100 - FNMA CONFORMING FIXED WITH JUMBO OPTION by gnw27033

VIEWS: 21 PAGES: 19

									                               100 - FNMA
                   CONFORMING FIXED WITH JUMBO OPTION
                                                                                                7-20-10
                                                                                             PAGE F-2
LOAN PROGRAM:       •   The agency fixed rate product provides for a fixed interest rate and level payments
                        for the life of the loan.

LOCK-               •   Blue Connect Tips:
IN/REGISTRATION:             Loan Type – Conforming.
                             Amortization – 10, 15, 20, 25, & 30 years.
                             Jumbo – 15 or 30 years.

MINIMUM             •   None.
MORTGAGE:

MAXIMUM             •   Currently published FNMA loan limits.
MORTGAGE:               http://www.efanniemae.com/sf/refmaterials/loanlimits/index.jsp
                    •   Jumbo Loan Limits – For each transaction you must go to the HUD website to
                        determine if your property is eligible for the higher loan limits:
                        http://www.fhfa.gov/GetFile.aspx?FileID=135

MAXIMUM             •   Refer to 100 - FNMA Conforming Fixed Rate With Jumbo Option Matrix.
LTV/CLTV:

ADDITIONAL          •   N/A.
CONSIDERATIONS:

AGE OF              •   APPRAISAL:
DOCUMENTS:                 120 days for existing property.
                            - Appraisals >120 days needs an update/recert of value is required.
                            - Choice – 90 days for existing property.
                           180 days for new construction.
                    •   CREDIT:
                           Existing Construction maximum age of credit documents is 90 days.
                           New Construction maximum age of credit documents is 120 days.
                           The age of the document is measured from the date of the document to the
                           date the Note is signed.
                           Credit Documents include: Credit Report, Employment Documentation, Income
                           Documentation, and Asset Documentation.

APPLICATION:        •   A 4506T must be signed and dated at application for all borrowers (salaried & self-
                        employed).
                    •   Effective for all loans registered on and after July 6, 2009, and regardless of
                        income type or documentation method the underwriter will process the IRS 4506-T
                        tax transcripts for the two years prior to the loan application date.
                              Effective with loan applications taken on or after Monday, October 12,
                              2009, IRS Tax Transcripts for the past two (2) years dated prior to the
                              closing date will be required.
                             - If the IRS returns “No Transcripts Available”, proof of extension and the most
                             recent years’ IRS Transcripts available will be required.
                             - When tax returns are provided to document income, the tax returns must
                             match the IRS Transcripts. If the IRS Transcripts do not match the tax returns,
                             proof of amended returns must be provided or the file will be ineligible.
                             - When W-2’s are used to document income, they must be compared to the
                             “Wage, Salaries, and Tips” section shown on the IRS Transcript for the
                             corresponding years. Underwriters must review the Transcripts and compare to
FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                              7-20-10
                                                                                           PAGE F-3
APPLICATION              the verified documentation in the file that was used to qualify. Variances must
(CONT’D):                be documented. Variances of more than 10% needs to be addressed and
                         documented accordingly. Files where Transcripts do not correspond to the
                         documentation provided will be ineligible.
                         - In addition, additional documentation or re-calculation of income may be
                         necessary if Transcripts reflect capital gains/losses, rental property
                         income/losses, un-reimbursed employee expenses, etc.
                         - Underwriters should review for “red flags” such as undisclosed self-
                         employment, occupancy issues, undisclosed dependents, undisclosed rental
                         and/or other properties, etc.
                 •   Refer to DOCUMENTATION section.

APPRAISAL        •  As determined by Desktop Underwriter® (DU™).
REQUIREMENTS:    •  Copy of the Appraisers License
                 •  Copy of the Appraisers current E&O Insurance.
                 •  Refer to AGE OF DOCUMENTS section.
                 •  DECLINING MARKET REQUIREMENTS:
                        If appraiser notes that property is in a “declining or soft market” (soft market is
                        where sales are taking greater than six (6) months to sell and/or there is an
                        oversupply of housing) a reduction in LTV/CLTV/HCLTV will not be required
                        however the following additional guidelines must be followed:
                        ♦ A full URAR appraisal is required.
                        ♦ Three (3) comps required, two (2) comps must have closed within the last
                             90 days, one (1) no greater than six (6) months old, all within the
                             neighborhood boundaries as defined on page one (1) of the appraisal.
                        ♦ Two (2) pending sales or listings from the subject’s neighborhoods
                        ♦ If the appraiser cannot comply with these requirements, a HVC report
                             will be required regardless of LTV/CLTV. You can automatically order
                             the HVC before you determine it is needed if you like. This tool is
                             inexpensive and providing it up front rather than waiting for the underwriter
                             to request may help to prevent delays.
                        ♦ In the interim, the following table may be used to determine what additional
                             appraisal tool or action needs to be obtained dependent upon the HVC
                             score results.
                HVC Score             LTV                                  ACTION
                  700+                 Any           If the appraiser is unable to meet any of the
                                                     above requirements, the appraiser must provide
                                                     a detailed explanation as to why the
                                                     requirements were not met, and if it resulted in
                                                     making an adjustment to the property value.
                 600-699               Any           AVM (or Desk Review). This is dependent upon
                                                     how far from 699 the score veers and the
                                                     Underwriter’s confirmation that value is
                                                     acceptably supported by data provided and
                                                     sufficient comments are contained in the
                                                     appraisal about the comparable selection to
                                                     support lack of data, non-use of more recent
                                                     sales indicated in AVM, etc.
                                                     Correspondents must obtain AVM
                                                     regardless.
                                                                        nd
                Below 600          60.01-95%         Field Review or 2 full appraisal dependent
                                                     upon Underwriter’s confirmation that value is
FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                               7-20-10
                                                                                             PAGE F-4
APPRAISAL                                              acceptably supported and appraisal is
REQUIREMENTS                                           consistent in its data content.
(CONT’D):                                              Correspondent must obtain Field Review or
                                                        nd
                                                       2 Appraisal and must be ordered from
                                                       LandSafe. LandSafe can be reached at 877-
                                                       572-5673.
                Below 600         60.00% and less Desk Review.
                 • Effective with loans locked on or after Friday, November 6, 2009:
                          A comparable rent schedule on Form 1007 must be obtained on all investment
                          properties to document the monthly rent on the subject property regardless if
                          the rental income was used in qualification. On a 2-4 Unit an Operating Income
                          Statement on Form 216 or a similar cash flow and operating income statement
                          is required for investment properties, including 2-4 Unit properties in which the
                          applicant will occupy one unit as a principal residence (regardless if the rental
                          income was used in qualification). This is a requirement set forth by Federal
                          Housing Finance Agency (FHFA).
                 • PROPERTIES IN A DISASTER AREA:
                        If property was appraised prior to the disaster you must obtain an additional
                        property inspection prior to closing. If a property is appraised after the disaster,
                        you must obtain an interior and exterior inspection even if DU™ has offered a
                        more streamlined property inspection.
                        If the appraisal has been completed the appraiser must go back and re-inspect
                        the property. Appraiser must provide an addendum stating “I have reviewed
                        both the interior and exterior of the subject property and noted no damage or
                        deferred maintenance related to the recent severe weather. A property
                        inspection can also be performed by a licensed property inspector in lieu of the
                        appraiser’s inspection. Any review or inspection must be dated after the date of
                        the disaster.
                        Non-standard Appraisals (1004, 2055E or 2075) are NOT allowed for a
                        minimum of 90 days after the disaster. An exterior re-inspection by an approved
                        appraiser is required and must provide the following:
                          - Written certification that verifies the property is free from damage and the
                          disaster has had no effect on value or marketability.
                          - If the appraiser indicates damage, the extent of the damage must be
                          addressed and require the completion of any repairs needed to ensure that the
                          property is “safe, sound and sanitary”.
                          - A Form 442, Satisfactory Completion Certificate, with photos must be
                          provided.
                        All loans refer to FEMA website: http://www.fema.gov/news/disasters.fema
                        Verify the Borrowers place of employment has not been negatively impacted by
                        these events.
                 • Jumbo Loan Limit:
                          A Field Review is required if:
                         -The loan amount is $625,500 or greater and the loan-to-value/combined loan-
                         to-value is greater than 80% or
                         -The property is valued at $1,000,000 or more and the loan-to-value/combined
                         loan-to-value is greater than 75%.
                         -If the Field Review results in a different value than the appraisal, the lowest of
                         the original appraised value, the Field Review value, or the sales price must be
                         used to calculate the loan-to-value ratios.
                          For properties in attached condominium projects, the appraisal must contain at
                          least two comparable sales from projects outside of the subject project in

FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                            7-20-10
                                                                                          PAGE F-5
APPRAISAL                   addition to standard current comparable sale requirements.
REQUIREMENTS
(CONT’D):

ARM INDEX:       •   N/A.

ARM INITIAL      •   N/A.
INTEREST RATE
CAPS:

ARM INTEREST     •   N/A.
RATE CEILING:

ARM INTEREST     •   N/A.
RATE FLOOR:

ARM MARGIN:      •   N/A.

ARM RATE         •   N/A.
ADJUSTMENT:

ASSUMABILITY:    •   Not allowed.

BORROWERS        •   Effective with applications dated on or after Thursday, October 15, 2009, a
ELIGIBILITY:         maximum of four (4) borrowers on a transaction.
                 •   U.S. Citizen.
                 •   Permanent Resident Aliens – Provide Alien Registration Card if borrower is not
                     living in the U.S.
                 •   Non-Permanent Resident Aliens:
                           Must be a legal resident of the U.S. as evidenced by Social Security Number.
                           Borrower must be employed in the U.S.

BORROWERS        •   Foreign Diplomats with diplomatic immunity.
INELIGIBLE:      •   Foreign Nationals.

BUYDOWNS:        •   Must be disclosed and acknowledged on the appraisal.
                 •   Primary Residence (1-4 Units) and Second Homes.
                 •   Purchases.
                 •   3-2-1 or 2-1.
                 •   Investment Properties – ineligible.
                 •   Self employed borrowers require a minimum credit score of 680.
                 •   PRIMARY RESIDENCE:
                          Qualify using the greater of the Note Rate or the fully indexed rate.
                          Minimum FICO of 660.
                 •   SECOND HOME:
                          Qualify using the greater of the Note Rate or the fully indexed rate.
                          Minimum FICO determined by AUS.
                 •   Jumbo Loan Limits – Ineligible.




FNMACONFRMFXD
                             100 - FNMA
                 CONFORMING FIXED WITH JUMBO OPTION
                                                                                            7-20-10
                                                                                          PAGE F-6

CASH RESERVES:    •   As determined by Desktop Underwriter® (DU™).
                  •   Rate and term refinances have no reserve requirement unless needed as a
                      compensating factor.
                  •   The cash out on a cash-out refinance may not be used to meet the reserve
                      requirement.
                  •   PRIMARY RESIDENCE:
                           Two (2) months PITI required or as determined by DU™.
                  •   SECOND HOME:
                           Two (2) months PITI required, regardless of DU™ findings.
                           Two (2) months reserves required for each additional financed second home or
                           investment property, regardless of DU™ findings.
                  •   INVESTMENT PROPERTY:
                           Six (6) months PITI required, regardless of DU™ findings.
                           Two (2) months reserves required for each additional financed second home or
                           investment property, regardless of DU™ findings.
                  •   Liquid Financial Reserves- all components of the monthly housing expense include:
                           Principal and interest,
                           Hazard, flood, and mortgage insurance premiums (as applicable),
                           Real Estate taxes,
                           Ground rents,
                           Special Assessments,
                           Owner’s Association, (excluding individual unit utility charges),
                           Subordinate finance payments on mortgages secured by the subject property.

