current mortgage rates

“KEEP THE DREAM” MORTGAGE REFINANCE PROGRAM April 4, 2008 4 1 4-4-08 PRESENTATION OUTLINE I. II. III. IV. IV V. VI. VI VII. Introduction/Program Highlights Borrower Eligibility Underwriting Considerations Mortgage I M Insurance Miscellaneous Next Steps for Counselors Who to Call 2 “KEEP THE DREAM” KEEP DREAM Introduction Program began on September 4th. Problem f b i l P bl of subprime loans and predatory lending is d d t l di i immense. Keep the Dream will assist homeowners who have faced or will face a payment hardship to a rate reset. 3 4-4-08 “KEEP THE DREAM” KEEP DREAM Program Highlights Refinance Product Features: Up to 100% financing FICOs as low as 575 Borrowers can be as much as 60 days delinquent (as of closing) Competitive fixed interest rate Not a Traditional SONYMA Program Fannie Mae Product Guidelines 4 4-4-08 “KEEP THE DREAM” KEEP DREAM Program Highlights Product Types 30 and 40 Year Fixed R t Mortgages. d Y Fi d Rate M t Sales Focus Any borrower who can demonstrate that they have or will incur a mortgage payment hardship as a result of an interest rate increase or mortgage payment reset. Geographic Restrictions g p New York State ONLY. 5 4-4-08 “KEEP THE DREAM” KEEP DREAM Borrower Eligibility Eligible Borrowers U.S. Citizens Permanent Resident Aliens id li Non-permanent Resident Aliens Ineligible Borrowers Foreign Nationals ITIN Borrowers Borrowers owning more than one (1) residential property Co-signors Co signors Non-occupant co-borrowers 6 4-4-08 “KEEP THE DREAM” KEEP DREAM Borrower Eligibility Eligible Properties 1-4 unit primary Co-ops (per Fannie Mae’s NYC Pilot Program Guidelines) Condos and PUDs (per Fannie Mae’s non-DU Guidelines) Modular homes Ineligible Properties Investment properties Second Homes Leaseholds Manufactured/Mobile homes 7 4-4-08 “KEEP THE DREAM” KEEP DREAM Borrower Eligibility Maximum Loan Amount: $417,000 – 1 Family $533,850 $533 850 – 2 Family $645,300 – 3 & 4 Family Maximum LTVs/CLTVs and Minimum FICOs: Limited Cash-Out Refinance ONLY Property Type 1 Unit P i U it Primary, Condo, Co-op 2 Unit Primary 3 & 4 Unit Primary Maximum LTV 100% 97% 95% Maximum CLTV 105% 105% 105% Minimum FICO 575 580 620 8 4-4-08 “KEEP THE DREAM” KEEP DREAM Borrower Eligibility Loan amount to pay off first lien (including prepayment penalties), penalties) closing costs, prepaids and most subordinate costs financing only. Cash proceeds may not exceed the lesser of $1,000 or 1% of the loan amount. Existing second liens to be subordinated at closing and must meet Fannie Mae’s Community Second guidelines when CLTV tF i M ’ C it S d id li h exceeds 100%. 9 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations All loans must be manually underwritten according to F Fannie Mae’s MyCommunity Mortgage Program i M ’ M C i M P guidelines unless otherwise noted. Appraisal Considerations All loans require a full appraisal, including photographs. Appraisals made subject to repairs require a final inspection. Escrow holdbacks for repairs will be considered on an exception basis only and will only be permitted for inclement weather. 10 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Borrower Eligibility Any borrower who can demonstrate they HAVE incurred or WILL incur a mortgage payment hardship where the rate and/or payment has increased or will increase in the future. Including borrowers with Prime and non-Prime products such as: o 2/28 ARMs o 3/27 ARMs o Interest-Only Loans e es O y oa s o PayOption ARMs o Other Adjustable Rate Loans with Upcoming Adjustments o Loans with Temporary Buydowns o Piggybacks with a HELOC Second 11 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Borrower Eligibility The hardship test is met if the proposed mortgage payment (PITI) is at least 10% less than the current “after rate reset payment after reset” (PITI) – at least 20% less than the current payment (PITI) if presently delinquent (after rate/payment reset). 60 days or less delinquent (as of the loan closing date, not including the right of rescission period) on mortgage payments because of higher interest rate and/or payment may be eligible. g p y y g May not have been 30 or more days delinquent in the 12 month period prior to the rate and/or payment increase. 