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CA2009-20_UWGuidelineSum

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					                                                                                                                                  CA 2009-20

                                               Underwriting Guidelines Summary
                                                            Effective April 15, 2009

This document provides a high-level summary of United Guaranty’s guidelines, including our Declining Markets
Policy. For complete underwriting guidelines and eligibility criteria, please see our Underwriting and Eligibility
Guide at www.ugcorp.com.

Agency AUS Requirements
United Guaranty requires, as do Fannie Mae and Freddie Mac, that the accuracy of the data upon which
the Desktop Underwriter® (DU) or Loan Prospector® (LP) recommendation is based be verified, including
the credit report. Additionally, information that cannot be evaluated by DU or LP must be considered in the
overall underwriting decision in accordance with Fannie Mae’s and Freddie Mac’s standard Selling Guide
requirements. This information includes, but is not limited to, the following:
           • Employment history.
           • Income stability and continuance.
           • Large asset deposits.
           • Property appraisal.
United Guaranty defers to DU and LP for underwriting guidelines when the recommendations below are received
and all “Additional Requirements” indicated below are met, unless otherwise indicated in United Guaranty’s
Underwriting and Eligibility Guide located at www.ugcorp.com.
              •    DU Risk Classification of “Approve” and a Purchase Eligibility Rating of “Eligible for
                   Purchase.”
           • LP Risk Classification of “Accept” and a Purchase Eligibility Rating of “Eligible for Purchase.”
Loans receiving the above Risk Classifications from DU or LP with a Purchase Eligibility Rating of “Ineligible
for Purchase” may be eligible for insurance when all United Guaranty underwriting guidelines and
requirements indicated below are met. United Guaranty does not defer to DU and LP for underwriting
when an “Ineligible” Purchase Eligibility Rating is received. Exceptions to underwriting guidelines may be
considered when strong compensating factors are present.
All other recommendations received from DU and LP are ineligible for insurance with United Guaranty.

Additional Requirements
The following requirements apply to all loans underwritten by Fannie Mae’s and Freddie Mac’s Automated
Underwriting Systems. All items indicated below may be found in our Underwriting and Eligibility Guide at
www.ugcorp.com:
              •    United Guaranty’s “eligibility criteria.” (See the “Ineligibility At A Glance” section of the
                   manual for quick reference or “eligibility criteria” throughout the guide.)
              •    Declining Markets policy.
              •    Maximum number of insured loans per borrower.
              •    Territorial Underwriting Guidelines.
              •    Loans that allow interested party contributions to be used as down payment assistance are
                   ineligible for insurance with United Guaranty.




          Desktop Underwriter (DU) is a registered trademark of Fannie Mae. Loan Prospector (LP) is a registered trademark of Freddie Mac.
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                                                                                                                               CA 2009-20