CLOSING           •   FNMA Multi-State Fixed Rate Note form 3200 or appropriate state specific
DOCUMENTS:            equivalent.
                  •   FNMA Uniform Mortgage/Deed of Trust for applicable state.
                  •   FNMA Multi-State Condo Rider (if applicable).
                  •   FNMA PUD Rider (if applicable).
                  •   FNMA One to Four Family Rider (if applicable).
                  •   4506T signed and dated at closing.
                  •   Points & Fees Limitation – All Documentation and Property Types-Certain types of
                      points and fees are counted against the 5 percent (%) / $1000 limitation. The
                      agencies have clarified that those points or fees are counted against the limitation
                      regardless of the party paying the fee.
                  •   Wholesale – All Conventional loans must close in the name of WMC.
                  •   Refer to the APPRAISAL REQUIREMENTS section for Appraisals Completed
                      After An Area Has Been Declared A Disaster Area.
                  •   IMPORTANT: All Files sent to Investor Delivery located in Oakbrook Terrace,
                      IL, must have Title Commitment. Short form policies cannot be used in lieu of
                      the title commitment.
CONTINUITY OF     •   Acceptable continuity of obligation transactions with an outstanding lien against the
OBLIGATION:           property exists when any of the following conditions are met:
                          There is at least one borrower obligated on the new loan who was also a
                          borrower obligated on the existing loan being refinanced.
                          The borrower has been on the title and has been residing in the property for at
                          least twelve (12) months and has paid the mortgage for the last twelve (12)
                          months or can demonstrate a relationship (relative, domestic partner, etc.) with
                          the current obligor.
                          The title on the existing loan has been held in the name of a natural person or
FNMACONFRMFXD
                              100 - FNMA
                  CONFORMING FIXED WITH JUMBO OPTION
                                                                                                  7-20-10
                                                                                               PAGE F-7
CONTINUITY OF               an LLC and the borrower was a member of the LLC prior to the transfer.
OBLIGATION                  The borrower has recently inherited or was legally awarded the property
(CONT’D):                   (divorce or separation).
                        NOTE: Transfer of ownership from a corporation to an individual does not meet the
                        acceptable continuity definition.
                   •   If Continuity of Obligation does not exist, the following transactions will be
                       considered Cash Out Refinances:
                            Outstanding liens with no continuity of obligation:
                              - If the borrower has been on title for at least six (6) months but continuity of
                              obligation does not exist, the maximum LTV/CLTV will be limited to 50
                              percent based on the current appraised value.
                            No outstanding liens with no continuity of obligation:
                              - If property was purchased within the six (6) to twelve (12) month period prior
                              to the application date for the new financing:
                                    - The LTV/CLTV will be based on the lesser of the original sales
                                    price/acquisition cost (documented by the HUD-1 Settlement Statement)
                                    OR
                                    If the property was purchased more than twelve (12) months prior to the
                                    application date for new financing:
                                       - The current appraised value can be used.

CO-BORROWER(S):    •   Co-borrower does not have to occupy the subject property.


CREDIT:            •   As determined by Desktop Underwriter® (DU™), never below 580. Effective
                       Monday, December 14, 2009, loans underwritten using DU™ Version 8.0 a
                       FICO of 620 required. All loans underwritten using DU™ Version 7.1 where
                       credit scores are less than 620 must be closed, disbursed and purchased by
                       Friday, January 15, 2010. No exceptions.
                   •   Effective with all loans locked on or after August 1, 2009, ALL borrowers must
                       have a credit score and traditional credit history regardless of AUS findings.
                             All loans locked prior to August 1, 2009 will be honored under previous
                             guidelines until the lock expiration date.
                             Lock extensions and relocks are permitted.
                   •   The “representative” score is to be used and is defined as the lower of two (2) credit
                       scores for one (1) borrower (if more than one (1) borrower, use the lower of all
                       borrowers) or the middle credit score if there are three (3) scores listed (if more than
                       one (1) borrower, use the lowest middle of all borrowers).
                   •   Bankruptcy/Foreclosure – Must be recognized by DU™ in the borrower’s history.
                       An “Approved/Eligible” recommendation must be received. Document per findings.
                             If DU™ is not able to determine when the bankruptcy was filed, Underwriter
                             must confirm that the bankruptcy was not filed 48 months prior to the credit
                             report date and that the loan complies with DU™ bankruptcy guidelines. All
                             bankruptcies must be discharged/satisfied prior to the application date.
                   •   Authorized Users – Are those individuals given permission by the credit account
                       owner to have access to and use of an account. Typically, an authorized user is a
                       relative who is managing credit for the first time.
                             Credit reports containing authorized user accounts require additional evaluation
                             and documentation regardless of any Automated Underwriting System (AUS)
                             recommendation. If the primary account holder is another borrower on the
                             transaction no further action is required.
                             If the primary account holder, including non-borrowing spouses, is not another

FNMACONFRMFXD
                               100 - FNMA
                   CONFORMING FIXED WITH JUMBO OPTION
                                                                                               7-20-10
                                                                                            PAGE F-8
CREDIT (CONT’D):         borrower on the transaction and the credit report shows any of the following
                         characteristics, it may indicate the report is not an accurate reflection of the
                         borrower’s credit profile:
                          - There is a significant difference in credit utilization between the authorized
                          user accounts and primary credit lines,
                          Or
                          - There is a significant difference when comparing the late payments of the
                          authorized user accounts to the primary credit lines.
                          Or
                          - The credit limits on authorized user accounts are significantly higher when
                          compared to the primary credit lines.
                         The following table provides the documentation requirements that must be
                         obtained when any of the above applies:
                             Underwriting                      Documentation Requirements
                       Loans Receiving a:            - A letter of explanation from the borrower that
                          • DU™                      identifies the relationship of the primary account
                          “Approve/Eligible”         holder to be that of a relative (the borrower’s
                                                     spouse, parent, or an individual related to the
                          • LP™ “Accept”
                                                     borrower by blood, marriage, adoption, or legal
                                                     guardianship),
                                                     And
                                                     - Evidence of three (3) months of recently
                                                     cancelled checks or account statements to
                                                     document that the borrower(s) has been making
                                                     payments on the account(s).

                                                     If either of these two (2) requirements cannot be
                                                     met, the loan is ineligible for purchase.
                         If the primary account holder is not another borrower in the transaction and the
                         credit report shows any of the following characteristics, it strongly indicates the
                         borrower's credit profile does not meet the required credit report standards:
                           - The primary credit lines show both high utilization and excessive past late
                           payments when compared to the authorized user accounts
                           Or
                           - The primary credit lines show both high utilization and significantly lower
                           credit limits when compared to the authorized user accounts
                           Or
                           - The primary credit lines show both significantly lower credit limits and
                           excessive past late payments when compared to the authorized user account
                           Or
                           - The primary credit lines show high utilization, excessive late payments, and
                           have significantly lower credit limits when compared to the authorized user
                           accounts.
                         The following table provides the documentation requirements that must be
                         obtained when the above apply:
                              Underwriting                     Documentation Requirements
                       Loans Receiving a:            - A letter of explanation from the borrower that
                           • DU™                     identifies the relationship of the primary account
                           “Approve/Eligible”        holder to be that of a relative (the borrower’s
                                                     spouse, parent, or an individual related to the
                           • LP™ “Accept”
                                                     borrower by blood, marriage, adoption, or legal
FNMACONFRMFXD
                               100 - FNMA
                   CONFORMING FIXED WITH JUMBO OPTION
                                                                                                7-20-10
                                                                                              PAGE F-9
CREDIT (CONT’D):                                        guardianship),
                                                        And
                                                        - Evidence of six (6) months of cancelled checks
                                                        along with the account statements to document
                                                        that the borrower(s) has been making payments
                                                        on the account(s).

