued on next page




July 2004                                                                    Processing Guidelines – 6
Doing Business with Chase                                                     Chase Correspondent Division



Credit Scores, Continued


Selecting the      NOTE: If the Correspondent has delegated authority from Chase, the
Appropriate        Correspondent must generate an in-file report under the same
Score of Multi-    procedures as outlined in this section.
Borrower
(continued)


“Insufficient”     Use the following chart to determine the credit score on a loan in which a
Credit Scores      credit report indicates “insufficient data” to determine the score.

                                  If…                                       Then…
                    a single repository is not able   use the lower of the two scores.
                    to develop a score,
                    a borrower does not have a        use zero as the selected score.
                    score with any of the
                    repositories,                     NOTE: The scored borrower’s score will
                                                      offset the zero, except for products that
                                                      required a minimum score. In those
                                                      instances, the score will be zero (i.e., two
                                                      borrowers, one with score of zero- zero will be
                                                      the score for underwriting purposes).




July 2004                                                                          Processing Guidelines – 7
Doing Business with Chase                                                    Chase Correspondent Division



Appraiser Requirements


Correspondent’s    All Correspondents are required to ensure that appraisers are meeting Chase’s
Responsibility     Fair Lending Policy as shown on page 4 of the “Credit Policy” section of the
                   Correspondent Lending Guide. It is against Chase policy to discriminate
                   against applicants based on race, sex, sexual orientation, color, national
                   origin, religion, age, marital status, disability, or any other prohibited basis.


Appraiser          Chase allows Correspondents to use their own Approved Appraiser List for
Requirements       transactions up to $1,5000,000, provided that the Appraiser is not listed on
                   the Chase Review Appraiser List and the Appraiser meets the following
                   accreditation criteria. Provisional Appraisers or Appraisal Trainees are not
                   permitted to perform appraisals for Chase. A Supervisory Appraiser must
                   countersign the Appraisal Report and provide an interior inspection of the
                   subject property.

                           Loan Amount                                Requirements
                    Less than $500,000 Non-      ·   Appraiser must be state licensed in accordance
                    Complex Transactions             with FIRREA.
                                                 ·   Property must be physically inspected by state
                                                     licensed appraiser.
                                                 ·   Complete license number and license designation
                                                     of appraiser must be reflected on appraisal report.
                    $500,001 ≤ $1,000,000        ·   Appraiser must hold a certified residential license
                                                     in accordance with FIRREA.
                                                 ·   Property must be physically inspected by certified
                                                     residential appraiser.
                                                 ·   Complete license number and license designation
                                                     of appraiser must be reflected on appraisal report.

                                                                                    Continued on next page




July 2004                                                                        Processing Guidelines – 8
Doing Business with Chase                                                  Chase Correspondent Division



Appraiser Requirements, Continued


Appraiser Requirements (continued)

                           Loan Amount                             Requirements
                    > $1,000,000 and less than   · The appraiser must hold a certified general license
                    $1,500,000,                    in accordance with FIRREA.
                                                 · The Correspondent must use one of the following
                                                   options:

                                                 Option 1
                                                 · Correspondent selects an appraiser based on their
                                                   own selection criteria, and
                                                 · Orders a Field Review from either an appraiser on
                                                   the Chase-approved Appraiser List or one of the
                                                   following National Service Providers:
                                                   · Lenders Service, Inc. (LSI)
                                                   · First American Appraisal Services/e-
                                                     AppraiseIT
                                                   · ATM
                                                   · Express Financial Services

                                                 Option 2
                                                 · Correspondent contacts Chase to obtain a Chase-
                                                   approved appraiser from the Chase-approved
                                                   Appraiser List.
                    Equal to or greater than     Contact Chase to obtain a Chase-approved appraiser
                    $1,500,000,                  from the Chase-approved Appraiser List.

                   NOTE: As always, if the specific Product Guide sets forth differing
                   requirements, it will supercede the above thresholds.


Review             Chase maintains a Review Appraiser Master List comprised of Appraisers
Appraiser          with noted deficiencies. Monthly updates to the list are provided monthly via
Master List        Correspondent Bulletins.

                   Appraisers identified on the list are not permitted to perform an appraisal on
                   properties valued at greater than $750,000. If an appraiser, on the list,
                   performs an appraisal on a property valued at greater than $750,000, a Field
                   Review must be obtained by the Correspondent prior to submitting the loan to
                   Chase for purchase.

                                                                                 Continued on next page




July 2004                                                                      Processing Guidelines – 9
Doing Business with Chase                                               Chase Correspondent Division



Appraiser Requirements, Continued


Removal From       Appraisers may be eligible for removal from review status when five
Review Status      consecutive acceptable field reviews, completed by Chase approved
                   appraisers, are noted by Appraiser Panel Management. If a change in status is
                   deemed warranted, the appraiser’s Chase-designation will typically revert to
                   the status in effect prior to Review status.

                   NOTE: To be considered for removal from the Review Status List,
                   copies of the Appraisal and subsequent Field Review should be
                   forwarded to the Sales Support Group. They will facilitate delivery of
                   the documents to the Appraiser Panel Management Group.




July 2004                                                                 Processing Guidelines – 10
Doing Business with Chase                                                    Chase Correspondent Division



General Appraisal Requirements


Field Review       · Delegated Correspondents are responsible for ordering the Field Review
                     Appraisal.
                   · Field Review Appraisals must be performed by someone other than the
                     original appraiser and are at the Correspondent’s expense.
                   · Reviews can be ordered from one of the following National Service
                     Providers or the Correspondent can contact the Regional Sales Assistant to
                     determine if an appraiser is on Chase’s approved list.
                     · Express Financial Services
                     · ATM
                     · e-AppraiseIT/First American Appraisal Services
                     · Lender Services, Inc. (LSI)


Appraisals/        Both DU and LP allow for streamlined property appraisal and review
Automated          processes based on the specific property and loan parameters. Although the
Underwritten       Uniform Residential Appraisal Report (Form 70/1004) is acceptable to both
Loans              agencies and Fannie Mae Form 2055 is acceptable to Freddie Mac, Fannie
                   Mae does not accept Freddie Mac appraisal forms. The following chart
                   outlines the streamline appraisal documents that may be listed on the DU
                   Findings Report or LP Feedback Certificate and identifies the applicable
                   required exhibits.

                        Agency           Appraisal Type                   Required Exhibits
                    Fannie Mae       Fannie Mae Form          ·   Street map that shows the location of
                    (DU)             2075, 2055, and 2065 -       the subject property.
                                     Exterior Only            ·   Photograph that shows the front
                                     Inspection                   scene of the subject property.
                                     Fannie Mae Form 2055     ·   Street map that shows the location of
                                     Interior and Exterior        the subject property.
                                     Inspection               ·   An exterior building sketch of the
                                                                  improvements.
                                                              ·   Photograph that shows the front, the
                                                                  rear, and the street scene of the
                                                                  subject property.
                                                              ·   Photographs that show the front of
                                                                  each comparable sale.

                                                                                   Continued on next page




July 2004                                                                      Processing Guidelines – 11
Doing Business with Chase                                                Chase Correspondent Division



General Appraisal Requirements, Continued


Appraisals/Automated Underwritten Loans (continued)

                         Agency      Appraisal Type                   Required Exhibits
                    Freddie Mac   Freddie Mac Form        ·   Location map of subject property.
                    (LP)          2070 and 2075 -         ·   Location map of comparable
                                  Exterior Only               properties.
                                  Inspection              ·   Photographs that show the front
                                                              scene of the subject property.
                                  Freddie Mac/Fannie      ·   Location map of subject property.
                                  Mae Form 2055           ·   Location map of comparable
                                  Exterior Only               properties.
                                  Inspection              ·   Photographs that show the front
                                                              scene of the subject property.
                                  Freddie Mac Form        ·   Location map of subject property.
                                  2070 Interior and       ·   Building sketch.
                                  Exterior Inspection     ·   Photographs that show the front
                                                              view street scene and rear view of
                                                              the subject property.
                                  Freddie Mac/Fannie      ·   Location map of subject property.
                                  Mae Form 2055           ·   Location map of comparable
                                  Interior and Exterior       properties.
                                  Inspection              ·   Building sketch.
                                  Freddie Mac Form        ·   Photographs that show the front
                                  70/1004 or 465/1072 -       view street scene and rear view of
                                  Condominiums                the subject property.
                                  Freddie Mac Form        ·   Photographs of comparable
                                  72/1025 - 2-4 Unit          properties.
                                  Properties

                                                                               Continued on next page




July 2004                                                                  Processing Guidelines – 12
Doing Business with Chase                                                     Chase Correspondent Division



General Appraisal Requirements, Continued


DU Appraisal       As indicated above, Correspondents may obtain the streamline appraisal listed
Upgrade            on the DU Findings Report. However, under certain circumstances, lenders
Requirements       are required to upgrade the property documentation to the next higher level.
                   Use the following chart to determine if an upgraded appraisal is required.

                       If the original DU                                     Then the appraiser must
                     appraisal requirement       and one of the following      upgrade the property
                            was an…                   conditions is…              inspection to…
                    exterior-only property     property does not conform      Form 2065 or Form 2055.
                    inspection on Form         to the neighborhood, or
                    2075,                      Adverse physical
                                               deficiencies or conditions
                                               were observed,
                    exterior-only inspection   inspection of the property     an interior and exterior
                    on Form 2065 or 2055,      and available data sources     inspection on Form 2065
                                               does not provide sufficient    or 2055 or a URAR.
                                               information about the
                                               property to perform the
                                               appraisal,


LP Appraisal       Although Correspondents may elect to obtain only the minimum
Upgrade            documentation required, the lender may require the appraiser to provide
Requirements       additional documentation for any reason. In addition, lenders are required to
                   upgrade the property documentation to the next higher level under the
                   following circumstances:

                       If the original LP                                     Then the appraiser must
                     appraisal requirement       and one of the following       upgrade the property
                            was an…                    conditions…                inspection to an…
                    exterior-only property     the appraiser cannot           Interior/Exterior
                    inspection on Form         adequately view the            inspection on Form 2070.
                    2070,                      property from the street,
                    Exterior-only property     condition or marketability     Interior/Exterior
                    inspection on Form         issues with the property are   inspection on Form 2055.
                    2070,                      identified during the
                                               inspection,

                                                                                    Continued on next page




July 2004                                                                       Processing Guidelines – 13
Doing Business with Chase                                                     Chase Correspondent Division



General Appraisal Requirements, Continued


LP Appraisal Upgrade Requirements (continued)

                       If the original LP                                     Then the appraiser must
                     appraisal requirement       and one of the following       upgrade the property
                            was an…                    conditions…                inspection to an…
                    exterior-only inspection   condition or marketability     Interior/Exterior
                    on Fannie Mae Form         issues with the property are   inspection on Form 2055
                    2075,                      identified during the          or URAR.
                                               inspection,
                                                                              NOTE: Fannie Mae
                                                                              upgrade rules also
                                                                              apply.
                    interior/exterior          the appraiser identifies       Interior/Exterior
                    inspection on Form         conditions or marketability    inspection on Form 2055.
                    2070,                      issues with the property
                                               during the inspection,
                    exterior-only inspection   · the appraiser has            An Interior/Exterior
                    on Form 2055,                insufficient information     inspection on Form 2055.
                                                 from a third-party data
                                                 source, or
                                               · the appraiser is unable to
                                                 reconcile significant
                                                 discrepancies from
                                                 available data sources, or
                                               · the appraiser’s exterior
                                                 appraisal does not
                                                 provide sufficient
                                                 information to develop a
                                                 reliable appraisal, or
                                               · the property is new
                                                 construction or
                                                 undergoing renovation or
                                                 Rehabilitation, or
                                               · the appraiser observes
                                                 apparent physical
                                                 deficiencies or adverse
                                                 property conditions
                                                 and/or data sources
                                                 indicate the same,

                                                                                    Continued on next page




July 2004                                                                       Processing Guidelines – 14
Doing Business with Chase                                               Chase Correspondent Division



General Appraisal Requirements, Continued


Closed Loan        The following appraisal documents must be provided in the closed loan file
Delivery File      delivered to Chase for purchase:
Requirements

                                If…                                    Then…
                    manually underwritten,       · Completed DU/LP Specified appraisal and
                                                   applicable addendum
                                                 · Floor Plan
                                                 · Location Map
                                                 · Photos and front elevation (if applicable).
                    underwritten through an      · Completed appraisal and applicable addendum
                    automated underwriting       · Photos and front elevation (if applicable).
                    system,

                   NOTE: The appraiser’s state license number and census tract number
                   must be on the appraisal. In addition, the mortgagor name(s), property
                   address, and legal description listed on the appraisal must match the
                   Security Instrument and title policy.




July 2004                                                                 Processing Guidelines – 15
Doing Business with Chase                                                 Chase Correspondent Division



Specific Appraisal Requirements


Appraisals on      Although the credit risk on 3-4 unit properties may be evaluated through LP
3-4 Unit           or DU, the property must be evaluated by Chase’s Underwriting department
Properties         prior to funding.


Manually           Refer to the “Collateral” chapter, located within the “Credit Policy” section of
Underwritten       this guide, for detailed information regarding Chase’s appraisal requirements
Loans              on manually underwritten loans.


Monroe             The following Mandatory Appraisal Review policy applies to conventional
County, PA         and FHA loans with properties located in Monroe County, PA:
Loans
                   · All appraisal assignments, both purchase and refinance, for properties
                     located in Monroe County, PA must be ordered through Lender’s Service,
                     Inc, (LSI).
                   · A full appraisal (URAR/1004) is required from LSI. The 2075, 2055 or any
                     form of automated valuation is not permitted.
                   · If the appraisal is not ordered through LSI, the original appraisal must be
                     forwarded to LSI for pre-closing field review.
                     NOTE: To provide better service, it is preferable that LSI is utilized
                     for the initial appraisal assignment, eliminating the need for further
                     field review.
                   · Chase underwriting and delegated underwriting is allowed. However,
                     contract underwriting is not permitted.
                     NOTE: Contract underwriters will be advised that any loans received
                     for properties in Monroe County must be forwarded to Chase
                     Underwriting.
                   · The underwriter must condition for the field review requirement when LSI
                     does not perform the initial appraisal.
                   · All LSI assignments for appraisals or reviews must be directed to Brian
                     McSheehy at LSI. Brian’s telephone is 800-392-6396 and fax is (877) 258-
                     1462. All orders must contain a reference number of CHPA.

                   NOTE: To establish an account with LSI, contact Brain McSheehy by
                   telephone at 1-800-392-6396 or by fax at (877) 258-1462.

                                                                                Continued on next page




July 2004                                                                   Processing Guidelines – 16
Doing Business with Chase                                                Chase Correspondent Division



Specific Appraisal Requirements, Continued


Monroe             All conventional and FHA loans with properties in Monroe County, PA,
County, PA         received without a LSI appraisal, will be suspended until a review appraisal
Loans Without      from LSI is received.
an LSI
Appraisal




July 2004                                                                  Processing Guidelines – 17
Doing Business with Chase                                                 Chase Correspondent Division



Additional Processing Documentation Requirements


Initial 1003       Chase requires an initial credit application (initial 1003) on all borrowers with
                   the exception of those applying for VA IRRL and FHA streamline loans.
                   This application serves as the borrower’s financial statement and provides
                   statistical information. The initial 1003 may be:

                   · signed,
                   · signed electronically, or
                   · unsigned


Final 1003         Additionally, once all the information stated by the borrower on the initial
                   application is received and/or verified, Chase requires a final credit
                   application (final 1003), signed and dated by the borrower, at or prior to
                   closing.

                   NOTE: The signature may NOT be electronic.


Regulation C       The borrower is not obligated to complete the Missing Government
                   Monitoring section of the 1003. However, it is mandatory that the
                   government monitoring information be completed on all files delivered to
                   Chase.

                   A completed Regulation C, Missing Government Monitoring Information
                   form, will be required prior to funding a file that contains incomplete
                   government monitoring information.


Interviewer’s      All of the “Interviewer’s” information blocks must be completed on the Initial
Data               and Final 1003. However, the Interviewer is not required to sign the Initial or
                   Final 1003.


Termite            Chase does not make any specific additional requirements concerning
Inspections        termites or other wood-infesting insects. However, lenders must comply with
                   those requirements placed on them by their HUD/VA regional office,
                   underwriter, or appraiser.

                                                                                Continued on next page




July 2004                                                                    Processing Guidelines – 18
Doing Business with Chase                                                Chase Correspondent Division



Additional Processing Documentation Requirements, Continued


Income/Asset       Manually Underwritten Loans
Verifications      The income and asset documentation required varies from transaction to
                   transaction. To determine the income and asset verification documentation
                   required on a specific type of transaction refer to the “Underwriting” Chapter
                   within the “Credit Policy” section of this guide.

                   Automated Underwritten Loans
                   The Fannie Mae Findings Report and LP Feedback Certificate identifies the
                   required income and asset verification documents.

                   The income and asset verification documents obtained on loans underwritten
                   through an automated underwriting system should match the documentation
                   requirements specified on the Finding Report/ LP Certificate, unless upgraded
                   by the underwriter.




July 2004                                                                  Processing Guidelines – 19
Doing Business with Chase                                                Chase Correspondent Division



Credit Insurance Policies


Acceptable         Chase will allow the following types of credit insurance provided the
Policies           premium is separately calculated, earned or paid on a monthly or other
                   periodic basis:

                   · credit life,
                   · disability,
                   · unemployment, or
                   · property insurance.


Single             · Chase Correspondent Division will not purchase any loan in which a
Premium -            prepaid single-premium credit life, credit disability, credit unemployment,
Chase’s Policy       or credit property insurance policy was obtained in connection with the
                     origination of the mortgage.
                   · This policy applies regardless of whether the premium is financed or is paid
                     by the borrower’s own funds.




July 2004                                                                  Processing Guidelines – 20
Doing Business with Chase                                                    Chase Correspondent Division



Property Damage - Prior to Submitting to Underwriting


Chase Policy       Any property that lies within a Federal Disaster Area that was appraised prior
                   to the occurrence of the natural disaster will require a drive-by inspection
                   prior to closing and funding.


When does this     · This policy applies when a natural disaster such as a hurricane, earthquake,
Policy apply?        tornado, or extensive flooding occurs and there is damage to residential
                     properties in the area.
                   · If an appraisal is performed on a property prior to the closing, and shipping
                     to Chase occurs subsequent to the natural disaster, then the lender must be
                     able to provide evidence that the property is in marketable condition.


Conventional       Use the following chart to determine the acceptable evidence of marketable
Loans -            condition for conventional loans:
Acceptable
Evidence

                        If the property…              Then Acceptable Evidence would be…
                    did not sustain damage,   · Property inspection by appraiser, certified inspector,
                                                or lender representative.
                                              · If lender performs inspection, then the certification
                                                must be on corporate letterhead and signed by an
                                                officer of the company.
                    sustained damage,         · Re-inspection and re-certification performed by the
                                                appraiser after the damage has been repaired.

                                              NOTE: Chase will not fund the loan until the
                                              damages have been repaired and the appraiser
                                              certifies that the property is now in marketable
                                              condition.

                                                                                   Continued on next page




July 2004                                                                       Processing Guidelines – 21
Doing Business with Chase                                                 Chase Correspondent Division



Property Damage - Prior to Submitting to Underwriting,
Continued



FHA/VA             Correspondents should follow the policies and procedures established by the
Loans -            government agencies and/or local FHA/VA offices.
Acceptable
Evidence


Federally          It is the lender’s responsibility to be aware of natural disasters occurring in
Declared           their lending area. A good resource for this information is FEMA’s Web site
Disaster Area      (www.fema.com), which maintains an up-to-date list of Federally Declared
Resources          Disaster Areas.




July 2004                                                                   Processing Guidelines – 22
Doing Business with Chase                                                 Chase Correspondent Division



                            Chase Underwriting Programs
Overview


Introduction       Chase offers a variety of underwriting options designed to best meet our
                   Correspondents’ needs. These options include automated and manual
                   underwriting methods. In this chapter we will discuss the available
                   underwriting methods and their applicable policies and procedures.


In this Chapter    Use the following chart to locate the main topics covered in this chapter.

                                               Topic                                    See Page
                    General Underwriting Policies                                           4
                    Chase Underwriting - Standard Underwriting Program                      7
                    Chase Underwriting - DOCUFAX Program                                   12
                    CHOICE Contract MI Underwriting Program                                14
                    Automated Underwriting General Policies                                19
                    Accessing LPI or DO/Web                                                26
                    LPI Sign-up Procedures                                                 27
                    Assigning LPI Loans                                                    29
                    DO on the Web Sign-up Procedures                                       30
                    Getting Help on AU Issues                                              33
                    Choice AU Expressway                                                   34
                    TPO Requirements for LP Submissions via AU Link                        36


Correspondent      The Correspondent is responsible for ensuring that all loans submitted to
Responsibility     Chase for purchase have been underwritten in accordance with Chase,
                   Agency, State, and Federal guidelines and restrictions.

                                                                                Continued on next page




July 2004                                                              Chase Underwriting Programs –1
Doing Business with Chase                                                 Chase Correspondent Division



Overview, Continued


HMDA               It is mandatory that the government monitoring information on the 1003 be
Requirements       completed on all files delivered to Chase and that the interviewer completes
                   the interviewer’s data on the application.

                    In addition, to determine if the race and gender information is required, the
                   “Method Application Taken” block must be completed.


Standard           Regardless of the method of underwriting selected, the following standard
Closing            closing conditions must be met on all loan files delivered to Chase for
Conditions         purchase:

                   · Final 1003 must be executed (original signatures of all borrowers) and
                     must be in the closed loan file,
                   · Good Faith Estimate and Final Truth-in-Lending Statement must be
                     executed in accordance with regulatory guidelines and must be in the loan
                     file,
                   · Right of Rescission must be executed and placed in the closed loan file on
                     primary residence, refinance transactions only,
                   · Seller contributions may not exceed product limits, and
                   · Proper mortgage insurance coverage must be obtained (when required).


Pre-approved       Chase offers pre-approval of mortgage loan requests to borrowers who have
Borrowers          not offered a contract to purchase. This program is generally available to all
                   borrowers who make application prior to identifying the collateral to be
                   purchased under the following circumstances:

                   · With the understanding that this program is available for owner-occupied
                     primary and secondary residences, these loans may be underwritten for all
                     approved programs.
                   · Available for purchase money first mortgages only.
                   · We must be in receipt of all required financial information on the borrower,
                     including tax returns, financial statement, and credit report prior to pre-
                     approval.
                   · All approvals must carry a maximum LTV, maximum purchase price, and a
                     maximum commitment amount.

                                                                                Continued on next page




July 2004                                                              Chase Underwriting Programs –2
Doing Business with Chase                                                 Chase Correspondent Division



Overview, Continued


Pre-approved       · All notifications to customers must be in the form of “proposal letters” or
Borrowers            commitment letter riders approved by Chase Legal which contain suitable
(continued)          protective wording to allow the Correspondent to cancel the prospective
                     commitment should the eventual collateral or appraisal prove unacceptable.
                   · Upon identification of the collateral:
                     · The revised approval document with the identified collateral should be
                       initialed by the underwriter for collateral suitability and acceptance. Any
                       concerns should be discussed with the approving individual.
                     · Upon satisfactory review, a regular commitment letter specifying the
                       property is to be issued to the customer.

Product Guides     The available methods of underwriting vary based on the Correspondent’s
                   approval authority level, the product type, program type, and credit score. In
                   addition, certain restrictions and limitations may apply to particular
                   underwriting methods, programs, and products. Therefore, Correspondents
                   are encouraged to use the appropriate product guides when determining
                   which underwriting methods are acceptable for which products and
                   programs. The “Automated Underwriting” and “Submissions” sections of
                   the product guides provide the available methods and any restrictions that
                   may apply.


Billing            All Correspondents are responsible for fees incurred for underwriting
                   expense. These fees may include:

                                Fee Description                          Billing Method
                    Chase Underwriting                        Chase Net Funded
                    CHOICE AU Administrative Fee              Chase Net Funded
                    CHOICE AU Underwriting Fee                Billed by MI Company
                    LP, LPI, DU, DO-Web, Submission Fees      Billed by Applicable Agency

                   NOTE: Chase Choice AU Expressway has been approved as a Single
                   Lender Experience Web site, allowing Correspondents to continue
                   submitting loans to DU without being charged the $15 multi lender fee.




July 2004                                                              Chase Underwriting Programs –3
Doing Business with Chase                                               Chase Correspondent Division



General Underwriting Policies


Introduction       Chase’s underwriting policies ensure all loans sold to Chase are underwritten
                   to the same standards; bear an acceptable level of risk and are of investment
                   quality. Correspondents are encouraged to review the policies outlined in
                   this section to avoid potential funding delays.


Manually           · Certain products may be underwritten manually. Refer to the appropriate
Underwritten         product guide to make this determination.
Loans              · All loans manually underwritten (Delegated, CHOICE, or Chase) must be
                     underwritten in accordance with Agency Guidelines, Agency Enhancement
                     Tables, Chase Credit Policy, and Product/Program Guidelines.
                   · Manually underwritten loans are only eligible for standard terms and are
                     not eligible for any “enhanced” products or programs such as those noted
                     on the “Agency Enhancement Tables.”
                   · In cases where a delegated Correspondent submits a loan to Chase for
                     Underwriting, Chase acknowledges that the delegated Correspondent has
                     chosen not to exercise their delegated authority.

                   NOTE: This is the only case in which a delegated Correspondent would
                   not take full ownership and responsibility for a loan.


Delegated          Correspondent’s Responsibilities
Underwritten       · All loans underwritten by delegated Correspondents must be underwritten
Loans                in accordance with Agency Guidelines, Agency Enhancement Tables,
                     Chase Credit Policy, and Product/Program Guidelines.
                   · Correspondents receiving delegated underwriting approval are provided
                     with an option whether or not to exercise their delegated authority.
                   · When a Correspondent chooses to have an underwriter, other than Chase,
                     underwrite a loan, the Correspondent contracts, reps, and warrants apply on
                     the loan and the Correspondent is held accountable for the quality of the
                     delegated loans sold to Chase.

                                                                              Continued on next page




July 2004                                                             Chase Underwriting Programs –4
Doing Business with Chase                                                        Chase Correspondent Division



General Underwriting Policies, Continued


Delegated          Underwriter Qualifications
Underwritten       · Individual underwriters designated by the Correspondent to underwrite
Loans                conventional loans for sale to Chase should exhibit an acceptable level of
(continued)          underwriting experience to support the additional warranties associated with
                     the authority being granted.
                   · To be considered as qualified, Chase recommends that each underwriter
                     exhibit a minimum of five years recent underwriting experience as
                     evidenced by a current resume.


Acceptable         Use the chart below to determine the underwriting methods acceptable for
Underwriting       each loan type.
Methods by
Loan Type

    Loan Type/
    Parameter                                      Underwriting Requirements
Agency Loans                All conventional conforming agency loans eligible for automated underwriting
                            must be underwritten via either Fannie Mae’s Desktop Underwriter (DU) or
                            Freddie Mac’s Loan Prospector (LP).
Caution or Refer with       Conventional agency loans receiving a “Caution” (LP) or “Refer with
Caution                     Caution” (DU) recommendation must be underwritten and validated in
                            accordance with the chart below.

                                     If the         And the credit           Then the loan must be
                              recommendation is…      score is…         underwritten and validated by….
                              DU- Refer w/Caution, Less than 680,      Chase underwriting.
                              DU- Refer w/Caution, 680 or greater,     · Chase Underwriting or
                                                                       · CHOICE MI Contract
                                                                         Underwriter.
                              LP-Caution,            less than 680,    Chase Underwriting.
                              LP-Caution,            680 or greater,   · Chase Underwriting or
                                                                       · CHOICE MI Contract
                                                                         Underwriter.

Freddie A Minus or          Not eligible for purchase.
Fannie Expanded
Approval

                                                                                       Continued on next page




July 2004                                                                     Chase Underwriting Programs –5
Doing Business with Chase                                                     Chase Correspondent Division



General Underwriting Policies, Continued

Acceptable Underwriting Methods by Loan Type (continued)

    Loan Type/
     Parameter                                       Underwriting Requirements
<620 Credit Score           Preferred Non-Agency Loans, ChaseFlex 7/1 ARMs, and Liquid Express
                            All loans with credit scores <620 must be approved by Chase’s Underwriting
                            Manager, unless the loan is a conforming loan approved by an automated
                            underwriting system (LP or DU).

                            Agency Loans
                            · Conventional loans with credit score <620 receiving an “Approve” or
                              “Accept” recommendation must be validated by:
                              · Chase Underwriting, or
                              · CHOICE MI Contract Underwriting.
                            · Conventional loans with credit score <620 receiving a “Refer”
                              recommendation must be validated by Chase Underwriting only.
FHA/VA Loans                · Loans must be underwritten/validated by a
                              · Direct Endorsement (DE) Underwriter for FHA loans, or
                              · Lender Appraisal Process Program (LAPP) Underwriter for VA
                                (appraisals).
                              · Supervised VA lenders may have any writer review and approve a VA
                                credit loan.
                            · Non-supervised VA Lenders must use a VA approved automatic underwriter
                              to review and approve a VA credit loan.
3-4 Unit Properties         Preferred Non-Agency Loans, ChaseFlex 7/1 ARMs, and Liquid Express
                            Chase Underwriting must underwrite the credit and property.

                            Agency Loans
                            The credit risk on loans secured by 3-4 unit properties may be evaluated
                            through DU or LP. However, Chase Underwriting must review the property
                            prior to purchasing the loan.
LMI Subsidy Loans           Correspondents may submit LMI loans to Chase Underwriting before or on
                            the day of submitting the closed loan package. In addition, Chase permits
                            LMI loans to be underwritten by:

                            · Delegated Correspondents,
                            · Desktop Underwriter,
                            · Loan Prospector, and
                            · MI Contract Underwriter.
Out of Scope or             Loans underwritten through DU or LP receiving an “Out of Scope” or
Incomplete                  “Incomplete” message may be manually underwritten if documented properly.
                            For more information, see section entitled, “Out of Scope Loans.”




July 2004                                                                  Chase Underwriting Programs –6
Doing Business with Chase                                                 Chase Correspondent Division



Chase Underwriting - Standard Underwriting Program


Introduction       Certain products do not allow delegated underwriting authority and must be
                   underwritten by the Chase Underwriting Department. The Chase
                   Underwriting Department also is available to underwrite all conventional
                   loans for both delegated and non-delegated customers.


Required           When submitting a credit package to Chase for underwriting, the following
Submission         documents must be provided to Chase Underwriting:
Documents
                   · Chase Correspondent Loan Submission File Checklist,
                   · Chase’s Applicant Authorization Form,
                   · Initial 1003,
                   · 1008,
                   · Appraisal (if available),
                   · Credit Report,
                   · Source of income documentation, and
                   · Asset documentation.

                   NOTE: Refer to the “Credit Administration” section for the applicable
                   maximum document age.


Credit             If a loan is submitted by a non-delegated Correspondent in which the loan
Authorization      closed prior to Chase underwriting, then a borrower’s authorization to Chase
Forms              to order a credit report is required. To fulfill this requirement, a signed and
                   dated “Applicant’s Authorization” or a comparable authorization form must
                   be included in the loan submitted to Chase.

                   NOTE: A copy of the Applicant’s Authorization form is provided under
                   Exhibit 2.1.

                                                                                Continued on next page




July 2004                                                              Chase Underwriting Programs –7
Doing Business with Chase                                                  Chase Correspondent Division



Chase Underwriting - Standard Underwriting Program,
Continued



Delivery           Complete the following steps to assemble and deliver a credit package to
Procedures         Chase for underwriting approval.