12 “KEEP THE DREAM KEEP DREAM” Underwriting Considerations Ineligible Borrowers Loan is more than 60 days delinquent (at application or closing). Have not yet experienced a rate reset but are currently y p y delinquent or have been delinquent in the past 12 months. Currently in a subprime fixed-rate loan. Want to add or d l another borrower from the original dd delete h b f h i i l loan. Own more than one residential property. property 13 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Credit History A credit report is required at application. At least 5 days prior to closing, either an updated credit report or mortgage verification is required to determine that borrowers are not more than 60 days delinquent. (Requirement does not apply to non-delinquent borrowers) Judgments, tax liens, and collections must be paid in full prior to or at closing (cannot be included in loan amount). Timely repayment of debts prior to rate reset. Chapter 13 bankruptcy and CCCS require 24 months of reestablished credit; all other bankruptcies and foreclosures bli h d di ll h b k i df l require 48 months of re-established credit. 14 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Documentation Requirements Current note and mortgage; Current mortgage payment statement or coupon stub; Completed Payment Hardship Worksheet (Exhibit A); Deed or title report; p ; Divorce / Separation agreement (if applicable); Self-employed borrowers are required to provide 2 years complete tax returns; Wage earners must provide a recent paystub disclosing yearto-date income, as well as W-2’s for the most recent 2 years, (or a full verification of employment). 15 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Homeowner Counseling Pre- and Post-Closing Homeowner Counseling -- Post-Closing will be required at any time, if the homeowner is unable to make mortgage payments, as well as 90 and 360 days after closing of the refinancing loan. SONYMA will pay up to $500 for counseling. Lenders must pay counselor fee at closing and SONYMA will reimburse the Lender at loan purchase. Applicants receiving counseling from a Not-For-Profit approved by MI company will be receive a 10 bps (or more) reduction in premium. premium Certificate confirming completion and an executed document confirming borrowers’ willingness to participate in early intervention delinquency counseling must be included in the loan file. 16 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Income Limits Gross underwriting income may not exceed the program’s income limits: o o 165% of Area Median Income for New York City, Long Island and the counties of Dutchess, Orange, Putnam, Rockland, Ulster, Westchester. 125% of the Area Median Income for the rest of New York State. Rental income on 2- to 4-family properties MUST be included in the income limit calculation except if the property is located in a FannieNeighbors® Area. Area A link to the FannieNeighbors® Areas can be found on SONYMA s SONYMA’s website. Refer to SONYMA’s website for the actual limits. 17 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Loan Decisioning and DTI All loans must be manually underwritten by the Lender. DU and Lender LP decisions are not eligible. Maximum DTI is 45%. Must meet the minimum PITI reductions. Delegated MI underwriting is not permitted. 18 4-4-08 “KEEP THE DREAM” KEEP DREAM Underwriting Considerations Maximum Number of Properties Owned Borrowers may not own any other residential property. Subordinate Financing No new subordinate financing is permitted except Community Seconds (up to 105% CLTV). Non-purchase second mortgage liens may be paid off as long as: The second lien is seasoned at least 6 months; If the second is a HELOC, no draws were taken during the HELOC previous six (6) months. 19 4-4-08 “KEEP THE DREAM” KEEP DREAM Mortgage Insurance Borrower-paid MI is required for all loans over 80% LTV. MI is acceptable from Genworth Mortgage Insurance only. only Required LTV MI Coverage 97.01% – 100% 20% 95.01% – 97% 18% 90.01% - 95% 16% 85.01% – 90% 12% 80.01% – 85% 6% 20 4-4-08 “KEEP THE DREAM” KEEP DREAM Mortgage Insurance Monthly and annual premiums are eligible. “Reduced”, “Custom”, Financed, and LPMI are not allowed. Loans must be manually submitted to the MI company. All loans will also require pool insurance from SONYMA’s Mortgage Insurance Fund (MIF). The pool insurance commitment will be issued upon MIF’s receipt of p p p the MI certificate from the MI company. Loans with a LTV of 80% or less must be sent to directly MIF for pool insurance approval. approval 21 “KEEP THE DREAM KEEP DREAM” Mortgage Insurance