                                                       If either of these two (2) requirements cannot be
                                                       met, the loan is ineligible for purchase.
                    •   Rental Income – Effective Tuesday, February 16, 2010, borrowers using rental
                        income to qualify must obtain rent loss insurance for 1-4 unit investment properties
                        and 2-4 unit owner-occupied properties.
                            Wholesale – Loans under previous guidelines must be closed and disbursed
                            by WMC no later than Friday, February 26, 2010. No exceptions.
                            Correspondent – Loans under previous guidelines must be purchased by
                            WMC no later than Friday, February 26, 2010. No Exceptions.

DISCLOSURES:        •   Lender Paid Mortgage Insurance (if applicable) Exhibit (E-237).
                    •   Multi-State Net Tangible Benefit Worksheet Exhibit E-314 (only applicable for the
                        state of Colorado).
                    •   Rhode Island – Prohibited Acts of Lenders & Loan Brokers Exhibit E-316.
                    •   Tangible Benefit Worksheet Alaska, Arkansas, Connecticut, Illinois, Maine,
                        Massachusetts, Minnesota, New Mexico, North Carolina, Ohio, Rhode Island,
                        Virginia, and West Virginia Exhibit E-331 (if applicable).
                    •   Kentucky Homeownership E-137.

DOCUMENTATION:      •   Desktop Underwriter® (DU™) will dictate level of documentation required depending
                        on the overall risk evaluation of the loan.
                    •   A paystub showing YTD earnings or a W2 is required, regardless of AUS findings.
                        The use of a written VOE (Verification of Employment) as the only documentation
                        used to verify income is no longer permitted.
                    •   Effective with loan applications dated on or after Tuesday, September 1, 2009:
                               Stocks, Bonds, and Mutual Funds - 70% of the value may be used as
                               reserves.
                               Retirement Accounts - 60% of the vested value may be used as reserves.
                               Stock Options and Non-Vested Restricted Stock are ineligible for use as
                               reserves.
                               Tip Income may be used to qualify the borrower if:
                              - Verification that the borrower has received tip income for the last two (2) years
                              and
                              - The employer indicates the tip income will, in all probability, continue.
                              - An average of the past two (2) years’ tip income to determine the amount of
                              income that may be considered in qualifying the borrower.
                    •   Refer to CREDIT section.
                    •   Refer to DOWN PAYMENT REQUIRED section.
                    •   IRS W-2 Transcript Policy - WMC will allow W-2 transcripts obtained from the IRS
                        in lieu of tax return transcripts for salaried borrowers not required to provide tax
                        returns. However, if any income is derived from tax returns or the tax returns are
                        present in the loan file, tax return transcripts are required. W-2s and IRS W-2
                        transcripts from the same year must match. If the IRS transcripts do not match the
                        W-2, proof the employer filed amended W-2s and a satisfactory letter of explanation

FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                     7-20-10
                                                                                   PAGE F-10
DOCUMENTATION      must be provided or the loan is ineligible for purchase.
(CONT’D):              Transcript Documentation Requirements - IRS transcripts must be obtained
                       for the years of income documented in the file. In instances where transcripts
                       are not available for the most recent year documented, Clients should obtain
                       the same number of years of transcripts, using the most recent years available.
                       Examples of situations where most recent year’s transcript would not be
                       available include income documented by a YTD paystub, or transcript not
                       available due to recent filing.
                           - Generally, transcripts are available from the IRS as follows:
                               - Paper Filing: 6-8 weeks from receipt by the IRS.
                               - E-Filing: 15 days from receipt by the IRS.
                               - W-2 Transcripts: Generally available beginning in April.
                           - For borrowers who have filed an extension with the IRS, the following
                           documentation is required:
                               - Evidence the extension was filed, and
                               - Evidence from the IRS stating “No Record of Return Filed”.
                    Note: Transcripts may not exist for all borrowers. This includes borrowers:
                             - Without qualifying income;
                             - With income from non-taxable sources (for example: child support);
                             - Exempt from filing tax returns based on income below IRS published
                             minimum income levels.
                       Using Recent Income When Transcripts Are Not Available - When IRS
                       transcripts are not available for the most recent year of income documentation,
                       the income may be still used to qualify provided material year over year income
                       increases are explained and documented. Refer to the guidance below on
                       addressing income increases when the most recent year’s transcript is not
                       available.
                        If earnings shown on most recent tax             Then…
                        year are…
                        0 to 10% greater than previous year’s            The loan is eligible for
                        transcripts                                      financing. Additional
                                                                         verification or explanation
                                                                         may be required at the
                                                                         discretion of the
                                                                         underwriter.
                        More than 10% greater than previous year’s The loan is eligible for
                        transcripts                                      financing. A satisfactory
                                                                         letter of explanation and
                                                                         supporting documentation
                                                                         may be necessary.
                                                                         Situations where this may
                                                                         occur include:
                                                                              • Wage earning
                                                                                   spouse who is not
                                                                                   on transaction
                                                                              • Borrower has an
                                                                                   additional wage
                                                                                   earning job not
                                                                                   disclosed
                                                                              • Bonus Income
                                                                              • Raise
                                                                              • Job change -
FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                            7-20-10
                                                                                        PAGE F-11
DOCUMENTATION                                                                    Supporting
(CONT’D):                                                                        documentation may
                                                                                 include
                                                                                 documentation to
                                                                                 substantiate second
                                                                                 job, a breakout of
                                                                                 individual W-2
                                                                                 filings or a written
                                                                                 Verification of
                                                                                 Employment (VOE)
                                                                                 detailing bonus, job
                                                                                 or salary changes.
DOWN PAYMENT     •   Primary Residence & Second Homes – 5% from borrower’s own funds.
REQUIRED:                If the LTV/CLTV is < 80% the entire down payment may be a gift.
                 •   Investment Property – 10% from borrower’s own funds.
                 •   Choice (CH) – Seller real estate tax prorations to be received or credited at closing
                     may not be considered at the time of underwriting as the source of the applicant’s
                     minimum investment or for any other required funds to close (including discount
                     points, closing costs and/or prepaids).
                 •   Jumbo Loan Limits – Borrower must have 5% of own funds.