                      Step                                   Action
                       1     Register the loan with Chase’s Loan Registration Department or via
                             ChaseLock on the web.
                       2     Complete the Chase Correspondent Loan Submission File Checklist for
                             Conventional/Government Loans.

                             NOTE: When completing this form, be sure to include the following
                             information:

                             · Borrower’s name,
                             · Chase loan number,
                             · Correspondent’s name, and
                             · Correspondent contact person’s name, telephone number, and fax
                                number.
                       3     Acco-fasten all original documents to the file folder.
                       4     Place a label with the borrower’s name and Chase loan number on the
                             file folder tab.
                       5     Address the credit package to the following address:

                                     Chase Correspondent Division
                                     Attention: Correspondent Underwriting Department
                                     10151 Deerwood Park Boulevard
                                     Building 300, 3rd Floor
                                     Jacksonville, FL 32256
                       6     Deliver the Credit Package to Chase for an underwriting decision.

                                                                                  Continued on next page




July 2004                                                                Chase Underwriting Programs –8
Doing Business with Chase                                                  Chase Correspondent Division



Chase Underwriting - Standard Underwriting Program,
Continued



Loan               An underwriting decision will be available within 24 to 48 business hours of
Disposition        receipt of a credit package in Underwriting; and the results of the decision
                   will be faxed to the contact person listed on the Chase Correspondent File
                   Submission Checklist.

                     If the Credit Package is…         Then the Correspondent will receive…
                    Approved,                    an Approval Memorandum via fax with specific
                                                 closing conditions.
                    Suspended,                   a Notice of Incompleteness via fax with reasons for
                                                 the suspension.
                    Denied,                      a Statement of Credit Denial, Termination, or
                                                 Change.
                    Denied with Counteroffer,    a Statement of Credit Denial with Counteroffer.

                   NOTE: Prior to issuing the Statement of Credit Denial, Termination, or
                   Change, a Credit Review Underwriter reviews all files with minority
                   borrowers and files with properties located in LMI areas to determine if
                   an approval can be issued. All loans recommended for denial receive a
                   second review.


Clearing           All approvals are contingent upon receipt of the underwriting conditions
Conditions         specified in the Approval Memorandum. As indicated in the chart below, the
                   timing associated with clearing these conditions is dependent upon the type
                   of condition.

                            If the Approval                  Then the documentation to
                      Memorandum contains…                clear these conditions must be…
                    asterisked (*) conditions,    forwarded via fax or mail to Chase’s Underwriting
                                                  Department prior to Chase funding the loan or
                                                  included in the closed loan file and forwarded to
                                                  Chase’s Underwriting Department.

                                                  NOTE: The loan will not be funded until all
                                                  Chase asterisked (*) conditions are reviewed
                                                  and approved by a Chase Underwriter. Any
                                                  conditions placed by an MI Underwriter may
                                                  only be cleared by an MI Underwriter.

                                                                                 Continued on next page




July 2004                                                               Chase Underwriting Programs –9
Doing Business with Chase                                                     Chase Correspondent Division



Chase Underwriting - Standard Underwriting Program,
Continued



Clearing Conditions (continued)

                           If the Approval                     Then the documentation to
                      Memorandum contains…                  clear these conditions must be…
                    non-asterisked and/or standard Included in the closed loan file for review at the
                    conditions,                    time of funding.

                   NOTE: Chase recommends that Correspondents send all conditions at
                   one time, rather than individually. All conditions must be cleared prior
                   to the lock expiration date. In addition, should a loan close on or after
                   the approval expiration date, noted on the Approval Memorandum,
                   credit documents must be updated.


Returning          Due to the HMDA requirements placed on Chase, Chase Underwriting will
Files to           observe the following guidelines regarding returning credit packages to the
Correspondents     Correspondent.

                               If the…                                     Then…
                    loan is approved and all        Chase will retain the credit file. Upon receipt of
                    conditions have been met,       the closed loan file, Chase will match up the credit
                                                    file with the closed loan file.
                    approval is expiring and the    the loan will be canceled from the pipeline and the
                    condition documentation has     file will be returned to the Correspondent upon
                    not been received within the    request.
                    allotted timeframe,
                                                    NOTE: If the loan is locked-in and the lock
                                                    expiration date is after the approval expiration
                                                    date, the loan will not be canceled from the
                                                    pipeline until the lock expiration date.
                                                    However, the Correspondent must contact
                                                    Chase Underwriting prior to closing the loan to
                                                    determine if the approval can be extended.

                                                                                    Continued on next page




July 2004                                                                 Chase Underwriting Programs –10
Doing Business with Chase                                                      Chase Correspondent Division



Chase Underwriting - Standard Underwriting Program,
Continued



Files to Correspondents (continued)

                                If the…                                    Then…
                    loan is suspended and the       the loan will be canceled from the pipeline and the
                    required documentation is not   file will be retained by Chase.
                    submitted within 21 days of
                    the Suspense Notice issue       NOTE: If the loan is locked-in and the lock
                    date,                           expiration date is after the suspense expiration
                                                    date, the loan will not be canceled from the
                                                    pipeline until the lock expiration date.
                                                    However, the Correspondent must contact
                                                    Chase Underwriting prior to closing the loan to
                                                    determine if the suspense date can be extended.
                                                    If at a later date, the loan is resubmitted, it
                                                    must be assigned a new loan number and re-
                                                    underwritten.
                    loan is denied,                 Chase will hold the file for 15 days, then cancel
                                                    the loan from the pipeline, regardless of the lock
                                                    expiration date. However, if the Correspondent
                                                    specifically requests that the original credit file be
                                                    returned, Chase will honor the request.

                                                    NOTE: Only original, not copy files, will be
                                                    returned to the Correspondent.
                    loan is a proposed              the loan will be canceled from the pipeline and the
                    construction loan and the       file will be retained by Chase.
                    closed loan package has not
                    been received within 180 days
                    of approval,


Turnaround         When the Correspondent requests that Chase return the original credit
Time for           package on a denied loan, Chase will generally return the loan on the same
Denied Loan        day requested if received by 2:00 p.m. EST. However, delays will occur if
Files              the HMDA information is incomplete or missing. Therefore, to avoid delays
                   in receiving the credit file back, be sure that all HMDA data is correct and is
                   in the credit package submitted to Chase for review.




July 2004                                                                 Chase Underwriting Programs –11
Doing Business with Chase                                                 Chase Correspondent Division



Chase Underwriting - DOCUFAX Program


Introduction       Chase’s DOCUFAX method of underwriting provides Correspondents with
                   the opportunity to fax a reduced documentation package to Chase for a more
                   timely underwriting decision.

                   NOTE: The DOCUFAX underwriting program is subject to availability
                   and Chase reserves the right to terminate the program based on volume
                   and capacity.


Program            The features associated with the DOCUFAX Program include:
Features
                   · available on purchase and refinance transactions on all conventional
                     Agency and Non-agency products with loan amounts up to $1.1million,
                   · limited initial submission documentation,
                   · same day turnaround time if received by 3:00 p.m. EST
                   · approvals are subject to Chase underwriting’s validation of the 1003 and/or
                     automated underwriting findings/feedback certificate.


Eligible           Refer to the specific product guide to determine eligible products in the
Products           “Product” section of this guide.


Required           When submitting loans through the DOCUFAX program, Correspondents
Documentation      must provide the following submission documentation to the Chase
                   Underwriting department for review.

                            Submission Type                     Documentation Required
                    DU                          ·   DOCUFAX submission form fully completed.
                                                ·   Chase Registration Confirmation sheet.
                                                ·   Initial 1003.
                                                ·   1008.
                    LPI and Chase Eligible      ·   DOCUFAX submission form fully completed.
                    Manually Underwritten       ·   Chase Registration Confirmation sheet.
                    Loans                       ·   Initial 1003.
                                                ·   1008.
                                                ·   Credit Report for each borrower.

                                                                                Continued on next page




July 2004                                                             Chase Underwriting Programs –12
Doing Business with Chase                                                  Chase Correspondent Division



Chase Underwriting - DOCUFAX Program, Continued


Program            The following steps must be used for each DOCUFAX request:
Procedures

                      Step      Responsibility                          Action
                       1     Correspondent        Contacts the Correspondent Loan Registration
                                                  Desk at (800) 305-LOCK or registers the loan
                                                  via the web to register the loan and obtain a
                                                  Correspondent loan number.
                       2     Correspondent        Gathers the required documentation for the type
                                                  of submission (see required documentation).
                       3     Correspondent        Completes the DOCUFAX coversheet.
                       4     Correspondent        Hand writes the page numbers along the mid-
                                                  right margin of each page faxed to reduce errors.

                                                  NOTE: Be sure to include the total number
                                                  of pages faxed on the DOCUFAX Coversheet.
                       5     Correspondent        Faxes the completed DOCUFAX coversheet
                                                  along with the required documentation to (904)
                                                  620-6700.
                       6     Chase Underwriting   Receives the fax and issues an underwriting
                                                  decision subject to the validation of the 1003/AU
                                                  Underwriting findings.
                       7     Chase Underwriting   Faxes the underwriting decision to the
                                                  Correspondent contact listed on the coversheet
                                                  within the same day if received by 3:00 p.m.
                                                  EST.
                       8     Correspondent        Obtains documentation required to verify
                                                  income, assets, and property value and submits
                                                  documentation in a complete credit file to Chase
                       9     Chase Underwriting   Reviews the credit file.

                                                       If data…                   Then…
                                                    agrees,           the amended approval is faxed
                                                                      to the Correspondent.
                                                    does not agree,   Chase’s Underwriting
                                                                      determines if the borrower
                                                                      meets Agency/Chase
                                                                      requirements and notifies the
                                                                      Correspondent accordingly.




July 2004                                                             Chase Underwriting Programs –13
Doing Business with Chase                                               Chase Correspondent Division



CHOICE Contract MI Underwriting Program


Introduction       The CHOICE Contract MI Underwriting program provides an additional
                   option to our Correspondents by enabling Correspondents to use MI contract
                   service companies for automated and manual contract underwriting.


Correspondent      All CHOICE Contract MI underwritten loans must be underwritten in
Responsibilities   accordance with the policies and procedures outlined in the “Credit Policy,”
                   “Credit Administration,” and “Products and Programs” section of this guide.

                   Delegated Correspondents may elect to send a loan to a Contract MI
                   Underwriter either under the Chase Choice MI program or their own contract
                   with the MI Company. When a delegated Correspondent chooses either of
                   these options, the Correspondent contracts, reps, and warrants apply on the
                   loan and the Correspondent is held accountable for the underwriting quality
                   of the delegated loans sold to Chase.

                   NOTE: Only in cases where a delegated Correspondent submits a loan
                   to Chase for Underwriting is the Correspondent relieved of their
                   underwriting reps and warrants.


Approved MI        The following MI companies have been approved, by the Correspondent
Companies          Division, to perform contract underwriting services on behalf of Chase:

                   · GEMICO,
                   · MGIC,
                   · PMI,
                   · Radian,
                   · RMIC,
                   · Triad, and
                   · UGI.

                                                                              Continued on next page




July 2004                                                           Chase Underwriting Programs –14
Doing Business with Chase                                                 Chase Correspondent Division



CHOICE Contract MI Underwriting Program, Continued


Limitations        Contract MI Underwriters are not permitted to underwrite the following
                   types of loans:

                   · Loan amounts over $650,000,
                   · Loans with Lender Paid MI (Radian is only MI Company eligible to UW),
                   · 3-4 Unit Properties.
                   · Conventional loans with credit score <620 receiving a “Refer”
                     recommendation
                   · Conventional loans with credit score <680 receiving a “Caution” or “Refer
                     with Caution” recommendation

                   NOTE: RMIC has elected not to underwrite loans secured by a
                   leasehold property.


Required           The required submission documentation varies based on type of underwriting
Documents          requested. The following table outlines the standard documentation
                   requirements based on method of underwriting.

                        Submission Type                      Required Documentation
                    Point of Sale             ·   MI Company submission form, if applicable.
                                              ·   Chase Contract Underwriting Loan Transmittal
                                                  with appropriate box checked indicating “CHOICE
                                                  AU” underwriting submission type.
                                              ·   Chase Registration Confirmation Sheet.
                                              ·   Hand written initial 1003.
                                              ·   Completed, typed 1003.
                                              ·   Completed, typed 1008.
                                              ·   MI application, if applicable.
                    Automated Underwriting    ·   MI Company submission form, if applicable.
                                              ·   Chase Contract Underwriting Loan Transmittal
                                                  with appropriate box checked indicating AU
                                                  underwriting submission type.
                                              ·   Chase Registration Confirmation Sheet.
                                              ·   Hand written initial 1003.
                                              ·   Completed, typed 1003.
                                              ·   MI application, if applicable.

                                                                                Continued on next page




July 2004                                                             Chase Underwriting Programs –15
Doing Business with Chase                                                   Chase Correspondent Division



CHOICE Contract MI Underwriting Program, Continued


Required Documents (continued)

                      Submission Type                           Required Documentation
                    Manual Underwriting       ·   MI Company submission form, if applicable.
                                              ·   Chase Contract Underwriting Loan Transmittal with
                                                  appropriate box checked indicating manual
                                                  underwriting submission type.
                                              ·   Chase Registration Confirmation Sheet.
                                              ·   Hand written initial 1003.
                                              ·   Completed, typed 1003.
                                              ·   Completed, typed 1008.
                                              ·   MI application, if applicable.
                                              ·   Appraisal Report.
                                              ·   Standard income documentation as per Chase Credit
                                                  Policy (if requested).
                                              ·   Standard asset documentation as per Chase Credit
                                                  Policy (if requested).
                                              ·   Sales Contract (Purchase Only).

                   NOTE: Participating MI Companies will administer the CHOICE
                   program utilizing the Operating and Performance Standards provided
                   by Chase Credit Policy. For specific information regarding the
                   documentation required by a specific MI company, contact your MI
                   representative.


Submission         Listed below are the general procedures that should be followed on all loans
Procedures         underwritten through the CHOICE MI program:

                      Step                                      Action
                       1     Complete the Contract Underwriting Loan Transmittal and mark the box
                             indicating that loan is to be underwritten through DU, LP, or manually
                             underwritten.
                       2     Register the loan with Chase prior to submitting it to the MI company to
                             underwrite.

                             NOTE: The Market Type must be an agency specific Market Type
                             when registering loans that are to be underwritten through DU and
                             LP.

                                                                                  Continued on next page




July 2004                                                               Chase Underwriting Programs –16
Doing Business with Chase                                                        Chase Correspondent Division



CHOICE Contract MI Underwriting Program, Continued


Submission Procedures (continued)

                      Step                                  Action
                       3     Submit the appropriate documentation to the MI company as indicated in
                             the table below.

                                   If the underwriting
                                         type is…                             Then submit…
                               automated underwriting,       the appropriate credit file documentation (i.e.,
                                                             Point-of-sale or AU) to the MI company for
                                                             underwriting.
                               manual underwriting and/or    one original and one copy of the completed
                               validation                    credit file to the MI company for
                                                             underwriting.

                       4     The Contract MI Underwriter will review the loan package and will make
                             an underwriting decision.

                                   If…                      Then the Contract Underwriter…
                               Approved,       · provides verbal advice to the Correspondent and written
                                                 Approval Memorandum to the Correspondent and Chase,
                                               · obtains all necessary underwriting conditions from the
                                                 Correspondent, and
                                               · forwards the original fully documented credit file to
                                                 Chase’s Underwriting Department.
                               Suspended,      · provides verbal advice to the Correspondent and written
                                                 Notice of Incompleteness to the Correspondent and Chase
                                                 obtains all documents necessary to issue a loan decision
                                                 from the Correspondent, and
                                               · reviews the completed credit package and issues a
                                                 decision.
                               denied          · provides verbal and written advice to the Correspondent
                               with/or           Notifies Chase only, and
                               without         · forwards the file to Chase Underwriting to review.
                               counteroffer,
                                                 NOTE: Chase Underwriting reviews the files and
                                                 notifies the Correspondent of the results of this
                                                 review.



                                                                                         Continued on next page




July 2004                                                                    Chase Underwriting Programs –17
Doing Business with Chase                                                  Chase Correspondent Division



CHOICE Contract MI Underwriting Program, Continued


Submission Procedures (continued)

                      Step                                   Action
                       5     Correspondent processes and closes the loan in accordance with the
                             underwriting approval and forwards the closed loan package with
                             appropriate labels to:

                                    Chase Correspondent Division
                                    Attention: Correspondent Funding Department
                                    10151 Deerwood Park Boulevard
                                    Building 300, 4th Floor
                                    Jacksonville, FL 32256

                             NOTE: A copy of the computer-generated Contract MI Underwriter
                             Approval Form and the Contract Underwriting Loan Transmittal must
                             be included in the closed loan file delivered to Chase.




July 2004                                                              Chase Underwriting Programs –18
Doing Business with Chase                                              Chase Correspondent Division



Automated Underwriting General Policies


Introduction       Correspondents may submit loans through Fannie Mae’s Desktop
                   Underwriter (DU) or Freddie Mac’s Loan Prospector (LP) under the
                   following circumstances:

                   · Correspondent has delegated underwriting authority and direct access to
                     DU/LP under their own Seller/Servicer number.
                   · Correspondent is delegated or non-delegated and submits loan through
                     Chase’s CHOICE AU program.
                   · Third-Party Originator (TPO) underwrites loan through DU/LP and
                     submits loan through a Chase approved Correspondent who has delegated
                     underwriting and TPO authority.
                   · Delegated Correspondent with TPO authority sponsors a Third Party
                     Originator to submit loans to DU/LP under the delegated Correspondent’s
                     seller/servicer number.
                   · Chase Sponsored Classic DO/DU, DO on the Web, or LPI.


Ineligible         Typically, all agency products must be underwritten through DU or LP;
Products           however, some Chase products require manual underwriting. To determine
                   the allowable method of underwriting, refer to the Product Guide.


Chase Loan         All loans underwritten through an automated underwriting system must be
Registration       registered under the appropriate agency-specific market type. Generic
Requirements       market types may not be used to register AU loans.

                                                                             Continued on next page




July 2004                                                          Chase Underwriting Programs –19
Doing Business with Chase                                                  Chase Correspondent Division



Automated Underwriting General Policies, Continued


FHA Loans          Chase will purchase FHA loans underwritten through DU and LP under the
through DU/LP      following conditions:

                   · Loans must be processed and closed in accordance with HUD guidelines.
                   · An FHA TOTAL Scorecard credit assessment engine recommendation is
                     required for all loans submitted to DU or LP:
                     · after May 1, 2004, or
                     · prior to May 1, 2004, if the loan is not closed by August 1, 2004.

                   NOTE: If the recommendation is other than “Approve/Eligible” or
                   “Accept/Accept Plus,” a DE Underwriter must underwrite the entire
                   loan (credit and appraisal). A copy of the original findings report
                   MUST be included in the submission package.


VA Loans           Chase will purchase VA loans underwritten through DU and LP under the
through DU/LP      following conditions:

                   · The Correspondent must be approved to deliver VA loans to Chase.
                   · The Correspondent must be able to provide evidence of VA Loan
                     Guarantee.
                   · The Correspondent must take Chase Credit Policy into consideration as
                     well as VA Guidelines when making the credit decision.
                   · Loans receiving an “Accept” or “Approve” rating will not require the
                     underwriter’s certification on VA Form 26-6393, Loan Analysis (items 50
                     through 54). However, Correspondents are required to complete the
                     following certification and attach this certification to the AU Findings
                     Report:

                            “I, the undersigned lender, hereby certify that case number
                            (insert VA loan number) was processed through and received
                            an “Accept” rating. I further certify that all information
                            entered into the system has been verified and that any credit
                            discrepancies have been reconciled.”

                                                                                 Continued on next page




July 2004                                                              Chase Underwriting Programs –20
Doing Business with Chase                                                Chase Correspondent Division



Automated Underwriting General Policies, Continued


VA Loans           · The “Accept” or “Approve” certification must be signed by a representative
through DU/LP        of the lender and submitted along with a copy of the AUS Feedback
(continued)          Certificate indicating the risk classification.

                   NOTE: LP and DU do not approve or disapprove any loan application.
                   They evaluate the risk associated with each application. It is the lender’s
                   decision to approve or disapprove the loan.


Clearing           The DU Findings Report and LP Feedback Certificate will identify all
Conditions         conditions that must be cleared prior to closing the loan. Correspondents
                   must obtain all documentation necessary to satisfactorily clear the conditions
                   listed on the Findings Report /Feedback Certificate and must include this
                   documentation in the closed loan file delivered to Chase for purchase.


Signing Off on     Delegated Correspondents are not required to sign off on individual
Conditions         conditions and are not required, by Chase, to provide a blanket statement
                   indicating that all conditions have been met. However, if the
                   recommendation is other than “Approve/Eligible” or “Accept,” then the
                   underwriter must document the reason for the approval and must sign off on
                   the decision using one of the following documents:

                   · Loan Findings Report/Feedback Certificate,
                   · Underwriting Analysis Report (DU only),
                   · 1008, or
                   · Delegated Underwriter Approval Form.

                                                                               Continued on next page




July 2004                                                            Chase Underwriting Programs –21
Doing Business with Chase                                                    Chase Correspondent Division



Automated Underwriting General Policies, Continued


Underwriting       The chart below outlines the underwriting tolerances for all eligible
Tolerance          conforming agency and preferred non-agency loans receiving an “Approve”
Policies           recommendation from DU and DO on the Web or an “Accept”
                   recommendation from LP and LPI.

                                               Resubmission is                 Resubmission is NOT
                          Topic               required if the…                   required if the…
                    Interest Rate   interest rate increases by more than     interest rate decreases
                    (Fixed and ARM) 1% from the submitted rate.              from the submitted rate.
                    Income          · Total verified income decreases        total verified income
                                      more than 2% from the total            increases and loan is not
                                      income submitted.                      a DreaMaker,
                                    · Total verified income increases        Community Lending, or
                                      from the total income submitted        Affordable Housing
                                      and the loan is a DreaMaker,           product.
                                      Community Lending, or
                                      Affordable Housing product.
                                    · Employment status of any
                                      borrower changes to self-
                                      employed, whether due to a
                                      change in income source, income
                                      type, or percentage.
                    Debt            total debt increases from the total      total debt decreases from
                                    debt analyzed by the system and          the total debt analyzed by
                                    the increase translates into a debt to   the system.
                                    income ratio increase of more than
                                    2%.

                                       NOTE: This includes changes
                                       resulting from an increase in the
                                       interest rate.
                    Assets             Total verified assets:                Total verified assets:

                                       · Decrease by more than 2% from       · Increase from the total
                                         the total assets submitted, or        assets submitted, or
                                       · Decrease below the amount           · Increase above the
                                         required to be verified by the        amount required to be
                                         system, or                            verified by the system,
                                       · Decrease below the amount             or
                                         needed to close.                    · Increase above the
                                                                               amount needed to
                                                                               close.

                                                                                   Continued on next page




July 2004                                                              Chase Underwriting Programs –22
Doing Business with Chase                                                Chase Correspondent Division



Automated Underwriting General Policies, Continued


Closed File        The following documents must be delivered in the closed loan files delivered
Requirements       to Chase for purchase:

                   · Standard loan documentation.
                   · Loan Registration Confirmation.
                   · Most recently dated, fully completed, legible and signed 1003. (Agency 2
                     loan types in the State of New York require an initial and Final signed and
                     dated copy of the 1003)
                   · Final, signed 1008.

                   NOTE: If the file is submitted by a delegated Correspondent, the 1008
                   does not need to be signed. In addition, if the loan is underwritten
                   through DU the Underwriting Analysis Report is acceptable in lieu of a
                   1008.

                   · LP Feedback Certificate and three in-file merged credit report (if
                     underwritten through LP).
                   · DU Findings Report, Underwriting Analysis, Credit Summary, and DU
                     generated Credit Report (if underwritten through DU).
                   · Documentation required to clear all conditions on the Findings Report/
                     Feedback Certificate.
                   · Appraisal or property inspection report as indicated on the Findings
                     Report/Feedback or upgraded appraisal (if required).
                   · Any additional documentation or explanations required to approve the loan
                     with recommendations other than “Approve/Eligible” or “Accept/Eligible.”
                   · Properly completed Funding Request Form.

                                                                               Continued on next page




July 2004                                                            Chase Underwriting Programs –23
Doing Business with Chase                                                 Chase Correspondent Division



Automated Underwriting General Policies, Continued


Ineligible         Correspondents with delegated authority may validate loans with ineligible
Response           responses. However, the delegated Correspondent must cite the reason the
                   loan is deliverable to Fannie Mae or Freddie Mac. If the ineligibility reason
                   cannot be cured, the loan cannot be purchased by Chase.


DU “Out of         · DU issues the “Out of Scope” message when DU does not contain the rules
Scope” and LP        or models necessary to underwrite the product, borrower, or type of loan
“Incomplete”         submitted.
Loans
                     · Examples of situations where this could occur are as simple as a data
                       input error identifying an inaccurate amortization term.
                     · Most frequently, “out of scope” occurs when one or more of the
                       borrowers do not have a credit score.
                   · LP issues the “Incomplete” message when:
                     · Transmission error occurs when ordering credit report.
                     · Minimum number of repositories cannot be accessed at time of
                       submission.
                     · No useable credit report is identified for borrower(s.) (This refers to lack
                       of a sufficient credit history to produce a valid credit score.)
                     · Chase requires all conventional, conforming agency loans eligible for
                       automated underwriting, to be run through one of the automated systems.
                   · Once the underwriter determines the reason the “out of scope” or
                     “incomplete” is related to the borrower’s lack of credit score, the loan
                     should be manually underwritten using a Non-Traditional Mortgage Credit
                     Report to establish a credit history.
                   · The loan may be manually underwritten by:
                     · Chase Underwriters
                     · Correspondent with Delegated Underwriting Authority
                     · Contract Underwriters

                   NOTE: Manually underwritten loans are only eligible for standard
                   terms and are not eligible for any “enhanced” products or programs
                   such as those noted on the “Enhancement Tables.”

                                                                                Continued on next page




July 2004                                                             Chase Underwriting Programs –24
Doing Business with Chase                                                   Chase Correspondent Division



Automated Underwriting General Policies, Continued


Non-               · The Non-Traditional Credit Report is designed to develop a credit history
Traditional          for borrowers who do not have the types of credit history that would appear
Credit Report        on a traditional credit report.
Requirement
                   · It can be used as a supplement to a traditional report that has an insufficient
                     number of credit references.
                   · A traditional RMCR or merged in-file must always be obtained.
                   · The Credit Reporting Agency must develop a credit report using verified
                     information from the non-traditional sources.
                   · In some cases, the bureau may contact each of the non-traditional credit
                     sources directly; however, in many cases, the borrower must obtain the
                     verification of pay history and provide that to the lender.
                   · The lender then forwards that information to the bureau in those cases
                     where the bureau is not able to obtain the information directly from the
                     source.
                   · The types of credit that can be used are categorized into three different tiers,
                     which are ranked numerically by their order of importance:

                       Tier                                   Types of Credit
                        I       Rental/Housing, electricity, gas, water, telephone, cable TV
                        II      Insurance premiums (not payroll deductions) for home, auto, medical,
                                life, etc.
                        III     Miscellaneous accounts such as childcare, local grocer, appliance, or
                                furniture store, school tuition, or loans payable to individuals if
                                payment history is documented by written agreement and cancelled
                                checks.




July 2004                                                              Chase Underwriting Programs –25
Doing Business with Chase                                                Chase Correspondent Division



Accessing LPI or DO/Web


Introduction       Chase provides our correspondents with several methods of accessing LPI or
                   DO on the Web (DO/Web) and receiving Chase sponsorship. To these
                   underwriting systems Correspondents may:

                   · Access directly to the LPI through a web browser and Internet service by
                     typing the Freddie Mac URL.
                   · Access directly to the DO/Web through a web browser and Internet service
                     by typing the Fannie Mae URL.


LPI Hours of       LPI is available during the times listed below:
Operation

                            Days of the Week                             Times
                    Monday through Friday                    8:00 a.m. EST to 2:00 a.m. EST
                    Saturday                                8:00 a.m. EST to 11:00 p.m. EST
                    Sunday                                  11:00 a.m. EST to 2:00 a.m. EST

                   NOTE: LPI is not available on the following holidays:

                   · Christmas Day,
                   · Easter Sunday,
                   · Thanksgiving Day, and
                   · New Year’s Eve


DO on the Web      Desktop Originator on the Web is available through Fannie Mae’s
Hours of           MORNETPlus 2000 operating system 24 hours a day, 7 days a week.
Operation          However, the hours of availability change on holidays. For a list of updated
                   holiday hours, contact the MORNETPlus Hotline at 1-877-722-6757 or
                   access their Web site at the following address:

                                               www.efanniemae.com/




July 2004                                                            Chase Underwriting Programs –26
Doing Business with Chase                                                  Chase Correspondent Division



LPI Sign-up Procedures


Introduction       To gain access to LPI, Correspondents must complete the Freddie Mac
                   registration process and must obtain a User ID and Password.


On-line            To register using Freddie Mac’s on-line registration process, complete the
Registration       steps listed below:
Procedures

                      Step                                    Action
                       1     Access Freddie Mac’s Web site at www.freddiemac.com.
                       2     <Click> on the button titled “Loan Prospector on the Internet Resource
                             Center.”
                       3     Complete the On-line Registration form and submit on-line to Freddie
                             Mac.
                       4     Print the “hard-copy” paper forms from the web site forms menu.
                       5     Complete the ‘hard-copy” paper forms and mail to Freddie Mac at:

                             Freddie Mac
                             LP on the Internet, MS BIF
                             8100 Jones Branch Drive
                             McLean, VA 22102


Sign-up Kits       · In lieu of registering on-line, Correspondents may request a complete sign-
                     up kit from Chase by contacting their Account Executive. As with the on-
                     line registration process, all forms must be completed and must be sent
                     directly to Freddie Mac for processing.
                   · Within 10 to 14 business days of receiving the paper copy forms, Freddie
                     Mac will complete the set up process and will forward a Welcome Package
                     to the Correspondent.

                                                                                  Continued on next page




July 2004                                                              Chase Underwriting Programs –27
Doing Business with Chase                                                Chase Correspondent Division



LPI Sign-up Procedures, Continued


LPI Welcome        The Welcome Package includes the assigned User ID’s and Passwords and
Package            information needed to begin using LPI.


LPI Training       Freddie Mac offers several LPI training options. For more information, visit
Options            Freddie’s web site at www.freddiemac.com.


On-Line            While working within LPI, Correspondents can obtain detailed on-line
Resources          assistance by clicking on one of the following navigational bars located in the
                   left-hand column of the screen:

                   · Resource Center (on-line training, tools, and reference material)
                   · Business Partners (hot link to Chase Correspondent Division’s ChaseLock
                     Web site)
                   · Help (on-line assistance for each data field in LPI)
                   · Contact Us (ability to submit non-critical questions to Freddie Mac)




July 2004                                                            Chase Underwriting Programs –28
Doing Business with Chase                                                  Chase Correspondent Division



Assigning LPI Loans


Introduction       All LPI loans must be assigned to a lender prior to submitting the loan to
                   Loan Prospector for an evaluation.


Assigning          To assign a loan to Chase in LPI, use the following steps:
Loans to Chase

                      Step                                     Action
                       1     <Click> on the drop down box located in the “Wholesaler” field.
                       2     <Scroll> to the lender name titled “Chase Correspondent Division” or
                             use the “quick search” function and type “Chase Correspondent
                             Division.”
                       3     <Select> a Mortgage Service Provider (MSP).

                             NOTE: Only select a MSP if the loan will be validated by a MI
                             Contract Underwriter.
                       4     <Check> YES in the “Is this loan ready to be processed by the assigned
                             wholesaler or MSP?” field.
                       5     <Click> on the “Confirm” button located at the bottom of the screen.