                                                              General Parameters
                                                                                                                                   Minimum
                                                                                                Maximum          Maximum
                               Occupancy          Property Type    Loan Purpose      Units                                          Credit
                                                                                                LTV/CLTV        Loan Amount
                                                                                                                                    Score
                                                   Single-family     Purchase           1            97%1         $417,000            700
                                                   Detached &                           1            95%          $417,000            660
                                                   Attached and     Purchase &
 LTV/Loan Amount/                                                  Rate/Term Refi       1            90%         $625,5002            700
                                                       PUDs.
   Credit Scores                 Primary                                                1            95%         $417,000             700
                                Residence                           Purchase &
                                                  Condominiums                          1            90%         $417,000             660
                                                                   Rate/Term Refi
                                                                                        1            90%         $625,5002            700
                                                                    Purchase &
                                                   Cooperatives                         1            90%         $625,5002            700
                                                                   Rate/Term Refi
                              Primary residence only.
       Occupancy              Ineligible – Second homes and investment properties.
                              Eligible – Single-family detached and attached dwellings, PUDs, condominiums, and cooperatives.
     Property Type
                              Ineligible – Manufactured housing, 2–4 unit dwellings, non-warrantable condominiums, and time shares.
                              Full documentation.
    Documentation             Agency AUS (DU and LP) documentation efficiencies are allowed for loan amounts up to standard conforming
                              limits when the loan receives a DU Approve/Eligible or LP Accept/Eligible recommendation.
                              Ineligible – Limited documentation.
          Appraisal           A full Uniform Residential Appraisal Report (URAR), with interior/exterior inspections, is required.
                              See minimum credit score requirements in LTV/Loan Amount/ Credit Score section above.
      Credit Score            Representative credit score – The lowest representative score (middle of 3; lower of 2) for all borrowers equals
                              the loan representative credit score.
    Non-traditional
                              Ineligible.
       Credit
                              Fixed-Rate/Fixed-Payment.
                              ARM with initial fixed-rate period longer than one year – 95% maximum LTV.
                              ARM with initial fixed-rate period one year or less – 90% maximum LTV.
                              Temporary Interest-Rate Buydown (Cash-out refinance ineligible): 2–1 buydown – maximum 95% LTV; 3-2-1
        Loan Type             buydown – maximum 90% LTV.
                              Balloon Mortgages – Minimum term 7 years; maximum LTV 90%.
                              Ineligible Loan Types – Interest-only, Potential Neg Am ARM (including Pay Option ARM), Scheduled Neg Am
                              ARM, and PITI Abatement loans.
                              DU Approve/Eligible and LP Accept/Eligible Recommendations:
                               • Maximum 45%.
                               • No other qualifying ratio guidelines apply.
                              All other loans:
                               • Maximum 28/36%
   Qualifying Ratios                 – All loan instruments with an LTV higher than 95%.1
                                     – ARM with an initial fixed-rate period less than 5 years.
                                     – Temporary Interest-Rate Buydown.
                               • Maximum 33/38%
                                     – Fixed-Rate/Fixed-Payment
                                     – ARM with an initial fixed-rate period 5 years or longer.
      Cash-out                Ineligible.
       Reserves               2 months’ PITI (Additional reserves required for certain scenarios).
      Minimum                 95.01 to 97%1 – 3%.
   Borrower Invest.           95% LTV or lower – 5%.
        Seller                Higher than 90% LTV – 3%.
    Contributions             90% LTV or lower – 6%.
                              Loans with new subordinate financing are ineligible. Existing subordinate financing for a rate/term refinance
      Subordinate
                              only may be re-subordinated; however, the CLTV may never exceed the maximum LTV per the transaction
       Financing              type.

1 Affordable Housing loans only.
2 See page 4 for Jumbo Loan ($417,001–$625,500) parameters.




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                           Maximum 95% LTV, purchase transactions only.
                           Minimum 700 credit score.
   Construction-to-        Mortgage insurance coverage is ineligible during the construction phase. The property must be complete
     Permanent             before the insurance may be activated.
                           Mortgage insurance on the permanent loan is ineligible if the borrower had any delinquencies (greater than 30
                           days) during the construction period.
    Ineligible Loan        A-minus loans.
       Programs            Limited documentation loans.
                           See Declining Market Policy page for loans located in a declining market.
          Other            See Third-Party Originations section for loans originated by a third party.
                           See complete guidelines and eligibility criteria at www.ugcorp.com.