DU/LP            •   Loans must be run through Desktop Underwriter® (DU™). All loans must receive
INFORMATION:         an “Approve/Eligible”.
                                TM
                          If DU issues a message indicating the loan is eligible as a DU Refi Plus,
                                                                              TM
                          please refer to profile 107-FNMA DU REFI PLUS program.
                          On or after June 27, 2009 the file will be able to be underwritten as a standard
                          limited cash-out refinance. Indicate in the Product Description field to instruct
                          DU to underwrite the loan case file as a standard limited cash-out refinance by
                          entering the phrase Standard LCOR in this field prior to underwriting.
                          DU will issue the following message if the borrower’s existing loan has been
                          identified as an eligible Fannie Mae loan, and loan casefile as a standard
                          limited cash-out refinance:
                         o The borrower’s existing loan has been identified as a Fannie Mae loan. The
                              loan casefile was not underwritten according to the DU Refi Plus expanded
                              eligibility guidelines because DU was instructed to underwrite the loan
                              casefile as a standard limited cash-out refinance. This was indicated by
                              “Standard LCOR” being entered in the Product Description field.
                 •   Jumbo Loans Limits - must be ran through Desktop Underwriter® (DU™) and
                     receive an “Approve/Eligible”.
                          DU “Approve/Ineligible” decisions will be permitted if;
                               o The only reason for ineligibility is the maximum allowable loan limit,
                                    and
                               o The loan meets the new revised Agency High Balance guidelines.
                          DU “Approve/Eligible” decisions on all high balance loans must also meet the
                          new revised Agency High Balance guidelines.
                 •   A loan that receives a DU™ Expanded Approval (EA) recommendation may
                     not be submitted to LP™, or a loan that receives an LP™ Caution or A-Minus
                     recommendation may not be submitted to DU™ to see if it could receive an
                     acceptable finding or recommendation from the other AUS system; the loan
                     should be countered to the applicable DU™ Expanded Approval or Freddie
                     Mac® A-Minus program, and must meet all requirements (including
                     documentation) for those programs.

FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                             7-20-10
                                                                                           PAGE F-12
ESCROW           •   Allowed for weather related items:
HOLDBACKS:                Do not affect livability.
                          Must be completed within 120 days.
                 •   A final completion certificate from the appraiser upon completion.
                 •   Correspondents must obtain WMC approval prior to closing.

ESCROW           •   Escrow Waivers are permitted for 80% or less LTV’s. Refer to rate sheet or Blue
WAIVERS:             Connect for price adjustments.

GEOGRAPHIC       •   Alaska – Wholesale/Correspondent ineligible.
RESTRICTIONS:    •   Arizona – Wholesale/Correspondent ineligible.
                 •   California – Ineligible effective January 1, 2008.
                 •   Florida –Wholesale/Correspondent ineligible.
                 •   Hawaii - Wholesale/Correspondent ineligible.
                 •   Maryland - DU™ Verification of Income or Asset relief not permitted.
                 •   Michigan - Wholesale/Correspondent ineligible.
                 •   Minnesota - DU™ Verification of Income or Asset relief not permitted.
                 •   Nevada - DU™ Verification of Income or Asset relief not permitted.
                          Wholesale/Correspondent ineligible.
                 •   New York:
                          Wholesale Only - Purchases ineligible.
                 •   Texas – Cash-out refinances not permitted. Borrower cannot receive any cash
                     back.
                 •   DECLINING MARKETS:
                          Please refer to the “Declining Markets Matrix” posted at
                          www.wintrustmortgage.net under the program guidelines. Properties listed on
                          the “Declining Markets Matrix” must adhere to the following procedures:
                         - A full URAR appraisal is required.
                         - Refer to the APPRAISAL section for any additional requirements.

GIFTS:           •   OWNER/OCCUPIED:
                           Relatives.
                           Domestic partner.
                           Fiancé/Fiancée.
                           If the LTV/CLTV is 80% or less, the entire down payment may be a gift.
                 •   SECOND HOME:
                           Relatives only.
                           If the LTV/CLTV is 80% or less, the entire down payment may be a gift.
                 •   INVESTMENT:
                           Not permitted.
                 •   Primary Residence & Second Homes – Acceptable provided borrower investment
                     is met. The borrower investment is waived on primary residences and second
                     homes when gift funds reduce the LTV/CLTV to <80%.
                 •   Investment Property – Gifts are not permitted.
                 •   Gift of Equity – A gift of equity is acceptable for primary residence and second
                     home transactions. The borrower(s) may receive a gift of equity from the seller of
                     the subject property, provided the seller is a relative. The borrower must contribute
                     at least 5% of their own funds to the transaction if the gift of equity is less than 20%.
                     When there is a gift of equity, there is no transfer of funds involved. The gift will be
                     reflected as a credit on the HUD-1 Settlement Statement and must be clearly
                     labeled as a gift of equity. A gift of equity is not considered a seller contribution.

FNMACONFRMFXD
                              100 - FNMA
                  CONFORMING FIXED WITH JUMBO OPTION
                                                                                                7-20-10
                                                                                           PAGE F-13
GIFTS (CONT’D):         The donor must have sufficient equity in the property to cover the gift and a gift letter
                        must be signed. The HUD-1 Settlement Statement will satisfy donor’s ability and
                        receipt of gift verification.

INTEREST ONLY       •   N/A.
OPTION:

LIMITATIONS ON      •   If the subject property is a second home or investment property, the borrower(s) can
REAL ESTATE             have no more than four (4) properties financed including the subject property.
OWNED:

MORTGAGE                                          STANDARD COVERAGE
INSURANCE:                 LTV                  10, 15, & 20 Year Term              25 & 30 Year Term
                  90.01 – 95%                             25%                               30%
                  85.01 – 90%                             12%                               25%
                  80.01 – 85%                              6%                               12%
                    • Effective Monday, December 14, 2009, loans underwritten using DU™ Version
                        8.0 where Minimum MI Coverage is indicated is ineligible. Standard coverage
                        requirements apply.
                    • Reduced MI is available for loans underwritten through DU™ (where a lower
                        percentage of coverage is permitted without a fee) as indicated on AUS findings are
                        acceptable if they do not require a fee to the borrower. Loans with Reduced MI
                        Coverage must be locked by Friday, December 11, 2009 and close, disburse,
                        and be purchased by Friday, January 15, 2010.
                    • If reduced MI coverage per the DU™ report is not available, use the standard
                        coverage above. Loans with Reduced MI Coverage must be locked by Friday,
                        December 11, 2009 and close, disburse, and be purchased by Friday, January
                        15, 2010.
                    • Financed Single Premium Mortgage Insurance (FSPMI) – Eligible.
                    • New York State – Use the appraised value to determine if mortgage insurance is
                        required. If mortgage insurance is required, use the lesser of the sales price or
                        appraised value to determine the appropriate coverage.
                    • Lower Cost or Custom MI – Associated with a loan level price adjustment indicated
                        on the DU™ report is not permitted.
                    • LENDER-PAID MORTGAGE INSURANCE (LPMI):
                             Single Premium upfront lender paid mortgage insurance.
                             Full Documentation only.
                             Coverage must be maintained for the life of the loan.
                             Monthly and annual LPMI not allowed.
                             LPMI Disclosure Exhibit (E-237).
                    • JUMBO LOAN LIMITS:
                             Standard MI.
                             LPMI not eligible.