Dual               LPI also includes an option allowing the Correspondent to select a MI
Assignments        company in addition to selecting a lender. By selecting a MI company from
                   the Mortgage Service Provider drop down box (see step 3 above),
                   Correspondents have the option of sending their loans to a Contract MI
                   Underwriter for validation.

                   NOTE: Selecting a MI company on the ASSIGN LOAN screen is for
                   contract MI purposes only. MI coverage cannot be order through LPI.
                   When submitting loans to a MI Contract Underwriter for validation,
                   Correspondents must follow Chase’s CHOICE AU procedures.




July 2004                                                              Chase Underwriting Programs –29
Doing Business with Chase                                                Chase Correspondent Division



DO on the Web Sign-up Procedures


Introduction       Before beginning to use Desktop Originator on the Web to evaluate Fannie
                   Mae loans, Correspondents must be sponsored by Chase and must obtain a
                   User ID and Password from Fannie Mae.


Registration       The registration requirements vary if the Correspondent is an existing DO
Requirements       user. Therefore, prior to using Desktop Originator on the Web,
                   Correspondents must review the table below and complete the necessary
                   registration process.

                   NOTE: The Correspondent must be currently active with Chase to be
                   sponsored for DO.

                        If the Correspondent is…                          Then…
                    an existing DO User and is       · no additional actions are required.
                    sponsored by Chase               · Correspondent may use their existing DO
                    Correspondent,                     ID’s and passwords.
                    an existing DO user but is not   refer to section entitled “Requesting Chase
                    sponsored by Chase               DO Sponsorship.”
                    Correspondent,
                    not an existing DO user,         refer to section entitled “New DO
                                                     Registration.”

                   NOTE: In addition, all correspondents must be registered with one or
                   more of the participating Fannie Mae approved credit-reporting
                   agencies. For an updated list of approved credit agencies, go to
                   www.efanniemae.com.

                                                                               Continued on next page




July 2004                                                           Chase Underwriting Programs –30
Doing Business with Chase                                                  Chase Correspondent Division



DO on the Web Sign-up Procedures, Continued


Requesting         Follow the steps outlined below to request Chase sponsorship for DO on the
Chase DO           Web.
Sponsorship

                      Step    Responsibility                            Action
                       1     Correspondent       Go to www.eFanniemae.com.
                       2     Correspondent       <Click> on Mortgage Broker Center.
                       3     Correspondent       Select “Request sponsoring lenders via on-line
                                                 registration.”
                       4     Correspondent       Follow on-line instructions.
                       5     Fannie Mae          Sends an e-mail informing Chase of your request.
                       6     Chase               Review requests and informs Fannie Mae of our
                                                 decision.
                       7     Fannie Mae          Adds Chase to the Correspondent drop down box
                                                 listing sponsoring lenders.


New DO             Follow the steps below to register for DO and request Chase as a sponsoring
Registration       lender.

                      Step                                  Action
                       1     Access Fannie Mae’s Desktop Originator web site by typing
                             www.efanniemae.com/
                       2     <Click> on the Mortgage Broker Center.
                       3     <Click> on Register for DO.
                       4     Review the information regarding the registration process.
                       5     Review and agree to the Fannie Mae Software Subscription Agreement
                             by <Clicking> on the “View Agreement” button and then <Clicking> on
                             the “Agree” button.

                             NOTE: If you select the “DO Not Agree” button, the registration
                             session will end.
                       6     Input your Company and billing information.
                       7     Complete the Credit Card information for billing and validation
                             purposes.

                             HINT: Once your company has been set up to use DO on the Web,
                             you may request that the invoices be mailed. If alternative billing is
                             not arranged with Fannie Mae, the credit card used to register will
                             be billed accordingly.

                                                                                 Continued on next page




July 2004                                                              Chase Underwriting Programs –31
Doing Business with Chase                                                   Chase Correspondent Division



DO on the Web Sign-up Procedures, Continued


New DO Registration (continued)

                      Step                                   Action
                       8     Complete the User ID information.
                       9     Select “Chase Correspondent” as the Sponsoring Lender.
                       10    Insert promotional code, LOS vendor, and referral source (if applicable.)
                       11    Verify the data entered.
                       12    <Click> on the “Submit” button.

                             NOTE: The on-line registration forms will then be e-mailed to
                             Chase for approval.


Approval           Approved Correspondents will receive a User ID and password from Fannie
Turnaround         Mae within 5-10 business days of submitting the required registration forms.
Times


When can I       Correspondents may obtain an underwriting recommendation from DO on
start submitting the Web immediately upon receipt of their User ID and Password.
loans?


DO/Web             Fannie Mae offers several training options for new users of DO on the Web.
Training           For more information, visit their Web site at www.efanniemae.com and select
Options            the Mortgage Broker Center. Click on DO Training under the Support box.


On-Line            Correspondents may access guides and resource information on-line at Fannie
Resources          Mae’s Web site at http://www.efanniemae.com and select the Mortgage
                   Broker Center.




July 2004                                                               Chase Underwriting Programs –32
Doing Business with Chase                                              Chase Correspondent Division



Getting Help on AU Issues


Contacts           Use the following chart to determine whom to contact when you need
                   assistance.

                             If the issue is regarding…              Then Contact…
                    ·   DO/Web sign up forms              MORNETPlus 2000 Hotline
                    ·   DO User IDs and Passwords         1-877-722-6757
                    ·   Training                          Mon - Fri 8:00 a.m. - 11:00 p.m. EST
                    ·   DO on the Web connectivity        Sat - Sun 10:00 a.m. - 8:00 p.m. EST
                    ·   Feedback Messages
                    ·   LPI sign up forms                 LPI Hotline
                    ·   LPI User IDs and Passwords        1-888-576-6932
                    ·   Training                          Mon - Fri 8:00 a.m. - 9:00 p.m. EST
                    ·   Feedback Messages                 Sat 10:00 a.m. - 6:00 p.m. EST
                    ·   Internet Connectivity             Your internet provider
                    ·   LOS System                        Your LOS Help Desk




July 2004                                                          Chase Underwriting Programs –33
Doing Business with Chase                                                                 Chase Correspondent Division



Choice AU Expressway


Introduction          Choice AU Expressway provides our approved Correspondent lenders direct
                      access to agency’s automated underwriting systems and to multiple
                      automated underwriting (AU) links through the Correspondent Web site.


Links                 The following charts outline important features of the links on AU
                      Expressway.

        Link                   e-Magic                 e-PMI             UG Direct Submit            RMIC ELS
DU Connection            Yes                   Yes                      Yes                    Yes
LP Connection            Yes                   Yes                      Yes                    No
Direct Keying of         Yes                   Yes                      Yes                    Yes
Data
Real time feedback       Yes                   Yes                      Yes                    In development
System Availability      24/7                  24/7                     24/7                   24/7
Help Desk                M-F 7 am - 6 pm CST   M-F 7 am - 7 pm CST      M-F 7am - 9 pm EST     M-F 7 am - 8:30 pm EST
Availability             888-549-9322 opt 1    877-764-3764             888-484-4636           866-764-2398
On-Line Sign Up          Yes                   No, e-mail submission    No Call                Yes
                         www.emagic.com        esetup@pmigroup.com      888-484-4636           http://els.rmic.com
                                               or fax to 972-774-1186

         Link                   GE AU Central                     LPI                            DO/Web
DU Connection              Yes                         No                          Yes
LP Connection              Yes                         Yes                         No
Direct Keying of Data      Yes                         Yes                         Yes
Real time feedback         Yes                         Yes                         Yes
System Availability        M-F 6 a.m. - 11 p.m. EST    24/7                        24/7
                           Sat 8 a.m. - 6 p.m. EST
                           Sun 9 a.m. - 8 p.m. EST
Help Desk Availability     M-F 8 a.m. - 8 p.m. EST    M-F 8 a.m. - 9 p.m. EST      M-F 8 a.m. - 11 p.m. EST
                           800-444-5664, option 1     Sat 9 a.m. - 4 p.m. EST      S-S 10 a.m. - 8 p.m. EST
                                                      888-576-6932                 877-722-6757
On-Line Sign Up            Yes                        Yes                          Yes
                           http://www.gemortgageinsur www.freddiemac.com           www.efanniemae.com
                           ance.com/


                                                                                                Continued on next page




July 2004                                                                          Chase Underwriting Programs –34
Doing Business with Chase                                                    Chase Correspondent Division



Choice AU Expressway, Continued


Accessing an       A correspondent may access an AU link via Chase’s Correspondent Web site
AU Link            at www.chasecorrespondent.com. Once on the Web site, perform the
                   following steps to access an AU link.

                      Step                                    Action
                       1      Click on the “Choice AU Expressway” icon or select “Choice AU
                              Expressway” from the left-hand navigation bar.
                       2      Select the appropriate AU link.
                       3      Review the table below to determine next steps.

                               Are you an approved user of
                               the AU link you’re selecting?                  Then…
                               Yes,                          proceed to Step 4.
                               No,                           review the section entitled “AU Link
                                                             Contacts” to obtain Sign-up Forms and
                                                             Agreements.

                       4      Enter the required data requested and follow the remaining steps for loan
                              submission via the AU link chosen.

                              NOTE: Although a Chase loan number is not required when
                              submitting loans through an AU link, you must populate the
                              “Lender ID” or similar field with your 5-digit Chase Correspondent
                              C-Code, which will be used for tracking purposes. A Chase loan
                              number is required prior to validation.


Technical          Refer to the chart below to determine the best contact for getting the
Assistance         appropriate assistance for issues relating to the AU Expressway.

                         If the issue is regarding…                     Then Contact…
                    · access to the Chase                B2B Web Support
                      Correspondent site,                1-877-ASK-CHASE (1-877-275-2427), opt 3
                    · links on the Chase site not        Monday - Friday
                      working properly,                  8:00 a.m. to 8:00 p.m. EST
                    Internet Connectivity,               your Internet provider.
                    LOS System,                          your LOS Help Desk.




July 2004                                                                Chase Underwriting Programs –35
Doing Business with Chase                                                Chase Correspondent Division



TPO Requirements for LP Submissions via AU Link


Background         When submitting loans to Freddie Mac’s Loan Prospector® (LP) through one
                   of the available non-agency AU links, a Third Party Originator (TPO)
                   relationship must be established with Chase. This links the correspondent to
                   Chase when submitting loans to LP via a non-agency AU link.

                   NOTE: Fannie Mae does not have a similar requirement.


LP Submission      The correspondent cannot submit loans through an LP-approved non-agency
                   AU link until a TPO relationship with Chase has been established. In the
                   interim, correspondents may submit loans to DU through an AU link provided
                   they have completed the sign-up requirements for the AU link of choice.


TPO Sign Up        When signing up to obtain a TPO relationship with Chase, the correspondent
Procedures         must follow the steps below.

                      Step                                  Action
                       1     Access one of the LP-approved non-agency AU links.

                             NOTE: LP submission is currently available via the following non-
                             agency AU links:
                             · e-PMI or
                             · GEMIC AU Central
                             · UG Direct Submit
                       2     Complete the sign-up process with one of the LP-approved non-agency
                             AU links.
                       3     Obtain the TPO Sign-Up Forms from the Chase Correspondent Web site
                             at www.chasecorrespondent.com or your Divisional Account Executive.
                             See list below.

                             · TPO Cover Sheet
                             · TPO Registration Form
                             · Experian Subscriber Repository Agreement and Membership
                               Agreement
                             · Transunion Subscriber Repository Agreement and Membership
                               Agreement
                             · Equifax Subscriber Repository Agreement

                                                                               Continued on next page




July 2004                                                            Chase Underwriting Programs –36
Doing Business with Chase                                                 Chase Correspondent Division



TPO Requirements for LP Submissions via AU Link, Continued


TPO Sign Up Procedures (continued)

                      Step                                  Action
                       4     Forward the completed and signed original TPO Sign-Up Forms to:

                             Chase Correspondent Division
                             Correspondent AU Help Desk
                             10151 Deerwood Park Boulevard
                             Building 400
                             Jacksonville, FL 32256


Obtaining TPO      Once the TPO sign up forms are completed, B2B AU Help Desk follows the
Password           steps below to establish the Chase TPO Freddie Mac relationship.

                      Step                                  Action
                       1     Request TPO relationship from Freddie Mac
                       2     Freddie Mac will notify B2B Web Support:

                             · If any additional information is needed or
                             · Will forward the TPO information to Chase and the Correspondent, if
                               applicable.
                       3     B2B Web Support will e-mail the appropriate Sales Assistant and copies
                             the Divisional Account Executive, who will, in turn, contact the
                             correspondent.

                   NOTE: Once a Chase/TPO relationship has been established, it is not
                   necessary to repeat this process for additional non-agency AU links.




July 2004                                                             Chase Underwriting Programs –37
Doing Business with Chase                                               Chase Correspondent Division



                                         Pre-Closing
Overview


Introduction       This chapter outlines Chase’s policies and procedures for pre-closing actions
                   performed by our Correspondents. In addition to the policies and procedures
                   outlined in this chapter, Correspondents are responsible for maintaining
                   compliance with all State, Regulatory, and Agency Requirements.


In this Chapter    Included in this chapter are the following topics:

                                                Topic                                 See Page
                    Homeowner’s Insurance Requirements - Individual Units                 2
                    Flood Zone Certification                                              5
                    Flood Insurance Requirements - Individual Units                       7
                    Condominium, PUD, Co-operative Fire, and Extended                    10
                    Coverage Requirements
                    Liability Insurance - Condominium, PUD, and Co-operative              13
                    Condominium, PUD, and Co-operative, Flood Insurance                   14
                    Requirement
                    Evidence of Coverage                                                  19
                    Private Mortgage Insurance                                            22
                    Tax Due Date Policies                                                 27
                    New Construction Tax Payment Options                                  29
                    Power of Attorney                                                     31
                    Acceptable Title Insurance Policies                                   33
                    Escrow Holdback Policy                                                34
                    Escrow Holdback Procedures                                            38
                    Miscellaneous Pre-Closing Requirements                                41




July 2004                                                                            Pre-Closing – 1
Doing Business with Chase                                                    Chase Correspondent Division



Homeowner’s Insurance Requirements - Individual Units


Introduction       The following requirements are applicable to all:

                   · 1 Unit properties including
                     · Detached or attached
                     · Individual PUD units
                     · Co-op units
                     · Eligible site detached or 2-4 unit condominiums
                   · 2-4 Units

                   A Homeowner’s Casualty Policy, through a company, which has an
                   acceptable rating, must be in force at the time of closing.


Required           A hazard insurance carrier must meet only one of the following rating
Ratings            categories:

                          Rating Agency                             Required Rating
                    Best Company               ·   “B” or better general policyholder’s rating, or
                                               ·   “6” or better financial performance index in
                                                   Insurance Reports, or
                                               ·   “A” or better general policyholder’s rating, and
                                                   “VIII” category or better in Insurance Reports -
                                                   International Edition.
                    Demotech, Inc.             ·   “A” or better in Hazard Insurance Financial
                                                   Stability.
                    Standard and Poor’s Inc.   ·   “BBB” qualified solvency ratio, or
                                               ·   “BBB” or better claims-paying ability, or
                                               ·   “BBB” or better claims-paying ability ratio.


Standard           The coverage amount must be equal to at least, the lesser of:
Dwelling
Policies           · The insurable value of improvements (Full Appraised Value, minus the land
                     value of the property.)
                   · The greater of the unpaid principle balance or minimum required to
                     compensate for damage or loss on a replacement cost basis (80% of the
                     insurable value of the improvements).

                                                                                   Continued on next page




July 2004                                                                                  Pre-Closing – 2
Doing Business with Chase                                                 Chase Correspondent Division



Homeowner’s Insurance Requirements - Individual Units,
Continued



Rent Loss          Non-owner-occupied 2-4 unit properties also require six months Rent Loss
Coverage           Coverage.

                   Rent loss coverage is, generally, included in the standard casualty policy for
                   tenant occupied dwellings. Its function is to protect the owner against rental
                   income loss during the rehabilitation process following a casualty only.

                   NOTE: The Rent Loss coverage is NOT required if the borrower does
                   not use the rental income to qualify for the loan.


Acceptable         Hazard policies may have a term of six months (Florida only), one, three, or
Terms              five years.


Deductible         The maximum deductible for casualty insurance is the higher of $1,000 or 1%
                   of the face amount of the policy.

                   NOTE: State specific variances may dictate the minimum deductible.


Loss Payee         All homeowner’s policies on loans sold to Chase must contain the following
Clause             Mortgagee Clause:

                                        Chase Manhattan Mortgage Corporation,
                                        Its Successors and Assigns
                                        Loan Number ______
                                        P. O. Box 47020
                                        Doraville, GA 30362


Policies with      Chase will accept hazard insurance policies in which the Correspondent is
Correspondent      listed as loss payee. However, the Correspondent must provide a copy of the
Listed as Loss     Endorsement Letter requesting that the loss payee be changed to reflect Chase
Payee              as the loss payee.

                   NOTE: The Correspondent must send the original Endorsement Letter
                   to the insurance provider.

                                                                                Continued on next page




July 2004                                                                              Pre-Closing – 3
Doing Business with Chase                                              Chase Correspondent Division



Homeowner’s Insurance Requirements - Individual Units,
Continued



Force-Place        Chase will force-place insurance (at borrower’s expense) on any collateral
Coverage           where the borrower’s act of omission or commission nullifies the insurance
                   coverage defined above.




July 2004                                                                           Pre-Closing – 4
Doing Business with Chase                                                Chase Correspondent Division



Flood Zone Certification


Flood              · Chase relies on First American Flood Data Services, Inc (FDSI) as the final
Determination        authority on the need for Flood Insurance.
Certificate        · Chase does not accept lender certifications, surveys, or appraisals to
Requirements
                     determine the need for Flood Insurance, as the Surveyor or Appraiser does
                     not indemnify the lender for any loss resulting from inaccurate information.


Chase’s Flood      Chase offers Correspondents the following options for obtaining Flood Certs:
Cert Options
                   Option 1 - FDSI Life-of-Loan:

                   ·   Correspondent orders the Life-of-Loan determination through:

                                                       FDSI
                                             Attention: Client Services
                                           11902 Burnett Road, Suite 400
                                                Austin, TX 78758
                                                  (800) 447-4550


                   Option 2 - Basic Determination through any Flood Cert Company

                   ·  Chase will convert the basic determination to the Life-of-Loan Option
                    through FDSI and charge the Correspondent a fee of $9 (subject to change)
                    for the conversion.
                   · Upon conversion, the property will be reviewed immediately to
                    determine whether Flood Insurance is required.
                   · If it is determined the subject property needs Flood Insurance, the
                    Borrower will be notified.
                   · If the Flood Insurance is not placed within the allotted timeframe, Chase
                    will obtain the Flood Insurance and charge the Borrower.


Life-of-Loan       · The Life-of-Loan monitoring will continue throughout the entire Chase
Monitoring           servicing period.
Impact             · If it is determined at any point that the subject property needs Flood
                     Insurance, the borrower will be notified.
                   · If the Flood Insurance is not placed within the timeframe indicated in the
                     Notification, Chase will obtain the Flood Insurance and charge the
                     Borrower.

                                                                               Continued on next page



July 2004                                                                             Pre-Closing – 5
Doing Business with Chase                                                 Chase Correspondent Division



Flood Zone Certification, Continued


Funding            All loans submitted to Chase for purchase must include a Flood Zone
Impact             Certificate. Failure to include a Flood Determination Certificate will delay
                   funding and the loan will be subject to re-pricing if not provided prior to the
                   expiration of the commitment.




July 2004                                                                              Pre-Closing – 6
Doing Business with Chase                                                     Chase Correspondent Division



Flood Insurance Requirements - Individual Units


Chase Policy       Under the National Flood Insurance Reform Act of 1994, Chase will not
                   purchase loans secured by improved real estate, that is located or will be
                   located in an area that has been identified as a “Special Flood Hazard Area”
                   (SFHA) unless the property is covered by flood insurance.

                   NOTE: Flood insurance is not required for individual Co-op units as
                   they are covered by the “Master/Blanket” Flood Insurance Policy.


Purchase           Refer to the table below to determine if a loan is eligible for purchase when
Eligibility for    the property is located in a non-participating community.
Loans in Non-
Participating
Communities

                     If the property is located in a
                     non-participating community
                                and is…                               Then Chase will…
                    not mapped,                        · buy the loan, and
                                                       · pre-purchase can continue to process the loan.
                    mapped in a flood zone,            NOT buy the loan.
                    mapped in a non-flood zone,        · buy the loan, and
                                                       · pre-purchase can continue to process the loan.


Flood              To purchase a non-participating community loan locked under a Agency 1,
Certification      Agency 2, VA, FHA, or Portfolio market types, the loan file must contain a
Requirements       Flood Certificate (FEMA Form 81-93) noting the following information:
for Loans in
Non-
                   · Zone must be designated as “None”
Participating
Communities        · Map entry field must be left blank

                                                                                    Continued on next page




July 2004                                                                                  Pre-Closing – 7
Doing Business with Chase                                                 Chase Correspondent Division



Flood Insurance Requirements - Individual Units, Continued


SFHAs              Flood insurance is required when any part of the principal structure is located
Identified         in an SFHA. The Flood Insurance Rate maps (FIRM) identify the following
                   “Special Flood Hazard Areas:”

                    A                                      A99
                    AE                                     V
                    A1-30                                  VE
                    AH                                     V1-30
                    AO                                     VO

                   NOTE: Federal law mandates Flood Insurance; it cannot be waived
                   under any circumstances. Exceptions are NOT permitted for any reason


Detached           When the dwelling is not located in the SFHA, but the detached buildings
Buildings in       (garage, barn, etc.) are, flood insurance is required on the detached
SFHA but not       buildings if they are included in the property value and used as security for
the Dwelling       Chase’s mortgage.


Structures         If the mortgagor refuses to purchase flood insurance coverage on a property
Above Base         located in a special Flood Hazard area because the structure is above the Base
Flood Elevation    Flood Elevation (BFE) (i.e., on a knoll or bluff, or elevated on fill), the
                   Correspondent must initially require flood insurance. The borrower may
                   request a “Letter of Map Amendment” or “Letter of Map Revision,” from
                   FEMA as appropriate. If FEMA issues the LOMA or LOMR, flood insurance
                   coverage may then be canceled.

                   NOTE: For information on how to request a Letter of Map Amendment,
                   call your local Federal Emergency Management Agency.

                                                                                Continued on next page




July 2004                                                                              Pre-Closing – 8
Doing Business with Chase                                                Chase Correspondent Division



Flood Insurance Requirements - Individual Units, Continued


Coverage           The minimum amount of flood insurance required by law is the lesser of the:
Requirements
                   · outstanding principal balance of the loan, or
                   · the replacement cost of the improvements (generally defined as the
                     appraised value less the land and any improvements such as landscaping,
                     driveways, and walkways that are not insurable through the NFIP). Chase
                     defers to the insurance company’s determination/definition of replacement
                     cost and/or insurable value of the improvements, or
                   · the maximum amount of the floor insurance available through the NFIP
                     (currently $250,000)

                   NOTE: Chase will not require flood insurance in excess of the maximum
                   coverage available. If the outstanding balance and/or property value
                   exceeds $250,000, Chase will only require $250,000 in coverage.


Term               Chase requires that flood insurance policies provide at least 12 months of
                   coverage.


Deductible         The maximum deductible permitted is the higher of $1,000 or 1% of the face
                   amount of the policy, unless certain state laws apply.


Mortgage           All flood insurance policies on loans sold to Chase must contain the following
Clause             Mortgagee Clause:

                                        Chase Manhattan Mortgage Corporation,
                                        Its Successors and Assigns
                                        Loan Number ______
                                        P. O. Box 47020
                                        Doraville, GA 30362


Policies with      Chase will accept flood insurance policies in which the Correspondent is
Correspondent      listed as loss payee. However, the Correspondent must provide a copy of the
Listed as Loss     Endorsement Letter requesting that the loss payee be changed to reflect Chase
Payee              as the loss payee.

                   NOTE: The Correspondent must send the original Endorsement Letter
                   to the insurance provider.




July 2004                                                                             Pre-Closing – 9
Doing Business with Chase                                                 Chase Correspondent Division



Condominium, PUD and Co-operative, Fire, and Extended
Coverage Requirements


Background         In addition to the individual Homeowner’s/Casualty Insurance requirements
                   already details, Condominium, Co-operative, and PUD Projects have
                   additional requirements. Typically the condo, co-operative, and PUD
                   requirements are identical. All unique requirements will be labeled, as
                   applicable.


Condominium        High Rise
Project            When a condominium project consists of a high-rise or other vertical
Requirements       buildings Chase requires the Owner’s Association to maintain a “master” or
                   “blanket” policy for a minimum of fire and extended coverage insurance,
                   which includes “all risk” or “broad form” endorsement, with premiums being
                   paid as a common expense. The policy must cover all general and limited
                   common elements normally included in the coverage. These include fixtures,
                   building, service equipment, common personal property, and supplies. The
                   policy must also cover fixtures, equipment, and other personal property inside
                   the individual units if those items are financed, whether or not the property is
                   part of the common elements.

                   2-4 Units

                           If the exterior is…                             Then…
                    described as a common element,   a master hazard insurance policy must be
                                                     obtained together with a homeowner’s policy
                                                     for the interior of the unit.

                                                     NOTE: Liability insurance must be obtained
                                                     for common areas in the amount of $500,000.
                    not described as a common        an individual flood policy is required.
                    element,


Planned Unit       The Homeowner’s Association (HOA) must maintain a property insurance
Development        policy, with premiums being paid as a common expense. The policy must
(PUD)              cover all of the common elements except those normally excluded such as
Requirements       land, foundation, and excavations. Covered common elements may include
                   fixtures, building, service equipment, common personal property, and
                   supplies.

                                                                                Continued on next page




July 2004                                                                             Pre-Closing – 10
Doing Business with Chase                                                 Chase Correspondent Division



Condominium, PUD and Co-operative, Fire, and Extended
Coverage Requirements, Continued


Co-operative       The Co-operative Corporation must maintain a policy of property insurance
(Co-op) Project    that provides for at least fire and has an extended coverage endorsement, with
Requirements       premiums being paid as a common expense. The policy must cover the entire
                   project, including the individual units.


Acceptable         Chase accepts policies underwritten by Lloyd’s of London and other carriers
Policies           providing they meet the following rating requirements:

                                Type of Rating                          Required Rating
                    Best’s Key Rate Guide                  6 or better financial performance index
                                                           rating
                    Demotech’s First Rate/P&C Financial    A or better
                    Stability Rating


Coverage           The “master” or “blanket” insurance policy should cover 100% of the
Amount             insurable replacement cost of the project improvements, including individual
                   units. Coverage does not need to include land, foundations, excavations, or
                   other items that are usually excluded from insurance coverage. An insurance
                   policy that includes either of the following endorsements will ensure full
                   insurable value replacement cost coverage:

                   · Guaranteed Replacement Cost Endorsement (under which the insurer
                     agrees to replace the insurable property regardless of the cost) and, if the
                     policy includes a coinsurance clause, an “Agreed Amount Endorsement”,
                     which waives the requirement for co-insurance.
                   · Replacement Cost Endorsement (under which the insurer agrees to pay up
                     to 100% of the property’s insurable replacement cost, but no more) and, if
                     the policy includes a coinsurance clause, an “Agreed Amount
                     Endorsement,” which waives the requirement for coinsurance.
                     · Projects without an elevator require at least $1,000,000 in liability
                       coverage
                     · Projects with an elevator require at least $3,000,000 in liability coverage

                                                                                Continued on next page




July 2004                                                                             Pre-Closing – 11
Doing Business with Chase                                                 Chase Correspondent Division



Condominium, PUD and Co-operative, Fire, and Extended
Coverage Requirements, Continued


Deductible -       Unless otherwise required by state law, the maximum deductible amount for
Co-op              policies covering the common elements is the lesser of $10,000 or 1% of the
                   policy face amount. Funds to cover these deductible amounts should be
                   included in the Co-operative corporation’s operating reserve accounts.

                   Losses relative to individual units in the Co-op project that are covered under
                   the “master/blanket” policy should have a deductible equal to the higher of
                   $1,000 or 1% of the replacement cost of the unit.


Deductible -       Unless otherwise required by state law, the maximum deductible amount for
Condo/PUD          policies covering the common elements is the lesser of $10,000 or 1% of the
                   policy face amount. Funds to cover these deductible amounts should be
                   included in the owners’ association’s operating reserve accounts.

                   Losses relative to individual units in the PUD project that are covered under
                   the “master/blanket” policy should have a deductible equal to the higher of
                   $1,000 or 1% of the replacement cost of the unit.


Loss Payee         All policies on loans sold to Chase must contain the following Mortgagee
Clause             Clause:
                                  Chase Manhattan Mortgage Corporation,
                                  Its Successors and Assigns
                                  Loan Number ___________
                                  P.O. Box 47020
                                  Doraville, GA 30362
                   · Condominium policies should list the HOA or the insurance trustee as a
                     trustee for each unit owner and mortgagee(s) of record;
                   · Co-op policies should be list the Co-operative Corporation and the
                     mortgagee(s) of record.
                   · PUD policies should list the HOA and the mortgagee(s) of record.


Required           · Chase requires that all Condominium and PUD policies provide for at
Notice               least a 10-day written notice to be delivered to the unit owners, the HOA,
                     and the mortgagee prior to canceling or modifying the policy.
                   · Chase requires that all Co-op policies provide for at least a 30-day written
                     notice to be delivered to these shareholders (unit owners), and the
                     mortgagee prior to canceling or modifying the policy.



July 2004                                                                             Pre-Closing – 12
Doing Business with Chase                                                 Chase Correspondent Division



Liability Insurance - Condominium, PUD, and Co-operative



Liability          When required, the HOA must maintain a comprehensive general liability
Insurance          insurance policy for the entire project including all common areas, public
(Condominium/      ways, and any other areas that are under its supervision.
PUD/Co-op)         Additionally,

                   · The policy terms (may be by endorsement) must preclude the carrier’s
                     denial of a unit owner’s claim because of negligent acts by the association
                     or unit owners.
                   · The amount of the coverage should be at least $1 million for bodily injury
                     and property damage for any single occurrence.
                     · Projects without an elevator require minimum coverage of $1 million
                     · Projects with an elevator require minimum coverage of $3 million


Fidelity Bond      A review of Fidelity insurance is not required for condominium projects that
Insurance          consist of 20 or less units. When required, the HOA must have blanket
(Condominium/      fidelity bonds for anyone who either handles or is responsible for funds that it
PUD/Co-op)         holds as administrators.

                   · The bonds should name the Owner’s Association as the obligee and the
                     premiums should be paid as a common expense by the association.
                   · The amount of fidelity coverage must be at least one quarter of the total
                     income reflected on the current budget or coverage that meets the State’s
                     statutory fidelity bond requirements if documented.


Earthquake         Earthquake insurance is required for California Condominium Projects
Insurance          located in Freddie Mac identified high and moderate risk zip code areas.
(Condominium/      Documentation must include:
PUD)
                   · Evidence of 100% coverage of the insurable replacement cost is required.
                   · Freddie Mac Form 465S Earthquake Insurance analysis addendum to be
                     completed by the appraiser.
                   · Budget must evidence that earthquake insurance deductible is a fully funded
                     line item.




July 2004                                                                             Pre-Closing – 13
Doing Business with Chase                                                 Chase Correspondent Division



Condominium, PUD, and Co-operative, Flood Insurance
Requirements


Introduction       In addition to the individual Flood Insurance requirements already detailed,
                   Condominium, Co-operative, and PUD projects have additional requirements.
                   The following sections detail the additional requirements.