Genworth’s Counseling Saver Program Borrowers can qualify for a 0.10% premium discount on their MI premium by completing a counseling course through a not for profit agency approved under Genworth’s Counseling Saver programs The eligible agencies are published on SONYMA’s approved counselor list (Exhibit F). F) The following information will be required to receive the discount: Borrowers must have completed 8 hours of face-to-face counseling prior to application and have a certificate for evidence; On the Genworth application, the line next to “Counselor Saver” must be filled in with the name of the agency as well as Y or N circled on the order form. 22 “KEEP THE DREAM KEEP DREAM” Mortgage Insurance Genworth Restrictions Maximum 1x60 mortgage lates due to hardship are permitted. Mortgages with a FICO score > = 620 may receive A rates provided the loan meets the following: t th f ll i Mortgage: No more than 1x30 in last 12 months, 0x60, no delinquency in the last 90 days and mortgage is current. Revolving & Installment: Not currently delinquent Bankruptcy Public Derrogatories: Permitted to Fannie Mae s Seller Guide Mae’s guidelines. Foreclosure: Discharged 3 years. A Minus rates will apply if: Mortgage: 2x30 in last 12 months 1x60 in the last 12 months Mortgage is currently delinquent Currently delinquent mortgages and 1x60 on the mortgage in the last 12 months are only permitted if: Delinquencies were caused by mortgage payment increase from interest rate change, change end of IO or end of minimum payment period The borrower had no history of mortgage delinquency prior to the mortgage payment increase 23 4-4-08 “KEEP THE DREAM” KEEP DREAM Miscellaneous Assumability Not permitted. Escrow/Impounds Tax and insurance escrow is required. Escrow waiver – not allowed. MI cancellation – refer t Fannie Mae guidelines. ll ti f to F i M id li Loan Servicing Servicing-released only. Fees No rate lock fee. Maximum lender origination fee or points is 1.75%. Maximum ancillary fees of $ $400 (includes commitment, processing, underwriting, application and doc prep fees). 24 4-4-08 “KEEP THE DREAM” KEEP DREAM Miscellaneous NY Consolidation Extension and Modification Agreement (CEMA) Allowed Prepayment Penalty Not allowed Pricing and Rate Locks Refer to daily rate sheets published on SONYMA’s website. Temporary Buydowns T B d Not allowed 25 4-4-08 “KEEP THE DREAM” KEEP DREAM Miscellaneous Required Forms and Exhibits Origination and Underwriting M&T Registration Form Eligible Homeowner Counseling Agencies Borrower Authorization for Counseling Post-Closing Early D li P t Cl i E l Delinquency Intervention Acknowledgement I t ti A k l d t Keep the Dream Income Limits Underwriting File Stacking Order M&T Co-op and PUD Questionnaires p y Fannie Mae Condo, Co-op and PUD Warranty Forms Fannie Mae Community Seconds Checklist Payment Hardship Worksheet 26 4-4-08 “KEEP THE DREAM” KEEP DREAM Miscellaneous Required Forms and Exhibits Settlement and Delivery Keep the Dream Operational Instructions Closing Package Stacking Order M&T Allonge to Note Goodbye Letter G db L tt Tax and Insurance Info Sheet Assignment of Mortgage Form M&T Monthly Fixed Rate Co-op Note (Fiserv MT 4005) p y g ( ) M&T Co-op Security Agreement (Fiserv MT 4663) M&T Co-op Assignment of Proprietary Lease M&T Co-op Recognition Agreement 27 4-4-08 “KEEP THE DREAM” KEEP DREAM Miscellaneous Product Description Keep the Dream 30-Year p Keep the Dream 40-Year Product Code 1180 1181 28 4-4-08 “KEEP THE DREAM” KEEP DREAM Next Steps Counselors Review materials on SONYMA’s website (http://www.nyhomes.org/home/index.asp?page 489). (http://www.nyhomes.org/home/index.asp?page=489). Submit form in materials to SONYMA. Sign up as an approved counseling organization with Genworth or MGIC. Refer eligible candidates to participating lenders. 29 4-4-08 “KEEP THE DREAM” KEEP DREAM Who To Call Lenders L d Laura Pacifico, Sales & Account Management, lpacifico@mtb.com, 716-848-3717 Laura Peacock Registration/Underwriting/Funding/Delivery Peacock, Registration/Underwriting/Funding/Delivery, lpeacock@mtb.com, 716-848-7042 Deanna Walsh, Product and Program Information/Scenarios, dwalsh@mtb.com, 716-848-7589 Gail Kresge, Relationship Manager, Gaild@nyhomes.org, 212-688-4000 ext.399 Lynn Morris, Relationship Manager, Lmorris@nyhomes.org, 212-688-4000 ext. 398 Counselors Wanda Graham, Vice President/Community Relations, Wanda@nyhomes.org, 212-688-4000 ext. 393 30