MORTGAGE            •   Genworth.
INSURERS            •   UG.
APPROVED:           •   Radian.
                    •   RMIC.




FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                           7-20-10
                                                                                         PAGE F-14

NEW              •   Allowed. Refer to ESCROW HOLDBACKS section for additional considerations.
CONSTRUCTION:    •   Construction to Permanent financing involves the granting of a long-term
                     mortgage to a borrower to replace interim financing used for the construction of a
                     new home. This conversion may be treated as either a purchase money transaction
                     (as long as the borrower receives no cash from the settlement) or a refinance
                     transaction (in which the borrower may or may not receive cash from the
                     settlement).
                 •   To be considered a construction-to-permanent financing transaction, one of the
                     following must be met:
                          The borrower is the primary obligor on the construction financing which is
                          obtained through a legitimate financial institution; or
                          The borrower is the owner of the lot on which the residence is constructed.
                 •   If the construction-to-permanent financing is treated as a purchase:
                          The maximum LTV/CLTV is subject to purchase transaction LTV/CLTV limits;
                          The LTV/CLTV is based on the lesser of:
                               Current appraised value of the lot plus documented construction costs, or
                               Appraised value of the property at the time the permanent mortgage is
                               closed.
                          Acquisition cost must be documented as follows:
                               Purchase contract or construction statement signed by the borrower and the
                               builder;
                               If the lot is acquired separately, the borrower must also provided a copy of
                               the recorded deed with the filing date and one of the following:
                               o Copy of the lot purchase agreement or contract for deed;
                               o Owners title policy; or
                               o HUD-1 settlement statement
                 •   If the construction-to-permanent financing is treated as rate/term refinance:
                          The LTV/CLTV must be within the rate/term refi guidelines for the product;
                          The LTV/CLTV is based on the current appraised value;
                          Closing costs and prepaids may be included in the loan amount (subject to
                          LTV/CLTV limitations);
                          Documentation of acquisition cost is not required when the borrower does not
                          receive any cash out for the loan proceeds;
                          Complete acquisition cost and down payment documentation is required when
                          the borrower is reimbursed for cash investment into the property.
                 •   If the construction-to-permanent financing is treated as a cash-out refinance:
                          The LTV/CLTV must be within the cash-out refi guidelines for the product;
                          When the land was acquired by the borrower more than twelve (12) months
                          prior to the close of the interim financing, or when the land was received as a
                          gift or inheritance:
                               The LTV/CLTV is based on the current appraised value;
                               Documentation of acquisition cost or down payment is not required.
                          When the land was purchased with the interim financing of was acquired by the
                          borrower less than twelve (12) months prior to the close of the interim financing,
                          the LTV/CLTV ratio is based on the lesser of:
                               Appraised value of the property at the time the permanent mortgage is
                               closed, or
                               Acquisition cost of the lot plus documented construction cost.
                               Acquisition cost must be documented as follows:
                               o A purchase contract or construction statement (cost breakdown), signed
                                    by the borrower and the builder.

FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                              7-20-10
                                                                                         PAGE F-15
NEW                          o If the lot is acquired separately, the borrower must also provide a copy
CONSTRUCTION                    of the recorded deed with the date of filing (if applicable) and one of the
(CONT’D):                       following:
                                         A copy of the lot purchase agreement,
                                         A copy of the contract for deed,
                                         An owner’s title policy, or
                                         A closing settlement statement.
                          The borrower may receive cash back from the loan proceeds without
                          documentation of his cash investment into the property.

NON-OCCUPYING    •   Permitted:
BORROWER:                Occupant borrower ratios cannot exceed 35/43% regardless of the LTV and
                         maximum LTV is 90%.
                         Occupant borrower must have 5% of own funds if LTV is >80% and Non-
                         Occupant borrower’s income is used to qualify.
                 •   As determined by DU™.

OCCUPANCY:       •   Primary Residence*.
                      *2-Unit Primary Residence – Borrowers may not own any other residential property
                      of equal or greater value in the same area in which the units are located. The
                      mailing address and property address must be verified as the same; if this cannot
                      be done, it must be treated as an investment property.
                 •   Second Home.
                 •   Investment Property.
                           The borrower must have a two-year history of managing rental properties.
                           Verification must be provided through the most current two (2) years of signed
                           tax returns.
                          Exception: The two (2) year history managing rental properties may be waived
                          if the loan meets one (1) of the following requirements:
                          The borrower qualifies for the mortgage based on the full payment (PITI) for the
                          subject property without having to rely on the rental income.
                          OR
                          Purchase or Rate/Term refinance with a LTV less than or equal to 75%.
                          OR
                          Cash-Out refinance with LTV less than or equal to 70%.
                 •   PURCHASE OF A NEW PRIMARY RESIDENCE AND THE CONVERSION OF
                     THE EXISTING PRIMARY RESIDENCE TO A SECOND HOME OR INVESTMENT
                     PROPERTY:
                           Second Home:
                          - Both the current and the proposed mortgage payments must be used to
                          qualify the borrower for the new transaction; and
                          - Six (6) months of PITI for both properties is required to be in reserves. Lender
                          may consider reduced reserves of no less than two (2) months for both
                          properties if there is documented equity of at least 30 percent in the existing
                          property (derived from an appraisal, automated valuation model (AVM), or
                          Broker Price Opinion (BPO), minus outstanding liens).
                           Investment Property:
                          - Fannie Mae® will continue to permit up to 75 percent of the rental income to
                          be used to offset the mortgage payment in qualifying if there is document equity
                          of at least 30 percent in the existing property (derived from an appraisal, AVM,
                          or BPO, minus outstanding liens).
                          - The rental income must be documented with:

FNMACONFRMFXD
                               100 - FNMA
                   CONFORMING FIXED WITH JUMBO OPTION
                                                                                            7-20-10
                                                                                          PAGE F-16
OCCUPANCY                         - A copy of the fully executed lease agreement; and
(CONT’D):                         - The receipt of a security deposit from the tenant and deposit into the
                                  borrower’s account.
                            - If the 30 percent equity in the property cannot be documented, rental income
                            may not be used to offset the mortgage payment.
                                  - Both the current and proposed mortgage payments must be used to
                                  qualify the borrower for the new transaction; and
                                  - Six (6) months of PITI for both properties is required to be in reserves.
                        NOTE: The additional reserves requirements must be applied on a manual basis to
                        loan casefiles underwritten with DU™.