Condominium        When a condominium project consists of a high-rise or other vertical
Project            buildings Chase requires the Owner’s Association to obtain a flood policy for
Requirements       each building that is located in a Special Flood Hazard Area ( A, AE, A1-30,
                   AH, AO, A99, V, VE, V1-30, and VO).

                                       IF…                                   THEN…
                    any part of the condominium project’s     the Owner’s Association must
                    improvements are in a SFHA,               maintain a “master” or “blanket”
                                                              Residential Condominium Building
                                                              Association Policy (RCBAP).
                    the condominium is a 2-4 unit and walls   a master policy covering common
                    are considered as a common element,       elements and an individual unit
                                                              policy is required.
                    the condominium is a 2-4 unit and walls   an individual unit flood policy is
                    are considered not a common element,      required.


Purchase           Refer to the table below to determine if a condominium is eligible for
Eligibility for    purchase when the property is located in a non-participating community.
Condominiums
in Non-
Participating
Communities

                    If the condominium is located
                         in a non-participating
                          community and is…                      Then Chase will…
                    not mapped,                   · buy the loan, and
                                                  · pre-purchase can continue to process the loan.
                    mapped in a flood zone,       Not buy the loan.
                    mapped in a non-flood zone,   · buy the loan, and
                                                  · pre-purchase can continue to process the loan.

                                                                                Continued on next page




July 2004                                                                             Pre-Closing – 14
Doing Business with Chase                                               Chase Correspondent Division



Condominium, PUD, and Co-operative, Flood Insurance
Requirements, Continued


Flood              To purchase a condominium in a non-participating community, loan locked
Certification      under a Agency 1, Agency 2, VA, FHA, or Portfolio market types, the loan
Requirements       file must contain a Flood Certificate (FEMA Form 81-93) noting the
for                following information:
Condominiums
in Non-
Participating      · Zone must be designated as “None.”
Communities        · Map entry field must be left blank.


Planned Unit       When any part of the PUD project’s common ownership improvements are in
Development        a SFHA, the Owner’s Association must maintain a “master or “blanket”
(PUD)              Residential Condominium Building Association Policy (RCBAP). In
Requirements       addition, if the subject property is an individual unit and is in a SFHA,
                   individual unit flood insurance is required.

                   REFERENCE: Refer to the preceding pages for individual unit coverage
                   requirements.


Coverage           The following requirements pertain to common element buildings and all
Amount - PUD       common property:

                   · Building coverage should equal 100% of the insurable value of the common
                     elements and must include contents coverage to cover 100% of all
                     machinery and equipment that are part of the building or are not part of the
                     building but are owned in common by the association.
                   · The required coverage will never exceed the maximum allowable amount
                     under the NFIP.
                   · If the Association does not have and refuses to obtain the required
                     coverage, the loan is not available for purchase by Chase.
                   · The maximum deductible amount for policies covering the common areas
                     and elements is the lesser of $5,000 or 1% of the policy’s face amount.
                     Funds to cover the deductible should be included in the Homeowner
                     Association’s operating reserve account.

                                                                              Continued on next page




July 2004                                                                           Pre-Closing – 15
Doing Business with Chase                                                Chase Correspondent Division



Condominium, PUD, and Co-operative, Flood Insurance
Requirements, Continued


Purchase           Refer to the table below to determine if a PUD is eligible for purchase when
Eligibility for    the property is located in a non-participating community.
PUDs in Non-
Participating
Communities

                       If the PUD is located in a non-
                     participating community and is…                 Then Chase will…
                    not mapped,                          · buy the loan, and
                                                         · pre-purchase can continue to process the
                                                           loan.
                    mapped in a flood zone,              Not buy the loan.
                    mapped in a non-flood zone,          · buy the loan, and
                                                         · pre-purchase can continue to process the
                                                           loan.


Flood              To purchase a PUD in a non-participating community, loan locked under a
Certification      Agency 1, Agency 2, VA, FHA, or Portfolio market types, the loan file must
Requirements       contain a Flood Certificate (FEMA Form 81-93) noting the following
for PUDs in        information:
Non-
Participating
Communities        · Zone must be designated as “None.”
                   · Map entry field must be left blank.


Co-op              · When any part of the Co-op project’s common ownership improvements are
Requirements         in a SFHA, the Owner’s Association must maintain a “master or “blanket”
                     Residential Condominium Building Association Policy (RCBAP).
                   · The Co-op Corporation must evidence a separate policy for each building
                     that is located in the SFHA.

                   NOTE: Flood Insurance for individual units is not required as they are
                   covered under the blanket coverage.

                                                                                Continued on next page




July 2004                                                                            Pre-Closing – 16
Doing Business with Chase                                                Chase Correspondent Division



Condominium, PUD, and Co-operative, Flood Insurance
Requirements, Continued


Coverage           · The policy must cover the building and any common elements and property
Amount -             (including machinery and equipment) that are owned in common by the
Co-op                shareholders, of the co-op project.
                   · The amount of coverage should be at least equal to the lesser of the
                     insurable value of the building (including all common elements and
                     property) for the maximum coverage available under the NFIP.
                   · The maximum deductible amount for policies covering each building in a
                     high-rise/vertical project is the lesser of $5,000 or 1% of the policy’s face
                     amount. Funds to cover this deductible should be included in the co-
                     operative corporation’s operating reserve account.


Coverage           · Building coverage should equal 100% of the insurable value of the common
Amount -             elements and must include contents coverage to cover 100% of all
Condo                machinery and equipment that are part of the building or are not part of the
                     building but are owned in common by the association.
                   · If required coverage exceeds the maximum allowable under the NFIP
                     programs (currently $250,000, Chase will not require greater than the
                     maximum allowable amount.
                   · Coverage for each unit should be the lesser of $250,000 or the amount of its
                     replacement cost (i.e., the replacement cost of all units combined or the
                     number of units x $250,000)
                   · The maximum deductible amount for policies covering the common areas
                     and elements is the lesser of $5,000 or 1% of the policy’s face amount.
                     Funds to cover this deductible must be included in the owner’s association
                     operating reserve account.

                                                                               Continued on next page




July 2004                                                                            Pre-Closing – 17
Doing Business with Chase                                                Chase Correspondent Division



Condominium, PUD, and Co-operative, Flood Insurance
Requirements, Continued


Loss Payee         All policies on loans sold to Chase must contain the following Mortgagee
Clause             Clause:

                                        Chase Manhattan Mortgage Corporation,
                                        Its Successors and Assigns
                                        Loan Number ______
                                        P. O. Box 47020
                                        Doraville, GA 30362

                   · Condominium policies should list the HOA or the insurance trustee as a
                     trustee for each unit owner and mortgagee(s) of record;
                   · PUD policies should list the HOA and the mortgagee(s) of record.


Required           · Chase requires that all Condominium and PUD policies provide for at
Notice               least a 10-day written notice to be delivered to the unit owners, the HOA,
                     and the mortgagee prior to canceling or modifying the policy.
                   · Chase requires that all Co-op policies provide for at least a 30-day written
                     notice to be delivered to these shareholders (unit owners), and the
                     mortgagee prior to canceling or modifying the policy.




July 2004                                                                            Pre-Closing – 18
Doing Business with Chase                                                Chase Correspondent Division



Evidence of Coverage


Purchase           Chase requires a new hazard and/or flood policy (if applicable) and a paid
Transactions       receipt for the first year’s premium to evidence proof of insurance on
                   purchase transactions

                   NOTE: If the closing agent collects and pays for the first year’s
                   premium, the HUD-1 Settlement Statement must reflect the amount
                   disbursed in lieu of providing the receipt.


Refinance          Chase requires either:
Transactions
                   · a copy of the existing policy, certified by the insurance agency with an
                     endorsement to Chase, or
                   · a new hazard and/or flood insurance policy (if applicable) and proof of
                     payment for the first year’s premium.

                   NOTE: If the existing policy has less than two months remaining, the
                   renewal premium must be paid at closing and a receipt must be provided
                   or the HUD-1 Settlement Statement must reflect the amount disbursed.


Binders            Except in Iowa and Nebraska, a 60- or 90-day binder is acceptable, providing
                   that there is at least 30 days of coverage remaining at the time the loan is
                   purchased by Chase. When a binder is provided as evidence of insurance, the
                   binder must include:

                   ·   Mortgagor’s Name(s)
                   ·   Property Address,
                   ·   Amount of Coverage,
                   ·   Agent’s Signature,
                   ·   Underwriting Company’s Name, and
                   ·   Premium Amount.

                   NOTE: If State Law allows for a maximum of 30 days for Binder, Chase
                   requires that there be at least 20 days remaining at the time the loan is
                   purchased.

                                                                               Continued on next page




July 2004                                                                            Pre-Closing – 19
Doing Business with Chase                                                Chase Correspondent Division



Evidence of Coverage, Continued


Certificate of     Certificates of Insurance/Memorandums of Insurance are acceptable proofs of
Insurance          the Hazard Insurance, providing the certificate is on the insurance company’s
                   letterhead and is signed by the agent. In addition, the
                   certificate/memorandum must contain the following information:

                   ·   Mortgagor’s Name(s),
                   ·   Property Address,
                   ·   Policy Number,
                   ·   Effective Date,
                   ·   Expiration Date of the Policy,
                   ·   Dwelling Coverage Amount, and
                   ·   Premium Amount.

                   NOTE: When using computerized forms (i.e., “Evidence of Insurance”
                   and “ Certificates of Insurance” through Accord), The form is only
                   acceptable if it provides for a 10-day notice to the mortgagee (Chase)
                   prior to any reduction in coverage and/or cancellation of the policy.


Rent Loss          On 2-4 unit investment properties, Chase requires that the hazard policy
Insurance          evidence at least six months of rent loss coverage. However, if the policy has
                   not been issued, Chase will accept a letter from the borrower(s), the
                   originating lender, or the insurance agent stating that rent loss insurance has
                   been obtained.

                   NOTE: This is not required if the borrower did not use the rental
                   income to qualify for the loan.

                                                                               Continued on next page




July 2004                                                                            Pre-Closing – 20
Doing Business with Chase                                                Chase Correspondent Division



Evidence of Coverage, Continued


Condominium/       Proof of insurance on Condominiums and PUDs is dependent upon the type
PUD Insurance      of coverage obtained.

                              If the unit is…                        Then the…
                   Considered a site/detached an    individual unit must be covered as described
                   eligible 2-4 unit Condominium/   above and in the preceding pages.
                   PUD,
                   a high-rise or other vertical    owner’s association must maintain a
                   building,                        master/blanket policy or binder with a paid
                                                    receipt. For these types of loans, Chase will
                                                    accept a certified copy of the Declaration
                                                    Page of the policy or a Certificate of
                                                    Insurance for the entire Condominium,
                                                    providing that it identifies:

                                                    ·   Borrowers’ Name(s),
                                                    ·   Property Address,
                                                    ·   Effective Date,
                                                    ·   Expiration Date,
                                                    ·   Amount of Coverage, and
                                                    ·   the Condominium Associations Name and
                                                        Address.

                                                    NOTE: Expired certificates are not
                                                    acceptable unless evidence that the master
                                                    policy is in force is provided.




July 2004                                                                            Pre-Closing – 21
Doing Business with Chase                                               Chase Correspondent Division



Private Mortgage Insurance


Product            Generally MI is required on loans with an LTV in excess of 80%. However,
Requirements       the amount of coverage required varies by product, transaction type, LTV,
                   and occupancy. Therefore, to determine the amount of required coverage,
                   Correspondents should reference the applicable product chart located in the
                   “Product and Program” section of this guide.


Homeowner’s        In compliance with the Homeowner’s Protection Act, Chase will not purchase
Protection Act     loans with MI coverage on loans meeting the following criteria:
Requirements
                   ·   Single Family
                   ·   1 Unit Primary Residence
                   ·   LTV < 80%
                   ·   Closed on or after July 29, 1999


MI Certificate     Chase accepts policies from the following private mortgage insurers:
Providers
                   ·   MGIC
                   ·   UGIC
                   ·   REMIC
                   ·   PMI
                   ·   GEMIC
                   ·   TRIAD
                   ·   RADIAN

                                                                              Continued on next page




July 2004                                                                           Pre-Closing – 22
Doing Business with Chase                                                  Chase Correspondent Division



Private Mortgage Insurance, Continued


Closed Loan        The MI documentation required to be included in the closed loan package
Package            varies based on the type of coverage obtained. Use the following table to
Requirements       determine the MI documentation requirements for your loan.

                      Type of Coverage                     Required Documentation
                    Lender Paid MI         · Signed LPMI Disclosure
                                           · 1008 with notation on MI line stating “LPMI”
                                             NOTE: For loans underwritten through DU, the
                                             1008 is not required.
                                           · LPMI Sticker on the outside of the closed loan file, and
                                           · Underwriter Certification of Eligibility (Form C-6013)
                                             if property type is a condominium.
                                           · Radian is the only eligible provider.

                                           NOTE: Correspondents may use their own
                                           Underwriter Certification of Eligibility Form providing
                                           it contains the same information as Form C-6013.
                    Borrower-paid          · Copy of the MI Certificate of Insurance,
                    (Monthly Premium)      · Copy of the Loan Sale Notice evidencing that the MI
                                              company has been notified of the transfer,
                                           · Conditions shown on the MI Certificate, and
                                           · HUD-1 Settlement Statement reflecting one month
                                              premium was collected on line 902.

                                          NOTE: Reserves are not required.
                    Borrower-paid (Annual · Copy of MI Certificate of Insurance,
                    Premium Plan)         · Copy of the Loan Sale Notice evidencing that the MI
                                            company has been notified of the transfer,
                                          · Conditions shown on the MI Certificate, and
                                          · HUD-1 Settlement Statement reflecting the annual
                                            premium was collected on line 902 and one month’s
                                            reserves was collected on line 1002.
                    Borrower-paid (Zero   · Copy of MI Certificate of Insurance
                    Up-front Premium      · Copy of the Loan Sale Notice evidencing that the MI
                    Plan)                   company has been notified of the transfer, and
                                          · Conditions shown on the MI Certificate.
                    Financed MI           Not eligible on any product.

                   NOTE: Failure to provide the required documentation will result in
                   funding delays.

                                                                                  Continued on next page




July 2004                                                                              Pre-Closing – 23
Doing Business with Chase                                                  Chase Correspondent Division



Private Mortgage Insurance, Continued


Loan Sale          The MI Loan Sales Notice on loans sold to Chase should reflect:
Notice
                                  Chase Manhattan Mortgage Corporation
                                  P. O. Box 11740
                                  Monroe, LA 71211-1740


Borrower Paid      Chase currently accepts the following types of borrower-paid MI policies:
MI Options
                   · Monthly Premium Plan,
                   · Annual Premium Plan, and
                   · Zero Up-front Premium Plan.


Lender Paid        Eligible Products
MI                 Lender Paid MI (LPMI) may only be obtained on conventional loans closed
                   under Market Types 210, 212, 214, and 603.

                   NOTE: Second homes, investment properties, and cash-out refinance
                   transactions are not eligible for LPMI.

                   LTV Adjustments
                   Loans with LPMI require a pricing adjustment that is based on LTV.
                   Therefore, should the LTV change subsequent to locking in the loan, the price
                   must also be changed prior to delivering the loan to Chase. In addition,
                   should the LTV increase, the Underwriter must issue a new approval and a
                   Notice of Counter Offer.

                   NOTE: The Notice of Counter Offer must contain language matching
                   the notice provided by Chase.

                   Condominiums
                   Condominium loans with LPMI, also require the MI Company’s
                   Condominium Registration number on the “Underwriter Certification of
                   Eligibility.” To obtain this document, contact Radian Project Approval
                   Department at 1-800-254-7643. In addition, the Correspondent is required to
                   ensure that the classification used to determine the eligibility is acceptable for
                   the type of product for which the loan was registered.

                                                                                 Continued on next page




July 2004                                                                              Pre-Closing – 24
Doing Business with Chase                                                     Chase Correspondent Division



Private Mortgage Insurance, Continued


Reduced MI/        The Reduced MI coverage option is available on Fannie Mae loans with and
Fannie Mae         without DU approval. However, to qualify for the reduced coverage, Agency
Loans              1 loans must meet the following criteria:

                             Feature                                 Requirement
                    Product Type            Fully amortizing fixed rate mortgage with a term greater than
                                            20 years.
                    Transaction Type        · Purchase, and
                                            · No Cash-Out Refinance
                    Occupancy               Owner-occupied, primary residence only.
                    Property Type           · 1-2 Unit
                                            · Single Family
                                            · Condos
                                            · PUDs
                    Market Types            Type Product
                                            212      30-Year Fixed
                                            209      30-Year DreaMaker 95% with 5% Option
                    DU Recommendation       Approve/Eligible.
                    DU Underwritten Loans   · MI Coverage

                                                         LTV                         Coverage
                                                     85.01-90.00%                      17%
                                                     90.01-95.00%                      25%

                    Manually Underwritten   · Salaried Employees
                    MI Coverage                                                           Reduced MI
                                                                     Minimum Credit        Coverage
                                                     LTV                 Score             Amount
                                                 85.01-90.00%             700                17%
                                                 90.01-95.00%             720                25%

                                            · Self-employed Borrower

                                                                                          Reduced MI
                                                                     Minimum Credit        Coverage
                                                     LTV                 Score             Amount
                                                 85.01-90.00%             730                17%
                                                 90.01-95.00%             730                25%

                                            NOTE: The Credit Score requirement only applies to
                                            loans that are manually underwritten.
                    MI Type                 Borrower paid or Lender paid.

                                                                                     Continued on next page




July 2004                                                                                  Pre-Closing – 25
Doing Business with Chase                                                  Chase Correspondent Division



Private Mortgage Insurance, Continued


Reduced MI/        The Reduced Mortgage Insurance Coverage is also available on Freddie Mac
Freddie Mac        loans that reflect a Credit Risk Class of “Accept” on the LP Findings
Loans              Certificate and meet the following criteria:

                           Feature                                Requirement
                    Product Type           Fully amortizing fixed rate mortgages with terms greater
                                           than 20 years (including community lending mortgages
                                           not subject to subordinate financing).
                    Transaction Type       · Purchase
                                           · No Cash-Out Refinances
                    Occupancy              Owner-occupied properties only.
                    Property Type          · 1-2 Units
                                           · Single Family
                                           · Condos
                                           · PUDs
                    LP Recommendation      Accept
                    MI Coverage            LTV                  Coverage
                                           85.01-90.0%          17%
                                           90.01-95.0%          25%
                    MI Type                Borrower paid or Lender paid.


Lower Cost/        Chase does not accept Fannie Mae’s Lower Cost MI or Freddie Mac’s
Custom MI          Custom MI options that offer lower mortgage insurance coverage providing
                   that a delivery fee is paid to the Agency.


Balance Pay        Chase will not purchase Balance Pay Down loans or loans in which the loan
Downs              amount is paid down to avoid obtaining MI.


Cancellation       All Borrower initiated inquiries regarding the cancellation of MI should be
Requests           addressed by requesting a PMI Requirements Letter from the Servicing
                   Department. They may be reached at 800-848-9136.




July 2004                                                                              Pre-Closing – 26
Doing Business with Chase                                                  Chase Correspondent Division



Tax Due Date Policies


Chase’s Tax        Should taxes become due within 30 days of Chase’s purchase of the loan,
Payment            Correspondents are required to:
Policy
                   · pay taxes,
                   · provide proof of taxes paid only if in the taxes are past due or have passed
                     the discount day, and
                   · provide an accurate and complete Tax Information Sheet in the closed loan
                     file.

                   REMINDER: A complete and accurate Tax Information Sheet is
                   required in all closed loan files.


Determining        Taxes must be paid at the earlier of the discount or penalty date to provide the
Tax Due Dates      greatest economic benefit to the borrower. Therefore, unless the property
                   state is identified as a year end state, Chase will identify the tax due date as
                   follows:

                       If Chase’s Tax Service Provider
                                   indicates…                     Then the Chase due date is…
                    various due dates each with different   the date in which the highest discount is
                    discount levels,                        available.
                    a date taxes are to be paid to avoid    the last day to pay taxes avoiding
                    penalties or loss of discount,          penalties.


Year-End           The following states are identified, by Chase, as year-end states and will
States             maintain a tax due date of December 31st, provided tax bills are released by
                   the collector no later than December 15.

                    · Georgia (those with collector due dates     · North Carolina
                      in December and January)
                    · Kentucky (only those with collector due     · Oklahoma
                      dates of January 1)
                    · Louisiana                                   ·   South Carolina
                    · Maryland                                    ·   Tennessee
                    · Michigan                                    ·   Texas
                    · Mississippi                                 ·   Virginia
                    · Missouri                                    ·   Wisconsin
                    · New York Boroughs

                                                                                 Continued on next page



July 2004                                                                              Pre-Closing – 27
Doing Business with Chase                                                      Chase Correspondent Division



Tax Due Date Policies, Continued


Customers          If the borrower(s) is exempt from paying real estate property taxes, the
Exempt from        Correspondent must provide proof of the tax exemption in the closed loan
Paying Taxes       package (usually a letter from the taxing authority).


Past Due Taxes     When taxes are past due, the tax due date will be verified with Chase’s tax
                   service vendor. If the tax service vendor indicates taxes are past due, the loan
                   will be suspended for proof of paid taxes.


Taxes Due          When taxes are due within 30 days of Chase’s purchase of the loan, the tax
Within 30 Days     due date will be verified with Chase’s tax service vendor. If the tax service
of Chase’s         vendor indicates taxes are due within 30 days, the tax escrows collected are
Purchase           reviewed by comparing the “Last Amount Paid or Estimated Amount of Next
                   Disbursement” (next amount due) on the Tax Information Sheet to the tax
                   escrow amount collected on the HUD-1 Settlement Statement.
                        IF the tax escrows
                          collected are…                                  THEN…
                    sufficient to pay the next    ·   Chase will deduct the next amount due on the Tax
                    amount due,                       Information Sheet from the purchase balance.
                                                  ·   The Correspondent will be responsible for paying
                                                      the taxes.
                    not sufficient to cover the   ·   Chase will deduct the tax escrow amount collected
                    next amount due,                  on the HUD-1 Settlement Statement and any
                                                      additional amounts paid into escrows from amortized
                                                      payments from the purchase balance.
                                                  ·   The Correspondent will be responsible for collecting
                                                      from the customer and paying any tax deficiencies.


Escrow             Sufficient escrow to pay all taxes when due is required on all escrowed loans
Account            and must be reflected on the HUD-1 Settlement Statement. Should
Requirement        insufficient escrow be available, the loan will be placed in suspense until the
                   issue is resolved.

                   REMINDER: Chase requires a two-month escrow cushion.


Exceptions         If a particular loan has an unusual circumstance, contact your Account
                   Executive or Sales Assistant to determine the specific actions required on a
                   loan-by-loan basis.




July 2004                                                                                  Pre-Closing – 28
Doing Business with Chase                                                Chase Correspondent Division



New Construction Tax Payment Options


Background         Initial taxes on newly constructed homes rarely reflect an accurate tax
                   assessment. Typically, the initial taxes are based upon unimproved or
                   partially improved land.

                   The discrepancy between the initial tax year assessment and the following tax
                   year assessment (based upon the fully improved land) if often substantial.
                   This discrepancy causes “payment shock” to the borrower when he or she is
                   required to pay the larger tax amount.


Notice to          In order to ensure the Borrower is aware of the probable tax increase, Chase
Borrower Form      developed a NOTICE TO BORROWER(S) TAX PAYMENTS ARE SUBJECT
                   TO SIGNIFICANT INCREASES WHEN FINANCING NEW
                   CONSTRUCTION Form.

                   The form is intended to inform the Borrower(s) of the likelihood of a
                   substantial:

                   · Tax increase once property is assessed as improved
                   · Payment increase due to the increased tax escrow allocation (when
                     applicable)

                   Additionally, the form serves as an Acknowledgement that the Borrower
                   received and understood the form. The form should be:

                   · Signed,
                   · Dated, and
                   · Attached to the HUD-1.

                   NOTE: The Chase developed form has been provided for your
                   convenience. You may submit your own proprietary form, as long as it
                   contains similar information. Use of this form, or a similar form is
                   voluntary ONLY. New construction files will NOT be suspended if a
                   form is not included.

                                                                               Continued on next page




July 2004                                                                            Pre-Closing – 29
Doing Business with Chase                                              Chase Correspondent Division



New Construction Tax Payment Options, Continued


Options for Tax Please note the following Chase approved options for tax collection at closing for
Collection and  New Construction loans. Correspondents may:
Escrow
Allocation at   · Collect on Land Value only. If this option is used, the Correspondent bases the
Closing
                     payment and escrow allocation strictly on the value of the land.
                   · Collect based upon an estimated tax figure on the HUD-1. If this option is used,
                     the Correspondent bases the payment and escrow allocation upon an estimated tax
                     amount.
                   · Collect on Land Value only, but base the escrow allocation on an estimated tax
                     figure.

                   NOTE: The estimated figure must comply with RESPA guidelines on using
                   estimates. Consult your legal counsel.


Escrow         New Construction Tax Escrow accounts are impacted based upon the method used
Account Impact to calculate the initial payment amount.

                   Chase will complete an escrow analysis and adjust the payment based upon the most
                   current information from the Tax Collector.




July 2004                                                                          Pre-Closing – 30
Doing Business with Chase                                                   Chase Correspondent Division



Power of Attorney


Chase              Chase discourages the use of a Power of Attorney (POA). However, when a
Requirements       Power of Attorney is necessary to complete the transaction, Chase will accept
                   a POA under the following conditions:

                   · POA must be transaction-specific,
                   · The title insurer must approve the use of a POA and must insure Chase’s
                     security interest, and
                   · POA must be recorded with Mortgage/Deed of Trust.

                   NOTE: If the loan is a VA loan, the POA must also meet VA’s
                   requirements.


Americans          In addition to being transaction specific, the POA must also meet the
Residing           following criteria when an American borrower is currently residing overseas.
Overseas
                   · Must be drafted in the state where the property is to be financed,
                   · Must have a “choice of law” clause,
                   · Must be executed in a U.S. consulate and attested to by the counsel or
                     his/her designee, and
                   · Loan must be closed in the state the loan will be financed.


Foreign            Foreign Borrowers who are resident aliens (hold a green-card or hold a
Borrowers/         resident visa E, L, or H) that are at least three years in total duration (elapsed
Resident Aliens    or future), are considered residents of the State in which they reside.
                   Therefore, standard POA requirements apply.


Foreign            All other foreign borrowers are subject to the sovereign law of the country in
Borrowers/         which they are citizens. Therefore, POAs are not acceptable for these types
Non-Resident       of borrowers unless referred by a Chase entity who will provide Chase with a
Aliens             POA, approved by its attorneys, and will guarantee that the POA is legitimate
                   under the borrower’s country of residence.

                                                                                  Continued on next page




July 2004                                                                               Pre-Closing – 31
Doing Business with Chase                                              Chase Correspondent Division



Power of Attorney, Continued


Document           A Power of Attorney should sign all closing documents in accordance with
Signature          state law requirements.


Closed Loan        Correspondents must provide a certified copy of the POA in the closed loan
Package            package. Failure to provide a certified copy will result in funding delays
Requirements       and/or the loan may be subject to repricing.




July 2004                                                                          Pre-Closing – 32
Doing Business with Chase                                                 Chase Correspondent Division



Acceptable Title Insurance Policies


Specific Title     Refer to the “Closing” section of this guide for specific information regarding
Policy             title policies and related funding issues.
Requirements


Short Form         Chase accepts Short Form Residential Loan Policies issued by ALTA Title
Title Policies     Companies in all states except Texas and Iowa. However, the form must
                   insure against loss or damage caused by:

                   · violations of restrictions,
                   · encroachments or any item that may be disclosed by an accurate survey,
                     and
                   · surface damage due to mineral extractions.


Commitments/       Chase requires that the Correspondent provide the original Title Policy in the
Binders            closed loan packaged delivered to Chase for funding. However, if the
                   property is located in an area where the Title Policy is not normally available
                   at closing or the Correspondent can not deliver the Title Policy due to
                   recording delays, the Correspondent may provide Chase with a Title
                   Commitment or Binder.

                   All Commitments/Binders delivered to Chase must be “marked-up” by the
                   title insurance company to reflect which items will be deleted from the policy
                   and which endorsements will be included with the final policy.

                   NOTE: Providing a title commitment/binder in the closed loan package
                   does NOT constitute Chase’s acceptance of any exception referred to
                   therein.


Final Title        When a Title Commitment or Binder is submitted with the closed package,
Policy Delivery    the final Title Policy must be received by Chase within 120 days of purchase.
                   Final title policies should be mailed to the address listed on the Final
                   Documentation Transmittal form.




July 2004                                                                             Pre-Closing – 33
Doing Business with Chase                                                     Chase Correspondent Division



Escrow Holdback Policy


Introduction       Chase’s Escrow Holdback applies to conventional agency loans originated by
                   delegated correspondents, non-delegated correspondents, and correspondents
                   using contract underwriters.

                   NOTE: This policy does not apply to Private Investor, FHA, or VA
                   loans, which may dictate their own requirements.


Restrictions       · Under no circumstances may a loan be closed if the uncompleted items
                     affect livability or the integrity of the structure (i.e., lack of gas, electricity,
                     or plumbing or foundation defects).
                   · If an appraisal is subject to repairs, alterations, conditions, or completion of
                     construction, those items should be completed prior to closing. If the
                     appraiser cannot certify that the repairs are complete or will be completed at
                     the time of closing, the Underwriter or Chase’s Correspondent
                     Underwriting Division Manager must determine the extent to which the
                     incomplete items affect the collateral.


When an            The Chase Correspondent Division does not require an escrow holdback
Escrow Repair      when all of the following conditions have been met:
Account is
NOT Required       · Minor, uncompleted items (less than $2,000 based on the appraiser’s
                     opinion) that have no impact on the livability,
                   · The value and marketability are not impacted as documented by the
                     appraiser, and
                   · The final inspection will be completed within 30 days of the closing date.

                   Examples of repairs that do not require an escrow repair account, include:

                   ·   minor flooring,
                   ·   painting,
                   ·   wallpapering, or
                   ·   minor landscaping.

                                                                                    Continued on next page




July 2004                                                                                 Pre-Closing – 34
Doing Business with Chase                                                Chase Correspondent Division



Escrow Holdback Policy, Continued

When an            The Chase Correspondent Division requires an escrow holdback for
Escrow             significant, uncompleted items that do not affect livability, value,
Account is         marketability, or the structural integrity of the property. Examples of
Required           significant repairs or uncompleted items that require an escrow holdback
                   account, include:
                   · swimming pool (eligible on proposed construction or existing refinance
                     only),
                   · garage conversion,
                   · combination of flooring, carpeting, and/or painting,
                   · unfinished bathroom (providing that one bathroom is fully completed and
                     functioning)
                   · major landscaping,
                   · fencing, and
                   · delay in completion when related to weather, material shortage, new
                     construction, or other extenuating circumstances that can be fully
                     documented.