                                                    Declining Markets Policy
     LTV/Loan
                                                                                            Maximum        Maximum Loan        Minimum
   Amount/Credit         Occupancy          Property Type       Loan Purpose      Units
                                                                                            LTV/CLTV          Amount          Credit Score
      Scores
                                             Single-family                              1         95%             $417,000          700
                           Primary                                  Purchase &
   Moderately                                 Attached &
                          Residence
                                        Detached and PUDs.
                                                                  Rate/Term Refi        1         85%            $625,5003          700
 Declining Market
                                             Single-family                              1         90%             $417,000          700
    Standard               Primary                                  Purchase &
                                              Attached &                                                                  3
 Declining Market         Residence                               Rate/Term Refi        1         85%            $625,500           700
                                        Detached and PUDs.
                                             Single-family
     Severely              Primary                                  Purchase &
                                              Attached &                                1         90%             $417,000          720
 Declining Market         Residence                               Rate/Term Refi
                                        Detached and PUDs.
                         The subject property is located in an area identified as a declining market per United Guaranty’s Declining
                         Market List. The list identifies three market classifications: “Moderately,” “Standard,” and “Severely” Declining.
                         The property appraisal contains any negative comments, including, but not limited to, adjustments or indications
                         of being in a declining market (oversupply, over six months’ marketing time, or declining markets check box
      Definition         noted). These properties are classified as “Standard” if the location is not on United Guaranty’s Declining Market
                         List.
                          The lender has any other market intelligence or knowledge of the subject property being in a declining market.
                          These properties are classified as “Standard” if the location is not on United Guaranty’s Declining Markets List.
                         Primary residence only.
     Occupancy           Ineligible – Second homes and investment properties.
                         Eligible – Single family detached and attached dwellings and PUDs (attached dwellings and PUDs are ineligible
    Property Type        in Florida).
                         Ineligible – Condominiums, cooperatives, manufactured housing, 2–4 unit dwellings, and time shares.
                         Full documentation.
                         Agency AUS (DU and LP) documentation efficiencies are allowed for loan amounts up to standard conforming
   Documentation         limits when the loan receives a DU Approve/Eligible or LP Accept/Eligible recommendation.3
                         Ineligible – Limited documentation.
                         A full Uniform Residential Appraisal Report (URAR), with interior/exterior inspections, is required.
      Appraisal
                         Re-certifications of value are ineligible.
                         See minimum credit score requirements in LTV/Loan Amount/ Credit Score section above.
    Credit Score         Representative credit score – The lowest representative score (middle of 3; lower of 2) for all borrowers equals
                         the loan representative credit score.
   Non-traditional
                         Ineligible.
      Credit
                         Fixed-Rate/Fixed-Payment.
                         ARM with initial fixed-rate period of 5 years or longer.
                         Temporary Interest-Rate Buydown: 2–1 buydown – maximum 95% LTV; 3-2-1 buydown – maximum 90% LTV.
      Loan Type
                         Balloon Mortgages – Minimum term 7 years; maximum LTV 90%.
                         Ineligible Loan Types – Interest-only, ARM with initial fixed-rate period less than 5 years, Potential Neg AM ARM
                         (including Pay Option ARM), Scheduled Neg AM ARM, and PITI Abatement loans.




3 See page 4 for Jumbo Loan ($417,001–$625,500) parameters.



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                                   DU Approve/Eligible and LP Accept/Eligible Recommendations:
                                    • Maximum 45%.
                                    • No other qualifying ratio guidelines apply.
                                   All other loans:
                                    • Maximum 28/36%
   Qualifying Ratios                      – All loan instruments with an LTV higher than 95%.4
                                          – ARM with an initial fixed-rate period less than 5 years.
                                          – Temporary Interest-Rate Buydown.
                                    • Maximum 33/38%
                                          – Fixed-Rate/Fixed-Payment
                                          – ARM with an initial fixed-rate period of 5 years or longer.
      Cash-out                     Ineligible.
       Reserves                    2 months’ PITI (additional reserves required for certain scenarios).
      Minimum
                                   5% minimum borrower investment.
   Borrower Invest.
        Seller
                                   Maximum 6% seller contributions.
    Contributions
       Subordinate                 Loans with new subordinate financing are ineligible. Existing subordinate financing for a rate/term refinance
                                   only may be re-subordinated; however, the CLTV may never exceed the maximum LTV per the transaction
        Financing                  type.
   Construction-to-
                                   Ineligible.
      Permanent
    Ineligible Loan                A-minus loans.
       Programs                    Limited documentation loans.
                                   See Third-Party Originations section for loans originated by a third party.
           Other
                                   See complete underwriting guidelines and eligibility criteria at www.ugcorp.com.