POWER OF            •   Not eligible with loans closed in a trust.
ATTORNEY:           •   POA must be dated/appointed on or before the execution of any document executed
                        using the POA.
                    •   The security instrument, note and all other closing documents must be signed
                        exactly as appointed on POA.
                    •   Notary section correct including: state, county, date, borrower name, notary’s
                        signature, notary expiration, notary seal.
                    •   No POA allowed for loans with one borrower.
                    •   At least one borrower must be present at closing.

PREPAYMENT          •   N/A.
PENALTY:

PROPERTY TYPES      •   1-4 Units.
ELIGIBLE:           •   Condominium units meeting FNMA Type Q, S, T, & U requirements:
                            Effective with loan applications taken on or after Monday, February 1,
                            2010, FHA approved condominium projects are no longer eligible as a
                            project approval type (Type U) for conventional loans.
                            - Wholesale – Loans must be closed and disbursed by WMC no later than
                            Friday, February 26, 2010. No exceptions.
                            - Correspondent – Loans must be purchased by WMC no later than Friday,
                            February 26, 2010. No exceptions.
                    •   Jumbo Loan Limits – 1 Unit, Condo or PUD.
                    •   Refer to the “WMC CONDO & PUD DEFINITIONS” www.wintrustmortgage.net
                        website.

PROPERTY TYPES      •   Co-Ops.
INELIGIBLE:         •   Manufactured Homes.
                    •   Condotels
                    •   Non-Warrantable Condos
                    •   Montana properties >40 acres of land
                    •   Properties Sold at Auction.
                    •   Properties within the Right of Redemption.
                    •   Properties with less than 600 sq. ft.
                    •   Condominiums pending litigation.

QUALIFYING RATE:    •   DU™ will qualify at note rate.
                    •   Refer to BUYDOWN section.



FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                          7-20-10
                                                                                        PAGE F-17

RATIOS:          •   28/36% maximum. May be exceeded with an acceptable AUS certificate.
                           Effective Monday, December 14, 2009, maximum DTI ratio underwritten using
                           DU™ Version 8.0 is lowered to 45% with flexibility offered up to 50% when
                           approved by DU™.
                           Correspondent – Effective with locks taken as of Thursday, July 1, 2010,
                           loan must pass WMC Risk Assessment Review completed by WMC for ratios
                           between 45% and 50%.
                           Hybrid Correspondent - Effective with loans underwritten as of Thursday,
                           July 1, 2010, loan must pass WMC Risk Assessment Review completed by
                           WMC for ratios between 45% and 50%.
                           Wholesale - Effective with loans underwritten as of Thursday, July 1,
                           2010, loan must pass WMC Risk Assessment Review completed by WMC for
                           ratios between 45% and 50%.
                 •   All student loans with more than 10 payments must be included in the debt ratio,
                     regardless of deferment status. File needs to have the documentation to support
                     the verified payment amount and include that documented payment in the monthly
                     debt calculation.
                 •   Rental Income – When using rental income to quality refer to CREDIT section.

REFINANCES:      •   PROPERTIES LISTED FOR SALE:
                         In order to be eligible for rate/term refinance or cash out refinance properties
                         must be off the market for six (6) months from the date of application.
                 •   RATE/TERM REFINANCES:
                         No seasoning requirement.
                         Pay off of the existing first mortgage regardless of seasoning.
                         Pay off existing subordinate liens that were used in whole to acquire the subject
                         property.
                         Closing costs and prepaids.
                         Cash out limited to the lesser of 2% of the principal amount of the new loan or
                         $2,000.
                         Non-purchase money second liens, including re-conveyance and similar fees,
                         must be paid off prior to close for a transaction to be considered a rate/term
                         refinance. If these liens and fees are not paid off prior to close, the transaction
                         will be considered a cash-out refinance, even if the funds are provided from the
                         borrower at closing.
                         Texas – Borrower cannot receive any cash back.
                         Jumbo Loan Limits – The refinance transaction where loan proceeds will be
                         used to buy out a current owner’s equity will be considered and priced as a
                         cash-out refinance.
                 •   CASH OUT REFINANCES:
                         Borrower must own the property for at least six (6) months prior to the note
                         date of the refinance.
                         Texas – Not eligible.
                         For any loan to be eligible for a cash-out refinance, the transaction must meet
                         the following seasoning criteria;
                        -The borrower must have owned the subject property for a minimum of six (6)
                        months prior to the registration date; and
                        -Any previous refinance transactions on the subject property(rate/term or
                        otherwise) must have closed at least six (6) months prior to the application date
                        on the new cash-out refinance.


FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                          7-20-10
                                                                                      PAGE F-18
REFINANCES       •   SEASONING REQUIREMENTS CONSTRUCTION-TO-PERMANENT FINANCE:
(CONT’D):                 LTVS for Construction-to-permanent financing will be based on the lesser of
                      the current appraised value or the sales price plus any documented improvement
                      costs (previously LTVs were based on current appraised value where the borrower
                      has owned the land less than twelve (12) Months.)

RELOCATION OR    •   Primary Residence.
TRAILING CO-     •   Purchase, Full/Alt Doc.
BORROWER:        •   5% must be from borrower’s own funds.
                 •   Minimum credit score 680 or as determined by AUS.
                 •   Max. LTV based on product parameters.
                 •   The trailing co-borrower must be a “Related Person”:
                         A spouse, child, relative or dependent, a guardian, fiancée or fiancé or
                         domestic partner.
                         The “related person” must currently reside with the borrower, except fiancée or
                         fiancé.
                         A two (2) year documented history of employment is required for the trailing co-
                         borrower immediately preceding relocation, provide a statement of intent to
                         return to work, and occupation being sought.
                         Self-employed ineligible.
                         Use the latest salary for a salaried or hourly wage earner. Use an average of a
                         commissioned wage earner’s income for the past two (2) years.
                         Maximum D/I is 36% or as determined by AUS.
                         Buydown: Qualify at note rate.
                         Reserves: Minimum of six (6) months of PITI and all other recurring debt
                         obligations.
                     NOTE: The trailing co-borrower income is entered as “other income” into the
                     system. List co-borrower’s previous employment.
                 •   Effective with loan applications dated on or after Tuesday, September 1, 2009 -
                     The use of trailing secondary wage earner income is no longer allowed.