Delegated          Correspondents utilizing their delegated underwriting authority to establish an
Correspondent      escrow holdback account must obtain the appropriate escrow holdback
Underwriting       approval signatures prior to submission of the loan for funding. Refer to the
Authority          table below to determine the appropriate escrow holdback approval signatures
Approval           based on escrow holdback dollar amount.
Limits
                   NOTE: These approval limits also apply to loans underwritten by a
                   contract underwriter on behalf of a delegated Correspondent using the
                   delegated Correspondent’s delegated underwriting authority.
                    Holdback Dollar Amount Escrow Holdback Sign-off Approval Requirements
                    $25,000 or less        Delegated Correspondent Underwriter
                    $25,001 - $40,000      · Delegated Correspondent Underwriter,
                                           · Chase Correspondent Underwriting Manager, and
                                           · One of the following:
                                             · Chase Correspondent Operations Manager
                                             · National Funding Manager
                                             · Chase Correspondent Division Executive
                    greater than $40,000   · Delegated Correspondent Underwriter,
                                           · Chase Correspondent Underwriting Manager, and
                                           · One of the following:
                                             · Chase Correspondent Operations Manager
                                             · National Funding Manager
                                             · Chase Correspondent Division Executive, and
                                           · Credit Risk Senior Credit Officer
                                                                               Continued on next page


July 2004                                                                            Pre-Closing – 35
Doing Business with Chase                                                   Chase Correspondent Division



Escrow Holdback Policy, Continued


Chase and          Correspondents utilizing the Choice Contract MI Program Underwriters, or
Choice MI          Chase Underwriters, to establish an escrow holdback account must obtain the
Contract           appropriate escrow holdback approval signatures. Refer to the table below to
Underwriting       determine the appropriate escrow holdback approval signatures based on
Approval           escrow holdback dollar amount.
Limits

                     Holdback Dollar
                          Amount             Escrow Holdback Sign-off Approval Requirements
                    $5,000 or less        Underwriter (Chase or Choice Contract)
                    $5,001 - $25,000      · Choice Contract Underwriter, and
                                          · Chase Correspondent Underwriting Manager
                    $25,001 - $40,000     · Underwriter (Chase or Choice Contract),
                                          · Chase Correspondent Underwriting Manager, and
                                          · One of the following:
                                            · Chase Correspondent Operations Manager
                                            · National Funding Manager
                                            · Chase Correspondent Division Executive


Terms and          In addition to obtaining the appropriate approval, Chase requires all approved
Conditions         escrow holdback accounts to be administered in accordance with the terms
                   and conditions outlined in the chart below.

                          Type                                    Description
                    Establishing/       The Correspondent is responsible for establishing and
                    Monitoring          monitoring all escrow holdback accounts.
                    Holdback            Holdback accounts must be established at 150% of the cost of
                    Amount              the work to be completed.

                                     EXAMPLE: If the appraiser establishes the cost of the
                                     work to be $10,000, then the amount of the holdback
                                     account must be $15,000.
                    Days to Complete The Escrow Holdback Agreement should establish a maximum
                    Extensions       of 90 days to complete the work.

                                                                                  Continued on next page




July 2004                                                                               Pre-Closing – 36
Doing Business with Chase                                                  Chase Correspondent Division



Escrow Holdback Policy, Continued


Terms and Conditions (continued)

                          Type                                  Description
                    Completion Date   If extenuating circumstances are documented and the Chase
                    Extensions        Correspondent Underwriting Manager approves the extension,
                                      then the completion date may be extended to 180 days.

                                      NOTE: Requests to extend past 180 days must be approved
                                      by the Correspondent Underwriting Manager,
                                      Correspondent Operations Manager or National Funding
                                      Manager, and Credit Risk Senior Credit Officer.
                    Cost              Chase will not be liable for any costs incurred. The cost of the
                                      final inspection and/or other costs relating to the escrow
                                      holdback must be paid by the seller or borrower.
                    Maximum
                    Holdback                                                           Holdback
                    Amount                    Item/Reason            CLTV              Percentage
                                          Weather                 > 90%                    5%
                                          Materials Shortage      > 85.1% - 90%           10%
                                                                     < 85%                15%
                                          Swimming Pool              > 90%                10%
                                                                  85.1% - 90%             15%
                                                                     < 85%                20%

                    SRP             Chase will hold SRP on all non-weather related items.
                    Escrow Holdback The Escrow Holdback Agreement must contain the following
                    Agreement       information:

                                      ·   Chase Loan Number
                                      ·   Borrower(s) Name,
                                      ·   Total Dollars being held in Escrow,
                                      ·   Actual Dollar Amount of cost to repair,
                                      ·   Scheduled Completion Date,
                                      ·   Items Requiring Completion or Repair,
                                      ·   Correspondent Lender Name
                                      ·   Title Agency and Contact Name of Title Company that is
                                          holding the Escrow Funds.




July 2004                                                                              Pre-Closing – 37
Doing Business with Chase                                                     Chase Correspondent Division



Escrow Holdback Procedures


Holdback           Complete the following steps to obtain an escrow holdback approval:
Approvals

                      Step         Phase                                  Action
                       1     Holdback Approval       Submit a holdback approval request to the
                                                     Underwriter including one of the following:

                                                     · Bid for repair/improvement,
                                                     · Itemization of work to be completed,
                                                     · Statement of estimated cost to complete from the
                                                       appraiser. Appraiser must include value in
                                                       appraisal report.
                       2     Holdback Approval       Underwriter will review for acceptability.

                                  If holdback criteria is…              The Underwriter will…
                              within approval authority,       approve or deny.
                              not within approval authority,   forward to appropriate approval authority.

                       3     Holdback Approval       · If approved, Underwriter will issue a loan
                                                       approval with escrow holdback condition
                                                       describing the acceptable terms of the holdback
                                                       to include:
                                                       · Description of repair/improvement,
                                                       · Escrow holdback amount,
                                                       · Maximum term of the escrow holdback
                                                       · Party supplying holdback funds (borrower or
                                                          seller).
                                                     · Underwriter will attach a copy of the bid to the
                                                       underwriting approval.

                                                     NOTE: If the purpose of the holdback is to
                                                     repair/complete a swimming pool, the
                                                     Appraiser must include the pool market value
                                                     in the property-appraised value, based on the
                                                     comparable sales.

                                                                                     Continued on next page




July 2004                                                                                  Pre-Closing – 38
Doing Business with Chase                                                     Chase Correspondent Division



Escrow Holdback Procedures, Continued


Closing and        The following steps should be completed when closing and funding loans
Funding            with escrow holdbacks.

                      Step      Phase                                   Action
                       1     Closing        ·   Closing agent will prepare Holdback Agreement in
                                                accordance with the underwriter approval terms.
                                            ·   Borrower and seller will execute Holdback Agreement.
                                            ·   Closing agent will establish the Holdback Escrow
                                                Account.
                                            ·   Closing agent will prepare HUD-1 indicating amount
                                                and holder of funds on Line 1307.
                       2     Shipping       ·   Correspondent will include in the shipping file the
                                                following documents pertaining to the escrow holdback:
                                                · copy of the loan approval with bid attached, and
                                                · copy of the executed holdback agreement.
                       3     Shipping       ·   Funding Analysts will review the terms of the Escrow
                                                Holdback Agreement and the underwriter’s approval to
                                                ensure they are in accord.
                       4     Funding

                                                If the…                         Then funding will…
                              terms agree,                                 proceed with review.
                              terms do not agree,                          suspend the file.
                              holdback has not been approved,              suspend the file.
                              holdback is for non-weather-related items,   hold SRP.

                       5     Research       Notifies Post-Production Services of escrow holdback.

                                                                                    Continued on next page




July 2004                                                                                 Pre-Closing – 39
Doing Business with Chase                                               Chase Correspondent Division



Escrow Holdback Procedures, Continued


Holdback           Once the repairs/items have been completed, Correspondents should complete
Completion         the steps outlined in the chart below:

                      Step            Phase                           Action
                       1     Holdback Completion     When the work has been completed, the
                                                     Correspondent must:

                                                     · Obtain a final inspection,
                                                     · If swimming pool was reason for
                                                       holdback, obtain an updated title policy,
                                                     · Obtain Certificate of Completion or
                                                       comparable document.
                       2     Holdback Completion     Title agent must disburse funds and provide
                                                     documentation to evidence final disbursal.
                       3     Holdback Completion     Correspondent must forward copies of the
                                                     final documentation to:

                                                     Chase Manhattan Mortgage Corporation
                                                     Attention: Correspondent Research Dept.
                                                     10151 Deerwood Park Boulevard
                                                     Building 300
                                                     Jacksonville, FL 32256
                       4     Holdback Completion     If SRP is being held, Correspondent includes
                                                     a written request to release the SRP when
                                                     submitting the final documents to Post-
                                                     Production Services.
                       5     Holdback Completion     If SRP is being held and all final
                                                     documentation is in order, PPS will approve
                                                     the release of funds and fax a copy of the
                                                     final inspection to Research in Jacksonville,
                                                     instructing them to release SRP.
                       6     Holdback Completion     Research will release the SRP to the
                                                     Correspondent.
                       7     Overdue Holdback        Chase Customer Management Group will
                             Completion              contact Correspondent if work is not
                                                     completed within the agreed time frame.




July 2004                                                                           Pre-Closing – 40
Doing Business with Chase                                                      Chase Correspondent Division



Miscellaneous Pre-Closing Requirements


Termite            Correspondents must comply with the requirements placed on them by their
Inspections        HUD/VA regional office, Underwriter, and Appraiser. In addition, when
                   termite inspections are required, the Correspondent must include the
                   documentation required to satisfy the condition in the closed loan file.


Appraisal Notes When the appraiser notes any evidence of termites (or other wood-destroying
Evidence of     organism), the Correspondent must provide evidence that the condition does
Termites        not pose a structural threat to the property.

                    If the damage is…                             Then…
                    extensive,        a professionally prepared report must be obtained indicating
                                      that the damage is not structural.

                                           If the report indicates
                                            that the damage is…                     Then…
                                          structural,                repairs must be made prior to
                                                                     delivering the loan to Chase.
                                          not structural,            the Underwriter may determine the
                                                                     corrective action required.

                    not extensive       the Underwriter may determine the corrective action required.


Requirement        If a property is determined to be in an area affected by an earthquake, an
for Earthquake     appraisal is required to certify there is no damage to the property beyond
Affected Areas     repair, whether the selected loan type requires an appraisal or not.

                                                                                     Continued on next page




July 2004                                                                                  Pre-Closing – 41
Doing Business with Chase                                                Chase Correspondent Division



Miscellaneous Pre-Closing Requirements, Continued


Trusts             Chase will accept inter vivos revocable or “living trusts” on Agency and Non-
                   agency conventional loans, providing that the trust meets Fannie Mae’s
                   criteria and Chase’s guidelines as outlined in the “Credit Administration”
                   section of Chase’s Credit Policy.

                   For loans closed with an inter vivos revocable trust, the Trust Agreement
                   must be reviewed by the Correspondent’s legal counsel, rendering an
                   Attorneys Opinion stating that the trust is enforceable and is in compliance
                   with state and local laws and regulations. The Correspondent will utilize the
                   opinion to provide Chase with their Rep and Warrant of the Trust.

                   NOTE: If the loan is underwritten by Chase Underwriting, Chase
                   Underwriting can only issue an approval after the Chase Underwriter
                   has reviewed the attorney’s opinion.


FHA ARM            FHA ARM loans must meet GNMA Guidelines requiring grouped change
Change Dates       dates and strict delivery time frames. The daily rate sheet provides the
                   parameters for selling FHA ARM loans to Chase. However, the following
                   table will assist in accurately preparing the closing documents.

                                                 And the loan is delivered Then the first interest
                      If the loan disbursement     to Chase in fundable      rate adjustment
                       date occurs between…      condition on or before…     will occur on…
                      11/01/2003 - 01/31/2004,          02/06/2004,            04/01/2005.
                      02/01/2004 - 04/30/2004,          05/07/2004,            07/01/2005.
                      05/01/2004 - 07/31/2004,          08/06/2004,            10/01/2005.
                      08/01/2004 - 10/31/2004,          11/05/2004,            01/01/2006.




July 2004                                                                            Pre-Closing – 42
Doing Business with Chase                                                         Chase Correspondent Division



                                       Closing the Loan
Overview


Introduction       When submitting a closed loan package for purchase, Chase will review
                   certain closed loan documents in their entirety to ensure compliance with
                   industry guidelines prior to purchasing the loan. This chapter will identify
                   those specific closing documents that should be included in the loan file, and
                   specify Chase’s purchasing requirements as it pertains to each document.


In this Chapter    Use the following chart to locate the main topics in this chapter:

                                               Topic                                             See Page
                    Title Insurance Policies                                                         2
                    Original Note                                                                    8
                    Assignment of Mortgage                                                          11
                    Mortgage/Deed of Trust                                                          13
                    Miscellaneous Collateral Documents                                              14
                    (Survey, Consolidation, Extensions, & Modification Agreements,
                    Construction-to-Permanent Financing Modifications, Buydown
                    Agreements, and LGC Certificates)
                    Regulatory Documents                                                             18
                    (HUD-1, TIL, NRC, First Payment Letter, Loan Payment History, Name
                    Affidavit, Transfer of Servicing Letter, Disclosures, W-9, IRS 4506-T, and
                    Tax Information Sheet)
                    Required Escrow Documents                                                        25
                    (Initial Escrow Account Disclosure Statement and Escrow Waiver Letter)
                    Escrow Waivers                                                                   27
                    Chase Funding Guide                                                              29




July 2004                                                                                   Closing the Loan – 1
Doing Business with Chase                                                Chase Correspondent Division



Title Insurance Policies


Introduction       The original Title Insurance Policy is required on all closed loan packages
                   submitted to Chase for purchase. However, if the property is located in an
                   area where the Title Policy is not typically available at closing or is
                   unattainable due to recording delays, the correspondent may provide Chase
                   with a Title Commitment or Binder. In addition to the Title Commitment or
                   Binder, Chase will also accept Short Form Title Policies issued by ALTA
                   Title Companies, except in Texas. This section outlines Chase’s funding
                   requirements as it pertains to Title Policies and Endorsements. However,
                   there may be additional requirements if Schedule B of the Title Policy
                   contains exceptions.


Title         The Title Commitment or Binder can be submitted to Chase with the closed
Commitment or loan package, if there is a delay in obtaining the final Title Policy. An agent
Binder        from the title insurance company must “mark up” the Title Commitment or
                   Binder to specify which items will be deleted from the Title Policy as well as
                   identify the type of endorsement that will accompany the final Title Policy.
                   Failure to provide this in the closed loan package will delay funding.

                   NOTE: If a Title Commitment or Binder is submitted with the closed
                   loan file, the final Title Policy must be forwarded to Chase within 210
                   days of purchase.


Short Form         Chase will accept Short Form Residential Loan Policies issued by ALTA
Title Policies     Title Companies in all states except Texas and Iowa. These policies should
                   insure against loss or damage caused by violations of restrictions,
                   encroachments or anything that may be disclosed by an accurate survey
                   (therefore eliminating the need for a survey), and surface damage due to
                   mineral extractions.

                                                                               Continued on next page




July 2004                                                                        Closing the Loan – 2
Doing Business with Chase                                                   Chase Correspondent Division



Title Insurance Policies, Continued


Assessments        Any assessment(s) for a Homeowner Association must state “paid current”
                   and a PUD Endorsement should accompany the Title Policy.


Easements          Any easement(s), right of way, and setback lines specified on the Title Policy,
                   must be shown on the survey, if required, or must state “Blanket Easement.”

                                          and the easement
                      If the loan is…         is over…                         Then…
                    FHA/VA,                    10 feet,        an FHA/VA waiver is required.
                    Conventional,              12 feet,        a letter from an appraiser is required.


Pipeline           There are two types of pipeline easements. The chart below outlines the
Easements          requirements for each.

                          Type                                  Requirement
                   Defined Easements    · Must be located on the survey.
                                        · The outer edge of the easement cannot be lesser than 10 feet
                                          from the improvement.
                                        · On FHA/VA loans, a formal waiver must be obtained from
                                          FHA/VA.
                   Blanket Easements    Must have affirmative insurance which states that:

                                        · the buildings and improvements do not encroach upon the
                                          easement, and
                                        · the easement does not interfere with the use of the buildings
                                          or improvements.


Conventional       Easement violations on Conventional loans are automatically waived if:
Loan Easement
Violations         · Affirmative coverage is provided by the Title Policy for any damages or
                     reversion of title resulting from the easement violation, or
                   · A letter from the utility company is obtained stating that they will abandon
                     the portion of the easement that is violated.

                                                                                  Continued on next page




July 2004                                                                           Closing the Loan – 3
Doing Business with Chase                                                   Chase Correspondent Division



Title Insurance Policies, Continued


FHA/VA             If the Title Insurance Policy provides affirmative coverage that insures
Easement           against any damages or reversion in title resulting from an easement violation,
Violations         a General Waiver will cover those violations. However, if the violation does
                   not fall under “General Waiver,” the following requirements apply:

                   · A letter from the utility company stating that they will abandon the portion
                     of the easement that is in violation;
                   · A letter and a waiver request must be submitted to HUD/VA to obtain a
                     waiver prior to closing the loan.

                   NOTE: If a Short Form Title Policy is used, any setback or easement
                   violation is automatically covered.


Setback Line       Setback Line Violations on Conventional loans are automatically waived if:
Violations on
Conventional       · Restrictions do not set out penalty of reversion, forfeiture of title, a lien of
Loans                any kind for damages, or have an adverse effect on the fair market value of
                     the property; or
                   · Affirmative coverage is provided by the Title Policy for any damages or
                     reversion of title resulting from the setback violation; or

                      If the property is located…       Then a letter must be obtained from the…
                   inside the city limits,            City Engineer stating no objection to the
                                                      violation.
                   outside the city limits,           County Commissioner stating no objection to the
                                                      violation.


Setback Line       The following Setback Violations on FHA/VA loans are covered by General
Violations on      Waiver:
FHA/VA Loans
                   · Violations of cost or setback restrictions which do not provide a penalty of
                     reversion, forfeiture of title, or a lien for liquidated damages which may be
                     superior to the lien of the insured mortgage;
                   · Violations of cost or setback restrictions which provide for penalties,
                     whereas penalty rights have been released or subordinated to the lien of the
                     insured mortgage;
                   · Title Insurance Policies that provide affirmative coverage, insuring against
                     any damage(s) or reversion in title resulting from setback violations.

                                                                                  Continued on next page




July 2004                                                                           Closing the Loan – 4
Doing Business with Chase                                                    Chase Correspondent Division



Title Insurance Policies, Continued


Setback Line       If the setback violation does not fall under the General Waiver provisions, the
Violations on      following requirements apply:
FHA/VA Loans
(continued)

                     If the property is located…       Then a letter must be obtained from the…
                   Inside city limits,             City Engineer or the municipality having
                                                   jurisdiction stating no objection to the violation.
                   Outside city limits,            County Commissioner or the municipality having
                                                   jurisdiction stating no objection to the violation.

                   NOTE: The letter and a waiver request must be submitted to HUD/VA
                   and a waiver must be obtained from HUD/VA prior to closing the loan.


Liens and          Any liens and/or judgments that appear on Schedule B of the Title Policy
Judgments          must be paid off and deleted on the final policy.


Mineral Leases/    If the release of surface rights cannot be obtained for FHA/VA loans, Chase
Releasing of       will make an exception to close the loan without the release. This decision is
Surface Rights     based on the fact that, customarily, leases provide for damages resulting from
for FHA/VA         any drilling or exploratory operations on the property as well as prohibit
Loans              drilling within 200 feet of a structure.


Mineral Leases/    Exceptions for outstanding oil, gas, water or mineral rights are acceptable to
Releasing of       Chase if:
Surface Rights
for                · The exercise of these rights do not result in damage to the mortgaged
Conventional
                     property or impair the use or marketability of the property, and
Loans
                   · There is no right of surface or subsurface entry within 200 feet of the
                     residential structure, or
                   · There is affirmative coverage insuring against loss or damage due to the
                     exercise of surface rights, in which the surface rights will not result in
                     damage to the mortgaged property or impair the use or marketability of the
                     property.

                   NOTE: The lease must provide for repair and/or replacement of any
                   damages to the property.

                                                                                   Continued on next page




July 2004                                                                            Closing the Loan – 5
Doing Business with Chase                                                   Chase Correspondent Division



Title Insurance Policies, Continued


Name of            The following chart outlines the appropriate “Name of Insured” phrases for
Insured            Conventional, FHA, and VA loans.

                     Loan Type                               Name of Insured
                   Conventional    “Chase Manhattan Mortgage Corporation and/or its assigns, as
                                   their interest may appear”
                   FHA             “Chase Manhattan Mortgage Corporation and/or Secretary of
                                   Housing and Urban Development, their successors and assigns, as
                                   their interest may appear”
                   VA              “Chase Manhattan Mortgage Corporation and/or Secretary of
                                   Veterans Affairs, their successors and assigns, as their interest may
                                   appear”


Title              Chase requires the use of appropriate endorsements to the Title Policy
Endorsements       including, but not limited to the following:

                          Type                                  Endorsement
                   ALTA 4.0                Condominium Endorsement
                   ALTA 5.0                Planned Unit Development Endorsement
                   ALTA 6.0                Adjustable Rate Endorsement
                   ALTA 8.1                Environmental Lien Protection

                   NOTE: All correspondents must comply with their state specific
                   guidelines when determining the appropriate endorsements to the Title
                   Policy.


Title Policy       All references to property taxes as an exception on the Title Policy must state
Exceptions         “not yet due and payable” or “paid.” If there is an exception in question,
                   contact the appropriate Customer Coordinator/Advocate for your specific
                   region to determine which exceptions are not acceptable to Chase.

                                                                                   Continued on next page




July 2004                                                                            Closing the Loan – 6
Doing Business with Chase                                               Chase Correspondent Division



Title Insurance Policies, Continued


Party Wall         Chase requires a Party Wall Agreement, when the Title Policy lists a Party
Agreements         Wall exception. On an attached property, Chase requires that an executed
                   Party Wall Agreement be included in the closed loan file.

                   REFERENCE: Refer to the “Credit Administration” section of this
                   guide, for details regarding Party Wall Agreement requirements.




July 2004                                                                       Closing the Loan – 7
Doing Business with Chase                                                  Chase Correspondent Division



Original Note


Introduction       To ensure acceptability of the Original Note, all correspondents must properly
                   execute the endorsement to the Note in accordance with the funding
                   requirements outlined in the Chase Funding Guide (located at the end of this
                   chapter). In addition to Chase’s requirements, the Original Note should
                   comply with state specific guidelines. Failure to submit the Original Note
                   will delay funding and may result in loan repricing if the document is not
                   provided prior to the loan expiration date.


Endorsement        The endorsement on the Original Note should read:

                   PAY TO THE ORDER OF CHASE MANHATTAN MORTGAGE
                   CORPORATION, WITHOUT RECOURSE

                   (Correspondent Lender’s Business Name)

                   BY:      (Signature of Authorized Officer on Endorsement)
                            Officer’s Name & Title Typed Under Signature

                   NOTE: The endorsement cannot be abbreviated.

                   REFERENCE: Refer to “Correspondent Eligibility” for fictitious name
                   requirements.


Original Note      If the Original Note is endorsed by the correspondent’s Warehouse Bank, the
Endorsed by        loan file must contain a letter from the Correspondent stating that they fully
Warehouse          acknowledge that their reps and warranties are in full force and effect, as
Bank               specified in the Selling Contract. In addition to the letter, a specific Power of
                   Attorney must be included in the file. If these documents are not included in
                   the loan file, funding will be delayed.

                   NOTE: Blanket agreements, which allow the Note to be endorsed in this
                   manner, are NOT acceptable to Chase.


Corrections to     Any alterations to the Original Note, such as strike-throughs, white-outs,
the Original       and/or lift-offs, must be initialed by all borrowers prior to submitting the
Note               closed loan file to Chase for purchase.

                                                                                 Continued on next page




July 2004                                                                          Closing the Loan – 8
Doing Business with Chase                                                Chase Correspondent Division



Original Note, Continued


Bailee             Requirements
Agreements         If the Warehouse Bank sends the Original Note with an attached Bailee
                   Agreement, the agreement should contain the following information:

                   ·   Name, address, and fax number of the Warehouse Bank
                   ·   Name and address of the correspondent lender
                   ·   Complete wiring instructions for payment
                   ·   Name of borrower(s)
                   ·   Loan amount
                   ·   Chase loan number, if available
                   ·   Acknowledgment that the Warehouse Bank’s security interests will be
                       terminated upon receipt of the payment.

                   Delivery
                   Warehouse Banks should be advised to forward the Original Note and Bailee
                   Agreement to:

                   Chase Manhattan Mortgage Corporation
                   ATTN: Correspondent Note Control
                   10151 Deerwood Park Boulevard
                   Building 300
                   Jacksonville, FL 32256


Signature and      The borrower’s signature(s) and printed name(s) on the Original Note must
Name               match the Mortgage/Deed of Trust, otherwise, a notarized Name Affidavit
Requirements       must accompany the loan file illustrating all signatures. In addition to the
on the Original    borrower’s name, the correspondent lender’s name must read exactly the
Note               same on the front of the Note and on the endorsement.

                   NOTE: The correspondent lender’s name must be EXACTLY the same
                   on the front of the Note as the endorsement reads on the back of the
                   Note.

                                                                               Continued on next page




July 2004                                                                        Closing the Loan – 9
Doing Business with Chase                                               Chase Correspondent Division



Original Note, Continued


Chase’s Late       Chase will require that the mortgagor pay a late fee on each payment received
Charge             after the 15th of the month. Review the table below to determine the
Requirements       appropriate late fee percentages.

                                 Loan Type                       Late Fee Percentage (%)
                   Conventional                                            5%
                   California Conventional Loans Only                      6%
                   Government (FHA/VA)                                     4%

                   NOTE: If the above late fees are prohibited by state or applicable law,
                   the maximum amount permissible under such law will apply. All fees are
                   subject to change.




July 2004                                                                      Closing the Loan – 10
Doing Business with Chase                                                Chase Correspondent Division



Assignment of Mortgage


Introduction       A true, certified copy of an Assignment of Mortgage must be authorized by
                   an officer of the correspondent lender, prior to the submission of the closed
                   loan file to Chase for purchase. Failure to comply with Chase’s funding
                   requirements, as it pertains to this document, will delay funding and may
                   result in loan repricing if the document is not provided prior to the loan
                   expiration date.


Assignment of      The following sections on the Assignment of Mortgage must be exactly the
Mortgage           same as the information contained on the Note and Mortgage/Deed of Trust:

                   ·   Legal Description,
                   ·   Name of the Correspondent Lender,
                   ·   Borrower’s Name(s), and
                   ·   Signature(s), including that of the notary.


Chase’s            The Assignment of Mortgage should contain the following address:
Address on the
Assignment of      JPMorgan Chase Custody Services
Mortgage           P. O. Box 8000
                   Monroe, LA 71211

                                                                               Continued on next page




July 2004                                                                       Closing the Loan – 11
Doing Business with Chase                                                Chase Correspondent Division



Assignment of Mortgage, Continued


Recording the      The Assignment of Mortgage (AOM) must be recorded by the Correspondent.
Assignment of      However, the Assignment should NOT be recorded until the
Mortgage           Correspondent has been notified by Chase that the loan has been
                   purchased.

                   EXCEPTION: The chart below outlines the state specific requirements
                   for properties located in Virginia, Maryland, or the District of Columbia.

                             State                               Requirement
                    Virginia               AOM may be recorded, but it is not required.
                    Maryland               AOM must be recorded; however, an Assignment of
                                           Deed of Trust is not required to be recorded.
                    Washington, D.C.       All AOMs must be recorded within 30 days of execution.


Intervening        A certified copy of any intervening assignments, if applicable, must be
Assignments        included in the closed loan file to Chase.




July 2004                                                                       Closing the Loan – 12
Doing Business with Chase                                                      Chase Correspondent Division



Mortgage/Deed of Trust


Introduction       A certified, true copy of the Mortgage or Deed of Trust signed by the
                   borrower(s), with all applicable riders, must be included in all closed loan
                   packages submitted to Chase for purchase. Failure to comply with Chase’s
                   funding requirements, as it pertains to this document, will delay funding and
                   can result in loan repricing if the document is not provided prior to the loan
                   expiration date.


Mortgage or        The following items on the Mortgage or Deed of Trust must be exactly the
Deed of Trust      same as the information contained on the Note and Assignment of Mortgage:

                   ·   Legal Description,
                   ·   Property Address (including zip code),
                   ·   Name of the Correspondent Lender,
                   ·   Borrower’s Name(s), and
                   ·   Signature(s), including the notary’s signature


Accompanying       The following Agency Riders, if applicable, must be attached to the Mortgage
Riders             or Deed of Trust when submitting the closed loan file to Chase for purchase:

                   ·   PUD Rider
                   ·   Condo Rider
                   ·   1-4 Family Rider
                   ·   ARM Rider
                   ·   Balloon Rider
                   ·   Second Home Rider
                   ·   VA Rider
                   ·   Rehabilitation Rider (if originally closed as a 203k)
                   ·   Fannie Mae Multi-State Mortgage Insurance Rider




July 2004                                                                             Closing the Loan – 13
Doing Business with Chase                                                  Chase Correspondent Division



Miscellaneous Collateral Documents


Survey             Chase’s Policy
                   A current survey is required on all loans purchased by Chase. Therefore, if
                   the survey is over 90 days old at the time of loan closing, Chase will be
                   unable to purchase the loan. Failure to include the survey in the closed loan
                   package will delay funding and the loan will be subject to repricing if the
                   survey is not provided prior to the loan expiration date.

                   NOTE: Refer to Chase’s Funding Guide for additional requirements on
                   surveys.

                   Exceptions
                   If the title policy insures against survey defects then Chase will not require a
                   survey. If the title company requires a survey in order to issue the
                   endorsement then Chase will require the survey.

                   Plat vs. Survey States
                   The table below lists all the Plat and Survey States:

                                  Plat States                                Survey States
                   Arizona, California, Idaho, Iowa,          Alabama, Arkansas, Florida, Georgia,
                   Michigan, Missouri*, Minnesota,            Illinois, Indiana, Kansas, Kentucky,
                   Nebraska, New York, Nevada, North          Louisiana, Maryland, Massachusetts,
                   Dakota, Oregon, Pennsylvania, South        Mississippi, Montana, New Jersey, New
                   Dakota, *Utah, Washington, Wisconsin       Mexico, North Carolina, Ohio, South
                                                              Carolina, Tennessee, Texas, Virginia,
                   *Some areas within the state may issue a   West Virginia
                   survey.

                                                                                 Continued on next page




July 2004                                                                         Closing the Loan – 14
Doing Business with Chase                                                Chase Correspondent Division



Miscellaneous Collateral Documents, Continued


Consolidation,     Consolidation, Extension, and Modification Agreements on refinanced loans
Extensions, and    are only acceptable in the state of New York. To purchase the loan the
Modification       following documentation must be provided in the closed loan file submitted
Agreements         to Chase:
(CEM)
                   · all original Notes (other than the Consolidated/Gap/Advanced Money
                     Note), properly endorsed,
                   · the Consolidated/Gap/Advanced Money Note must be original, but does not
                     have to be endorsed,
                   · all recorded assignments,
                   · all original recorded mortgages from all previous loans
                   · a certified copy of the mortgage for any new money associated with the
                     loan, and
                   · a certified copy of the Consolidation, Extension, and Modification
                     Agreement (Fannie Mae Form #3172) must be provided.

                   NOTES:
                   · CEM Agreements on FHA/VA loans are acceptable to Chase for those
                     loans located in the state of New York only; however, the agreements
                     must meet HUD specific guidelines.
                   · CEM Agreements on purchase transactions are only acceptable, in the
                     state of New York, with an approved Product Exception.


Construction-      Construction-to-Permanent Financing Modifications are acceptable to Chase
to-Permanent       in all states unless otherwise prohibited by state law.
Financing
Modifications      NOTE: Chase currently purchases One Time Closing Construction- to-
                   Perm Loans. Refer to the “Credit Policy,” or the “Loan Program”
                   section under Special Document Processing Programs for more detailed
                   descriptions.


Modifications      Modifications are only acceptable for those loans located in the state of New
                   York that require Consolidation/Extension Modification Agreements, and
                   those loans requiring Construction to Permanent financing.