                                                    Jumbo Loans ($417,001–$625,500)
                                                                                                                        Maximum
                                                                                                           Maximum                     Minimum
                                     Occupancy           Property Type         Loan Purpose       Units                  Loan
                                                                                                           LTV/CLTV                   Credit Score
                                                                                                                        Amount
  LTV/Loan Amount/                                         Single-family
    Credit Scores                                           Attached &                                                   $417,001
                                        Primary                                 Purchase &
                                                        Detached, PUDs,                            1         90%             to             700
                                      Residence                                  Rate/Term
                                                       Condominiums and                                                  $625,500
                                                          Cooperatives.
                                   Primary residence only.
       Occupancy                   Ineligible – Second homes and investment properties.
                                   Eligible – Single-family detached and attached dwellings, PUDs, condominiums, and cooperatives.
     Property Type
                                   Ineligible – Manufactured housing, 2–4 unit dwellings, non-warrantable condominiums, and time shares.
                                   Full documentation is required regardless of the documentation allowed by the GSE AUS.
    Documentation
                                   Ineligible – Documentation efficiencies allowed by the DU or LP findings report and limited documentation.
          Appraisal                A full Uniform Residential Appraisal Report (URAR), with interior/exterior inspections, is required.
                                   See minimum credit score requirements in LTV/Loan Amount/ Credit Score section above.
      Credit Score                 Representative credit score – The lowest representative score (middle of 3; lower of 2) for all borrowers equals
                                   the loan representative credit score.
    Non-traditional
                                   Ineligible.
       Credit
                                   Fixed-Rate/Fixed-Payment.
                                   ARM with initial fixed-rate period of 5 years or longer.
        Loan Type                  Ineligible Loan Types – Interest-only, ARM with initial fixed-rate period less than 5 years, Temporary Buydowns,
                                   Balloon Mortgages, Potential Neg Am ARM (including Pay Option ARM), Scheduled Neg Am ARM, and PITI
                                   Abatement loans.

4 Affordable Housing loans only.



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                                   DU Approve/Eligible and LP Accept/Eligible Recommendations:
                                   • Maximum 45%.
                                   • No other qualifying ratio guidelines apply.
                                   All other loans:
                                   • Maximum 28/36%
   Qualifying Ratios                   – All loan instruments with an LTV higher than 95%.5
                                       – ARM with an initial fixed-rate period less than 5 years.
                                       – Temporary Interest-Rate Buydown.
                                   • Maximum 33/38%
                                       – Fixed-Rate/Fixed-Payment
                                       – ARM with an initial fixed-rate period of 5 years or longer.

          Cash-out                 Ineligible.

          Reserves                 2 months’ PITI (additional reserves required for certain scenarios).

      Minimum                      5% minimum borrower investment.
   Borrower Invest.
        Seller                     Maximum 3% seller contributions.
    Contributions
      Subordinate                  Loans with new subordinate financing are ineligible. Existing subordinate financing for a rate/term refinance
                                   only may be re-subordinated; however, the CLTV may never exceed the maximum LTV per the transaction
       Financing                   type.
                                   Mortgage insurance coverage is ineligible during the construction phase. The property must be complete
   Construction-to-                before the insurance may be activated.
     Permanent                     Mortgage insurance on the permanent loan is ineligible if the borrower had any delinquencies (greater than 30
                                   days) during the construction period.
     Ineligible Loan               A-minus loans.
        Programs                   Limited documentation loans.
                                   See Declining Market Policy page for loans located in a declining market.
           Other                   See Third-Party Originations section for loans originated by a third party.
                                   See complete guidelines and eligibility criteria at www.ugcorp.com.


                                                      Third-Party Originations (TPOs)
                                   Third-Party Originated (TPO) loans include loans for which the loan origination (taking the loan application)
                                   is performed by an entity other than the insured. Mortgage service providers are not considered Third-Party
        Definition
                                   Originators if they do not take the loan application and are paid on an arm’s-length fee basis for services
                                   performed, with payment of fees not being contingent on mortgage approval or closing.
    Credit Score                   Minimum 700.
     LTV/CLTV                      Maximum 90%.
  Declining Markets                Properties located in a “Severely” declining market are ineligible.
                                   When applying for United Guaranty mortgage insurance involving a TPO loan, the insured lender must
                                   identify the loan as a “Third-Party Originated” loan and provide the name, city, and state of the third-party
           Other                   originator.
                                   See complete guidelines and eligibility criteria at www.ugcorp.com.

5 Affordable Housing loans only.




United Guaranty Residential Insurance Company | United Guaranty Mortgage Indemnity Company
230 N. Elm Street, Greensboro, NC 27401 | 800.334.8966 | www.ugcorp.com | United Guaranty is a marketing term
for United Guaranty Corporation and its subsidiaries. Coverage is available through admitted company only.

Desktop Underwriter (DU) is a registered trademark of Fannie Mae. Loan Prospector (LP) is a registered trademark of Freddie Mac.
UG+3® is a registered mark.

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