RIGHT OF         •   Fee simple.
OWNERSHIP:

SALES            •   Must be disclosed and acknowledged on the appraisal.
CONCESSIONS:     •   Seller contributions cannot be applied to the borrower’s minimum down payment
                     requirement.
                 •   Lesser of the sales price or appraised value.
                 •   Maximum sales commission paid to a Realtor cannot exceed 8%.
                 •   PRIMARY RESIDENCE OR SECOND HOME:
                         3% Maximum for LTV/CLTV >90%.
                         6% Maximum for LTV/CLTV >75% <90%.
                         9% Maximum for LTV/CLTV <75%.
                 •   INVESTMENT PROPERTY:
                         2% Maximum.
                 •   JUMBO LOAN LIMITS:
                          Primary Residence & Second Home – 3% regardless of LTV/CLTV.
                          Investment – 2%.

SUBORDINATE      •   Refer to MAXIMUM LTV/CLTV section for additional considerations.
FINANCING:       •   HELOC- When calculating the total housing expense ratio, borrowers must qualify

FNMACONFRMFXD
                             100 - FNMA
                 CONFORMING FIXED WITH JUMBO OPTION
                                                                                            7-20-10
                                                                                          PAGE F-19
SUBORDINATE           using a monthly payment equal to 1% of the full line amount.
FINANCING                       The 1% of the total balance applies to all other properties with HELOCS as
(CONT’D):                       well as the subject property.
                                For HELOCs with evidence of a line modification, the modified limit will be
                                used to calculate the 1% monthly payment.
                  •   If the subordinate is an equity line of credit use the line limit to calculate the
                      LTV/CLTV.

TITLE             •   Short Form Title policy allowed and encouraged.(Title Commitment still required.)
REQUIREMENTS:     •   The title policy and/or preliminary title report must include a minimum six (6) months
                      history of property ownership from the effective date of the policy or preliminary
                      report.
                  •   Purchase Transactions: If the six (6) month history indicates that the property is
                      being sold by a relocation company, a copy of the sales contract between the
                      previous owner and the relocation company is required.
                  •   Failure to provide an acceptable six (6) month history will result in denial.

TITLE VESTING:    •   Individual.
                  •   Joint Tenants.
                  •   Tenants in Common.
                  •   Inter Vivos Revocable Trust (Living Trust).
                            2-4 Units Investment properties held in an Inter Vivos Trust are limited to
                            maximum 70% LTV.

UNDERWRITING      •   Loans must be underwritten through FannieMae® Desktop Underwriter® (DU™)
SUBMISSION            and receive an “Approve/Eligible”. If “Expanded Approval”, refer to FNMA
PROCEDURE:            Expanded Approval Program.
                  •   A loan that receives a DU™ Expanded Approval (EA) recommendation may
                      not be submitted to LP™, or a loan that receives an LP™ Caution or A-Minus
                      recommendation may not be submitted to DU™ to see if it could receive an
                      acceptable finding or recommendation from the other AUS system; the loan
                      should be countered to the applicable DU™ Expanded Approval or Freddie
                      Mac® A-Minus program, and must meet all requirements (including
                      documentation) for those programs.
                  •   Note Underwriters - A 4506T must be signed and dated at application for all
                      borrowers (salaried & self-employed).
                  •   The underwriter needs to validate that the current income used to qualify for the loan
                      is reasonable compared to the borrower’s prior/current earnings. Reconciliation of
                      the results must be documented on the Transmittal Summary in the file.
                      Additionally, the transcripts must also be included in the file.
                            Unless the income documentation provided by the borrower is more than 20%
                            greater than the income documented on the IRS transcript, no further action is
                            required.
                                                 IF                                  THEN:
                               the income documentation provided
                                        by the borrower is:
                               Less than the income documented         Use the income provided by the
                               on the IRS transcript-                  borrower to qualify the loan as
                                                                       long as it meets all
                                                                       documentation parameters.


FNMACONFRMFXD
                            100 - FNMA
                CONFORMING FIXED WITH JUMBO OPTION
                                                                                             7-20-10
                                                                                         PAGE F-20
UNDERWRITING                <20% greater than the income            Use the income provided by the
SUBMISSION                  documented on the IRS transcript-       borrower to qualify the loan as
PROCEDURE                                                           long as it meets all
(CONT’D):                                                           documentation parameters.
                            >20% greater than the income            Refer to Income Validation
                            documented on the IRS transcript-       section below.
                             If the income documentation provided by the borrower is > 20% greater
                             than the income documented on the IRS transcript, the following steps
                             must be take:
                                      Wage Earner or Other Income – Underwriter should perform an in
                                      depth review to determine if the increase in income seems
                                      reasonable and if additional steps need to be taken. At a minimum,
                                      a letter from the borrower explaining the difference. The underwriter
                                      to request additional documents if necessary.
                                      Self-employed borrowers or borrowers who receive 1099 or
                                      commission income greater than 25% of their total earnings-
                                      Underwriter should perform an in-depth review to determine if the
                                      increase in income seems reasonable and if additional steps need
                                      to be taken. At minimum the borrower explaining the difference.
                                      The underwriter to request additional documents if necessary.
                                      Information reported on the tax transcripts should match information
                                      reported on the tax returns provided by the borrower. Note: all
                                      other current guidelines for analysis of self-employment income
                                      must be followed.
                             Effective with all new registrations on or after July 6, 2009.
                             Refer to APPLICATION section.
                 •   JUMBO LOAN LIMITS:
                        Must receive DU™ Approved/Eligible.
                 •   WHOLESALE:
                        All loans should be submitted through DU™ and send the original file, with AUS
                        findings in an Acco fastened file folder to WAMCo Wholesale Operations
                        Center in Schaumburg or Kansas.
                        Jumbo Loan Limits:
                        ♦ Loan amounts < $650,000 must be contract underwritten.
                        ♦ Loan amounts >$650,000 must be submitted to WMC.
                 •   HYBRID CORRESPONDENT:
                        All loans should be submitted through DU™ and send the original file, with AUS
                        findings in an Acco fastened file folder to your designated WAMCO
                        Underwriting Center.
                        Jumbo Loan Limits:
                        ♦ Loan amounts >$650,000 need an additional 3 to 5 business days for
                            underwriting.
                 •   CORRESPONDENT:
                        Lenders with delegated underwriting authority may underwrite this product –
                        FNMA Form 1008 must be signed by the underwriter.
                        Jumbo Loan Limits:
                        ♦ Loan amounts < $650,000 must be contract underwritten.
                        ♦ Loan amounts >$650,000 must be submitted to WAMCO.
                        ♦ Radian, UGIC, or RMIC are the only approved contract underwriters.



FNMACONFRMFXD

								
To top