                                                                               Continued on next page




July 2004                                                                       Closing the Loan – 15
Doing Business with Chase                                               Chase Correspondent Division



Miscellaneous Collateral Documents, Continued


Buydown            If the loan was closed as a Correspondent Subsidized buydown, all
Agreements         correspondents must provide an executed buydown agreement and schedule
                   containing the following:

                   ·   Note rate
                   ·   Buydown rate
                   ·   P&I - note rate
                   ·   P&I - buydown rate
                   ·   Monthly buydown amount
                   ·   Yearly buydown amount
                   ·   Total buydown amount

                   NOTE: The total buydown schedule must be in 12-month increments.
                   See specific product description to determine if buydowns are allowed.
                   Refer to the “Buydowns” section in the Credit Administration chapter of
                   this guide for additional information regarding Chase’s buydowns.


Loan Guaranty      If, at the time the loan is sold to Chase, the LGC (VA loans) has been issued,
Certificate        the certificate must be included with the closed loan package. If the LGC has
(LGC)              not been issued, proof of payment of the VA Funding Fee must be included in
                   the closed loan package.

                   NOTE: Chase will monitor the submission of the loan package for
                   insurance, and issuance of the LGC. Any loan closed over 90 days at the
                   time of purchase by Chase must include the LGC certificate.


Chase Payment      To obtain a Chase 6-month payment history required to obtain the MIC/LGC,
History            notify the appropriate Research Coordinator by completing the Research
Required for       Submission Form, and fax it to (904) 620-6664. The normal resolution
MIC/LGC            timeframe is two business days. For all other requests for payment histories,
                   contact Chase’s Customer Service Department at 800-848-9136.

                                                                              Continued on next page




July 2004                                                                      Closing the Loan – 16
Doing Business with Chase                                           Chase Correspondent Division



Miscellaneous Collateral Documents, Continued


1031 Exchanges     On a 1031 Exchange loan, a copy of the Exchange Agreement must be
                   included in the file sent to Chase for purchase.




July 2004                                                                  Closing the Loan – 17
Doing Business with Chase                                                Chase Correspondent Division



Regulatory Documents


HUD-1 or           Chase’s Policy
HUD-1A             The final HUD-1/HUD-1A Settlement Statement must be included in the
Settlement         closed loan package submitted to Chase for purchase. It must accurately
Statement          reflect all settlement costs incurred, including those costs paid outside of
                   closing (POC), and should be signed by the borrower(s), seller(s), and closing
                   agent. In addition, all parties must sign any addendum to the HUD-1.

                   Escrows
                   Private mortgage insurance, hazard insurance, and flood insurance premiums
                   disbursed at closing or paid outside of closing (POC) should be reflected in
                   Section 900 of the Settlement Statement (HUD-1). The reserves shown in
                   Section 1000 of the Settlement Statement (HUD-1) will be deducted from the
                   proceeds of the purchase. Any aggregate analysis adjustment should also be
                   reflected in Section 1000. The beginning balance on the Initial Escrow
                   Account Disclosure Statement should match the reserves collected on the
                   HUD-1 Settlement Statement less the aggregate adjustment.

                   Interest Credits
                   Interest credit is allowed by Chase, therefore the closing agent should show a
                   credit to the borrower on the HUD-1. Refer to the table below to determine
                   what interest credit Chase will allow.

                   NOTE: Chase will not accept an estimated Settlement Statement in lieu
                   of the final HUD-1 in escrow closing states.

                          IF the loan type is…            THEN the maximum interest credit is…
                    Conventional Purchase or Refinance,                30 days
                    VA Purchase or Refinance,                          30 days
                    FHA Refinance,                                     30 days
                    FHA Purchase,                                       7 days

                                                                               Continued on next page




July 2004                                                                       Closing the Loan – 18
Doing Business with Chase                                                Chase Correspondent Division



Regulatory Documents, Continued


Final Truth-in-    A final TIL disclosure is required on all loans. This form must be completed
Lending (TIL)      accurately for the specific loan type. All appropriate boxes should be checked
Disclosure         and any information concerning the particular loan type provided. This form
                   must be signed and dated by all borrowers. In addition, the final TIL must
                   also meet the following requirements:

                   · There should not be any handwritten changes.
                   · If the loan is an ARM, the paragraph for “Variable Rate Feature” must be
                     checked.
                   · The APR should be calculated utilizing the most recent and comprehensive
                     information available to the lender. The calculated figure should fall within
                     the range of tolerance set by the federal regulatory agencies.
                   · The total number of payments disclosed should correspond with the loan
                     term. (For example, a 15-year loan should disclose a total number of 180
                     payments. A 30-year loan should disclose a total number of 360 payments.)
                   · For ARM loans and those loans with MI coverage, multiple payment
                     amounts must be disclosed.

                   NOTE: An ESTIMATED FINAL TIL is permitted. Provided it meets
                   the above requirements.

                                                                               Continued on next page




July 2004                                                                       Closing the Loan – 19
Doing Business with Chase                                                 Chase Correspondent Division



Regulatory Documents, Continued


Notice of Right    Policy
to Cancel          An executed Notice of Right to Cancel (NRC) is required on all refinance
(NRC)              transactions where the property is an owner-occupied primary residence. This
                   includes transactions involving land contracts. Sundays and federal legal
                   holidays may not be included in the three business day rescission period.

                   When the Notice of Right to Cancel is required, the following items should be
                   verified:

                   · Each individual who has signed the mortgage or deed of trust, or who will
                     be required to execute the security instrument because of homestead, dower,
                     curtsey, or community property rights. Must sign the Notice of Right to
                     Cancel (NRC). The signature(s) should appear under the
                     “Acknowledgment” and not under “I Wish to Cancel.”
                   · The rescission period expiration date can be no less than three business days
                     later than the transaction date. Business days are all calendar days except
                     Sunday and federal legal holidays.

                   NOTE: Failure to submit a Notice of Right to Cancel (NRC) with the
                   closed loan package to Chase will delay funding and the loan file will be
                   subject to re-pricing. Chase cannot fund the loan until the recision
                   period has expired.

                   Exceptions
                   Second homes, vacation homes, investment properties, and construction-to-
                   permanent loans are exempt from the rescission requirements. In addition,
                   when the original creditor refinances the loan, the Notice of Right to Cancel is
                   not required unless new money is advanced.

                                                                                Continued on next page




July 2004                                                                        Closing the Loan – 20
Doing Business with Chase                                                Chase Correspondent Division



Regulatory Documents, Continued


Notice of Right    Examples
to Cancel          The following are three illustrative examples; all assume the property is an
(NRC)              owner-occupied primary residence:
(continued)
                   · ABC correspondent makes a loan to Joe Borrower for $50,000. Sometime
                     later, Joe Borrower refinances the same loan with ABC correspondent. No
                     new money is advanced. In this case, a Notice of Right to Cancel is not
                     required.
                   · ABC correspondent makes a loan to Amy Borrower for $50,000. Sometime
                     thereafter, Amy Borrower refinances the same loan with ABC
                     correspondent. New money is advanced. In this case, a Notice of Right to
                     Cancel is required.
                   · ABC Correspondent makes a loan to David Borrower for $100,000.
                     Sometime later, David Borrower refinances the loan with XYZ
                     correspondent. No new money is advanced. In this case, a Notice of Right
                     to Cancel is required because XYZ correspondent is not the original
                     creditor.


First Payment      · Chase requires, on each loan purchased, that a copy of the first payment
Letter               letter be provided with the closed loan package. This provides the borrower
                     with important information including the breakdown of the monthly
                     payment, when the payment is due and where to make the first payment.
                   · To ensure the initial payments due Chase are processed quickly and are
                     posted to the proper account, borrowers must include the Chase loan
                     number on their checks and send their first payments to the following
                     address:

                   Mailing Address
                   Chase Manhattan Mortgage Corporation
                   ATTN: Post Office Box 79046
                   Phoenix, AZ 85034-9700

                   Overnight Delivery Address
                   Chase Manhattan Mortgage Corporation
                   1820 E. Sky Harbor Circle South
                   ATTN: Post Office Box 79046
                   Phoenix, AZ 85062-9046

                   NOTE: When the loan is set up for servicing, there may be a variance in
                   the total payment due to “systems” calculations.
                                                                               Continued on next page



July 2004                                                                       Closing the Loan – 21
Doing Business with Chase                                                 Chase Correspondent Division



Regulatory Documents, Continued


Loan Payment       A loan payment history indicating timely payments is required on all
History            construction to permanent loans and on any loan that has had previous
                   payment(s) made to the Correspondent.


Name Affidavit     A notarized Name Affidavit will be required when any signature is not
                   exactly as it appears on other documents in the closed loan package. If a
                   Name Affidavit is required for the Note or Mortgage/Deed of Trust, funding
                   will be withheld and the loan will be subject to re-pricing if not provided prior
                   to the expiration of the commitment.


Notice of          The Correspondent must comply with all RESPA requirements concerning
Assignment,        the transfer of servicing. RESPA requires that the originating/transferring
Sale, or           lender provide the Notice of Transfer to the borrower not less than 15 days
Transfer of        prior to the effective date of the transfer. The transferee servicer (Chase)
Servicing          must also provide notice to the borrower not more than 15 days after the
Rights
                   effective date of the transfer.

                   The telephone number for Customer Service is 1-800-848-9136.

                   NOTE: If the originating lender disclosed the transfer to Chase at
                   closing, a copy of the Notice of Assignment, Sale. or Transfer of
                   Servicing Rights Disclosure [Good-bye Letter] should be included in the
                   closed loan package.


Purchase           The principal balance purchased on a loan is determined by the date on which
Method with        the loan is purchased and the date of the first payment as follows:
Regard to First
Payment            · All loans purchased before the first payment due date will be purchased at
                     the original principal balance.
                   · All loans purchased on or after the first payment due date will be amortized
                     by one or more payments and the escrow and buydown funds will be
                     adjusted accordingly. In addition, the correspondent will be responsible for
                     remitting FHA MIP or mortgage insurance premiums on any previously
                     collected payments.

                   NOTE: Refer to the “Seasoned Loans” section located in the “Program
                   Parameters” chapter of this guide for specific payment requirements on
                   seasoned loans.
                                                                                Continued on next page



July 2004                                                                        Closing the Loan – 22
Doing Business with Chase                                                    Chase Correspondent Division



Regulatory Documents, Continued


LPMI               Any loan delivered to Chase for purchase under the LPMI Program must
Disclosures        contain a signed disclosure describing LPMI terms and conditions. An LPMI
                   sticker must also be placed on the outside of the file folder.


IRS W-9            This form provides the primary borrower’s social security number required by
Form/IRS W-8       Chase to properly account for interest paid by the borrower(s). A properly
(including SSN)    completed and executed W-9 must be included in the closed loan package or
                   funding will be withheld and the loan will be subject to re-pricing if not
                   provided prior to the expiration of the commitment.

                   NOTE: The primary borrower is defined as the first borrower signing
                   the Note. The W-9 should reflect that borrower’s Social Security
                   number and signature.


IRS Form           The IRS form 4506-T is required for all self-employed and commissioned
4506-T             borrowers, and/or for borrowers using federal tax returns to qualify for a loan.
                   If not received in the closed loan package, Chase will withhold the service
                   release premium.


Tax                Chase Policy
Information        Correspondents must submit a complete and accurate Tax Information Sheet
                   in all closed loan files. The Tax Information Sheet must include the
                   following:

                   ·   all collecting taxing authorities for the property,
                   ·   addresses for all taxing authorities,
                   ·   last paid date of all taxes,
                   ·   the amounts of taxes, and
                   ·   all applicable parcel ID numbers.

                                                                                   Continued on next page




July 2004                                                                           Closing the Loan – 23
Doing Business with Chase                                                   Chase Correspondent Division



Regulatory Documents, Continued


Tax                Chase will compare the Tax Information Sheet due dates to the due dates
Information        provided by our Tax Service provider. Discrepancies will be brought to the
(continued)        Correspondent’s attention. A different format may be used for the tax
                   information sheet, however, it must contain all of the above-mentioned
                   information.

                                                                  the Correspondent must
                    If the property is located in…                 provide an executed…
                   New Jersey, New York, or Illinois,   Tax Authorization Form with the closed loan
                                                        package.
                   Wisconsin,                           Tax Option Letter with the closed loan package.

                   Exemptions
                   If the borrower(s) are exempt from paying real property taxes, the
                   correspondent must provide proof of the tax exemption in the closed loan
                   package (usually a letter from the taxing authority). Funding will be delayed
                   if a tax information sheet is incomplete or is not included in the closed loan
                   package. In addition to the delay in funding, the loan will be subject to re-
                   pricing if the required information is not provided prior to the expiration of
                   the commitment.

                   Acceptable Proof of Payment
                   Chase will accept any of the following documents as proof of tax payment
                   prior to Chase purchase.

                   ·   HUD-1
                   ·   paid receipt from taxing authority
                   ·   canceled check
                   ·   updated Title Binder/Policy
                   ·   lender’s payment history showing tax disbursement




July 2004                                                                          Closing the Loan – 24
Doing Business with Chase                                                 Chase Correspondent Division



Required Escrow Documents


Initial Escrow     Chase’s policy as it relates to the issuance of the Initial Escrow Account
Account            Disclosure Statement is as follows:
Disclosure
Statement          · For loans purchased by Chase, the Correspondent is responsible for
(IEADS)
                     providing the borrower(s) with an Initial Escrow Account Disclosure
                     Statement using the aggregate analysis method. A copy should be included
                     in the file submitted for purchase to Chase. All loans using the single item
                     analysis must be re-disclosed using the aggregate analysis method before
                     Chase will purchase the loan.
                   · If the Correspondent accepts a payment or makes an escrow disbursement,
                     the Correspondent must provide the borrower(s) with an Initial Escrow
                     Account Disclosure Statement using the aggregate analysis method and
                     include a copy in the file submitted to Chase.
                   · The disbursement amounts listed on the IEADS must reflect the hazard and
                     MI premium amounts disclosed on the HUD-1.
                   · When loans are purchased by Chase, the Servicing Division will re-analyze
                     the escrow account using the aggregate analysis method with a two-month
                     cushion (except where restricted by state law). For loans with MIP or PMI,
                     no cushion will be collected. An Initial Escrow Account Disclosure
                     Statement will be mailed to the borrower(s) at the time of analysis. The
                     borrower(s) may either be subject to a payment increase to cover a shortage
                     or a refund check for the surplus in the escrow account.
                   · Additionally, be aware the borrower(s) may receive multiple IEADS, which
                     may generate questions or complaints.

                   NOTE: The information contained on the Initial Escrow Account
                   Disclosure Statement must match the information provided on the HUD-
                   1 Statement.

                   · Shortages/Surpluses will be handled as follows:
                     · Chase will spread all shortages over the 12 months following the analysis.
                     · Chase will refund all surpluses of $50 or more to the mortgagor(s) within
                       30 days of Chase’s analysis. Amounts less than $50 will be spread into
                       the borrower’s payments over the 12 months following the analysis,
                       reducing the payments (new coupons will be mailed).
                   · Due dates of escrow items:
                     · Tax due dates have been established at Chase for all jurisdictions it
                       services.
                     · For MIP or PMI, Hazard/Flood Insurance actual premium due dates will
                       be utilized in calculating amounts due for the next year.

                                                                                Continued on next page



July 2004                                                                        Closing the Loan – 25
Doing Business with Chase                                                Chase Correspondent Division



Required Escrow Documents, Continued


Escrow Waiver      The security instrument must establish an escrow account for the payment of
Letter             tax and insurance bills for all government loans and for all conventional loans
                   unless a waiver is approved. If an escrow waiver is approved, a completed
                   Escrow Waiver letter must be included in the file.

                   REFERENCE: To determine the escrow waiver criteria, refer to the
                   Chase Escrow Waiver Policy and the applicable Product Guide.




July 2004                                                                       Closing the Loan – 26
Doing Business with Chase                                                  Chase Correspondent Division



Escrow Waivers


Escrow Waiver      Refer to the table below to review the escrow waiver policy based on the loan
Policy             product type.

                     Product Type                                 Policy
                    Government        Waiver of tax and/or hazard insurance escrows is not permitted
                                      on Government loans.
                    Conventional -    Escrow waivers may be waived as outlined below:
                    Agency
                                      · Eligible up to 90% LTV for tax and hazard insurance.
                                      · PMI must always be escrowed unless lump sum.
                                      · If LTV >80%, a Delegated, Contract, or Chase Underwriter
                                        must approve and document their approval on the approval
                                        document.
                                      · If any escrow account is established and flood insurance is
                                        required, flood must be escrowed.
                                      · Applicable escrow waiver adjustments must be applied.

                                      NOTE: A Product Exception is not required to request
                                      Underwriting approval for waiving escrows on an Agency
                                      loan with a LTV over 80%.
                    Preferred/ Non-   Certain Preferred/ Non-Agency products permit escrow
                    Agency            waivers on loans with a LTV up to 90%. Refer to the
                                      applicable product guide for escrow waiver criteria.

                   REFERENCE: For applicable premiums and restrictions, refer to the
                   Pricing Policy.


Flood              Under the National Flood Insurance Reform Act of 1994, flood insurance
Insurance          escrows may not be waived when an escrow account is established for the
                   payment of taxes, hazard insurance, mortgage insurance, assessments, or
                   other similar items. Exceptions to this policy are not permitted.


Correspondent’s    It is the Correspondent’s responsibility to advise Chase if the account will be
Responsibility     escrowed, either through the Registration Desk or ChaseLock. Should a
                   correspondent register the loan as an escrowed account and subsequently
                   submit a non-escrowed loan to funding, Chase’s funding department will
                   adjust the service release premium accordingly.

                                                                                 Continued on next page




July 2004                                                                         Closing the Loan – 27
Doing Business with Chase                                              Chase Correspondent Division



Escrow Waivers, Continued


Non-Escrow         Chase does not require a non-escrow pricing adjustment on loans in which
Pricing            state law prohibits the use of escrow accounts.
Adjustment
Exceptions


Escrow Waiver      Escrow Waiver adjustments vary based on the loan amount and the type(s) of
Adjustments        escrow account components waived (i.e., hazard only, taxes only, hazard and
                   taxes).

                   · Adjustments for escrow waivers on the ChaseFlex program are located on
                     the daily rate sheet.
                   · For all other applicable programs, adjustments for waiving escrows are
                     posted on the current SRP Schedule.


Funding            In addition to meeting standard funding requirements, all non-escrowed
Requirements       conventional loans must meet the following funding requirements:

                   · LTV must be lower than 90% for Agency or within the appropriate LTV
                     limitations as outlined in the appropriate Preferred Non-Agency product
                     rules.
                   · Escrow waiver letter must be included in closed package.
                   · Registration system must indicate escrows waived.
                   · SRP must be adjusted on Registration system, if applicable.
                   · HUD-1 (settlement statement) must not reflect reserves.

                   NOTE: Should any of the above requirements be incorrect or missing,
                   the loan will be suspended and may be subject to repricing.




July 2004                                                                     Closing the Loan – 28
Doing Business with Chase                                               Chase Correspondent Division



Chase Funding Guide


Introduction       To assist correspondents in minimizing purchasing turnaround time, Chase
                   has prepared Exhibit 2.4 Chase Correspondent Division Funding Guide. A
                   careful comparison of the items listed against each file being shipped will
                   prevent nearly all errors and omissions that result in purchasing delays.

                   All documents listed on the Funding Guide have one of the following codes:

                   · (HF) indicates that the document is critical and the loan will not be funded
                     if this document is missing or incorrect.
                   · (HSR) indicates that the document is important but not critical for funding.
                     If these documents are missing or incorrect, Chase will fund the loan but
                     withhold payment of the Service Release Premium until receipt of the
                     corrected or missing document(s).
                   · (TF) indicates that the document may be submitted after funding or with the
                     final recorded documents.

                   NOTE: It is suggested that those responsible for shipping of a closed
                   loan for purchase to compare the underwriter’s approval memorandum
                   against the Funding Guide to ensure compliance with all conditions.


“Hold Fund”        The required document(s) that will resolve the hold funding suspension
(HF)               should be attached to the Loan Status Report and sent via overnight mail or
Documents          faxed (if applicable) to the appropriate Customer Coordinator/Advocate.
                   Upon receipt of the required document(s), Chase will immediately fund the
                   loan and a purchase advice will be faxed to confirm the purchase.

                   NOTE: Refer to the Chase Correspondent Funding Guide for
                   clarification regarding hold funding, hold service release, and to follow
                   documents.

                                                                              Continued on next page




July 2004                                                                      Closing the Loan – 29
Doing Business with Chase                                                Chase Correspondent Division



Chase Funding Guide, Continued


Hold Service       There are several document conditions that would require Chase to withhold
Release            Service Release Premiums. Although these documents are not critical to the
Premium            funding of a loan, they are needed to complete the closed loan file. Therefore,
(HSR)              if the Service Release Premium was withheld at purchase due to missing or
                   incomplete document(s), those documents, along with the Loan Status Report
                   and Wiring Instructions, must be forwarded to the appropriate Chase
                   Research Coordinator at:

                   Chase Manhattan Mortgage Corporation
                   Attention: Correspondent Research Department
                   10151 Deerwood Park Boulevard
                   Building 300
                   Jacksonville, FL 32256

                   NOTE: Refer to the Chase Correspondent Funding Guide for those Hold
                   Service Release documents.


“To Follow”        If all of the missing or incorrect documents are “To Follow” items, a Follow-
(TF)               Up Documentation Transmittal will be faxed to the Correspondent. These
Documents          documents may be forwarded to the address listed on the Follow-Up
                   Documentation Transmittal form.


Final              All final documents (Recorded Assignment, Recorded Mortgage/Deed of
Documents          Trust, Final Title Policy, and MIC/LGC) should be forwarded to the address
                   listed on the Final Documentation Transmittal form.

                   NOTE: Refer to the “Final Document” section of “Post-Production” for
                   a list of conventional and government final documents.




July 2004                                                                       Closing the Loan – 30
Doing Business with Chase                                                  Chase Correspondent Division



                                    Loan Submission
Overview


Introduction       To ensure the timely delivery and review of all closed loan packages
                   submitted to Chase for purchase, this chapter outlines the procedural
                   guidelines to expedite the loan funding process. In addition to closing the
                   loan in accordance with Chase funding guidelines, there are several loan
                   submission requirements that will enable Correspondents to deliver closed
                   loan packages, in fundable condition, to be purchased within timely and
                   efficient turnaround times. Failure to comply with the loan submission
                   requirements outlined in this chapter will result in possible funding delays
                   and re-pricing.


In this Chapter    Use the following chart to locate specific topics outlined in this chapter:

                                                 Topic                                    See Page
                   Loan Delivery Requirements                                                 2
                   Closed Loan Package Submission                                             5
                   d-Lite Funding Process                                                     7
                   Wiring Instructions                                                       12
                   Acceptable Source of Funds                                                13
                   MERS Electronic Title Transfer                                            14




July 2004                                                                         Loan Submission – 1
Doing Business with Chase                                                Chase Correspondent Division



Loan Delivery Requirements


Introduction       This section provides basic procedures to be followed when preparing a loan
                   package for Chase to purchase. Failure to comply with the loan preparation
                   guidelines may delay the funding process.


Lock            All credit and closed loan packages must be delivered to Chase in “fundable”
Expiration Date condition prior to the lock expiration date. Failure to provide the fundable
                   closed loan package prior to the lock expiration date may result in loan
                   repricing and funding delays.


Funding            The Funding Request Form identifies the method of underwriting used to
Request Form       make the final loan decision. By completing this form in its entirety it
(FRF)              enables Chase to determine whether the method of underwriting used
                   correlates with the loan’s market type. The Funding Request Form is
                   required on all closed loan packages submitted to Chase for purchase. Use of
                   the form helps to ensure a delay free funding process.


Method             Review the table below to determine the method of underwriting used to
Underwritten       make the final loan decision.

                                                 And the loan             Then the method of
                       If the loan file is…  recommendation is…            underwriting is…
                    manually underwritten   Approve,                   Delegated Underwritten
                    by a delegated                                     Manually.
                    correspondent,
                    underwritten through DU Approve/Eligible,          Delegated Correspondent
                    by a delegated          Expanded Approval,         Underwritten through
                    correspondent,                                     Fannie Mae’s Desktop
                                                                       Underwriter (DU).
                    underwritten through DU   Approve/Ineligible       Delegated Underwritten
                    by a delegated            Refer/Eligible           Manually.
                    correspondent,            Refer/Ineligible,
                    underwritten through DU   Approve/Eligible         Choice AU (MI contract
                    by a Chase approved MI    Approve/Ineligible       underwriter) through
                    company,                  Expanded Approval        Fannie Mae’s Desktop
                                              Refer/Eligible           Underwriter.
                                              Refer/Ineligible,

                                                                               Continued on next page




July 2004                                                                        Loan Submission – 2
Doing Business with Chase                                                Chase Correspondent Division



Loan Delivery Requirements, Continued


Method Underwritten (continued)

                                                    And the loan            Then the method of
                       If the loan file is…     recommendation is…          Underwriting is…
                    underwritten through LP    Accept or Accept-Plus,   Delegated Correspondent
                    by a delegated             A Minus,                 Underwritten through
                    correspondent,                                      Freddie Mac’s Loan
                                                                        Prospector (LP).
                    underwritten by a          Out-of-Scope,            Chase Underwritten
                    delegated correspondent,                            Manually.
                    underwritten through LP    Accept                   Choice AU (MI Contract
                    by a Chase approved MI     Accept-Plus              Underwriter) underwritten
                    company,                   A Minus,                 through Freddie Mac’s
                                                                        Loan Prospector.
                    underwritten by a Chase    N/A or                   Choice (MI contract
                    approved MI company,       Out of Scope,            underwritten manually).
                    submitted by a non-        Approve,                 Chase Underwritten
                    delegated correspondent,                            Manually.
                    underwritten through       Approve/Eligible         Chase Underwritten
                    DO/DU by a non-            Expanded Approval        Manually.
                    delegated correspondent,   Refer/Eligible
                                               Refer/Ineligible
                                               Refer with Caution,

                                                                               Continued on next page




July 2004                                                                        Loan Submission – 3
Doing Business with Chase                                                   Chase Correspondent Division



Loan Delivery Requirements, Continued


Completing the     Use the following steps to complete the Correspondent Funding Request
Funding            Form.
Request Form

                      Step                                    Action
                       1     Specify regional location
                       2     Provide the following contact information:

                             · Correspondent Name
                             · Contact Person
                             · Telephone Number
                             · Fax Number
                       3     Indicate the Chase loan number, 3-Digit Market Type, and the
                             Mortgagor Name.
                       4     Check the appropriate box that identifies the method underwritten.
                       5     Identify the documents contained in the closed loan package.
                       6     Provide the printed name and signature of the individual authenticating
                             the information provided on the form.
                       7     Place this form on the top right side of the loan file folder.


Regional Labels When submitting a closed loan package to Chase for purchase, the closed
                   loan package must contain the appropriate color-coded, regional label on the
                   bottom right corner of the mail/courier package. Failure to place the
                   appropriate regional label on the closed loan package may delay funding.

                                 Region                              Color-coded Label
                    Northeast                                Orange
                    Northwest                                Dark Blue
                    Pacific                                  Green
                    Southeast                                Black
                    Mandatory Bulk                           Lime Green

                   NOTE: The regional labels must be placed on the actual mail/courier
                   package. DO NOT place the label on the closed loan file folder. To
                   obtain Regional Labels complete the Label Request form and fax to the
                   number listed.




July 2004                                                                           Loan Submission – 4
Doing Business with Chase                                                    Chase Correspondent Division



Closed Loan Package Submission


Introduction       To ensure the timely review and purchase of all closed loan packages, this
                   section outlines the necessary submission requirements needed when
                   delivering closed loan packages to Chase. All closed loan packages must be
                   delivered in “fundable” condition. Failure to provide a closed loan package
                   meeting Chase’s funding requirements will result in funding delays.

                   NOTE: A fundable loan is a closed loan package, which contains all
                   pertinent documentation, specified in the Chase Funding Guide,
                   necessary to purchase the loan.


Funding            Complete the steps below when submitting a closed loan package to Chase
Submission         for purchase.
Requirements

                     Step                                       Action
                      1      Clear all asterisked (*) and/or standard underwriting conditions.

                             NOTE: Failure to clear all asterisked (*) and/or standard
                             underwriting conditions may result in funding delays and possible
                             loan re-pricing.
                       2     Contact Chase’s Loan Registration Department to ensure the loan is
                             registered, locked, and assigned a loan number with Chase.

                            NOTE: If there is a possibility that the lock may expire before the
                            loan file arrives at Chase, follow the appropriate procedures to
                            extend the lock expiration date prior to forwarding the loan file to
                            Chase (See the “Loan Registration” chapter).
                       3    Contact your Warehouse Bank and notify them that you are shipping the
                            loan to Chase. Inform the Warehouse Bank that Chase must receive the
                            Original Note on or before the lock expiration date or the loan may be
                            subject to re-pricing.
                       4    Complete the Correspondent Funding Request Form (FRF) in its entirety
                            and place it on the top right side of the loan file folder.

                            NOTE: Failure to include the completed FRF in the closed loan
                            package will result in funding delays and possible loan re-pricing.
                       5    Provide Wiring Instructions or Bailee Agreements.
                       6    Acco-fasten the loan file in a file folder with a label containing the
                            borrower’s name(s) and the Chase loan number.

                                                                                   Continued on next page




July 2004                                                                            Loan Submission – 5
Doing Business with Chase                                                   Chase Correspondent Division



Closed Loan Package Submission, Continued


Funding Submission Requirements (continued)

                     Step                                     Action
                      7      Properly address the closed loan package to:

                                                   Chase Correspondent Division
                                            ATTN: Correspondent Funding Department
                                                  10151 Deerwood Park Boulevard
                                                            Building 300
                                                      Jacksonville, FL 32256
                       8     Place the appropriate color-coded, regional label on the bottom right
                             corner of the mail/courier package. Do not place the label on the actual
                             loan file folder.
                       9     Overnight the closed loan package to Chase for funding review.


File Stacking      Review the chart below to determine how the closed loan package should be
Order              arranged if the loan file was underwritten by Chase, an approved MI
                   company, an approved delegated correspondent, or through an automated
                   underwriting system.

                                                       Then the closed loan file must contain the
                   If the file was underwritten by…       Funding Request Form along with…
                   Chase or an approved MI company, an Approval Memorandum with all post-closing
                                                     conditions numbered and attached.
                   approved delegated correspondent, a Delegated Approval Letter with all post-
                                                     closing conditions numbered and attached.
                   DU,                               · DU Findings Report,
                                                     · Underwriting Analysis,
                                                     · Credit Summary, and the
                                                     · DU Credit Report.
                   LP,                               · LP Feedback Certificate, and the
                                                     · 3-Merged In-file Credit Report used to
                                                       reconcile the data into LP.
                   Choice AU                         · the appropriate system generated reports
                                                       listed above,
                                                     · Correspondent Loan Transmittal Form, and
                                                       the
                                                     · MI company’s Approval Form.




July 2004                                                                          Loan Submission – 6
Doing Business with Chase                                                 Chase Correspondent Division



d-Lite Funding


Introduction       d-Lite Funding is a loan purchase process providing approved Correspondent
                   lenders the ability to deliver certain loans for funding with an expedited
                   review. Once Correspondents participate in the orientation phase they can
                   submit files for d-Lite funding through either a full file delivery or a staged
                   file delivery.

                   IMPORTANT: Correspondents are recommended by the
                   Correspondent Sales Team to participate in d-Lite Funding.


Loans Eligible     Refer to the “Exhibits” section of this guide (d-Lite Eligible Loans) for a
for d-Lite         complete list of all loan types eligible for d-Lite funding.
Funding


Full File          The full file option allows a one-time file delivery with the expedited review.
Delivery           The full file is delivered at the same time the d-Lite Funding Worksheet and
                   five key documents are sent. Once these documents have been received,
                   reviewed, and accepted, the loan can be funded.

                   NOTE: Full files are required during the orientation phase.
                   Correspondents may also choose to send full files after the orientation
                   phase has been completed.

                                                                                Continued on next page




July 2004                                                                         Loan Submission – 7
Doing Business with Chase                                                      Chase Correspondent Division



d-Lite Funding, Continued


Full File          Refer to the table below to determine the steps for submitting a full d-Lite
Delivery           funding file.
Procedure

                     Step                                      Action
                      1      · Select eligible loan files to be funded by d-Lite, based on the eligibility
                               criteria,
                             · complete the d-Lite Funding Worksheet and attach the following
                               required documentation:
                               · Original Note with wire instructions (unless the Note is being
                                 delivered by a warehouse bank)
                               · Evidence of hazard insurance
                               · Final HUD-1
                               · Property legal description (copy taken from the Mortgage/Deed of
                                 Trust or Title Commitment)
                               · Final Truth in Lending Disclosure
                               · Other required documents, if applicable, as listed on the d-Lite
                                 Funding Worksheet

                             IMPORTANT: The d-Lite Funding Worksheet must be
                             computer generated, complete, and accurate.
                       2     Compile the remainder of the documents sent to Chase for funding
                             and place the entire file in a manila Acco-fastened file folder.
                       3     · Place a d-Lite label and Regional/Mandatory label on the outside of the
                               delivery envelope or box and on the bottom right corner of the file
                               folder, indicating on the d-Lite label “Full File,” and
                             · forward to

                                     Chase Manhattan Mortgage Corporation
                                     ATTN: Correspondent File Control Department
                                     10151 Deerwood Park Boulevard
                                     Jacksonville, FL 32256

                             IMPORTANT: To avoid delays in funding, the d-Lite labels
                             and Regional/Mandatory labels must be attached clearly to the
                             outside of the delivery envelope or box and on the bottom right
                             corner of the file folder. If the Note is being sent from a
                             warehouse bank, the Note must be received by Chase prior to,
                             or at the same time as the file.

                                                                                     Continued on next page




July 2004                                                                              Loan Submission – 8
Doing Business with Chase                                                    Chase Correspondent Division



d-Lite Funding, Continued


Staged File        The staged file delivery method allows Correspondents to deliver the file in
Delivery           two parts:

                   · The first is the delivery of the Purchase Pack that includes the complete and
                     accurate d-Lite Funding Worksheet plus the five primary documents (and/or
                     other ‘if applicable’ documents according to the loan). Once these
                     documents have been received, reviewed, and accepted, the loan can be
                     funded.
                   · The second is the delivery of the Companion Pack that includes the
                     remainder of the documents sent to Chase for funding, as defined in the
                     Correspondent Lending Guide. These documents must be delivered to
                     Chase no later than 30 days after the loan has been purchased by Chase.


Staged File        To submit a d-Lite staged file delivery loan, complete the steps in the table
Delivery           below.
Procedure

                     Step                                      Action
                      1      · Select eligible loan files to be funded by d-Lite staged file delivery,
                               based on the eligibility criteria,
                             · complete the d-Lite Funding Worksheet and attach the following
                               required documentation in an Acco-fastened legal file folder:
                               · Original Note with wire instructions (unless the Note is being
                                 delivered by a warehouse bank)
                               · Evidence of hazard insurance
                               · Final HUD-1
                               · Property legal description (copy taken from the Mortgage/Deed of
                                 Trust or Title Commitment)
                               · Final Truth in Lending Disclosure
                               · Other required documents, if applicable, as listed on the d-Lite
                                 Funding Worksheet

                             IMPORTANT: The d-Lite Funding Worksheet must be
                             computer generated, complete, and accurate.

                                                                                    Continued on next page




July 2004                                                                             Loan Submission – 9
Doing Business with Chase                                                    Chase Correspondent Division



d-Lite Funding, Continued


Staged File Delivery Procedure (continued)

                     Step                                     Action
                      2     · Place a d-Lite label and Regional/Mandatory label on the outside of the
                              delivery envelope or box and on the bottom right corner of the file
                              folder, indicating on the d-Lite label “Purchase Pack,” and
                            · forward to:

                                    Chase Manhattan Mortgage Corporation
                                    ATTN: Correspondent File Control Department
                                    10151 Deerwood Park Boulevard
                                    Jacksonville, FL 32256

                            IMPORTANT: To avoid delays in funding, the d-Lite labels and
                            Regional/Mandatory labels must be attached clearly to the outside of
                            the delivery envelope or box and on the bottom right corner of the file
                            folder. If the Note is being sent from a warehouse bank, the Note
                            must be received by Chase prior to, or at the same time as the file.
                       3    Once the Companion Pack has been compiled

                            · place a d-Lite label on the outside of the delivery envelope and on the
                              bottom right hand corner of the file folder, indicating on the d-Lite label
                              “Companion Pack,” and
                            · forward to:

                                    Chase Manhattan Mortgage Corporation
                                    ATTN: Correspondent File Control Department
                                    10151 Deerwood Park Boulevard
                                    Jacksonville, FL 32256

                            IMPORTANT: The Companion Pack must be delivered to Chase no
                            later than 30 days of the loan being purchased by Chase. Failure to
                            provide the Companion Pack documents within 30 days may result in
                            elimination from the d-Lite funding program.

                                                                                    Continued on next page




July 2004                                                                           Loan Submission – 10
Doing Business with Chase                                                Chase Correspondent Division



d-Lite Funding, Continued


Certification of   The d-Lite Funding Worksheet must be signed by the Correspondent. Chase
the d-Lite         will rely on the accuracy and completeness of the information contained in
Funding            the d-Lite Funding Worksheet. If incorrect information is provided on the d-
Worksheet          Lite Funding Worksheet the Correspondent is liable and subject to redress.

                   Correspondents who do not comply with the requirements of d-Lite process
                   may be removed from this program.


Monitoring         Chase will continue to monitor and report on the completeness and accuracy
d-Lite Loan        of loan files and d-Lite Funding Worksheets. Reports will be created and
Files              reviewed on a monthly basis and shared with the Correspondent.
                   Correspondents that frequently provide incomplete or inaccurate loan files
                   will not be eligible for continued participation in the d-Lite program.


d-Lite Exhibits    For sample copies of the following, please refer to the “Exhibits” section of
                   this Guide:

                   · d-Lite Funding Worksheet
                   · d-Lite Eligible Loans
                   · Label Request Form




July 2004                                                                      Loan Submission – 11
Doing Business with Chase                                              Chase Correspondent Division



Wiring Instructions


Wiring             All closed loan packages must include the correct wiring instructions unless
Instructions or    the Original Note is sent from a Warehouse Bank attached to a Bailee
Bailee             Agreement. Failure to provide wiring instructions and/or a Bailee Agreement
Agreements         will delay funding.


Bailee             If the Warehouse Bank sends the Original Note with an attached Bailee
Agreement          Agreement, the agreement should contain the following information:

                   · Name, address, and fax number of the Warehouse Bank
                   · Name and address of the correspondent lender
                   · Complete wiring instructions for payment
                   · Name of borrower(s)
                   · Loan amount
                   · Chase loan number, if available
                   · Acknowledgment that the Warehouse Bank’s security interests will be
                     terminated upon receipt of the payment.


Delivery of        Warehouse Banks should be advised to forward the Original Note and Bailee
Bailee             Agreement to:
Agreements
                   Chase Correspondent Division
                   ATTN: Correspondent Note Control
                   10151 Deerwood Park Boulevard
                   Building 300, Suite 321
                   Jacksonville, FL 32256


Ineligible Bailee Chase will not accept Master or Blanket Bailee Agreements and reserves the
Agreements        right to reject any Bailee Agreement that contains provisions that are
                   objectionable to Chase unless previously approved by Chase’s Customer
                   Management Group.




July 2004                                                                    Loan Submission – 12
Doing Business with Chase                                                 Chase Correspondent Division



Acceptable Source of Funds


Acceptable         Chase will only wire to Chase approved Warehouse lines. Therefore, Chase
Wire Accounts      will not wire to operating accounts.

                   NOTE: Banks, S&L, Credit Unions, and their wholly owned subsidiaries
                   are exempt from this rule, providing that the wholly owned subsidiaries
                   use the parent company’s operating account.


Wire Set-Up        To request a new Wire Set-Up or a change to wire instructions currently in
Requests           Chase’s system, submit a completed Wire Instruction Set-Up Form to Chase.

                   Correspondents should forward revised Wire Set-Up requests to Chase prior
                   to submitting the loan for funding to avoid funding delays.

                   Upon receipt of a request to wire funds to an account other than an approved
                   account currently in our system, Chase will contact two separate individuals
                   at the Correspondent’s office to verify the instruction prior to wiring funds to
                   the requested account.

                   NOTE: Chase will also accept a Bailee Letter or written directive on
                   company letterhead, providing that these documents include the
                   information contained within the Wire Instructions Set-Up Form. Refer
                   to “Exhibits” for Wire Instruction Set-Up Form.




July 2004                                                                        Loan Submission – 13
Doing Business with Chase                                               Chase Correspondent Division



MERS Electronic Title Transfer


Introduction       Chase’s Correspondent Division will accept a MERS electronic title transfer
                   in lieu of an Assignment of Mortgage. Use the following guidelines to reduce
                   funding delays and post-purchase issues.


Definition of      Mortgage Electronic Registration Systems (MERS) is an electronic registry
MERS               that tracks mortgage rights, streamlining the lending and document recording
                   process. By using MERS as the Original Mortgagee (MOM) in the Deed of
                   Trust or Mortgage, Correspondents can eliminate the preparation, recording,
                   tracking, and submission of mortgage loan assignments.


Acronyms           Listed below are definitions of the acronyms used throughout this memo.

                            Acronym                              Definition
                    MERS                     Mortgage Electronic Registry Systems
                    MOM                      MERS as Original Mortgagee
                    MIN                      MERS Identification Number
                    TPO                      Third Party Originated


Chase              All MERS loans submitted to Chase must meet the following Chase
Requirements       requirements:
for MERS
Loans              · Loan must be Agency or Non-Conforming MOM (MERS as Original
                     Mortgagee), or Correspondents must provide the required assignment for
                     any Third Party Originated (TPO) loans by a non-MERS member, unless
                     the Correspondent has instructed the TPO to execute an assignment to
                     MERS and has registered the loan on the MERS system.
                   · The TPO must prepare the assignment and deactivate the MERS
                     registration, for MOM loans sold to a non-MERS correspondent.
                   · Correspondents must register the loan with MERS before or on the date it is
                     submitted to Chase for purchase.
                   · Correspondents must transfer the servicing and beneficial rights to Chase
                     before or on the date of purchase.
                     NOTE: If the Correspondent fails to register the loan with MERS or
                     transfer rights to Chase within 30 days of purchase, Chase will return
                     the loan to the correspondent for repurchase.
                   · Correspondent must ensure that the MIN number appears in the top right
                     hand corner of the Note and security instrument of any MERS loans.

                                                                              Continued on next page



July 2004                                                                     Loan Submission – 14
Doing Business with Chase                                                 Chase Correspondent Division



MERS Electronic Title Transfer, Continued


Chase              · Correspondents must perform a MERS registration for any pre-registered
Requirements         loans.
for MERS           · Loan must meet all Chase product and program guidelines.
Loans
(continued)


Chase MERS         The Chase MERS Organization ID number is 1000277.
Organization
ID


MERS Process       The following chart outlines the procedures for incorporating MERS into
                   your current loan process.
                     Step    Responsibility                         Action
                      1     Correspondent      Assigns a MIN number and records the number on
                                               the following documents.

                                                  If the document         Then place the MIN
                                                       is the…                  number…
                                                  Note,             at the top right hand corner.
                                                  Mortgage/Deed     to the right of or below the
                                                  of Trust,         form title, but not within the top
                                                                    recording margin or on the right
                                                                    margin of the form.

                      2     Correspondent      Processes loan, submits through underwriting and
                                               closes loan.
                      3     Correspondent      Forwards loan to Chase Funding.
                      4     Chase Funding      Reviews the loan. If a Purchase Advice is issued,
                                               proceed to step 5.
                      5     Correspondent      Transfers the servicing and beneficial rights to
                                               Chase.
                      6     Chase Final Doc    Obtains and reconciles MERS reports.
                      7     Chase Final Doc    Contacts Correspondent on outstanding transfers/
                                               documents and/or corrections.
                      8     Correspondent      Completes follow-up terms.

                                                                                 Continued on next page




July 2004                                                                         Loan Submission – 15
Doing Business with Chase                                                Chase Correspondent Division



MERS Electronic Title Transfer, Continued


Discrepancies      The Correspondent is obligated to correct any discrepancies regarding the
                   MIN or the MERS registration data prior to the transfer of servicing and
                   beneficial rights to Chase. In addition, the Correspondent will be responsible
                   for notifying Chase for any loans transferred in error.
                   NOTE: To reconcile any MERS loan discrepancies and/or errors,
                   Correspondents should e-mail Alisha Young at
                   Alisha.Young@jpmchase.com. For more general information on MERS,
                   please visit their web site at www.mersinc.org or call 800-646-6477.




July 2004                                                                      Loan Submission – 16
Doing Business with Chase                                                 Chase Correspondent Division



                                    Funding the Loan
Overview


Introduction       Upon receipt of all closed loan packages, Chase’s Funding Department
                   conducts a thorough review of each loan package to ensure the loan file was
                   submitted in accordance with Chase’s funding guidelines as outlined in the
                   Chase Correspondent Funding Guide.

                   This chapter discusses the funding review process and the actions taken when
                   funding closed loan files.


In this Chapter    Use the following chart to locate the main topics in this chapter.

                                                Topic                                   See Page
                    Funding Review                                                          2
                    Fee Schedule                                                            3
                    Purchase Advice and Loan Status Report                                  4
                    Suspended Loans                                                        10
                    Withholding Service Release Premiums                                   13
                    Returned Wires                                                         16
                    Wire Discrepancies                                                     17




July 2004                                                                         Funding the Loan – 1
Doing Business with Chase                                                Chase Correspondent Division



Funding Review


Introduction       Chase’s Funding Department will review all collateral documents as well as
                   those documents required by Chase to ensure compliance with industry
                   guidelines prior to funding the loan. As a reminder, it is imperative that all
                   closed loan packages be submitted in accordance with the requirements
                   specified in the Chase Correspondent Funding Guide. Failure to comply with
                   the funding requirements outlined in the Correspondent Funding Guide will
                   result purchasing delays.


Funding            The funding review timeframe is dependent upon whether the contents of the
Review             closed loan package submitted is in accordance with Chase’s Correspondent
Timeframe          Funding Guide. Therefore, to expedite the loan funding process, the
                   correspondent must provide a completed and well-documented closed loan
                   package that meets all of the specified requirements outlined in the previous
                   chapters.


Notification       The chart below identifies the appropriate notification methods used when a
Process            loan is purchased or suspended by Chase.

                          If the closed loan               The Correspondent’s Closing/
                             Package is…                  Shipping contact will receive a …
                    purchased by Chase,           Purchase Advice via fax confirming the purchase
                                                  with a breakdown of all fees paid or deducted.
                    suspended by Chase,           Loan Status Report via fax identifying the
                                                  incorrect and/or missing document(s) needed to
                                                  purchase the loan and the turnaround time for
                                                  correction. The Loan Status Report will specify a
                                                  “Cure by Date” which is the last day the
                                                  Correspondent may cure document deficiencies
                                                  without being subject to the cost of an extension
                                                  or re-lock.




July 2004                                                                        Funding the Loan – 2
Doing Business with Chase                                               Chase Correspondent Division



Fee Schedule


Fees               The following fees are applicable in the Chase Correspondent Division:

                                    Description                             Amount
                    Standard Underwriting Fee                   $70
                    DO/DU Validation Fee (DO/DU loans           $35
                    validated by Chase Underwriting only)
                    DO/DU Per Loan Fee                          $15 (billed by Fannie Mae)
                    LPI                                         $20 (billed by Freddie Mac)
                    Administration Fee (except FHA ARM loans)   $100
                    Administration Fee - FHA ARM loans          $150
                    Tax Service Fee                             $69
                    Life-of-Loan Flood Certification Fee (not   $9
                    FDSI)
                    Choice MI/AU Administration Fee             $10
                    Lock-In Extension Fees                         # of Days            Fee
                                                                    1-7 days          .125%
                                                                   8-15 days          .250%
                                                                  16-30 days          .500%
                                                                   31+ days        Not available




July 2004                                                                       Funding the Loan – 3
Doing Business with Chase                                                  Chase Correspondent Division



Purchase Advice and Loan Status Report


Purchase           Once Chase Funding approves a loan, the Purchase Advice will be faxed at
Advice             11:30 a.m. EST or 2:30 p.m. EST, depending on when the loan was approved.
Distribution
                   NOTE: Purchase Advices are faxed in alphabetical order. Therefore,
                         please allot sufficient time for receipt.


Purchase           The following chart describes all information included on the Purchase
Advice Field       Advice.
Description

                         Field                                  Description
                   RUN DATE              Date the Purchase Advice was printed.
                   PURCHASED             Correspondent name, address, and wire instructions.
                   FROM
                   CODE                  Correspondent identification number.
                   APPROVAL DATE         Date the loan was approved by the Chase Funder.
                   FUNDING DATE          Chase purchase date.
                   LOAN #                Chase assigned loan number.
                   CLOSED                Date borrower closed loan with Correspondent.
                   NAME                  Borrower’s Last Name, First Name, and Middle Initial.
                   LAST PAID DATE        Date loan is current through.
                   RATE %                Interest rate.
                   PURCHASE PRICE        Purchase Price not including SRP.
                   PRINCIPAL             Original Loan amount.
                   BALANCE
                   PURCHASED             NOTE: This loan amount may be different from the
                                                registered loan amount if payments were made
                                                after the loan was registered with Chase.
                   INT ADJ               The amount of interest due at funding.

                                           If the Last paid date is…               Then…
                                           before the approval date,   the interest amount is paid to
                                                                       the Correspondent.
                                           after the approval date,    the interest amount is paid to
                                                                       Chase.
                                           the same as the approval    there is no interest paid.
                                           date,

                                         NOTE: Interest is calculated using a 360-day per diem.

                                                                                  Continued on next page




July 2004                                                                           Funding the Loan – 4
Doing Business with Chase                                                    Chase Correspondent Division



Purchase Advice and Loan Status Report, Continued


Purchase Advice Field Description (continued)

                        Field                                 Description
                   DISCOUNT          The difference paid calculated by the purchase price.

                                          If the purchase
                                               price…                         Then…
                                        under 100.000,        the difference multiplied by the loan
                                                              amount is paid to Chase.
                                        over 100.000,         the difference multiplied by the loan
                                                              amount is paid to the Correspondent.
                                        is 100.000,           there is no amount paid.

                                     Example:
                                        Purchase         Loan
                                          Price         Amount          Discount           Receiver
                                         99.125         100,000           $875              Chase
                                                                    (.875 x 100,000)
                                         100.125        100,000           $125          Correspondent
                                                                    (.125 x 100,000)

                   ESCROW            Amount correspondent collected from borrower’s escrow
                   BALANCE           account.
                   DEDUCT
                                     NOTE: This amount is due to Chase; therefore, it is
                                              deducted from the purchase price.
                   SERV FEE %        Service Release premium percentage.
                   SERVICE FEE       Service Release premium amount.
                   AMOUNT
                   BUYDOWN           Amount deducted for buydown.
                   DEDUCTED
                   ADM FEE           Chase’s Administration fee.
                   REFUND FEE        Amount paid up-front.
                   ADDED
                                     Example: Extended Rate Lock or Rate Cap program.
                   NET WIRE          Amount wired.
                   AMOUNT
                                     NOTE: This amount should equal the balance due unless
                                              SRP Hold items are not received at funding. In
                                              these instances, the net wire amount will not
                                              include SRP funds.
                   BALANCE DUE       Total balance due to the Correspondent.

                                                                                    Continued on next page




July 2004                                                                              Funding the Loan – 5
Doing Business with Chase                                                 Chase Correspondent Division



Purchase Advice and Loan Status Report, Continued


Purchase Advice Field Description (continued)

                        Field                                Description
                   CREDIT             Date loan approved by MI Contract Underwriting, if applicable.
                   DECISION (MI)
                   CREDIT             Date loan approved by Chase Underwriting, if applicable.
                   APPROVED
                   LOAN DISB          Date Borrower closed the loan with the Correspondent.
                   DATE
                                      NOTE: This date is the same as the CLOSED date unless
                                            the loan is a cash-out refinance. On NCO/CO
                                            refinanced loans, this date will be three days after
                                            the CLOSED date.


Corrections to     It is imperative that the Correspondent review the Purchase Advice in its
the Purchase       entirety and reconcile the wire amount to ensure that the appropriate funds
Advice             have been received. However, if a financial discrepancy is identified, the
                   Correspondent must notify the appropriate Chase Research Coordinator,
                   within 45 days of loan purchase, by completing the Research Submission
                   Form.

                   The Research Submission Form must be accompanied by the documentation
                   supporting the discrepancy (i.e., canceled checks, tax receipts, corrected
                   documents, etc…). The form, along with the appropriate documentation,
                   should be submitted to one of the following:

                   Overnight Delivery
                   Chase Correspondent Division
                   Attention: Correspondent Research Department
                   10151 Deerwood Park Boulevard, Building 300
                   Jacksonville, FL 32256
                   888-289-6114

                   Fax: (904) 620-6664

                   E-mail: Resarch.Request@Chase.com

                   The Research Coordinator will acknowledge receipt of the Research
                   Submission Form within two business days of receipt by contacting the
                   Correspondent via telephone or fax.

                                                                                Continued on next page




July 2004                                                                         Funding the Loan – 6
Doing Business with Chase                                                    Chase Correspondent Division



Purchase Advice and Loan Status Report, Continued


Resolution         Due to the research required to resolve financial discrepancies, the resolution
Timeframe for      timeframe may be up to four weeks. However, once resolved and approved, a
Purchase           corrected Purchase Advice will be prepared itemizing the financial
Advice             discrepancies.
Corrections
                   Review the table below to determine the method by which financial
                   discrepancies will be handled.

                            If the financial
                          discrepancy is an…                                Then…
                    underpayment, and all supporting   a check will be sent to the Correspondent, via
                    documentation has been received    regular mail, along with a corrected Purchase
                    by Chase’s Correspondent           Advice and a Letter of Explanation.
                    Research Department,
                    overpayment,                       · the Correspondent will be notified via
                                                         telephone or fax by the Research Coordinator,
                                                       · a collection letter will be forwarded to the
                                                         appropriate Correspondent contact outlining
                                                         the discrepancy and Chase’s expected
                                                         resolution timeframe, and
                                                       · a copy of the corrected Purchase Advice,
                                                         along with the supporting documentation will
                                                         be sent to the Correspondent.


Loan Status        If a loan is suspended, the correspondent will receive a Loan Status Report.
Report             The Loan Status Report will indicate which documents are “Hold Funding,”
                   “Hold SRP,” and “To Follow” and will provide the submission address for
                   each funding condition. The items listed under the Hold Funding section
                   must be received by Chase by the lock expiration date to avoid repricing.
                   Hold SRP items must be delivered to Chase to receive the service release
                   funds. All To Follow documents are to be delivered to Chase in Monroe.

                                                                                   Continued on next page




July 2004                                                                            Funding the Loan – 7
Doing Business with Chase                                                  Chase Correspondent Division



Purchase Advice and Loan Status Report, Continued


First Payment      In some cases, based on the date of the purchase, financial discrepancies
Discrepancies      identified on the Purchase Advice may involve the borrower’s first payment.
                   There are three possible scenarios that would prompt this type of financial
                   discrepancy.

                                If the…              Then the financial discrepancy would be an…
                    loan was amortized at purchase   underpayment to the Correspondent, and a check
                    and the borrower sends in a      will be sent via regular mail based on the
                    payment to Chase rather than     following circumstances:
                    the Correspondent, thus
                    overpaying the loan,                      If the
                                                          borrower is…              Then…
                                                       paid ahead,        a check will be sent to the
                                                                          Correspondent via regular
                                                                          mail.
                                                       current or         no refund is due, and the
                                                       delinquent,        letter may be sent to the
                                                                          borrower advising them to
                                                                          contact the Correspondent.

                    borrower’s payment was sent to   underpayment to the Correspondent, and refund
                    Chase in error,                  check will be sent to the borrower via regular
                                                     mail.

                                                     NOTE: To request funds be sent back to the
                                                             borrower, the Correspondent must
                                                             fax a completed Research
                                                             Submission Form to (904) 620-6664.
                    borrower forwards the first      overpayment to the Correspondent, and
                    payment to the Correspondent
                    instead of Chase Correspondent, · the Correspondent will be notified via
                                                      telephone by the Research Coordinator, and
                                                    · a collection letter will be forwarded to the
                                                      appropriate Correspondent contact outlining
                                                      the discrepancy and Chase’s expected
                                                      resolution timeframe, along with the
                                                      supporting documentation.

                   NOTE: It is imperative that Purchase Advices be reconciled
                         immediately upon receipt, thereby enabling a timely response
                         within 45 days of loan purchase.

                                                                                 Continued on next page




July 2004                                                                          Funding the Loan – 8
Doing Business with Chase                                               Chase Correspondent Division



Purchase Advice and Loan Status Report, Continued


Contact            Purchase Advices and Loan Status Reports are sent to the Correspondent’s
Information        designated contact. To request a contact change, please contact your Sales
                   Assistant or Account Executive.


Issues             If there are any issues regarding the Purchase Advice or Loan Status Report,
                   please contact your designated Research Coordinator.




July 2004                                                                       Funding the Loan – 9
Doing Business with Chase                                                 Chase Correspondent Division



Suspended Loans


Introduction       Once the closed loan package has been reviewed and it is determined that the
                   loan file contains missing and/or incorrect documentation, the loan file will be
                   suspended and forwarded to a Chase Funding Coordinator/Advocate for
                   further review. The Funding Coordinator/Advocate will then fax a Loan
                   Status Report to the Correspondent that identifies the missing and/or incorrect
                   documentation and the timeframe for submitting corrections.


Clearing           The Loan Status Report will list all hold funding, hold service release, and to
Suspended          follow items. Although each item is important, priority should be given to
Loans              those items that will hold funding.

                   The Loan Status Report will also specify a cure by date, the last day in which
                   the Correspondent may cure document deficiencies and are not subject to the
                   cost of an extension or relock.

                   NOTE:     To resubmit the loan file at a later date, the correspondent
                             must contact Chase’s Loan Registration Department to assign
                             a new loan number to the file.


Determining        The table below provides examples to follow when determining the cure by
the Cure by        date.
Date

                       Loan Status Report      Assuming no holiday, the
                        Generated on…               cure by date is…
                   Monday,                     Thursday,
                                                                            or the lock expiration,
                   Tuesday,                    Friday,
                                                                              whichever is later.
                   Wednesday,                  Monday,
                   Thursday,                   Tuesday,
                   Friday,                     Wednesday,

                                                                                Continued on next page




July 2004                                                                       Funding the Loan – 10
Doing Business with Chase                                                   Chase Correspondent Division



Suspended Loans, Continued


Suspended          Loans delivered on or prior to the lock expiration, not in fundable condition
Loans with a       will be suspended. The Correspondent will be required to clear the suspense
Valid Lock         conditions by the later of the rate lock expiration date or three business days
                   from the issuance of the Loan Status Report.

                   NOTE: Loans placed in suspense are subject to re-lock and extension
                   policies as defined below.


Loans              Loans delivered with an expired lock will be considered a request for relock.
Delivered with     Therefore, upon identifying that the lock is expired, Chase Correspondent
an Expired         Registration Department will automatically relock the loan for 15 days at
Lock               worst case pricing and will issue a new Lock Confirmation.

                   NOTE: If the loan is not in fundable condition, the Correspondent will
                   be required to clear the suspense conditions by the later of the rate lock
                   expiration date or three business days from the issuance of the Suspense
                   Notice.


Conditions Not     If conditions are not cleared by the Cure By Date and the Correspondent has
Cleared by         not contacted the Registration Department to request an extension or relock,
Cure By Date       Chase will review all loans with an expired Cure By Date and will take the
                   following course of action based on the loan status.

                                           And conditions are
                         IF the…           not cleared on the…        THEN Registration will…
                  Expiration Date is      Expiration Date and   Either extend the lock expiration
                  greater than the Cure   no previous extension date for seven days at a cost of .125
                  By Date,                exists,               (if the lock has not expired) or
                                                                relock (if the lock has expired) the
                                                                loan for 15 days depending on
                                                                whichever is better for the
                                                                Correspondent.
                  Expiration Date is      Expiration Date and   Relock the loan in accordance with
                  greater than the Cure   the loan was          Chase’s Relock Policy and issue a
                  By Date,                previously extended, new Lock Confirmation.
                  Cure By Date is         Cure By Date,         Relock the loan in accordance with
                  greater than the                              Chase’s Relock Policy and issue a
                  Expiration Date,                              new Lock Confirmation.

                   NOTE: Pricing is established as of the date the action is taken.
                                                                                  Continued on next page



July 2004                                                                          Funding the Loan – 11
Doing Business with Chase                                               Chase Correspondent Division



Suspended Loans, Continued


Hold Funding       The required document(s) that will resolve the hold funding suspension
(HF)               should be attached to the Loan Status Report and sent via overnight mail or
Documents          faxed (if applicable) to the appropriate Customer Coordinator/Advocate.
                   Upon receipt of the required document(s), Chase will immediately fund the
                   loan and a purchase advice will be faxed to confirm the purchase.

                   NOTE: Refer to the Chase Correspondent Funding Guide for
                   clarification regarding hold funding, hold service release, and to follow
                   documents.


“To-Follow”        If the required document(s) listed on the Loan Status Report are “To-Follow”
Documents          items, a Follow-Up Documentation Transmittal will be faxed to the
                   appropriate correspondent contact. These documents should be forwarded to
                   the address listed on the Follow-Up Documentation Transmittal Form.




July 2004                                                                     Funding the Loan – 12
Doing Business with Chase                                                    Chase Correspondent Division



Withholding Service Release Premiums


Introduction       All closed loan packages are purchased on a service release basis by Chase.
                   Therefore, once the closed loan package is purchased, the SRP will be
                   itemized as a credit on the Purchase Advice.


Holdback           There are several document conditions that would require Chase to withhold
Service Release    Service Release Premiums. Although these documents are not critical to the
Premiums           funding of a loan, they are needed to complete the closed loan file. Therefore,
(HSRP)             if the Service Release Premium was withheld at purchase due to missing or
                   incomplete document(s), those documents, along with the Loan Status Report
                   and Wiring Instructions, must be forwarded to the appropriate Chase
                   Research Coordinator at:

                   Chase Correspondent Division
                   ATTN: Correspondent Research Department
                   10151 Deerwood Park Boulevard
                   Building 300
                   Jacksonville, FL 32256

                   NOTE: Refer to the Chase Correspondent Funding Guide for those
                         Hold Service Release documents.


Releasing the      Upon receipt of the requested document(s) and wiring instructions, the
Service Release    Research Coordinator will contact the correspondent, via phone, to confirm
Premiums           receipt within 48 hours. The timeframe to review and fund the Service
                   Release Premium is approximately five business days.

                           If the documentation
                                 provided…                    The Research Coordinator will…
                    satisfies the underwriting          wire the SRP and fax the SRP Wire
                    condition(s),                       Confirmation to the correspondent.
                    does not satisfy the underwriting   contact the correspondent to obtain the
                    condition(s),                       additional documentation required to satisfy
                                                        the underwriting condition(s).

                                                                                   Continued on next page




July 2004                                                                          Funding the Loan – 13
Doing Business with Chase                                                Chase Correspondent Division



Withholding Service Release Premiums, Continued


Escrow             An escrow holdback occurs when completion of improvements must be
Holdbacks          postponed until after closing. Escrow Holdbacks should be used when
                   incomplete items or unfinished repairs are minor in nature. In these cases, the
                   entire proceeds of the loan should be disbursed at closing with a portion held
                   in a restricted escrow account to be released when the work is complete.

                   Chase requires the SRP to be withheld on any escrow holdback
                   established for non-weather related delays, for items affecting livability
                   or the structural integrity of the property, and anytime the amount of the
                   holdback is greater than $2000.


Required           Once the Service Release Premium is withheld on an escrow holdback, the
Documents to       Research Coordinator will contact the Correspondent two weeks prior to the
Release the        escrow holdback expiration date to establish an expected completion date.
SRP on Escrow
Holdbacks          When the work has been completed, the Correspondent must obtain the
                   following documents:

                   · Final Inspection,
                   · an updated Title Policy (if a swimming pool was the reason for the
                     holdback),
                   · a Certificate of Completion, or comparable document, and
                   · evidence that funds were disbursed.

                   All documents must be forwarded to Chase’s Research Department at:

                   Chase Correspondent Division
                   ATTN: Correspondent Research Department
                   10151 Deerwood Park Boulevard
                   Building 300
                   Jacksonville, FL 32256

                                                                               Continued on next page




July 2004                                                                      Funding the Loan – 14
Doing Business with Chase                                                 Chase Correspondent Division



Withholding Service Release Premiums, Continued


Releasing the      Upon receipt of the final documentation, Chase will review the documents to
SRP on Escrow      ensure that no additional documentation is required.
Holdbacks

                     If additional documentation is…    Then the Research Coordinator will…
                    required,                        contact the correspondent and the release of
                                                     the SRP will be delayed.
                    not required,                    wire the SRP, and fax an SRP Wire
                                                     Confirmation to the correspondent.




July 2004                                                                        Funding the Loan – 15
Doing Business with Chase                                               Chase Correspondent Division



Returned Wires


Introduction       A purchase is not considered complete until the correspondent receives a wire
                   from Chase. If a wire is returned to Chase, it usually occurs within the first
                   five days following the purchase. Therefore, if a wire is not received by the
                   correspondent, and is returned back to Chase, the returned wire will be
                   resolved immediately upon receipt of the wire notification.


Notification of    A Chase Research Coordinator will notify the correspondent of the returned
the Returned       wire via telephone and will verify the account information. Once the account
Wire               information is verified, Chase will wire the funds accordingly.


Timeframe to   All returned wires will be resolved before 2:00 p.m. EST on the date of
Resolve        notification.
Returned Wires




July 2004                                                                      Funding the Loan – 16
Doing Business with Chase                                                 Chase Correspondent Division



Wire Discrepancies


Introduction       Once a loan has been purchased by Chase, there is a possibility of wire
                   discrepancies, which may result in the purchase amount being less than or
                   greater than the loan amount less the applicable fees. In these instances,
                   Chase will promptly review and resolve identified discrepancies in
                   accordance with Chase’s guidelines.


Financial          If the correspondent identifies a financial discrepancy on the purchase advice,
Discrepancies      Chase will resolve the discrepancy within four to eight weeks. A Chase
                   Research Coordinator will acknowledge receipt of the inquiry within twenty-
                   four hours by contacting the correspondent directly to obtain the documents
                   necessary to resolve the discrepancy.

                   Once an audit of the purchase is performed to identify all financial
                   discrepancies, a corrected Purchase Advice will be prepared itemizing the
                   financial discrepancies.

                         If the financial
                       discrepancy is an…                               Then…
                    underpayment,              a check will be requested and upon receipt by the
                                               Research Coordinator, will be forwarded to the
                                               correspondent along with a corrected Purchase
                                               Advice and a letter of explanation.
                    overpayment,               · the correspondent will be notified via telephone,
                                               · a collection letter will be forwarded to the
                                                 appropriate correspondent contact outlining the
                                                 discrepancy and Chase’s expected resolution
                                                 timeframe, and
                                               · a copy of the corrected Purchase Advice along with
                                                 the supporting documentation.


Outstanding        Chase will follow up on all outstanding collection letters until a
Collection         reimbursement check is received from the correspondent. Failure to resolve
Letters            the outstanding collection within the allotted timeframe may result in possible
                   recourse and recovery actions.




July 2004                                                                        Funding the Loan – 17
Doing Business with Chase                                               Chase Correspondent Division



                             Post-Production Services
Overview


Introduction       After Chase - Jacksonville funds a loan, the file is forwarded to our Post-
                   Production Services (PPS) division in Monroe, LA. This chapter will discuss
                   the functions and roles of PPS in the loan purchase process.


In this Chapter    Included in this chapter are the following topics:

                                                 Topic                                See Page
                    Research                                                              2
                    Follow-Up Documents                                                   5
                    Final Documents                                                       6




July 2004                                                                Post-Production Services – 1
Doing Business with Chase                                                 Chase Correspondent Division



Research


Research           The Correspondent Research department resides in the Jacksonville location.
Requests           This department is responsible for resolution of issues occurring post
                   purchase. Three of the common functions performed by this department
                   include:

                   · Corrections to the Purchase Advice that was previously addressed in the
                     section entitled “Purchase Reviews.”
                   · Providing payment histories to obtain MIC/LGC.
                   · Resolution of First Payment discrepancies.


Submitting         · The first step to initiating a new research request is completion of the
New Requests         Research Submission Form (see Exhibits.)
                   · Make sure that you attach any required supporting documentation as
                     explained on the form.
                   · Fax your request to (904) 620-6664, or mail to:

                   Overnight Delivery
                   Chase Correspondent Division
                   Attention: Research Department
                   10151 Deerwood Park Boulevard
                   Building 300
                   Jacksonville, FL 32256
                   888-289-6114

                   Fax: (904) 620-6664

                   E-Mail: Research.Request@Chase.com

                   You will receive a confirmation acknowledging receipt of the request within
                   two business days.


Additional         If the Research Coordinator determines additional documentation is required
Research           to complete the request, you will be contacted and advised of the specific
Documentation      documentation required. This additional documentation, along with a cover
                   sheet referencing the borrower’s name and loan number, must be faxed to
                   (904) 620-6676.

                                                                                 Continued on next page




July 2004                                                                   Post-Production Services – 2
Doing Business with Chase                                                Chase Correspondent Division



Research, Continued


Customer           Use the following chart to determine the appropriate contact for post purchase
Inquiries          customer issues:

                                       Issue                                 Contact
                    Loan Servicing issues within 45 days of    1500 North 19th Street
                    purchase                                   Monroe, LA 71210
                                                               800-631-5946
                    Loan Servicing issues after the loan has   3415 Vision Drive
                    been purchased more than 45 days           Columbus, OH 43219
                                                               800-848-9136
                    Collections                                800-848-9380
                    Foreclosure                                800-981-3792
                    PMI Billings                               Chase Manhattan Mortgage Corp.
                                                               Post Office Box 11730
                                                               Monroe, LA 71211-1730


Payment            · The Jacksonville Research Department can assist you in obtaining a 6-
History              month payment history for the purposes of getting a MIC or LGC. The
                     normal response time is two days from receipt of the written request.
                   · If you need a payment history for any other reason, the request must be
                     submitted to the Chase Servicing Division in Ohio at 800-848-9136.

                   NOTE: There is no charge for the first request. However, Chase, at its
                   discretion, may charge for additional requests.


First Payment      The Correspondent Division locations in Jacksonville and Monroe cannot
Processing         process mortgage payments. Therefore, all mortgage payments must be
Center             mailed to:

                   Mailing Address
                   Chase Correspondent Division
                   P. O. Box 79046
                   Phoenix, AZ 85062-9046

                   Overnight Delivery Address
                   Chase Correspondent Division
                   1820 E. Sky Harbor Circle South
                   P. O. Box 79046
                   Phoenix, AZ 85034-9700

                                                                               Continued on next page



July 2004                                                                 Post-Production Services – 3
Doing Business with Chase                                               Chase Correspondent Division



Research, Continued


First Payment      If the loan was amortized at purchase and the borrower sends in a payment to
Discrepancies      Chase too early, thus overpaying the loan, the Research department can assist
                   you. Complete and fax the Research Submission Form requesting the
                   borrower’s refund of the payment. The normal resolution time is four weeks.

                   NOTE: Chase may ONLY refund money to the borrower in cases where
                   the borrower has sent the first payment to Chase in error.




July 2004                                                                Post-Production Services – 4
Doing Business with Chase                                              Chase Correspondent Division



Follow-Up Documents


Definition         Follow-up documents are defined as documents not critical for funding but
                   are required in the file to meet agency or Chase guidelines. Examples of
                   follow-up documents include:

                   · copy of the loan sale notice to the MI company, and
                   · hazard insurance endorsement changing mortgagee to Chase.


Follow-up          All follow-up documentation should be mailed to the address listed on the
Document           Follow-Up Documentation Transmittal Form.
Address




July 2004                                                                Post-Production Services – 5
Doing Business with Chase                                                       Chase Correspondent Division



Final Documents


Definition         Final documents are critical loan documents that for numerous reasons cannot
                   be provided when shipping the loan to Chase, such as recorded security
                   instruments or final title policies and endorsements.


Final              The following chart outlines the final documents to be shipped to Chase’s
Documents          Final Certification Department, after the loan is purchased by Chase, for
                   conventional and government loans.

                                                         Final Documents
                                     Conventional                               Government
                    ·   Recorded Security Instrument              · Recorded Security Instrument
                        (recorder’s certified copy or original)     (photocopy of the recorded instrument,
                    ·   Title Policy and Endorsements               recorder’s certified copy, or original)
                        (duplicate original or original)          · Title Policy and Endorsements
                    ·   Recorded Assignments (recorder’s            (photocopy, duplicate original, or
                        certified copy, original, or unrecorded     original)
                        original, if in non-recording state)      · Recorded Assignments (photocopy,
                    ·   Power of Attorney (recorder’s               recorder’s certified copy, original, or
                        certified copy or original)                 unrecorded original if in non-
                                                                    recording state)
                                                                  · LGC (original)

                   NOTE: After the loan is purchased by Chase, each of documents listed
                   above must be submitted to Chase’s Final Certification Department upon
                   receipt. Do not hold any documents for the purpose of creating a
                   complete loan package.


Final Document Correspondents are responsible for forwarding all final documents to Chase in
Shipping       accordance with the procedures outlined below.
Procedures

                     Step       Responsibility                              Action
                      1        Chase Funding         Notifies Correspondent of Chase loan purchase.
                      2        Correspondent         Receives Chase required final document(s).
                      3        Correspondent         Writes the Chase ten-digit loan number on the
                                                     document(s).

                                                                                      Continued on next page




July 2004                                                                        Post-Production Services – 6
Doing Business with Chase                                                Chase Correspondent Division



Final Documents, Continued


Final Document Shipping Procedures (continued)

                     Step    Responsibility                           Action
                      4     Correspondent     Completes the Document Transmittal form for the
                                              final document(s) received.

                                              NOTE: Correspondents may use an in-house
                                              Document Transmittal provided it is similar to
                                              Chase’s Document Transmittal form provided in
                                              the “Exhibits” section of this guide.
                      5     Correspondent     Submits the final document(s) along with the
                                              Document Transmittal to the address reflected on :
                                              The Documentation Transmittal form.

                                              NOTE: To eliminate exception processing,
                                              documents are not to be sent to a designated
                                              contact person unless specifically requested on a
                                              priority basis.
                      6     Chase Document    Receives the Document Transmittal and document(s)
                            Processor         and verifies contents for accuracy and completeness.
                      7     Chase Document    Signs the Document Transmittal once verified
                            Processor         complete and accurate and forwards a copy to the
                                              Correspondent.

                                              NOTE: Should the processor find any errors on
                                              the Document Transmittal, the processor will note
                                              the correction(s) and forward the revised
                                              Document Transmittal to the Correspondent.
                      8     Chase Document    Updates final document(s) in Chase’s system and
                            Processor         forwards document(s) to the Document Custodian.
                      9     Chase Document    Removes government and conforming conventional
                            Custodian         loan document(s) from the Outstanding Document
                                              Report.

                                                                               Continued on next page




July 2004                                                                 Post-Production Services – 7
Doing Business with Chase                                                       Chase Correspondent Division



Final Documents, Continued


Outstanding        The Outstanding Document Report (ODR) assists Correspondents in
Document           collecting and monitoring final documents on government and conforming
Report for         conventional loans. Outstanding Document Reports are produced monthly
Government         and can be obtained from Illumin.com. Appropriate security access is
and                requires for the Web site. New Correspondents and those not currently
Conforming
                   receiving the ODR, should contact Julie Waits at (318) 329-1723 to complete
Conventional
Loans (ODR)        the registration process and obtain security access for the Web site. The
                   following chart outlines the ODR report parameters and types of information
                   available for conforming conventional and government loans.

                                Report Parameters                          Information Available
                    Included                                       ·   Detailed description of each loan,
                    Available on pooled conforming                 ·   Requested document type,
                    conventional and government loans that are     ·   Document status,
                    aged at least 90 days from the funding date.   ·   Corrections description,
                                                                   ·   Age of each document requested,
                    Not Included                                   ·   Chase contact information, and
                    Loans that have not been sold to GNMA,         ·   Summary of total number of
                    Fannie Mae, or Freddie Mac, loans funded
                                                                       documents.
                    within 90 days of “as of” date listed on the
                    ODR and loans funded prior to 1997.


Outstanding        Currently, the Outstanding Document Reports cannot be generated for the
Non-               non-conforming conventional loan portfolio. Should you have questions
Conforming         regarding a final document on a non-conforming conventional loan, contact
Conventional       Gary Kelly at (318) 329-1745.
Loan
Documents


Document           The standard processing timeline for conventional and government final
Processing         documents to be updated in Chase’s system is within three business days of
Timeframe          receipt. In addition, it can take up to three weeks for the Document Custodian
                   to remove documents from the Outstanding Document Reports. Therefore,
                   please allow three weeks from the time documents are submitted before
                   addressing the issue with your final document contact representative.

                                                                                      Continued on next page




July 2004                                                                        Post-Production Services – 8
Doing Business with Chase                                             Chase Correspondent Division



Final Documents, Continued


Final Document All final documentation should be mailed to the address listed on the Final
Address        Documentation Submittal form.

                   NOTE: Final documents only, NO funding packages, are to be sent to
                   the address listed on the form.


Final Document Use the chart below to determine the appropriate contact for issues and
Contacts       questions regarding missing documents and/or the ODR reports for
                   conforming conventional and government loans.

                                                   Telephone
                        Title        Contact        Number                    E-mail
                    Supervisor    Molly Hendrix (318) 340-3520     Molly.S.Hendrix@chase.com
                    Team Leader   Julie Waits   (318) 329-1723     Julie.Waits@chase.com

                   NOTE: The fax number for all contacts listed above is (318) 329-1491.




July 2004                                                              Post-Production Services – 9
Doing Business with Chase                                                 Chase Correspondent Division



                            Mandatory Bulk Transactions
Overview


Introduction       This chapter of the Correspondent Lending Guide contains the policies and
                   procedures relating to special commitments involving bulk purchases of loans
                   subject to mandatory delivery.


In this Chapter    Use the following chart to locate the main topics in this chapter:

                                              Topic                                     See Page
                    Correspondent Approval                                                  2
                    Eligible Products                                                       3
                    Forward Commitments                                                     7
                    Mandatory Bulk Transaction Policies                                     9
                    Mandatory Trade File Flow                                              11
                    Mandatory Bulk Contacts at Chase                                       13




July 2004                                                               Mandatory Bulk Transactions –1
Doing Business with Chase                                               Chase Correspondent Division



Correspondent Approval


Correspondent      Correspondents must meet the following criteria to be approved to
Approval           participate in the Mandatory Bulk Transaction program:

                   · Is in good standing with the Chase Correspondent Division,
                   · has delegated underwriting authority,
                   · is experienced in mandatory bulk transaction delivery, and
                   · participates in the Mandatory Bulk Transaction orientation program.


How to Request     If a Correspondent wishes to be considered for the program, contact your
Approval           Sales Manager.




July 2004                                                            Mandatory Bulk Transactions –2
Doing Business with Chase                                              Chase Correspondent Division



Eligible Products


Agency Pooling     Loans delivered via the Mandatory Bulk program must meet agency pooling
Requirements       requirements. Eligible products include:

                   · Conforming conventional 30-, 20- and 15-year Fixed Rate loans,
                   · Non-conforming conventional 30-, 20- and 15-year Fixed Rate loans,
                   · GNMA I 30- and 15- year fixed rate loans, and
                   · GNMA II 30-year fixed rate loans.


Conforming         Use the following chart to determine the conforming conventional loans
Conventional       eligible for delivery via this program.
Loans

                                                                                  Market Type
                      Security Type                    Product                       Code
                    Fannie 30-Year    Fannie Mae 30-Year Community 100                204
                                      Fannie Mae 30-Year DreaMaker 95% with          209
                                      5% Option
                                      Fannie Mae 30-Year Fixed                         212
                                      Fannie Mae 30-Year Fixed Non-owner               213
                                      Fannie Mae 30-Year Fixed with Lender             217
                                      Subsidized Buydown
                                      Fannie Mae 30-Year DreaMaker 95% with            229
                                      3/2 Option
                                      Fannie Mae Flex 97% via DU                       482
                                      Fannie Mae 30-Year Chase 97 %                    648
                                      Fannie Mae 30-Year Fixed Flexible 100            668
                                      Fannie Mae 30-Year DreaMaker PLUS                697
                                      (FNMA 97%)
                    Fannie 20-Year    Fannie Mae 20-Year Fixed                         207
                                      Fannie Mae 20-Year Non-owner                     208
                    Fannie 15-Year    Fannie Mae 15-Year Fixed                         222
                                      Fannie Mae 15-Year Fixed Non-owner               223
                                      Fannie Mae 15-Year DreaMaker 95% with            227
                                      5% Option
                                      Fannie Mae 15-Year Chase 97                      649

                                                                             Continued on next page




July 2004                                                            Mandatory Bulk Transactions –3
Doing Business with Chase                                              Chase Correspondent Division



Eligible Products, Continued


Conforming Conventional Loans (continued)

                                                                                  Market Type
                      Security Type                    Product                       Code
                    Freddie 30-Year   Freddie Mac 30-Year Fixed                      214
                                      Freddie Mac 30-Year Fixed Non-owner            215
                                      Freddie Mac 30-Year Fixed with Lender          218
                                      Subsidized Buydown
                                      Freddie 30-Year Alt 97 (with 35% MI)             597
                                      Freddie 30-Year DreaMaker 97%                    613
                                      Freddie 30-Year DreaMaker 95% with 5%            634
                                      Option
                    Freddie 20-Year   Freddie Mac 20-Year Fixed                        201
                                      Freddie Mac 20-Year Non-Owner                    203
                    Freddie 15-Year   Freddie Mac 15-Year Fixed                        224
                                      Freddie Mac 15-Year Fixed Non-owner              225
                                      Freddie 30-Year DreaMaker 95% with 3/2           636
                                      Option


Non-               Use the following chart to determine the non-conforming conventional loans
Conforming         eligible for delivery via this program.
Conventional
Loans

                      Security Type                                                   Market
                                                       Product                       Type Code
                   Jumbo 30-Year      Non-Conforming Conventional 30-Year Fixed         603
                                      Non-Conforming Conventional 25-Year Fixed         603
                                      Non-Conforming Conventional 20-Year Fixed         603
                   Jumbo 15-Year      Non-Conforming Conventional 15-Year Fixed         623
                                      Non-Conforming Conventional 10-Year Fixed         623

                                                                          Continued on next page




July 2004                                                           Mandatory Bulk Transactions –4
Doing Business with Chase                                                   Chase Correspondent Division



Eligible Products, Continued


GNMA I             Use the following chart to determine the GNMA I 30-year fixed rate loans
                   eligible for delivery via this program.

                                                                                         Market Type
                     Security Type                       Product                            Code
                    GNMA I            30-, 25-, 20-Year Fixed (full documentation)          110
                    30-Year Fixed     30-, 25-, 20-Year Fixed (alternate                    115
                                      documentation)

                   NOTE: Non-half or non-whole interest rates cannot be included in the
                   GNMA I type bulk transaction. These loans must be placed into a
                   GNMA II type bulk transaction.


GNMA II            Use the following chart to determine the GNMA II 30- and 15-year fixed
                   rate loans eligible for delivery via this program.

                                                                                            Market
                      Security Type                        Product                         Type Code
                    GNMA II 30-Year     30-, 25-, 20-Year Fixed (full documentation) -        110
                    Fixed               NON WHOLE AND HALF RATE
                    GNMA II 30-Year     30-, 25-, 20-Year Fixed (alternate                    115
                    Fixed               documentation) - NON WHOLE AND HALF
                                        RATE
                    GNMA II 30-Year     30-Year Fixed Temporary Buydown (full                 120
                    Fixed               documentation)
                                        30-Year Fixed Temporary Buydown (alternate            125
                                        documentation)
                                        30-Year Fixed Lender Subsidized Buydown               121
                                        (full docs)
                                        30-Year Fixed Lender Subsidized Buydown               126
                                        (alternate docs)
                    GNMA I 15-Year      15-, 10-Year Fixed (full documentation)               140
                    Fixed               15-, 10-Year Fixed (alternate documentation)          145




July 2004                                                                Mandatory Bulk Transactions –5
Doing Business with Chase                                               Chase Correspondent Division



Eligible Products, Continued


Seasoned Loans     Chase also purchases seasoned loans meeting the following criteria:

                   · All loans received by Chase for purchase in which payments have already
                     been made, must have either a current payment history showing the current
                     principal balance and escrow balance or the current payment(s) due.
                   · If the insurance, taxes, or monthly MIP/PMI have become due and have
                     been paid, it must be clearly shown on the pay history or copies of checks
                     used to pay the monthly amount must be provided.
                   · The maximum seasoning period is:
                     · 10 months from Note date to Chase funding date for conforming and non-
                       conforming conventional loans, and
                     · 18 months from Note date to Chase funding date for government loans.
                   · The recorded mortgage/deed of trust, recorded assignment(s) and final title
                     policy are required to be in the closed loan package if the Chase funding
                     date is 210 days later than the Note date.
                   · The Loan Guaranty Certificate (LGC) is required to be in the closed VA
                     loan package if the Chase funding date is 90 days later than the Note date.

                   NOTE: Chase will not purchase a loan if it contains a delinquent
                   payment history. (History of making payments > 15 days after the
                   scheduled due date.)




July 2004                                                             Mandatory Bulk Transactions –6
Doing Business with Chase                                                     Chase Correspondent Division



Forward Commitments


Minimum            The minimum bulk trade commitment is $250,000. The Mandatory Desk
Commitment         Manager may make exceptions on a case-by-case basis.
Amount


Hours of           Commitments may be obtained Monday through Friday from 9:00 a.m. to
Operation          5:00 p.m. EST except on holidays and on days when the bond market closes
                   early.


Obtaining a        Use the following steps to obtain a mandatory bulk commitment.
Commitment

                      Step                                    Action
                       1     Correspondent calls the Mandatory Desk to request a price for a
                             commitment at (800) 250-5015.
                       2     Correspondent details the type of commitment to be priced.

                                     If the commitment                 Then the Correspondent
                                           type is…                         must provide…
                               Fannie Mae or Freddie Mac     ·   Correspondent contact name
                               (30- or 15-year),             ·   Correspondent C-code
                                                             ·   Commitment amount
                                                             ·   Agency
                                                             ·   Loan term (30- or 15-year)
                                                             ·   Security Rate
                                                             ·   Rate range (1/4 to 7/8ths above the
                                                                 Security Rate)
                                                             ·   Commitment period (8, 15, 30, 45, or 60
                                                                 days)

                                                             EXAMPLE: $1 million of Fannie Mae
                                                             30-year, 8.000 Security Rate with a note
                                                             rate range of 8.250 - 8.875 for 30 days.



                                                                                     Continued on next page




July 2004                                                                   Mandatory Bulk Transactions –7
Doing Business with Chase                                                     Chase Correspondent Division



Forward Commitments, Continued


Obtaining a Commitment (continued)

                      Step                                     Action
                       2
                                 If the commitment                 Then the Correspondent
                                       type is…                          must provide…
                               GNMA I or GNMA II      ·   Correspondent contact name
                               (30- or 15-year),      ·   Correspondent C-code
                                                      ·   Commitment amount
                                                      ·   Agency
                                                      ·   Loan term (30- or 15-year)
                                                      ·   Security Rate
                                                      ·   GNMA I Rate range (1/2 above the Security
                                                          Rate)
                                                      ·   GNMA II Rate range (1/4 to 3/4 above the
                                                          Security Rate)
                                                      ·   Commitment period (8, 15, 30, 45, or 60 days)

                       3     The Mandatory Desk will quote a price to the Correspondent and ask the
                             Correspondent if they accept the bid.
                       4     If the Correspondent verbally accepts the bid, the Mandatory Desk will
                             send a commitment letter via fax.
                       5     Upon receipt of the commitment letter by fax, the Correspondent must
                             sign and fax back to (904) 620-6852 within 24 hours of receipt.




July 2004                                                                   Mandatory Bulk Transactions –8
Doing Business with Chase                                                     Chase Correspondent Division



Mandatory Bulk Transaction Policies


Loan Level         · Individual loans are still subject to price adjustment if the type or feature
Price                for the product selected normally bears a price adjustment.
Adjustments          · An example of a type adjustment is a non-owner-occupied loan.
                     · An example of a feature adjustment is an escrow waiver.
                     · See the Chase Price Sheet for more information.
                   · The only exception to this policy is the buydown feature on GNMA II
                     trades in which the buydown adjustment is priced into the commitment.


Commitment         All commitments must be filled to within 1% (plus or minus) of the
Fulfillments       commitment amount.

                   Example: If a commitment is established for $500,000, the commitment
                   must be filled from $495,000 to $505,000.


Pair-offs          · A pair-off fee will be charged when a Correspondent requests to pair-off a
                     commitment or if the commitment expires without being filled or rolled to
                     a new commitment.
                   · The fee will be calculated at the time of the request or at the close of the
                     market on the expiration date of the unfilled trade.


Fixed Rate         The fee for fixed rate loan pair-offs is calculated as follows:
Loan Pair-offs

                      Step                             Action                               Example
                       1     Determine the original price of the trade.                     100.000
                       2     Determine the original delivery period.                         15 days
                       3     Determine the current price for the original delivery          100.250
                             period.
                       4     Subtract the current price for the original delivery period      (.250)
                             (3) from the original trade price (1).
                       5     Add 2/32nd bid/ask spread.                                      (.0625)
                       6     Pair-off price.                                                 (.3125)

                   If current market is better, the price differential will be multiplied by the
                   unfilled balance of the trade (less tolerance).

                                                                                     Continued on next page




July 2004                                                                   Mandatory Bulk Transactions –9
Doing Business with Chase                                                 Chase Correspondent Division



Mandatory Bulk Transaction Policies, Continued


Payment of         · The Mandatory Desk will send a bill to the Correspondent for the pair-off
Pair-off Fees        fee.
                   · Fees must be received by Chase within 30 calendar days.
                   · If the fees are not received by the 30th calendar day, the Divisional Sales
                     Manager will contact the Correspondent for payment.
                     · If fees are not received within 60 calendar days the Correspondent’s
                       Mandatory Approval may be rescinded.


Rolling a Trade    · The undelivered balance of a commitment will be automatically rolled, in
                     15-day increments, up to 30 days.
                   · The new price on the remaining balance of the trade will be the original
                       trade price less the roll cost.
                   · The rolled balance of a trade will be assigned a new commitment number,
                     price, and expiration. A new commitment letter will be issued.




July 2004                                                             Mandatory Bulk Transactions –10
Doing Business with Chase                                                Chase Correspondent Division



Mandatory Trade File Flow


Loan Delivery      · Loans must be delivered with the note rate specified in the commitment.
                     Note rates outside of the commitment will not constitute good delivery.
                   · The "Mandatory Bulk" sticker should be placed on the exterior of the loan
                     file and on the outside of the shipping package. (Additional stickers may
                     be obtained by contacting the Mandatory Desk at (800) 250-5015.)
                   · The appropriate delivery address for mandatory bulk files is:

                                          Chase Correspondent Division
                                       Attention: Registration Department
                                        10151 Deerwood Park Boulevard
                                                  Building 300
                                            Jacksonville, FL 32256

                   · While mandatory loan files are underwritten by the Correspondent under
                     their delegated underwriting authority, Chase may require underwriting
                     review of specific loan types including 3-4 unit properties or conventional
                     loans with a credit score of less than 620. If Chase Underwriting must
                     review a loan file, the Correspondent must deliver the file to allow
                     sufficient time for underwriting review and clearing of all conditions prior
                     to expiration of commitment.
                   · Mandatory bulk files should not be co-mingled with traditional best efforts
                     files when delivering to Chase.

                                                                               Continued on next page




July 2004                                                             Mandatory Bulk Transactions –11
Doing Business with Chase                                                       Chase Correspondent Division



Mandatory Trade File Flow, Continued


Funding            The Funding Unit will use the following procedures when reviewing files for
                   funding:

                      Step                                     Action
                       1     The funder will review all collateral documents as well as those
                             documents required by Chase to ensure compliance with industry
                             standards.
                       2
                                    If the loan is…                     Then the Funder …
                               fundable,                  funds the loan and the process is complete.
                               not fundable,              suspends the loan and routes the file to the
                                                          Coordinator who proceeds to Step 3.

                       3     The Funding Suspense Specialist notifies the Correspondent of the loan
                             deficiencies.

                             NOTE: Correspondents have 72 hours to cure loan deficiencies; not
                             to exceed 72 hours beyond the commitment expiration date.
                       4
                                 If the Correspondent …                         Then …
                               sends Chase appropriate         Chase funds the loan.
                               documentation to cure the
                               deficiencies within 72 hours,
                               cannot cure the deficiencies    the Correspondent can elect to:
                               within 72 hours,
                                                               · Have the loan extended for an additional
                                                                 15 days at the current roll cost not to
                                                                 exceed 45 days.
                                                               · Pair-off the outstanding balance and lock
                                                                 the loan as a Best Effort, or
                                                               · Allocate the loan to a subsequent
                                                                 commitment.

                                                               NOTE: The time to cure the deficiencies
                                                               can be extended if the mandatory
                                                               commitment has not expired.




July 2004                                                                   Mandatory Bulk Transactions –12
Doing Business with Chase                                                   Chase Correspondent Division



Mandatory Bulk Contacts at Chase


Quick              Use the following chart to determine the appropriate contact numbers for the
Reference          Chase Mandatory Bulk Program.

                              Contact                   Telephone Number             Fax Number
                    Mandatory Desk                         800-250-5015             (904) 620-6852
                    Regional Funding Supervisor    Refer to the “Welcome to         (904) 620-6664
                                                   Chase” chapter of this guide
                                                   for your contact and
                                                   telephone number.
                    Regional Suspense Specialist   Refer to the “Welcome to         (904) 620-6664
                                                   Chase” chapter of this guide
                                                   for your contact and
                                                   telephone number.

                   NOTE: The Mandatory Bulk Department may be reached via e-mail at
                   CHF.MANDATORY@JPMCHASE.com




July 2004                                                               Mandatory Bulk Transactions –13

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:1/31/2013
language:English
pages:270